MESTRON Holdings Bhd’ short-lived joy from being a COVID-19 vaccine distributor to having to retract its announcement over a span of less than 48 hours is a valuable lesson to all glove, vaccine and personal protection equipment (PPE) wannabes.
Late Friday, the steel pole maker said it has inked a heads of agreement (HOA) with China-based Zhongyu Yexing (Chengdu) Industrial Co Ltd to distribute the COVID-19 vaccine in Malaysia.
In a statement, Mestron said it expects to invest up to RM20 mil for its new business venture which will be funded via internally-generated funds, bank loans and proceeds from a private placement.
In this regard, Mestron’s managing director Por Teong Eng noted that the company has obtained a clearance letter from the Health Ministry (MOH) to commence negotiation and cooperation with any company from China for the importation, distribution, sale, marketing, use and application of the COVID-19 vaccine in Malaysia.
But yesterday (Jan 31), Mestron clarified that it did not obtain approval or a clearance letter from the MOH to purchase or distribute COVID-19 vaccines in Malaysia.
This follows MOH’s statement which refuted news reports citing Mestron that the latter had received a letter of permission from the ministry to begin the negotiation process.
Commenting on the chain of events, Minority Shareholders Watch Group CEO Devanesan Evanson pointed out that Metron’s action has flouted Bursa Malaysia’s Listing Requirements.
He shares his take with FocusM:
“The Listing Requirements require that an announcement is factual to enable shareholders and investors to make informed investment decisions.
It furthermore states that the announcement is not false, misleading or deceptive.
Listed issuers must also ensure that the announcement is balanced and fair. Thus, the announcement must avoid, among others, the omission of material facts and not be false.
The reason for these provisions is to ensure that minority shareholders are not misled by announcements of material information.
A favourable announcement of material information will tend to move the share price of the listed issuer and motivate an investment in that listed issuer.
Making announcements is a serious continuing disclosure requirement of a listed issuer and listed issuers must be mindful of the detrimental impact that such announcements can have on the minority shareholders, if not done responsibly.
Some announcements – by their nature – can be subjective and as such are challenging to craft. Most announcements are nevertheless straight-forward.
Some recent announcements relate to obtaining an approval or a clearance letter from the MOH to purchase or distribute COVID-19 vaccines in Malaysia. It then becomes a question of either you have obtained such a letter or not; and it is not rocket-science!
To say that you have obtained a particular letter when you have not may tantamount to a false, misleading or deceptive announcement.
At the end of the day, the board owes a responsibility to shareholders in disclosing timely, accurate and unbiased information.” – Feb 1, 2021
