1.  South Malaysia Industries Berhad ("Company") wishes to announce that each of the directors of the Company has received a letter from the Securities Commission Malaysia ("SC") dated 24 August 2026 ("SC Letter dated 24 August       2026") in relation to the Company's application dated 25 March 2026 for review pursuant to Section 364 of the Capital Markets and Services Act 2007 ("CMSA") for the imposition of sanctions. The details of the sanctions have been published by the SC on its website.

2.  The SC had on 18 March 2026 issued a letter ("SC Letter dated 18 March 2026") to each of the directors of the Company, stating that the Board of Directors of the Company ("Board") had breached the following:-

      2.1  Subparagraph 20.01(2)(b) of the Rules on Take-overs, Mergers and Compulsory Acquisitions ("Rules") for failure to respond within four (4) market days to a request from the offeror, Target 1 Sdn Bhd ("Offeror") for details in respect of the record of depositors; and

      2.2  Paragraph 3.06 and subparagraph 11.01(1)(b) of the Rules for failure to appoint an independent adviser as soon as practicable to provide comments, opinions, information and recommendation on the Offeror's take-over offer in an independent advice circular and failure to submit the independent advice circular together with the Company's board circular to the SC for comment within the stipulated timeframe.

3.  It is stated in the SC Letter dated 18 March 2026 that pursuant to Section 220 of the CMSA, the SC imposed the following private sanctions against the Board:

      3.1  Reprimand pursuant to Section 220(1)(c) of the CMSA;

      3.2  Penalty pursuant to Section 220(1)(b) of the CMSA in the amount of RM455,000.00 jointly and severally against the Board; and

      3.3  Directive pursuant to Section 220(1)(a) of the CMSA to the Board to comply with subparagraph 20.01(2)(b) of the Rules by responding to the Offeror within four (4) market days from the date of the SC's letter with details in respect of the Record of Depositors of the Company.

4.  The Company had on 25 March 2026 submitted its application to SC to seek for a review of the SC's decision as set out in the SC Letter dated 18 March 2026 pursuant to Section 364 of the CMSA for the imposition of sanctions.

5.  On 24 August 2026, each of the directors of the Company had received the SC Letter dated 24 August 2026 where the SC had decided to dismiss the review application and maintain the decision in respect of the sanctions imposed upon the Board. The SC had also stated in the SC Letter dated 24 August 2026 that given the dismissal of the review application, the directive imposed in the SC Letter dated 18 March 2026 ought to be complied with by taking the following steps:

     5.1  Respond to the Offeror within four (4) market days from the date of the SC's letter i.e. no later than 1 September 2026, with details in respect of the record of depositors of the Company; and

     5.2  Upon compliance with the directive above, the Board is required to provide confirmation to the SC of such compliance.

6.  The Company and the directors of the Company had filed a Notice of Application for Leave to Commence Judicial Review on 28 August 2026 at High Court of Malaya at Kuala Lumpur vide Application for Judicial Review No.: WA-25-243-08/2026, together with a certificate of urgency, to seek among others:

     6.1  That the Company and the directors of the Company be granted leave of the court to file an application for judicial review to the court against the SC arising out of its decision vide the SC Letter dated 24 August 2026 in dismissing the Company's application dated 25 March 2026 to review the SC's decision stated in the SC Letter dated 18 March 2026 with regards to the sanctions imposed against the directors of the Company;

     6.2  The leave sought by the Company and the directors of the Company in prayer 6.1 above shall be for the following orders or reliefs at judicial review, inter alia:-

             (a)  A Certiorari order to quash and/or nullify the decisions made by the SC, including the reprimand, penalty and directive as mentioned above;

             (b)  A Certiorari order to quash and/or nullify the decisions made by the SC vide the SC Letter dated 24 August 2026 in dismissing the Company's application dated 25 March 2026 to review the SC's decision pursuant to Section 364 of CMSA 2007;

             (c)  That the SC's decisions vide the SC Letter dated 18 March 2026 and the SC Letter dated 24 August 2026 are stayed pending the full and final determination of the application; and

             (d)  That, consequent upon and further to the Certiorari Order(s) sought above quashing the SC's decisions in the SC Letter dated 18 March 2026 and the SC Letter dated 24 August 2026, the SC do refund and repay to the directors the sum of RM455,000.00 paid on 7 April 2026 by way of the penalty imposed under Section 220(1)(b) of the CMSA 2007, together with interest thereon at such rate and for such period as the court deems fit.

This announcement is dated 28 August 2026.