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Regulator says ‘no action’ against GTI for delaying financial reports

Harrison White / Khmer Times Share:
Taiwan-based garment manufacturer’s GTI Cambodian head office based in Phnom Penh. KT/Siv Channa

The Cambodia Securities Exchange-listed Grand Twins International Cambodia (GTI) released its second-quarter audited financial report on Friday, after delaying from its regulatory release date of Aug14.

The Taiwanese garment manufacturer’s consecutive delay was attributed to its original delay in processing the company’s first-quarter report this year, which was blamed on COVID-19.

During an interview on Friday the Securities and Exchange Commission
of Cambodia (SECC) said despite it consecutively missing two financial report release dates “no action
will be taken against the company”. “According to our regulatory guidelines, listed companies must provide information to investors as per obligated deadlines. However, if companies find that they cannot meet this deadline they may request to delay and provide a valid reason for it,” said Sou Socheat, director-general of the SECC.

Socheat said that the most common reasons for a company to delay its financial reports were either cash flow issues or a lack of licensed auditors to review the companies report as required under SECC guidelines. “As the exchange regulator, our role is to make the exchange work in an orderly and transparent manner for both the investor and listed companies. Hence, if a company comes to us with a valid reason for a delay we will consider the situation and act accordingly for each case,” Socheat said.

He added in the case of GTI, the SECC understands  the garment industry has been hit hard by the pandemic and because of a lack of resources the company needed some extra time to complete their accounting obligations.

“While the SECC does have the ability to issue financial penalties against companies that do not meet regulatory guidelines, in this case, we decided it was not in the best interest of investors nor GTI to issue such a penalty,” Socheat added.

According to the quarterly report, the company made $30,886,368 in second-quarter revenue
with gross profit listed at $1,743,670. The results are down from $43,532,887 in revenue and $1,743,670 in gross profit, compared with the same period last year.

GTI is currently trading at a “special quotation” price of 3,080 riels a share after recording no trading activity since Tuesday last week.

 

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