Wednesday, August 18, 2010

M3Nergy CEO Fined 100K For Non Factual Statements!

Read the following article: Hubline, M3nergy reprimanded, top officials fined. Since I hade blogged on M3Nergy and on its CEO before, I was curious to read why and what the CEO was reprimanded for.

  • On M3nergy, Bursa Securities publicly reprimanded the company, its managing director and chief executive officer Datuk Shahrazi Sha’ari, and non-executive chairman Datuk Zulkifly@Sofi Mustapha.

    Shahrazi and Zulkifly were fined RM10,000 each.

    Bursa Securities said M3nergy announced on Aug 27, 2007 that it had received an invitation from Core Attributes (M) Sdn Bhd (CASB) for the company to sell its entire stake in Malaysian Merchant Marine Bhd (MMM) consisting of 50.376 million ordinary shares (28.67% of MMM’s share capital) and 470,000 Islamic preference shares (IPS) for a cash consideration of RM33.5mil.

    Subsequently, on Oct 31, 2007 it announced that M3nergy and CASB signed a conditional share sale agreement for the proposed disposal.

    The company later announced that the proposed disposal based on varied terms, with the total number of ordinary shares reduced to 29.442 million (among others), had been completed on Dec 12, 2007.

    However, it is noted that of the 29.442 million MMM shares, 16.6 million MMM shares were disposed by M3nergy on Nov 28, 2007 via open market to a total of 173 buyers, and 12.842 million to two individuals via direct business transaction, none of whom was CASB.

    “Hence, it is apparent that the company’s earlier announcement of Oct 31, on the proposed disposal of 50.376 million ordinary shares to CASB was no longer factual and fulfils the requirements of paragraph 9.16(1). However, the company failed to comply with the obligation under paragraph 9.16(4) of the listing requirements to notify Bursa Securities of the same,” it said.

    In addition, the company’s announcement on Dec 12, 2007 that the disposal of 29.442 million ordinary shares of MMM to CASB had been completed on that day was not factual, inaccurate and in breach of paragraph 9.16(1)(a) of the listing requirements.

    Bursa Securities also said M3nergy had also breached paragraph 10.04(1) for failing to make an immediate announcement when the company issued a notice of exercise of put option to CASB on Dec 10, 2008 to require CASB to purchase all the option shares. The company only made an announcement on this on Feb 20, 2009.


Statements made the CEO, Shahrazi Sha’ari, was NOT FACTUAL!!!!

And the meaning of Not factual?

This is Urban Dictionary meaning:

  • Something that is not factual; a made up and/or incorrect idea. A better and funnier way to say "a figment of your imagination." ( Urban Dictionary: not factual )

My English is not good. :D

My Auntie's definition is better. NOT factual means LIES!

What's yours?


Is a fine of 100k enough for making NOT factual statements?

And of course I remember Shahrazi Sha’ari and his MMM stake!

On 26th July I blogged this posting That Unfair Offer On M3Nergy.

Let me repeat what was posted...

Let's see where should I start?

Hmmm... it was 29th November 2002.

There was this company called or Malaysian Merchant Marine Bhd. On that day, MMM made the following announcements: Changes in Director's Interest (S135) - Shahrazi bin Sha'ari and Changes in Director's Interest (S135) - Shahrazi bin Sha'ari

The first announcement showed that Shahrazi bin Sha'ari purchased some 2,057,000 shares of MMM at a price of rm 1.00 and the second announcement showed that Shahrazi bin Sha'ari purchased some 13,393,000 shares of MMM at a price of rm 1.00 also.

Now perhaps that would sound like someone who is making a long term investment into the company.

A few days later or exactly 5 days later, the incredible happened. Shahrazi announced he was longer a shareholder! Notice of Person Ceasing (29C) - Shahrazi bin Sha'ari

Maruchi Malaysia Steel Tube Bhd announced that it was buying a 32.5% stake in MMM.

  • The Board of Directors of Maruichi Malaysia Steel Tube Berhad (“Maruichi” or “the Company”) had at the Board of Directors’ Meeting held on 4 December 2002 agreed for the Company to enter into a Share Sale Agreement (“the Agreement”) with Shahrazi bin Sha’ari (“the Vendor”) in respect of the acquisition by the Company of 32.5 Million ordinary shares of RM1.00 each which is equivalent to 32.5% of the total issued and paid-up capital of Malaysian Merchant Marine Berhad (“MMM”) for a total cash consideration of RM99.9 Million (“the Proposed Acquisition”).

Well that worked to a price per share worth rm 3.07!!!!

Holy cow!

Huhu! Bought at 1.00 and within 5 days, sell it off at rm 3.07?

WOW! A 300% gain!

Good or what! :P

Who said the share market sucks?

But Maruichi shareholders were not happy.

Oh NO!!!!!!!!!!!!!!!!
  • Maruichi aborts MMM deal.
    (From The Star (Malaysia))

    MARUICHI Malaysia Steel Tube Bhd, bowing to tremendous pressure from the authorities and minority shareholders, has aborted its plan to buy a 32.5% stake in Malaysian Merchant Marine Bhd (MMM) from Shahrazi Shaari at RM3.07 per share.

    In a statement to the KLSE, Maruichi said its board, at its meeting yesterday, decided to rescind the share sale and purchase agreement with Shahrazi, who is MMM chief executive officer and managing director.

    In a second statement later, it said that the RM99.9mil that had been paid to Shahrazi - RM35mil on Dec 4, RM64.8mil on Dec 10 and RM100,000 on Dec 11 - would be fully repaid to the … ( source: here ) ( Bursa announcement Share Sale Agreement dated 4th December 2002 pertaining to the Proposed Acquisition of 32.5 million Shares in Malaysian Merchant Marine Berhad ("MMM") )

On 17th December 2002: Changes in Director's Interest (S135) - Shahrazi bin Sha'ari

  • Shahrazi acquired back the 32,500,000 shares via Snap Captal
August 2003.

  • Trenergy to pay RM61 mln cash for MMM stake
    By Thomas Soon, 9.16pm

    Trenergy (Malaysia) Bhd is taking up a 75 per cent stake in the controlling block of 32.5 per cent in Malaysian Merchant Marine Bhd (MMM) for RM61 million cash, valuing the latter at RM2.50 per share.

    Under the deal, Trenergy will subscribe for a 75 per cent stake comprising 61 million new shares in SNAP Capital Sdn Bhd, which holds the 32.5 per cent stake in MMM.

    In a statement on Aug 28, Trenergy said the company and SNAP entered into a conditional subscription of shares agreement on the same day for the proposed subscription.

    MMM managing director Shahrazi Sha'ari and one Tan Sook Yen respectively hold 99.99 per cent and 0.01 per cent stakes in SNAP. Pursuant to this, SNAP will increase its paid-up capital to RM81.25 million from RM20.25 million now.

    This confirms report on the same day that Shahrazi had struck a deal with Trenergy for the latter to acquire a 75 per cent stake in SNAP for RM61 million.

    Trenergy said the acquisition price valued MMM at RM2.50 per share as SNAP's sole investment was its 32.5 per cent comprising 32.5 million shares in MMM.... (see Bursa announcement here ).

So bought at 1.00.. finally sold at 2.50. Nice eh? :D


But amazingly despite the initial attempt to hive off the shares for a 3x gain, Shahrazi Sha'ari, remained as Managing Director and CEO of MMM until May 2006 ( see Change in Boardroom ) and stayed on as a director until November 2006. ( see Change in Boardroom )

And Shahrazi Sha'ari was featured on a Star Business article on Jan 2005.
  • Monday January 24, 2005
    Interest in marine lands Shahrazi into shipping

    SHAHRAZI Sha'ari was only 37 years old when he was offered the arduous task of taking over the management of Malaysian Merchant Marine Bhd (MMM) on his return from his studies and working stint in the United States in 2001.

    His venture into the shipping industry was purely by choice as he was into it for the challenge and keen interest in the marine business.

    “I came back to Malaysia after the Sept 11 terrorists' attack on the US and I was soon offered the management post in MMM.

    “Many people were puzzled by my decision to join the company at that time because of the uncertainties in the world economy and the shipping business was no exception. But I took up the challenge because of my interest in the marine business, I have many friends and contacts in the shipping industry from ship captains, engineers to cooks,” he said.

    Shahrazi graduated with a bachelor of arts from Macalester College In Minnesota. He worked in the US for five years in a senior managerial position with a civil engineering company before his return to Malaysia.

    Looking back, MMM has done very well indeed under his leadership, chalking up an increase in turnover from RM38mil in the financial year ended Aug 31, 2001 to RM120mil last year. The group's after-tax profit was also up from RM8.7mil in the financial year 2001 to RM11mil in the same corresponding period last year.

    Shahrazi said his experience in turning around several companies came in handy. He was previously involved in the restructuring of several companies in the manufacturing, communication, engineering and construction sectors before taking the bold step to go into the shipping industry.

    His various senior positions included executive director of the Wira Security group of companies and chief executive officer of the Pacific Asia Consolidated group of companies.

    Shahrazi came on board MMM and assumed the position of chief executive officer on Aug 8, 2002.

    He was appointed to the board of directors of Trenergy (Malaysia) Bhd as group managing director and chief executive officer on Sept 6, 2004.

    “I will give myself three years to build up Trenergy,” he said. “As a CEO, it is my duty to give direction and have a vision for the company. It is my job to restore certainty to the company.”

    Trenergy became the largest shareholder in MMM via its acquisition of SNAP Capital Sdn Bhd. Trenergy currently holds 100% interest in SNAP Capital, which in turn owns a 28.7% stake in MMM.

    On the steel pipe maker Melewar Industrial Group (MIG) Bhd's decision to purchase a substantial stake in Trenergy via its wholly-owned subsidiary Melewar Steel Services Sdn Bhd, Shahrazi said the latest development would not affect the direction and agenda of the Trenergy group.

    “There will be no change in our direction and agenda. The Trenergy board of directors will remain,” he told StarBiz.

    MIG had acquired 12 million shares representing 16% in Trenergy for RM38.4mil or RM3.20 per share, making it the single largest shareholder in Trenergy.

    MIG said the acquisition would provide an opportunity for the group to venture into the “burgeoning” oil and gas industry and its supporting ancillary and shipping activities at a low entry cost.

    The move was also in line with MIG's board decision to diversify into other industries to broaden MIG's earnings base.

    MIG managing director Tunku Datuk Yaacob Tunku Abdullah said Trenergy was a well-managed, vibrant and profitable oil and gas player with a lot of potential.

    He describes oil and gas as the sunrise industry in Malaysia and MIG will see much growth in this sector in the coming years.

    According to analysts, the purchase by MIG is appropriate as the group's steel products will complement Trenergy's floating, production, storage and offloading operations.
Trenergy since had changed its name to M3Nergy....


ronnie said...

And Malaysian retail and institutional investors are worried about Chinese companies listed on Bursa. LOL.

solomon said...

Moo Moo,

Could write on KianJoo, would it fly into Orbit?

solomon said...

CAn someone determine enough to change the rule and ban the wrongdoers? Peanut fine means nothing to the corporate offenders...don't tell the public so and so is the brother of big guns in certain political party and everyone is so hesitant to act...Brown cow you have not lost your brown skin, but the leopard lose its stripe???

Moolah said...

ronnie: I still cannot forget the incredible stunt that was pulled in November 2002. "Bought at 1.00 and within 5 days, sold it off at rm 3.07!"

Was the stock market so gullible?


Solomon: LOL! LOL! LOL!


Kris said...

Left hand pass money to right hand, leaving minority/retailers holding nothing at all!!!

"Bought at 1.00 and within 5 days, sold it off at rm 3.07!" -> No wonder he was so passionate :P

Moolah said...

kris: he was not too lucky. Shareholders made hell of noise and the deal was rescinded!

solomon: Are you ok? Leopard where got stripes?


Yeah.. so much needs to be done.

Take Kenmark. Sigh!

Take Megan Media. Sigh!!

Gamelion said...

It is no accident that most investors lose money in the stock market. Their losses are an inevitable by-product of their ignorance of how little they know about the invisible world of the Stock Exchange. Like machines dominated by external influences, they are capable only of mechanical action.
Regrettably, the arrangements that exist to preserve the traditions and legalize the frauds of the security industry are inseparable from the general organization of a society controlled by the financial establishment, a society whose laws and principal customs have been contrived to serve the special interests of the financial community. Thus, although the Stock Exchange's most profitable practices clearly compromise the freedoms granted others by the constitution, Exchange Insiders are granted immunity from the legal obligations and penalties that should be imposed on them.