Monday, June 18, 2007

Do you think that Bursa should take action against misleading reporting?

Published on Reuters News, Bursa Malaysia may take action against Transmile

  • "Bursa will not hesitate to take action against the companies should they be found to have made misleading announcements; and also against the directors if they had caused, aided, abetted or permitted the breach,"

So what about misleading news publications?

What if a reporter continues to publish misleading articles based on unconfirmed sources, time after time again?

This morning, Star Business reporter, Jose Barrock, reported the following, According to Sources: Ranhill Strikes Oil!!!!!!!!

  • Monday June 18, 2007

    Ranhill Bhd strikes oil


    RANHILL Bhd and its joint venture partners are believed to have struck oil in the Citarum block off West Java late last Friday, according to sources familiar with the company.

By lunch time, the stock flew up, up and away, rising a whopping 54 sen or 29% just because of that "according to sources" article published this morning!

However, before the market re-opened for the afternoon session, Ranhill made the following announcement, which was reported by Bloomberg.

  • Ranhill Bhd., a Malaysian engineering company whose shares surged 30 percent today, denied a report that it struck oil in an area off West Java, Indonesia.

    ``There's no commercial oil and gas show as yet,'' Chief Operating Officer Amran Awaluddin, said in an interview in Kuala Lumpur today.

The stock retreated instantly before it was suspended at 2.18, up 37sen, surrendering 17 sen of its gains!

Now this simply left a terrible taste for most market players, investors, traders and punters.

First it was false accounting, now it is false reporting!

What fighting chance does the market player has against such odds?

Here are some comments posted.

  1. I saw a denial from Ranhill in Bursa today as well about an article in the NST last Friday where they were supposed to be involved in a consortium to develop a RM 9B project in the ME.These reporters should be suspended and blacklisted.

  2. what you have said is very true...that reporter should be called up by SC to investigate who is the so call "source" and whether any money transacted between them to write this piece of rubbish and whether they have profited by this "rumour".Finding hard to read any" truth" news nowaday in the local newspapaer.

  3. Moola, have you compiled a list of links to your articles exposing this JOSE's "creative reporting"?
Well, I do have some old stuff!

1.Saturday January 31, 2004

Metro Kajang eyes Lankhorst


PROPERTY development and management company Metro Kajang is aggressively looking to beef up its land bank. One plan being considered towards this end involves the possible reverse takeover of Lankhorst Bhd. The biggest pull for Metro Kajang is Lankhorst's 54,753 sq ft undeveloped land in Shah Alam. The latter also has 14,000 ha land southwest of Seremban.

Details, however, were hard to come by as industry sources say the plan is still in the preliminary stages.

<=> Here is Lankhorst reply.
  • we wish to state that we have not been in any discussion nor are we aware of any discussion held with Metro Kajang for any possible reverse takeover of Lankhorst by the former

But the most incredible thing is this statement.

  • In addition we do not own 14,000 hectares land in southwest of Seremban. What we own is 14.164 hectares of quarry land in the Mukim of Jimah, District of Port Dickson, Negeri Sembilan.

Lankhorst denied and stated that they did NOT own that 14,000 hectares of land stated by the reported.

So where did the reporter get the info from? Who is the source?

2. Feb 14th 2004.

  • Fountain View in talks to buy Kurnia Setia stake


    FOUNTAIN View Development Bhd is eyeing a stake in plantation counter Kurnia Setia Bhd. It is believed that talks between both parties have just commenced and therefore, details are not forthcoming.

    Kurnia Setia – a little known main board plantation counter with a market capitalisation of only about RM69.32 million – has some 11,522 ha of oil palm and rubber plantation, and is controlled by the Agricultural Development Board of Pahang with a 45.41 per cent stake in the company.

    It is believed that Fountain View Development is looking to increase its presence in the plantation business, especially in oil palm cultivation, capitalising on high crude palm oil (CPO) prices to boost its earnings.
    The company has been suffering losses since financial years 2001 and 2002.

    The financial year just ended may not bring much cheer to Fountain View Development shareholders as well. The company, for the nine months ended September 2003, posted a net loss of RM3.84 million on the back of RM56.32 million in sales.

    CPO prices have been on an upward trend since September last year, gaining some 35 per cent to close at RM1,892.50 on Thursday.

    “The problem is with the company's property development arm which is based in Johor. A focus on plantations will boost earnings, especially with the current high CPO prices,”
    the source says.

    Fountain View has about 11, 570 ha of plantation land, of which almost 70 per cent is cultivated with oil palm while the remaining are planted with rubber and cocoa. Previously known as Plantation and Development (Malaysia) Bhd, Fountain View was a PN4 counter. Under a restructuring scheme, Plantation and Development became a wholly owned subsidiary of Fountain View after a share swap, capital reduction exercise, issuing of irredeemable convertible unsecured loan stocks and debt compromise.

    News of Fountain View's interest in Kurnia Setia has yet to hit the market.
    Kurnia Setia shares closed at RM1.11, down three sen from its close on Wednesday. It hit its 52-week high of RM1.25 on Dec 8 last year while its low of 63 sen was on Feb 27 last year.

    Fountain View shares have risen six fold, since listing at RM1 on Nov 18 last year. The counter closed at RM5.80 on Thursday.

Here is Fountain View reply. ARTICLE ENTITLED : "Fountain View in talks to buy Kurnia Setia Stake"

  • The Board of Directors wish to inform that the Company has never been involved in any talks to acquire a stake in Kurnia Setia Berhad and as such wish to deny the following statement :

    "Fountain View Development Bhd is eyeing a stake in plantation counter Kurnia Setia Bhd."

    In addition, the board have no knowledge as to the sources on the publication of the above-mentioned article.

3. Feb 12 2005.

  • Tradewinds breaks six-year losing streak

    TRADEWINDS Corp Bhd (formerly known as Pernas International Holdings Bhd), it is believed, will report profits of about RM100mil for FY04. This represents a marked improvement, breaking a six-year losing streak.

    The company is expected to announce its results at the end of the month.

    “Tradewinds (Corp) has turned around significantly. It made about RM100mil profit after incurring losses last year. Debt too has been slashed considerably,” says a source.

    For the financial year ended December 2003, Tradewinds Corp suffered a net loss of RM73.7mil from RM1.1bil in sales. But the signs of improvement were already evident from the first nine months performance of the company. For the nine months ended September 2004, the company - largely involved in the hotel business, property development and plantations -
    posted a net profit of RM54.2mil on the back of RM938.5mil in revenue.

    Sources say
    both the plantations and sugar businesses have lent a boost to the company’s earnings.

    Tradewinds Corp controls as much as 53% of Tradewinds (Malaysia) Bhd, a company that owns Central Sugar Refinery Sdn Bhd, which controls as much as 40% of Malaysia’s RM1.5bil sugar market.

    In the future, more can be expected from Tradewinds Malaysia as the company just strengthened its position in the sugar business via the acquisition of Gula Padang Terap Sdn Bhd, from among others Tan Sri Robert Kuok Hock Nien’s PPB Group Bhd, for RM188mil.

    Tradewinds Corp’s hotel business, it is understood has just about broken even, but the prospects seem promising. “There are a lot of improvements ... some of the loss-making hotels have turned around. The Mutiara Pedu (Golf and Lake Resort) in Kedah and the Hilton Batang Ai (Longhouse Resort in Sarawak) have also made progress, things are looking better for the group,” the source adds. The two hotels were previously up for sale with a price tag of around RM100mil.

    Tradewinds Corp has managed to cut its debt from RM2.5bil in 2003 to the region of RM1.2bil now which will undoubtedly reduce its finance cost burden.

    Year to date, Tradewinds shares have gained 11 sen, having reached a 52-week high of 78.5 sen in late January this year. The counter ended trading on Tuesday at 76 sen.

What was wrong?

1. Tradewinds first 3 quarters net profit only totals 54.2 million. So this source is suggesting that Tradewinds makes a whopping net profit of 100 million for its current fiscal year. Which means Tradewinds will make a whopping 45.8 million (100 -54.2 ) for the last quarter of the year. And how did Tradewinds do? Some 11 days later, Tradewind reported a loss for its remaining quarter of its fiscal year and only ended its fiscal year making some 52.504 million.

2. Debts only 1.2 billion? Badly twisted! Traewinds had a total debts of 1.894 Billion!

Now consider the impact on the stock.

Well Jose Barrock wrote that article on Saturday, Feb 12th 2004. Before that incredible according to sources article was written, TWSCorp (Tradewinds) was a stock trading around the 77 sen and many thanks to the article, TWSCorp went up some 4.8% on Feb 14th. Now after TWScorp hitting a 52-week high on the next trading day, Feb 14th 2005, 8 trading days later, on Feb 24th, TWSCorp closed at 63 sen!!!

4. November 19, 2005

  • Saturday November 19, 2005

    China boost for Salcon


    WITH a large contract in the booming Chinese market under its belt, and the possibility of inking more lucrative deals, there appears to be a steady flow of positive news for water treatment specialist Salcon Bhd.


    For the first six months of its financial year, Salcon posted a net profit of RM570,000 on the back of RM112.6mil sales. The company’s earnings per share during the period was 30 sen, while its net tangible asset per share stood at 52 sen.

Terribly misleading! Salcon EPS at that time was only a mere 3 sen and not 30 sen!

5. 21 Jan 2006. Courting AV Ventures

  • Courting AV Ventures


    SECOND board counter, AV Ventures Corp Bhd (formerly Autoindustries Ventures Bhd) may have a new controlling shareholder pretty soon, sources familiar with the company say.

    Datuk Amanullah Mohamed Yusoof, who is a non-independent, non-executive director of the company, is currently the majority shareholder with 28% equity or 12.1 million shares in AV Ventures.

    He is believed to be looking to cash out of AV Ventures to focus on his oil and gas business currently held under a private company Pivotal Achievement Sdn Bhd.

    BizWeek was told that several parties have expressed interest to take up his stake in the company, one of whom includes Tan Sri Syed Mokhtar Albukhary.

    Syed Mokhtar’s interest in AV Ventures, which manufactures automobile parts, such as wiper arms, car window regulators, horns and other parts for the auto industry, it seems stems from his shareholding in another automotive player, conglomerate DRB-HICOM Bhd in which he acquired 15.8% equity last year.

    The tycoon is believed to have sent his feelers out and made an offer to Amanullah via merchant bankers CIMB Bhd, offering RM1.20 a share, which works out to a total of about RM14.5mil for Amanullah’s shares.

    The RM1.20 per share offer is a steep premium to AV Ventures close of 66 sen on Thursday and its net tangible asset peer share which at end September stood at 27.5 sen.

Massive rumours! An offer of 1.20 for AV Ventures was simply sexy because AV Ventures was just trading at 66 sen then!

Here is AV ventures reply yo Bursa. AV VENTURES CORPORATION BERHAD ("the Company" or "AV Ventures") ARTICLE ENTITLED "COURTING AV VENTURES"

  • Reference is made to the enquiry by Bursa Malaysia dated 23 January 2006 with regards to the above article in The Star, Bizweek on Saturday 21 January 2006 and on the following particulars:-

    (1) Datuk Amanullah Mohamed Yusoof.... is believed to be looking to cash out of AV Ventures..."

    (2) "...several parties have expressed interest to take up his stake in the company, one of whom includes Tan Sri Syed Mokhtar Albukhary."

    (3) "The tycoon is believed to have...made an offer to Amanullah via merchant bankers CIMB Bhd, offering RM1.20 a share; which works out to RM14.5 million for Amanullah's share"

    The Company, after due and diligent enquiry with all its Directors, major shareholders and all such persons reasonably familiar with the matters for this disclosure, wish to inform the following:-

    Question 1
    Dato' Amanullah Bin Mohamed Yusoof confirmed that he is not looking to cash out of AV Ventures. However, as an entrepreneur, Dato' Amanullah may be open to any offers which may benefit the shareholders of AV Ventures.

    Question 2
    Dato' Amanullah has confirmed that several parties have expressed interest to take up his stake in the Company,
    but did not receive any offer from Tan Sri Syed Mokhtar Albukhary.

    Question 3
    Dato' Amanullah confirmed that Tan Sri Syed Mokhtar Albukhary did not make any offer

How? 3 strikes in one article?

Some more recent stuff.

6. December 2, 2006 ( TM eyes Time dotCom )

  • TM eyes Time dotCom


    THE board of Telekom Malaysia Bhd (TM) is expected to deliberate on a proposal this week, one that it has been mulling for some time now. Sources say the state controlled telecommunication giant is considering a plan to acquire a 42.7% stake in Time dotCom Bhd from its parent Time Engineering Bhd.

    BizWeek understands that the offer price for some 1.1 billion Time dotCom shares, although yet to be finalised, may be in the region of RM1 and RM1.20 per share. A decision is expected to be made soon

Here is the reply.

  • We wish to inform the Exchange that the above statements are inaccurate and misleading and they were not attributed to any sources from Telekom Malaysia Berhad (TM). We further wish to state that TM has no plan currently to acquire a stake in Time dotCom nor Time Engineering Berhad and that there is no Board of Directors meeting scheduled this week as erroneously reported.

    For the record, TM Group owns the largest network of fibre optic cables in Malaysia totaling more than 220,000 core kilometers.

7. Dec 9 2006. Dialog Group to list unit in Singapore Stock Exchange

  • OIL and gas player Dialog Group Bhd is planning to list one of its units on the Singapore Stock Exchange. The plan, if it materialises, may involve a sweet surprise for shareholders as the group may distribute special share dividends in the Singapore-listed unit.

    “The plans are looking good. The listing is likely to be pursued,” says a source close to the group.

Dialog's denial.

  • We wish to clarify that in line with its business expansion regionally and globally, Dialog has continuously explore various options to fund these expansion. However, at this point in time, the Board of Directors has not made any decision in regards to a listing of any one of its subsidiaries on any stock exchange nor has appointed any consultant or adviser.

Fast forward.. too long... more recent stuff.

8. April 21st 2007. ( Syabas shake-up in the pipeline? )


    IT is understood that Kumpulan Perangsang Selangor Bhd (KPSB) is looking at acquiring Puncak Niaga Holdings Bhd's 70% equity interest in water supply services player Syarikat Bekalan Air Selangor Sdn Bhd (Syabas). Kumpulan Darul Ehsan Bhd (KDEB), the Selangor government's investment arm, owns the rest of the Syabas shares.

    KDEB is also KPSB's parent company, with a 55% shareholding. KPSB intends to buy the 70% stake at the present market value, according to a source,
    who declines to disclose any figures.

    Syabas has a 30-year concession, which commenced in early 2005, to supply water to Selangor, Kuala Lumpur and Putrajaya.

    KPSB is considering the share purchase so as to allow the State Government to firmly control the concession.

    There is also likely to be synergy between Syabas and KPSB's existing water businesses. Says a source, “It's about accountability”.

    “At present, the accountability for the water supply lies mainly in the hands of a listed company controlled by an individual. This will change when KPS takes over the helm,” the source adds.

    “At present, the accountability for the water supply lies mainly in the hands of a listed company controlled by an individual. This will change when KPS takes over the helm,” the source adds.

    Executive chairman Tan Sri Rozali Ismail is the face of Puncak Niaga. He has a 41% stake in the company, both directly and via Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd.

    KPSB is no greenhorn in the water sector. It has 55% equity interest in Titisan Modal Sdn Bhd, whose subsidiary, Konsortium ABASS Sdn Bhd, operates a water treatment plant in Selangor. KPSB also has an associate stake, to the tune of 30%, in Syarikat Pengeluar Air Selangor Holdings Bhd, another supplier of treated water.

    At press time, it is not clear how KPSB plans to finance the acquisition.

    After a loss-making 2005, the main board company rebounded last year to post an unaudited net profit of RM17.8mil on the back of RM351.3mil in sales.

    As at December, the company had RM271.3mil in deposits and cash balances, while its trade receivables stood at about RM561mil.

According to sources and misleading info! Reporter highlights the cash balances without stating KPS's loans which totals more than 1.2 billion!

4 days later, KHSB lost 0.165 or some 17% since that article was published.

9. Saturday June 9, 2007 ( Tie-up in the offing? )

  • Tie-up in the offing?


    PROPERTY developer Equine Capital Bhd may see the entry of a new major shareholder in the form of the Employees Provident Fund (EPF), or a company controlled by the pension fund – Malaysian Resources Corp Bhd (MRCB).

    The plan for the retirement fund to acquire a stake (speculated to be 30%) in Equine, says a source, is related to the potential development of a new airport in Penang that is being mooted by Equine Capital.

MRCB posted these set of comments on Bursa Malaysia.

  • We refer to your letter dated 11 June 2007 and to the article which appeared in the Star Bizweek, page BW4 on Saturday, 9 June 2007.

    We wish to confirm that we are not aware of the alleged proposal reported by Star Bizweek in its article on 9 June 2007.

Equine Capital, on the other hand made the following set of comments.

  • The Company wishes to advise that it is not aware of the speculated acquisition of a 30% stake in ECB by Employees Provident Fund ("EPF") or Malaysian Resources Corporation Bhd ("MRCB"). Todate, it has not received any notification from EPF or MRCB of this speculated acquisition. Further, it has no knowledge of the speculated re-development of the existing Penang Airport land nor the building of a new airport at Batu Kawan.

10. Same day! Saturday June 9, 2007 ( Interest in DNP fuelled by privatisation talks )

  • Interest in DNP fuelled by privatisation talks


    Since April this year, the counter has risen almost three fold. Last Wednesday, the company’s shares breached the RM3 mark in intra day trading.

    Market chatter has it that the interest surrounding DNP Holdings stems from the major shareholder of the company, Wing Tai Holdings, planning to take the company private.

Well.. I could go on and on! Really! But I do think this is more than enough!


Do you think that Bursa should take action against such misleading reporting?


ToeBear said...

It's only wise that bursa or the star themself take actions to curb such unscrupulous reporter or perhaps we should call 'syndicate' from abusing their position to mislead the public. Whether they gain anything from such practice is unknown to's only logical to say yes, since evidence has showed trends of repetition which proves deliberate intention...

Seng said...

The problem in this instance is that "market rumour" reported by Jose Barrock has been "partly misportrayed, and misinterpreted by many" as facts.

Ideally, if the Star wants to keep on reporting "market rumours", then, they should do 2 things:

1. Change the caption from

"Ranhill Bhd strikes oil"


"MARKET RUMOUR: Ranhill Bhd strikes oil?"

2. Put a Disclaimer at the bottom of the article such as:

"DISCLAIMER: This is a market rumour which has not been substantiated by the company as fact. Speculate on rumours at your own risk."

If the Star is unable to do these 2 things, or to clearly differentiate rumours from facts, then, we - as a society - should never allow such rumour reporting by the Star. It would be a huge misabuse of power by the Star.