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THE Listings Disciplinary Committee of the Singapore Exchange (SGX) on Friday (Mar 8) publicly reprimanded Aditya Wisnuwardana Seky Soeryadjaya, the former group chief executive officer (CEO) and executive director of oil and gas company Eneco Energy Limited, for breaching listing rules.
In a bourse filing, SGX said that as a result of Aditya’s actions, Eneco Energy had failed to disclose in a timely manner developments surrounding the expiry of a material permit to explore and produce oil and gas assets in the operating areas of West Jambi in Indonesia.
This was in breach of Mainboard Rule 703(1)(a) which requires an issuer to announce any information known to the issuer concerning it or its subsidiaries or associated companies so as to avoid establishing a false market in the issuer’s securities.
Aditya had also circumvented established internal protocols in the appointment of a vendor, Mandiri Pratama Khatulistiwa (MPK), to assist in the procurement of a bank guarantee required for the extension of the permit.
He had also circumvented protocols in the disbursement of funds from the bank account of Eneco’s subsidiary, Hexindo Gemilang Jaya (Hexindo), without the knowledge and approval of the company’s board of directors.
His actions caused the company to breach Mainboard Rule 719(1) which stipulates that an issuer should have adequate and effective systems of internal controls and risk management systems.
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For breaching listing rules, Aditya is required to provide a signed written undertaking to SGX not to seek any directorship on the board of directors or role as a key executive officer of issuers whose securities are listed on the SGX mainboard or Catalist for two-and-a-half years starting from Feb 2, 2024.
Aditya was group CEO of Eneco Energy from November 2008 to July 2019. He served as executive director from June 2008 to February 2020.
In its grounds of decision, SGX said that both the exchange and Aditya had agreed on the terms of disposing of the disciplinary actions with “no contest”.
Furnishing further details of the case, the Listings Disciplinary Committee said that Aditya had failed to disclose the status of the permit by Sep 21, 2017 when an offer to extend the permit lapsed. The disclosure was necessary to avoid the establishment of a false market, it added.
The regulator noted that as Aditya was group CEO and executive director at that time, Eneco Energy’s board had relied on him for updates on the status and progress of the company’s oil and gas projects in Indonesia.
Although Aditya knew of the permit’s expiry and the group’s inability to secure an extension to the permit, he did not update the board of the developments despite having “ample opportunities” to do so over three audit committee meetings held between 2016 and 2018.
He also circumvented established internal protocols in the appointment of vendor MPK and disbursement of funds to MPK without the knowledge and approval of the board of directors.
It was Aditya’s duty as an executive director to inform the board of the appointment of MPK and the disbursement of funds to MPK, said the LDC.
However, he did not escalate any of these matters to the board but acted on his own without any notice to any other members of the board or the company. Furthermore, the appointment of MPK did not adhere to procurement procedures and was done without performing proper due diligence.
The disbursement of funds from Eneco Energy’s subsidiary Hexindo’s account was also carried out without complying with treasury activity procedures, which require all bank transfers to be subject to the approval of the respective business units’ boards.
This caused the company to fail to have in place a robust and effective system of internal controls addressing financial, operational and compliance risks, said the LDC.
Eneco Energy is currently on SGX’s watch list.
Its counter closed flat at S$0.008 on Friday.
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