IN the wake of rampant incidents of COVID-19 cases these days, public listed companies (PLCs) must make public the number of infections at their workplace promptly instead of waiting for ‘news leaks’ to initiate official disclosures.
This is because such revelation is construed as price sensitive information that could adversely impact stock prices, according to the Minority Shareholder Watch Group CEO Devanesan Evanson.
“Under Bursa Malaysia’s Listing Requirements, PLCs must proactively disclose such information,” he told FocusM.
“In practice, however, the affected PLCs tend to wait for a Bursa Malaysia query or market news/leaks before disclosing the truth … that shouldn’t be the spirit.”
Devanesan was commenting on the action of Kossan Rubber Industries Bhd which did not make a public announcement on the COVID-19 outbreak among its employees. Instead, the company only disclosed the matter to a group of analysts.
The selective disclosure method pursued by the glove maker would mean only investors who are clients to the said research houses are privy to the information.
According to TA Securities Research, a screening test on Dec 4 – and completed on Dec 10 – on Kossan’s 7,000-strong workforce revealed 427 positive cases (eight locals and 419 foreigners) at its K2 production facility in Meru, Klang.
“Additionally, if such information is not disclosed promptly, there may be opportunities for insiders to carry out insider trading,” cautioned Devanesan.
“What is there to stop an insider from unloading his shares from the time of discovery (of the COVID-19 cases) to the time of disclosure to the market?”
In other words, an insider could have sold his shareholding at a higher price prior to the disclosure following which the share price might have taken a beating.
“That is why prompt disclosure of price sensitive information is essential for a fair and orderly stock market,” added Devanesan.
Commenting on the Kossan incident DAP state assemblyman said there is no policy or law from the Health Ministry (MOH) that mandates a company or individual to reveal his/her medical status, including COVID-19.
“My call is to make testing available for everyone regardless of whether one is deemed a close contact or not,” said the Bukit Gasing state assemblyman.
“I feel strongly there is a need for MoH to build up on this as we have been constantly crossing four digits and outbreaks have been happening in factories with more than 250 workers.”
His contention is that MOH needs to revise its definition of close contact to conduct more mass testing that covers everyone.
“In short, COVID-19 testing should be made available to anyone who wants to get it for their own peace of mind and the safety of their family and community,” he added. – Dec 16, 2020
