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First clear alarm bell of Alam Maritim’s grave condition as a company was the announcement from 30.11.2021 that it triggered PN17 criteria and became a distressed business. As misfortunes come in pairs, two conditions were triggered: disclaimer of opinion by the auditor of a material uncertainty, and the announcement that shareholders’ equity dropped below 50% of shares capital. There was another disclaimer from a new auditor the following year too. Shocked shareholders soon also found out that the debts are in default as well, triggering yet another criterion. Clearly the company was in a catastrophic state; however, covid pandemics allowed the management to do NOTHING about this, without the consequences from the Bursa.
A very gloomy future formed for Alam. Bursa Malaysia has a special process for companies in distress when they meet even one crteria below:
1. Shareholders’ fund is equal to or less than 25% of the total issued and paid-up capital of the listed company.
2. Receivers or managers were appointed to take control of at least 50% of the total assets employed.
3. Winding up of a subsidiary or associate company which makes up at least 50% of the total assets employed of the listed company.
4. Auditors expressed adverse or disclaimer opinion on the listed company’s latest audited accounts.
5. Default in payment; the listed company must announce its inability to provide a solvency declaration
6. Company was suspended or ceased all or a major part of its operations
