Bursa Securities Berhad v Serba Dinamik Holdings Berhad

“An honest market cannot exist without timeous and honest public disclosure of material information. A dishonest market thrives upon mystery and secrecy.”

Wan Muhammad Amin JC (now, Judge)

The decision of the High Court in Bursa Securities Berhad v Serba Dinamik Holdings Berhad is welcome; illuminating upon the determinants of the concept of materiality comprised in the corporate disclosure policy in chapter 9 of the Main Market Listing Requirements (‘MMLR’) and the manner in which the disclosure policy is to be interpreted and enforced in the context of the Capital Markets and Services Act 2017 (‘CMSA’). Foremost, it was clarified that the concept of materiality information 'does not necessarily depend on the information being true, false or inconclusive. It depends on how the information would impact the listed issuer’s securities in terms of its pricing, value or market activity ('Market Impact Test') or the lister issuer’s or investor’s investment judgment ('Investment Judgment Test').' Where Bursa in discharging its duty under s 11 of the CMSA is satisfied that the information is material and issues a disclosure directive, it must be complied with as it is not the function of the Court in anything other than a clear case to second guess Bursa’s decision. In this respect, the provisions ‘in the MMLR are to be interpreted in accordance with the spirit, intention and purpose and in a way that best promotes the principles on which they are based. The term “spirit” is intended to free [Bursa] of having to give an overly legalistic, narrow or technical interpretation when administering the requirements of the MMLR.’ The High Court granted the orders sought by Bursa that the company make public the factual findings made by the special auditor concerning the affairs of the company pursuant to the judicial powers contained in s 360 of the CMSA.