Thursday, 29 September 2016

Dufu directors, only a fine and reprimand?

Article from the Securities Commission:

Yong Poh Yow, former Executive Director and Chief Executive Officer of Dufu, was found to have made remittances totalling US$1,010,041 to foreign parties in the United States between January 2013 and October 2014 without authorisation from Dufu’s Board. The monies were then used to purchase several assets which were registered under his own name. This is a breach of section 317A(1) of the Capital Markets and Services Act 2007 (CMSA).  He was reprimanded and fined RM200,000.

Lee Hui Ta, also known as Li Hui Ta, former Executive Director and Chief Financial Officer of Dufu, was reprimanded and fined RM150,000 for abetting Yong by approving payment vouchers for the said unauthorised remittances. Lee is currently the Executive Chairman of Dufu.

While a breach of section 317A(1) of the CMSA carries upon conviction, a minimum imprisonment term of two years up to a maximum of 10 years and a fine not exceeding RM10 million, the SC had imposed administrative sanctions on both Lee and Yong after taking into consideration that Yong had fully repaid the amount of US$1,010,041 to Dufu.

The punishment looks extremely mild, is this really a proper deterrent? I strongly doubt it.

The company has not yet published the above on the announcement's website of Bursa, surely this is material information for investors in Dufu.

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