More Shocking Revelations Made About Silver Bird

Things are getting really serious at Silver Bird.

Posted on Star Biz:

• Independent auditors find poor record-keeping, unable to verify sales transactions at Silver Bird
  
  Friday March 2, 2012
  Independent auditors find poor record-keeping, unable to verify sales transactions at Silver Bird
  By FINTAN NG
  
  PETALING JAYA: Poor record-keeping and the inability to verify sales transactions at Silver Bird Group Bhd are the reasons why Crowe Horwath, the independent auditors, has not been able to provide a basis for an audit opinion to the financial report for the financial year ended Oct 31, 2011 (FY11).
  
  “During the course of our audit for FY11, we expressed concerns to the audit committee and the board of directors over the validity and recording of certain transactions for which we were not able to obtain the sufficient and appropriate audit evidence and satisfactory explanations from management,” Crowe Horwath said in the independent auditors' section of the financial report released on Wednesday.
  
  The auditors said they were unable to verify the veracity of payments made amounting to RM7.6mil for the refurbishment of an existing warehouse and factory, as well as not being able to obtain information to verify additions of plant and equipment amounting to RM4.9mil.
  
  Besides that, the auditors were not able to verify transactions undertaken with five customers for the sweetened creamer business with revenue and cost of sales amounting to RM31.9mil and RM31.3mil respectively, while they were not able to verify the veracity of sales transactions undertaken with six customers from the bakery and telecommunications businesses amounting to RM149mil, including RM83.9mil in gross telecommunications sales.
  
  The auditors said the transactions cast a significant doubt on the financial performance and position of the bread and confectionary maker.
  
  They added that the accounting and other records required by the Companies Act 1965 to be kept by the company and its subsidiaries “have not been properly kept in accordance with the provisions of the Act”.
  
  “The audits of the subsidiaries have commenced but have not been completed as at the date of this report.
  
  “As a result of the delay in the completion of the audit of the subsidiaries, we have not been able to consider the financial statements and the audit reports of the subsidiaries,” the auditors said.
  
  Silver Bird issued a number of announcements to Bursa Malaysia on Wednesday, including notification of the suspension of group managing director Datuk Jackson Tan, executive director Ching Siew Cheong and general manager for accounts and finance Lai Poh Mei from Feb 24 to facilitate an internal inquiry into allegations of, among others, irregularities in the accounts.
  
  The board also said in separate announcements that three of the subsidiaries were in default of payment to Bank Islam Malaysia Bhd, Malayan Banking Bhd and CIMB Bank Bhd amounting to RM5.37mil, and that the company had triggered the Practice Note 17 criteria after not being able to provide a solvency declaration.
  
  In response to an inquiry from StarBiz on the solvency declaration, the directors said the company was “working on getting the solvency statement out as soon as possible”.
  
  Meanwhile, Lembaga Tabung Haji (LTH) and Berjaya Corp Bhd, major shareholders of the company, declined to comment while Koperasi Permodalan Felda did not reply to inquiries.
  
  “We'll leave it to the Silver Bird directors to issue any statements,” an LTH official said.
  
  Silver Bird's share price fell 20 sen to 20.5 sen at close when trading resumed yesterday following a request by the company to suspend trading on Monday after its directors said the company was unable to comply with stock exchange requirements to issue the annual audited financial statements within four months from the end of the financial year.

This is about as serious as it can get.

The auditors cannot verify sales transactions, they cannot verify payments made ( so where did the money go???!!!! ) ... and the MD and ED are both suspended (go figure the implications ) .... and then ... there is default of payment!!!!!

More Shocking Developments At China Ouhua ( CNOUHA )

Posted just the other day: China Ouhua Winery Announces Quarterly Losses

Last night, China Ouhua announced a shocker!

• Ouhua COO, director quit after Q4 loss
  
  Published: 2012/03/02
  
  KUALA LUMPUR: China Ouhua Winery Holdings Ltd yesterday announced the resignations of its chief financial officer Zheng Le Le and director Tam Fook Cheong.
  
  This came a few days after the company posted a fourth quarter net loss of almost RM7 million, against a net profit of more than RM7.3 million same quarter a year ago.
  
  The company’s cash balances also fell during the financial year from more than RM300 million in 2010 to RM110 million, while trade receivables increased to RM228 million from a mere RM125 million a year ago.
  
  Zheng said the resignation was due to “some personal reasons”, while Tam resigned due to heavy commitment to consultancy works. Tam was also the chairman of the audit committee prior to his resignation.

What??????

The CFO quits!!!!

The Chairman of the audit committee also quits!!!!

What???? What????? What????

Good grief!!!! How can this be happening????

How on earth could such a company be allowed to be listed in our stock exchange!!!!!

Latest Development On Envair

Got the following set of comments from the posting "Since Listing, Smartag Had Reported Losses Every Quarter!"

• Furex said...
  
  Dear Moola, would you mind to share on your opinion on the latest development on Envair. Thanks

The latest development on Envair?

Well.... if I am not wrong... I think the stock is in play... but whether the current play would see the stock goes higher or lower... I have no idea.

However on the corporate side.. so this ... 'carpetman' .... has announced that he had purchased back shares into Envair.

LOL! Sorry for laughing but isn't this way too comical?

So the said and much publicised plan is to push Envair into an O&G stock.

And that's about it... that's the most educated opinion I can give.

Will the O&G move payoff? Could Envair make big bucks in the future in the O&G sector?

I dunno...

Is it wise to invest based on this factor?

Best opinion I can offer is.... perhaps from a sporting perspective. Enjoy footy? Say, I ... Moolah.... went and purchased a stake in a footy club in the English SECOND division.... and then ... following my purchase (with me being an unknown... one who owns a barnyard business ... and certainly no track record in the footy business) ... boldly announce that my team would be a future success and my team would make it into the English Premier League soon. And that's all I have announced. And I did not disclose any clear plans on the possibility of me injecting money into the team and no clear plans on the coach and the possibility of new players.

Would you bet that my team would be a success? Would you bet on me and my new business?

How?

Now back to Envair...... all I can say for now is..... How?

Deep Woes For Silver Bird

From the EdgeMalaysia.

• Silver Bird’s woes come to light
  Written by Chua Sue-Ann
  Thursday, 01 March 2012 10:43
  
  KUALA LUMPUR: Bread and confectionery maker Silver Bird Group Bhd yesterday confirmed the suspension of three key executives with effect from Feb 24.
  
  They are managing director Datuk Jackson Tan Han Kook, executive director Derek Ching Siew Cheong and general manager of accounts and finance Lai Poh Mei.
  
  Silver Bird said the suspension of the trio was to facilitate an internal probe into allegations of irregularities in the company’s accounts.
  
  The announcement confirms The Edge Financial Daily’s report yesterday that Silver Bird’s board had suspended Tan and two other managers to facilitate the internal investigation.
  
  Silver Bird’s board said it is currently unable to ascertain the extent of the financial and operational impact of the alleged irregularities but estimates the maximum exposure to be approximately RM111.5 million.
  
  Additionally, Silver Bird’s board has lodged a police report in relation to the alleged financial irregularities and reported the matter to the regulatory authorities.
  
  Adding to its woes is the classification of the company as a PN1 and PN17 counter. In a filing with Bursa Malaysia yesterday, Silver Bird said it had triggered the PN17 criteria given that its auditors Crowe Horwath had expressed a disclaimer opinion on the group’s latest audited accounts for its FY11 ended Oct 31.
  
  Furthermore, Silver Bird’s major subsidiaries were in default of banking facilities repayments, with the group currently unable to provide a solvency declaration to Bursa.
  
  The three wholly-owned units in default are baked goods manufacturer Standard Confectionery Sdn Bhd, bakery goods and telecommunications products distributor Stanson Marketing Sdn Bhd and bread maker Stanton Bakeries Sdn Bhd.
  
  The three units were in default of a total of RM5.36 million in bankers acceptance facilities from three lenders, Bank Islam Malaysia Bhd, Malayan Banking Bhd and CIMB Bank Bhd.
  
  The bulk of the amount in default was incurred by Stanson Marketing, which owes RM4.42 million to its lenders.
  
  Ironically, Silver Bird’s substantial shareholders include pilgrim fund Lembaga Tabung Haji with a 22.19% stake, tycoon Tan Sri Vincent Tan Chee Yioun’s Berjaya Corp Bhd (20.53%), Koperasi Permodalan Felda Malaysia Bhd (12.7%) and venture capital fund CVC Ltd (9.07%).
  
  Tan is Silver Bird’s fourth largest shareholder with his 10.84% direct equity interest and has been at the helm of the group for over 10 years.
  
  Silver Bird explained that the issues were brought to the board’s attention when the auditors expressed concerns over the validity and recording of certain transactions.
  
  According to Silver Bird, its auditors had expressed concern on eight main issues including a RM10.6 million contract to refurbish an existing warehouse and factory, payments of RM69 million made to an equipment supplier and the common parties relationships between the group’s customers and suppliers.
  
  Silver Bird added that its auditors also raised issues with the group’s new sweetened creamers trading business segment, the audit trail of all sales transactions and revenue recognition in the telecommunications segment.
  
  Its auditors had also pointed out that the credit period for trade receivables appeared to be unusually high and that the cash collected and payment made were cleared by the banks after more than seven days from the balance sheet date, Silver Bird said.
  
  What’s next for Silver Bird?
  Now that Silver Bird is an affected listed issuer, it will have to submit a regularisation plan to the authorities, failing which its shares and warrants will be suspended from trading and subsequently delisted.
  
  Nevertheless, Silver Bird said it intends to formulate a regularisation plan to address its PN17 status.
  
  On the operations front, Silver Bird’s board had formed a special committee comprising its five non-executive directors to oversee the group’s operations in the interim.
  
  Silver Bird also announced that it had appointed PKF Advisory Sdn Bhd to conduct a forensic review into the company’s affairs.
  
  It also appointed Messrs Wong Kian Kheong as legal advisors and intends to form an inquiry committee to look into the investigation of Silver Bird’s group accounts.
  
  The forensic accountants and inquiry committee have three months from Feb 29 to complete their investigations.
  
  Silver Bird’s cash dwindles
  In a separate announcement yesterday, Silver Bird’s board said that it had reversed its earlier decision to change its financial year end, opting to maintain it at Oct 31.
  
  The group yesterday also issued its annual audited accounts for its FY11 ended Oct 31, 2011 in which its auditors expressed a disclaimer opinion.
  
  In its FY11, Silver Bird’s net profit grew 35.12% to RM4.93 million from RM3.65 million a year ago, while revenue rose 22.13% to RM232.06 million from RM190.01 million.
  
  As at Oct 31, 2011, Silver Bird’s cash and cash equivalents had plunged to RM3.55 million from RM21.32 million.
  
  In its audited annual accounts, Silver Bird’s board warned that there may be bad debts and additional allowances that may need to be made for impairment losses on receivables.
  
  Silver Bird’s shares and warrants will resume trading today after it was suspended from Feb 24 at the group’s request.
  
  Prior to its suspension, Silver Bird’s shares took its steepest plunge in over two months, falling 5.81% to 40.5 sen on Feb 24 from 43 sen a day earlier.
  
  
  This article appeared in The Edge Financial Daily, March 1, 2012.

I had posted on Silver Bird many times before. You can read them here:  Silver Bird

Since Listing, Smartag Had Reported Losses Every Quarter!

Posted several times before:

June 2011: Is Smartag Worth A Bet?
June 2011: Smartag: I Am Wrong Because The Stock Moved Higher?
Aug 2011: A Quick Look At Smartag's Earnings.

Smartag reported its earnings the other day. It reported losses again.

But the lack of sales revenue was most glaring.

Have a look.

Now if you look at the above snapshot, on 13th April 2011, Smartag made two quarterly earnings report. But Smartag made its listing debut on 18th April 2011. Which means those 2 set of earnings was made before Smartag was listed.

Now if I take this into consideration, since listing, Smartag had reported losses for every quarter!!!!

Yup!

Exactly!

Yet another QUALITY-LESS company being listed on our stock exchange.

Sigh!

And Ideal Jacobs Posts Losses

Last year, a few ACE (ACE? Bah! For me, it's still MESS-daq ) stocks were listed and because of their stock performance, they caught the attention for all the wrong reasoning.

One of them was

1. Ideal Jacobs Promising Debut? 
2. Ideal Jacobs - Stinking Up The Whole Market 
3. Yet Another Brilliant Performance From A Newly Listed ACE Stock!

What happened was the stock opened at an incredible premium.

It IPO-ed at 27 sen. Opened at 1.05, reach a high of 1.10... and then.... the stock collapsed and by the next day the stock reached a low of 35.5 sen.  ( Hmm.. what's the precise description for such a stock play? Anyone? )

What irked me was the press had the gall to hail it as a promising debut.

Three months later the company reported quarterly losses! ( see Yet Another Brilliant Performance From A Newly Listed ACE Stock! )

Last night Ideal Jacobs announced its earnings.

It lost money again!

Below is the screen shot of what they have done since listing...

Oh... Ideal Jacobs last traded yesterday at 17 sen!!!

Yup!

Exactly!

Yet another quality listing on Bursa Malaysia!

Comeon... what's the point of listing such quality-less company in the exchange?

Is it to turn the exchange into a bigger casino?

Oh but wait... Bursa is business. It's a listed company. It has to make money!

A Massive Payday Awaits Tanjong Shareholders

There's two rather interesting or revealing passages from the following article on the Edge :Ananda could see RM4b gain from Tanjong buyout

•  ................
  If the touted price tags for the power and gaming assets are true, Ananda would in less than two years managed to sell two of Tanjong’s prized assets for about RM12.85 billion — over RM4 billion or some 46% more money than the RM8.8 billion Tanjong valued using the RM21.80 per share minorities were bought-out for in July 2010.
  
  .............
  
  Secondly, Ananda’s investment cost is a lot less than the RM8.8 billion Tanjong was valued using the takeover price, as parties that offered to privatise Tanjong already had 49.96% of the group in hand .......

I remembered when Tanjong was privatised many hailed the privatisation because the offer was said to be extremely generous. They praised the generous premium over the stock price.

It was a fantastic payday.

Yeah... but ... have they even wondered if it was even a fair price?

Anyway.... now... apparently someone's going to have a even more fantastic payday!

Yeah... privatisation.... it's such a wonderful business.

But for who?

Much Lower Earnings And Much Less Dividends From Maybulk

Maybulk announced its earnings last night.And no, it was not a shocker. Not for me. Do refer to last September's posting (it's a must read) : Maybulk: Does poor corporate governance have a negative impact on a stock?  ( I wonder why some consider Maybulk as an investment grade stock given it's horrific corporate governance! )

Today Maybulk was featured on BTimes: Maybulk confident of staying profitable

• Maybulk confident of staying profitable
  
  By : GOH THEAN EU Published: 2012/02/29
  
  MALAYSIAN Bulk Carriers Bhd (Maybulk) is expected to take advantage of the current depressed freight market by acquiring more vessels this year.
  
  "We are monitoring the situation. We plan to reinvest our profits and to take opportunity of the current depressed freight market.
  
  "If the current situation continues, we expect to see more shipping companies to be in financial distress and maybe face bankruptcy," said chief executive officer Kuok Khoon Kuan briefing yesterday.
  
  He added that the value of vessels were at "rock bottom" and that buyers could "choose and pick" the vessels they want.
  
  Maybulk, which now owns and operates a fleet of 17 vessels, including dry bulk carriers and product tankers, is due to take delivery of three new vessels this year, all of which are under long-term charters.
  
  Currently, the industry is facing lower charter rates due to the oversupply of vessels in the market.
  
  For Maybulk, the average charter rates of its dry bulk carriers were down by 36 per cent to US$16,519 (RM49,781) a day.
  
  "The problem we are facing now is oversupply. There's still growth in the market but there's too much tonnage.
  
  "During such times, too many players will be squeezed and there will be too many bloodbath," said executive chairman Teo Joo Kim.
  
  Nevertheless, Teo believed that the situation will correct itself over time.
  
  Kuok and Teo was speaking to the media and analysts during its full-year financial results briefing.
  
  The company posted a fourth quarter net profit of RM16.81 million, a 75 per cent decline from the same quarter a year ago.
  
  For the full-year, its net profit fell by 61 per cent to RM93.37 million. Full-year revenue declined by about 36 per cent to RM256.31 million.
  
  "Although we reported lower numbers, we are thankful that we managed to stay profitable, especially in such challenging times," Teo said.

Yup, lower dividend and much lower set of earnings.