Cambodia Securities Exchange (CSX)-listed Advanced Bank of Asia Ltd (ABA) has announced a delay to the delivery of its third-quarter financial report to the regulator until Nov 30, after missing the mandated corporate disclosure date of Nov 16.
In a statement sent to Khmer Times yesterday, the company cited the reason they could not adhere to the corporate disclosure date as the “high number of holidays” in the quarter and “moderate concerns about the COVID-19 pandemic”.
According to the “Prakas of Corporate Disclosure”, all listed companies shall submit a quarterly report to the Securities Exchange Commission of Cambodia (SECC) – for review – within 45 days following the end of a quarter before being released publicly by the CSX.
Under existing regulations, if companies miss the deadline without proper and clear explanations or requests, they face transitional penalties (fines in cash) and/or administration penalties, the SECC has stated.
“We submitted a letter to the SECC in which we explained that the creation of the interim financial statement requires a bit more time than allowed by the SECC framework,” ABA Bank said.
“We have put in all efforts towards completing the third quarterly report within the deadline set forth in the prakas. ABA said “unfortunately” the number of holidays during the quarter and continued concerns about COVID-19 resulted in the filing not being finished in time. The bank’s statement added, “We also need time to get an approval of the statement by the Board Audit Committee and the board. Therefore, we kindly have asked His Excellency Director-General of the SECC for a delay until November 30.”
Director-General of the SECC Sou Socheat responded by stating his team was notified about the delay but not given the reason behind the failure to comply with the deadline.
“ABA asked SECC for a delay and, in turn, we asked them to send us the reason and to explain it publicly,” he said.
Socheat, however, did not elaborate whether the regulator would judge the reason(s) provided as “proper and clear explanations” or whether it would issue the first penalty to any listed company for missing a corporate disclosure deadline.
Any decisions made by the SECC to issue penalties depends on the situation, according to Socheat. He noted that the SECC must also look at whether the company has issued shares or bonds and what the impact of a delay in reporting may have had on the market.
Socheat added, “Regulations proscribe not only penalties, but also potentially warnings or other measures to correct or adjust company behaviour.”
Luc Cool, chief risk and investment officer at Prudential Life Assurance (Cambodia), which is an investor in several bonds, said that while in general he would not be overly concerned about a single missed corporate disclosure, from an investor viewpoint, however, it would not be deemed good if it became an ongoing occurrence.
“One of the reasons Prudential is invested in the CSX is because of its perceived strong regulations and corporate disclosure. It would be best for the future development of the capital markets if all listed companies met their corporate disclosure requirements,” he said.
Only seven of the 13 equity and bond listed companies on the CSX had their 2020 third-quarter financial reports released on time by the close of business on Nov 16. By the close of business yesterday, all listed companies with the exception of ABA had been released to the public.
ABA corporate bonds (assigned the “ABAA22A” symbol) were listed in August 2019. They were the first offer of debt securities from a commercial bank in Cambodia.
That issue was also the first Cambodian bond with a “B” rating, which was later upgraded to a “B+”, by the S&P Global rating agency. It was the first bond available for institutional and retail investors.
The bonds were issued for the total amount of 84.821 billion riels (around $21 million), with a maturity date of three years, paying a coupon of 7.75 percent per annum.
Last year, National Bank of Canada reported it had signed a deal to pay $83.5 million to buy the remaining 10 percent of shares not under its ownership following its 2016 purchase of a 90 percent stake in the bank.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.