Magnum Again.

I just read the research report on Magnum from RHB when I recalled I had blog on Magnum before.

Here is a snippet of what was mentioned then..

• Magnum needs to greatly improve its corporate governance. Its cross holding structure with its parent Multi-Purpose Holdings which owns 34 per cent of the company and in which Magnum has some 10 per cent stake, is viewed negatively.'There's no clear reporting line when it comes to inter-company transactions,
• 'Magnum's lack of earnings transparency is another concern... the company made big provisions in the past three years which did not relate to its core business, but to overseas investments which had not paid off.

Ok that was then. A newspaper article had come out blasting Magnum on its poor corporate governance and the lack of transparency from the company's managment.

Now if I was on the company's management, surely I would have seen the article, right?

And if I had seen and read the article, I would have clearly noted that the investing community is simply not happy with Magnum's lack of corporate governance and transparency.

Now surely, if I was on the company's management, I would have respected the investing community opinion and view on such important issues and I would have made an effort to change and to improve.

Right or not?

Back to now. Present day. Now in that RHB report, the researcher wrote the following.

• Net profit more than doubled for the year due to normalised luck factor as Magnum adopted more prudent risk management. However, this has limited its top line performance. Other divisions’ performances were mixed to lower with write off and provisions more than offset gains from sale of properties. Also note that no explaination was given for the RM13.3m losses at the IT and Trading division in 4Q, we suspect it may be due to write off.

Ahem. No explanation was given for the rm13.3m losses at the IT and Trading.

Don't you find it so unacceptable? As a plc, Magnum has a duty to respect its minority shareholders and explain why and how such a loss happened. Magnum simply cannot let the investing community to second guess what had happened. This yet again is poor corporate governance.