Monday, 3 August 2015

XiDeLang: Deal or no deal? (2)

Xidelang made another announcement and in a remarkable turn of events, has revealed most of the information regarding Yangsen as requested by Bursa:

Sunday, 2 August 2015

XiDeLang: Deal or no deal?

XiDeLang announced:

".....  that the Company is proposing to enter into a Heads of Agreement in relation to the Proposed Acquisition of the entire existing business and undertakings of JinJiang YangSen Garments Co.,Ltd (YangSen) including all of its assets and certain agreed liabilities ("Proposeed Acquisition")."

The wording in the attachment is however different: "that the Company has on 29 July 2015 entered into a Heads of Agreement with YangSen".

"Proposing to enter" and "has entered" are of course very different.

The announcement mentioned that XiDeLang proposes to settle the (yet to be decided) purchase amount "via cash and/ or issuance and allotment of new ordinary shares of USD0.03 each in XDL (“XDL Shares” or “Shares”) at the issue price of RM0.22 per Share".

RM 0.22 was clearly higher than the last traded share price, if the seller of the business is agreeable to receive shares of XiDeLang at such a price that looks like good news. Not surprisingly the share price of XiDeLang increased the next trading day.

Bursa decided to query the company, because the announcement was "rather devoid of details" (to put it mildly).

The company answered the queries in a rather astonishing way:

The following information regarding YangSen is currently unavailable:

  • Total assets and total liabilities
  • Total profit
  • Name of directors and substantial shareholders
  • Total contracts value secured
  • Distribution networks
  • Manufacturing capabilities

How is it possible to sign a Heads of Agreement to purchase a business when the most basic facts are not known? It looks like XiDeLang has not even seen the last accounts.

Why does XiDeLang announce this "non-information", why does it not wait until it has more information?

Saturday, 1 August 2015

Fake degrees at listed companies? (4)

Malaysian Insider wrote an article:

"KUB group CEO resigns amid allegations of falsified academic qualification".

A snippet:

In a filing with Bursa Malaysia yesterday, KUB said Zainal Abidin, 52, has submitted his resignation, citing personal reasons, and the board of directors has accepted it. He will serve a three-month notice period under the terms of his contract. According to KUB, a statement was made by a shareholder of the group at its annual general meeting on June 16, 2015 on the alleged falsification of Zainal Abidin's academic qualification.

"The (Zainal Abidin's) resignation was submitted before the board of directors was able to establish a Board Executive Committee to look into the allegations made by the said shareholder," said KUB. "In light of the said resignation, the board has resolved that it serves no purpose to continue with the investigation," it added.

It is good that on the question "Whether there are any matters that need to be brought to the attention of shareholders" the answer "Yes" was given in the Bursa announcement, plus a subsequent explanation of the issue at hand, good transparency.

The relevant Bursa announcement can be found here.

But I don't agree though that the board decided that it serves no purpose to continue the investigation. I think they should investigate, both regarding the allegations regarding the qualifications of the CEO and about the hiring process by the responsible department of KUB.

In the previous case written in this blog, the director had already resigned from the three listed companies involved, but Bursa did (correctly) follow up on the complaint. I assume Bursa will do the same in this case.

Friday, 31 July 2015

Fake degrees at listed companies? (3)

Received a helpful tip about my post of yesterday regarding Lim Yin Chow.

First of all an example of the disclosure in the 2012 annual report (page 5) of Rev Asia:

Bursa has established that "Dr" Lim has not graduated from the University of Hong Kong. That is bad.

But more worrisome is that he is involved in the healthcare business where his "doctors" title must have carried even more weight.

One example can be found in an interview in The Edge (dated November 29, 2009), listed on the website of HSC (it can also be found on the website of The Edge).

One snippet:

"Dr Lim: We saw how things work there, and wanted to try them here. Over here, most hospitals are opened by businessmen. We're medical people, so we know what the market or patient wants."

The question that remains: is a reprimand and fine from Bursa really enough?