THE Listings Disciplinary Committee (LDC) of the Singapore Exchange (SGX) on Friday (Mar 8) publicly reprimanded Aditya Wisnuwardana Seky Soeryadjaya, the former group chief executive officer and executive director of oil and gas company Eneco Energy : R14 0%, for breaching listing rules.

 

In a bourse filing, SGX said that as a result of Aditya&rsquo 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&rsquo 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&rsquo s subsidiary, Hexindo Gemilang Jaya (Hexindo), without the knowledge and approval of the company&rsquo 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.

 

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 &ldquo no contest&rdquo .

 

Furnishing further details of the case, the LDC 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&rsquo s board had relied on him for updates on the status and progress of the company&rsquo s oil and gas projects in Indonesia.

 

Although Aditya knew of the permit&rsquo s expiry and the group&rsquo s inability to secure an extension to the permit, he did not update the board of the developments despite having &ldquo ample opportunities&rdquo 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&rsquo 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&rsquo s subsidiary Hexindo&rsquo 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&rsquo 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&rsquo s watch list.

On Jan 4, Eneco Energy : R14 0% executive director Colin Moran acquired four million shares at S$0.01 per share. This increased his direct interest in the company from 0.05 per cent to 0.22 per cent. Eneco Energy is the holding company of RichLand Logistics in Singapore and Indonesia, and has been in the logistics services sector since 1992 under the brand of Richland Logistics. The company is actively exploring to grow its logistics business, strengthen its market position and look into business diversification for new markets.

 

Moran was promoted to the role of CEO and executive director of Eneco Energy in 2019 after 10 years with the group, where he was responsible as CEO for the running of its logistics business unit.

 

He joined the group in 2010 and has been a key driver in the geographical expansion of RichLand and the transformation of the business into a true third-party logistics, contract logistics and supply chain management company. He has over 30 years of experience, expertise, and leadership and prior to joining Eneco Energy worked for one of the world&rsquo s largest logistics organisations for 20 years.

 

On Jan 4, 2023, Eneco Energy announced it had been removed from the list of Singapore-listed companies required to perform mandatory quarterly reporting as of Oct 31, 2022. This means the company will cease quarterly reporting with immediate effect. Its FY22 (ended Dec 31) financial results are scheduled to be released on or before Mar 1, followed by the H1 FY23 (ended Jun 30) financials to be released on or before Aug 14. The cessation of quarterly reporting was due to the company receiving an unqualified audit report for its FY21, as stated in the FY21 Annual Report.

 

In addition, the findings by the Independent Reviewer were announced by the company on Jul 8, 2022. This follows the Singapore Exchange (SGX) adopting a risk-based approach for quarterly reporting effective Feb 7, 2020.   Eneco Energy has been on the SGX Watch List (Financial Criteria) as per the watch list rules found in Part V of Chapter 13 of the SGX-ST Listing Rules Manual since Dec 4, 2019. The company has been granted a 12-month extension of time until Dec 1, 2023, to meet the requirements for removal from the watch list. 

 

On Nov 11, Eneco Energy reported revenue for the first nine months of FY22 of S$33.4 million, which was S$4.6 million higher than the S$28.8 million achieved in the first nine months of FY21. This was attributable to contributions from the logistics segment, where revenue has been derived from numerous contracts and services across Singapore and Indonesia.

 

In Q3 2022, the group disposed its oil and gas business and successfully placed out 1,660,000,000 ordinary shares at the issue price of S$0.009 per share, and 1.66 billion warrants, with total proceeds of S$16.6 million. The group added in its industry outlook that it would be looking out for new revenue and profit streams that will be sustainable in the mid-to-longer term.

 

RichLand Logistics employs over 900 staff, fulfilling more than 40,000 deliveries each month. RichLand Logistics is also equipped with a modern transport fleet of more than 400 trucks and trailers, and manages more than 1,500,000 square feet of warehousing capacity. The company maintained a market capitalisation of S$25 million as of Jan 12.