85.7 Million Account Irregularity Confirmed In Xian Leng

Let's see.

On 5 Oct 2011 it was published that Special Audit To Be Carried Out On Xian Leng!

Xian Leng announced that there might be some financial irregularities involving some RM17.36 million in capital expenditure.

Then on 11 Jan 2012, Xian Leng announced its quarterly earnings and I posted Xian Leng's 52 Million Ringgit Loss Provision!!!

Two things were highlighted:

1. RM11.39 million impairment loss was provided for a subsidiary involved in the breeding of other tropical fish, such as guppy, platy fish and cat fish
2. RM52.11 million of impairment loss was provided for in respect of the value of fish ponds incurred by another subsidiary involved in the breeding of Arowana fishes.

A 11.39 million for the breeding of tropical fish such as guppy, platy fish and cat fish?????"

Yesterday, on the Edge Malaysia: Xian Leng MD resigns over accounting issue

• Xian Leng MD resigns over accounting issue
  Written by Kamarul Azhar
  Wednesday, 04 April 2012 14:25
  
  PETALING JAYA: Ng Huan Tong, managing director of ornamental fish breeder Xian Leng Holdings Bhd, resigned yesterday amid accounting irregularities in the group’s books that could reach RM90.7 million.
  According to Xian Leng’s filing with Bursa Malaysia yesterday, Ng, the group’s majority shareholder, has resigned from the top post as the audit investigation of the group’s capital expenditure is in the final stages.
  
  “Coupled with the deteriorating financial results of the group for the past few years, I believe it would be prudent for me to relinquish my position as the managing director of Xian Leng voluntarily of my own accord,” said Ng.
  
  He has also resigned from Xian Leng’s remuneration committee and as chairman of the group’s employees share option scheme (Esos).
  
  Ng and his wife Lim Wan Hong hold 46.5% of Xian Leng’s paid-up capital. It is believed that Ng and Lim hold more than 51% of Xian Leng via friendly parties.
  Replacing him in both positions is Kuan Kai Seng, a 38-year-old chartered accountant, who gained experience in carrying out statutory audits on private and public limited companies when he was with Ernst & Young between 1999 and 2002.
  
  According to an observer, the group’s board of directors has been trying to oust Ng as the MD since the accounting issue was discovered, but failed due to his majority ownership of Xian Leng.
  
  The Edge weekly reported last weekend that a draft report by PricewaterhouseCoopers Advisory Services Sdn Bhd (PwCAS) alleged that Xian Leng cannot account for the RM90.7 million in capital expenditure to build various fish farms between FY05 and FY08.
  
  It was reported that Xian Leng’s board of directors are aware of the “missing” sum, but it did not give consent for the expenditure.
  
  Xian Leng has provided for the amount in its accounts, which contributed to losses of RM56.23 million in FY12 ended Jan 31, on RM14.94 million in revenue.
  
  Four contractors were allegedly awarded jobs without tenders or competitive bids, and three out of the four were not registered businesses when they issued invoices to Xian Leng, The Edge reported.
  
  The draft also revealed that all four contractors were sole proprietors and secured RM85.9 million worth of jobs out of the RM90.7 million unaccounted for capex. The rest of the amount was shared among 52 other contractors.
  
  On March 30, Xian Leng announced to Bursa Malaysia that the expected completion of a special audit by PwC had been delayed to end-April from end-March this year.
  
  In October 2011, the group announced that “there are possibly some financial irregularities pertaining to capital expenditure of RM17.36 million as stated in the company’s financial statements, the nature and extent of which cannot be accurately determined at this juncture”.
  
  In February, Datuk Chin Seak Huat emerged as a substantial shareholder with 3.65 million shares or 5.05% equity interest. He has since increased his shareholding to 5.36% or 3.87 million shares.

Well the Edge Malaysia just published another article on Xian Leng: PwC : Irregularities in Xian Leng’s accounts

• PwC : Irregularities in Xian Leng’s accounts
  Written by Chong Jin Hun of theedgemalaysia.com
  Thursday, 05 April 2012 18:46
  
  KUALA LUMPUR (April 5) : The special audit on XIAN LENG HOLDINGS BHD [] revealed financial irregularities in its fish farm development capital expenditure amounting to RM90.7 million of which a total of RM85.7 million was disbursed under "questionable circumstances".
  
  In a statement to the exchange on Thursday, Xian Leng which undertakes commercial breeding of ornamental fish, said the auditor PricewaterhouseCoopers Advisory Services Sdn Bhd (PwC), had disclosed that there was lack of evidence that the RM85.7 million portion was paid to four contractors, as indicated in Xian Leng's records during financial years 2005 to 2008.
  
  According to the audit findings, the cheque payments were authorised by on Xian Leng managing director Ng Huan Tong, while signatories to the cheques were two former board members: Chua Chong Seng and Lim Wan Hong.
  
  Lim is the spouse of Ng, who had voluntarily resigned from his position last Tuesday as PwC finalised its investigation. Xian Leng said its board is deliberating on the next course of action, which may include lodging a police report.

WOW!

Say It Isn't So That Astro Wants Relisting Again!!

Got the following comments:

• Heineken Pilsener said...
  
  moola, i think you might be interested in this. http://www.btimes.com.my/Current_News/BTIMES/articles/20120329130041/Article/index_html
  
  my first impression? WTF.

HP: This is why I hold Bursa Malaysia responsible for all these shenanigans.

As mentioned many times before, Bursa Malaysia should never had been allowed to be a listed entity. As a business entity, it needs and wants more business. So when a business is seeking listing (even though it's a relisting exercise), Bursa as business seeking profits, Bursa would always welcome any relisting.

So, as some have argued, business lists to make profit. They take it private because it's a profitable exercise. And they would also relist because it's also profitable.

And what does turn Bursa into? An ATM machine? A Stock Exchange with a revolving door where companies can come and go as they wish? Such mockery!!

I think Bursa needs to be tough. Real tough.

Companies can always delist. It's their rights to do so.

But.....  BUT .... BUT ..... BUT .....  as a governing body Bursa needs to stand up and have the guts to make it much tougher for these businesses to relist again. Let them delist anytime they want. But when they want to relist, impose a time frame for companies seeking relisting. For example, you can only relist after 8 years after you delist. And/Or you can only relist but at a much lower valuation than the privatisation offer. ( For example, you do not want to see (again) company delisting at say a PE of 6 times and then only to seek relisting at a PE of 12 times! You seriously do not want such incidents to happen!)

However sadly, this now would not happen.

Business is business. Bursa is a business. It wants more profits. More listing means more profits. That's the simple and sad equation.

And if Astro wants relisting, sadly I think, Bursa would allow their relisting.

But what can we, the investing public, do? Should we be a gullible investor and minority shareholder and allow these companies to make a mockery of our money? Well, I think we can do something about it.

We need to be strong and we need to stand up to these companies.

Just tell them "NO".

Simple as that.

Don't buy their shares.

Forgo all those IPO seduction.

Have the guts to say NO.

There are so many other companies we can invest in. So one less IPO won't hurt us right?

3 Months After Its Airport Tax War, AirAsia Decides To Increase Their Fuel Surchages!!!

It was just recently AirAsia staged a war against Malaysia Airports fighting for the 'consumers' against the airport tax proposal.

One of my post was Featured Article: Why AirAsia Fighting The Airport Tax. In that posting I highlighted an article from Star Biz, AirAsia and Malaysia Airports urged to bury the hatchet and move on.

One statement reflected how strongly AirAsia reacted against the proposed airport tax.

• “To all Malaysians. AirAsia has made flying affordable for all. Before, it was just for the rich. We won't allow Malaysia Airports to keep wasting money and increase charges for you. We will fight. Our campaign starts tomorrow.''

"AirAsia has made flying affordable for all...... We won't allow Malaysia Airports to keep wasting money and increase charges for you. We will fight."

That was the bold statement made on 2nd Dec 2011.

They, AirAsia said they want to make flying affordable. They don't want 'increase charges' for the air travellers consumers.

So they, AirAsia fought and staged their war against the airport tax issue.

Well it's getting really ironic today.

Think about it first.

It was only in May 2011, AirAsia implemented fuel surcharges (ahem! )

Here's the link to the statement made on their website: AirAsia to introduce fuel surcharge on 3 May

Ahem!

Think about it.

They implemented the fuel surcharge on 3 May 2011. They said they will remain committed to being a low-cost model and they will do their best to offset the price hike to their customers.

Would I be wrong to say that this is perhaps one of the reason they staged their war against the airport tax issue. Think about it. They wanted to be a low-cost model. With Malaysia Airports increasing the airport tax, that would surely affect the pricing, yes? Hope my reasoning is not wrong.

But anyway, that's the past.

It's now only March 2012. About 3 months after the airport tax war.

Yesterday, 28 March 2012, RHB wrote an article saying AirAsia would increase their fuel surcharge by 30-50%!!

Yes, by 30-50%!!!!!!!!!!!!!!!!!!!

Whatever happened to their 'committment' to keep their prices low?

Here's the snippet of the research report.

Note: Yeah, due to this fuel surcharge, RHB reckons that this fuel surcharge hike will boost AirAsia profits by 8-11%!

YES!!!!!

RHB Research reckons AirAsia profits will increase!!!!!!

What the .......................

And here's table 2 which highlights the fuel surcharge increase.

What the .................................

Domestic flights will be increased by rm10 to rm 15??????

A 50% price increase?????

And there's no fuel surcharge for domestic flights in Thailand and Indonesia???????

What the ..............................

How can it be??????

Why no fuel surcharge in Thailand? Is it influenced by any way by the proposed listing of AirAsia Thailand????

What's happening here????

And Here Comes The Big Payday For Ananda

End of last month, I highlighted A Massive Payday Awaits Tanjong Shareholders.

I highlighted the following bit.

• ................
  
  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 .......
  

On the Sun: Ananda’s big pay day

• Ananda’s big pay day
  Posted on 7 March 2012 - 09:20pm
  Last updated on 8 March 2012 - 12:31am
  IZWAN IDRIS
  
  KUALA LUMPUR (March 8, 2012): In 2010, the country's second-richest man Ananda Krishnan took Tanjong plc private, valuing the company at RM8.8 billion. Barely two years down the road, he has made a massive gain by breaking up the company and selling it in chunks.
  
  In a statement yesterday, 1Malaysia Development Bhd said it had agreed to pay RM8.5 billion for Tanjong Energy Holdings Sdn Bhd.
  
  Ananda had already sold the group's gaming business under Pan Malaysian Pools Sdn Bhd for RM2.1 billion in August last year.
  
  These transactions valued Tanjong plc's former assets at RM10.6 billion, and netted Ananda at least RM1.8 billion.
  The reclusive tycoon built up his fortune through interests in hugely lucrative ventures ranging from power generation and gaming to exclusive satellite-TV operations, mobile communication, and a fleet of support vessels in the oil and gas industry.
  
  His stable of listed companies on Bursa Malaysia includes Maxis Bhd and Bumi Armada Bhd.
  
  Maxis was taken private, hived off its overseas operations and put back into the market as a Malaysia-only operation. Bumi Armada, too, was delisted and brought back to the market a different animal.
  
  The latest sale will probably mark Ananda's exit from the power business.
  
  Tanjong Energy has operations in six countries — Malaysia, Egypt, Bangladesh, Pakistan, Sri Lanka and the United Arab Emirates. It also has a water desalination capacity of 16 million imperial gallons per day.
  
  Information on its website revealed it owns and operates eight power plants and has investment in five others. Total net power generating capacity stood at 3,951MW, with three of these plants in Malacca having a capacity to produce 1,490MW.
  
  Ananda is one of the so-called first-generation independent power producers (IPPs), and had benefited tremendously from what was widely seen as a lopsided power purchase agreement that favours the generators.
  
  Petronas on Tuesday said total subsidies, or forgone revenues, to IPPs had reached a staggering RM6.7 billion in 2011. Since 1997, total subsidies to the IPPs amounted RM62.4 billion.
  
  It is unclear why the 74-year-old tycoon is selling some of his prized assets.
  
  "Energy is one of the core focus areas for 1MDB, and Tanjong Energy is a prized acquisition,'' 1MDB CEO Shahrol Halmi said in a statement yesterday.
  
  "We are attracted to the strong operating track record of Tanjong Energy, its well-diversified portfolio of quality assets, its strong in-house capabilities and the potential for new growth both here and abroad," he added.
  
  Goldman Sachs (Malaysia) Sdn Bhd is the financial adviser to 1MDB for this transaction. The acquisition, 1MDB said, was subject to financing and regulatory approvals.
  
  The announcement came following a definitive agreement signed between the two parties last Friday.
  
  Shahrol said 1MDB aimed to further enhance the capacity of Tanjong Energy as a leading emerging market independent power producer.
  
  "Given its unique private-public sector dynamics, 1MDB and Tanjong Energy are in a strong position to create new synergies, establish global strategic partnerships and promote innovations in green and sustainable technologies," he said.
  

Congratulations all minority shareholders who generously sold out all their shares during Tanjong privatisation. Without the shareholders selling out, this big payday might not happen! Bravo!

I wonder how these minority shareholders are feeling today. They sold their shares out because a said 'nice premium' was offered. So they sold out. But do they even know the true value of what they had sold? Would I be wrong to say that this is a perfect case of penny wise, pound foolish?

No wonder some say, the stock market is the best place to make money!

ps: I do like today's sun article a lot for stating what had happened in Maxis and Bumi Armada. Let me add in my version. Maxis was delisted at a cheap price and when it was relisted, it was relisted, Maxis only has its Malaysian operations. Gone was the massive investment made by Maxis in India. Bumi Armada? Bumi Armada was delisted in an obscene cheap valuation.

Looking Back At Silver Bird

I do have many old articles on Silver Bird and because of the time issue, some of the links are broken.

But where do I start. Let's start 1st March 2012. I posted: Deep Woes For Silver Bird

• 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.

I do remember that name Stanson.

Now this is a good starting point, which is 21st April 2003.

Posted on Bursa Malaysia website: Silver Bird Group Berhad ("SBGB" or "the Company") · Proposed bonus issue of up to RM21,585,500 comprising up to 43,171,000 new ordinary shares of RM0.50 each to be credited as fully paid-up on the basis of one (1) new ordinary share for every two (2) existing ordinary shares held in SBGB ("Proposed Bonus Issue"); · Proposed acquisition of the entire issued and paid-up ordinary share capital of Stanson Group Sdn Bhd ("SG") comprising 10,080,000 ordinary shares of RM1.00 each and 1,920,000 ‘A’ ordinary shares of RM1.00 each for a total consideration of RM54,000,000 ("Proposed Acquisition"); and · Proposed transfer of the listing of and quotation for the entire enlarged issued and paid-up share capital of SBGB after the Proposed Bonus Issue and if approved, the Proposed Acquisition from the Second Board to the Main Board of the Kuala Lumpur Stock Exchange ("KLSE") ("Proposed Transfer"). (Hereinafter collectively known as the "Proposals")

That was when Silver Bird BOLDLY announced that it wants to buy Stanson Group. Yeah, boldly. It was a 54 million transaction. The sticky (or shall i call it 'sicky') issue was.... the profitability of Stanson.

Here's a screen shot from the word file attached to the above announcement.

How would you interpret the financial track record of Stanson?

Me? Sceptical. My reasoning? Stanson only showed profit the very same year Silver Bird announced it wants to buy! For me, where is the justification????

And if you scroll down to section 9.0 of the word file, you would note that this is a RELATED PARTY TRANSACTION!

Yeah man. A RPT Transaction worth 54 million!!!!

That sum was later revised lower to rm46.6 million. Yeah, sadly, somehow Silver Bird's purchase of Stanson Group was approved. Mentioned on an article on Star Biz: (link broken)

• Thursday January 15, 2004
  
  2004 looks promising for Silver Bird
  
  SILVER Bird Group Bhd looks set for an eventful 2004.
  
  The company expects its proposed one-for-two bonus issue and the subsequent transfer of its listing on the MSEB second board to the main board to be completed in the next 30 days or so.
  
  Its proposed acquisition of bread maker Stanson Group Sdn Bhd should also be completed by the first or second quarter this year.
  
  In addition, its new bakery plant in Shah Alam would soon boost its installed capacity by three-fold.
  
  Yesterday, at Silver Bird's EGM in Kuala Lumpur, shareholders approved the proposed bonus issue. Minority shareholders also voted unanimously to acquire Stanson Group for RM46.6mil, to be satisfied by the issuance of a combination of Silver Bird shares and loan stocks.
  
  Silver Bird group managing director Datuk Jackson Tan and parties related to him, being the vendors of Stanson Group, abstained from voting on the Stanson proposal.
  
  Speaking to the media later, Tan said the new bakery plant, which he described as the biggest in South-East Asia, would allow the company to churn out new products faster than its competitors.
  
  It would also put Silver Bird in an enviable position to take advantage of trade liberalisation under the Asean Free Trade Area and to penetrate regional markets with its range of products, he added.
  
  The company's growth locally looked promising, he said.
  
  Instead of relying on stockists, Silver Bird had its own fleet of vehicles and salesmen who go around ensuring that its products were well stocked at more than 5,000 distribution points, he said.
  
  Over the next two years, the distribution points would be doubled, said Tan, who expects Silver Bird's sales to grow faster than the industry average of some 10% annually.
  
  He declined to be more specific, but said the new bakery plant and a planned advertising campaign of a few million ringgit would make for “exciting sales growth” this year.
  
  For its fiscal year ended Oct 31, 2003, Silver Bird posted a net profit of RM10mil on a turnover of about RM51mil, compared with RM9.2mil and RM45mil, respectively the prior year.

Then came March 2004.

Yet another mind blowing corporate exercise for me.

On Star Biz: (link broken)

• Thursday March 4, 2004
  Silver Bird’s RM100mil bakery to spearhead expansion plans
  BY DANNY YAP
  
  SILVER Bird Group Bhd, which is installing the single largest stand-alone bakery in Asean costing RM100mil, is confident it can double its net profit for the fiscal year ending Oct 31 to RM20mil, from RM10mil last year.
  
  “The plant will not only help Silver Bird lead the industry in Malaysia but also allow the company to expand its business offshore when the time is right,” group managing director Datuk Jackson Tan told reporters in Kuala Lumpur yesterday after the company’s transfer to the MSEB main board.
  
  The state-of-the-art plant, purchased from US-based AMF Bakery Systems, would also provide the leverage for the company to become a leading bread producer, he said.
  
  “Our first production line was completed ahead of time and the facility is already rolling out our High 5 bread,” Tan said, adding that the second line should be operational in a couple of months. .
  
  Silver Bird has about 30% market share of the local bread business and produces 11 products under the High 5 brand. They are distributed through its 7,000 outlets, which the company expects to expand to over 10,000 by next year..
  
  Silver Bird's recent acquisition of Stanson Group Sdn Bhd would enhance earnings besides widening its product range and distribution network.
  
  Tan said the local bakery industry was worth more than RM1bil a year, and growing in excess of 12% per annum.
  He said the transfer of the company to the main board will enhance business reputation; promote greater customer, supplier and employee confidence; and attract financiers and investors.
  
  “It will also enable us to compete with other major brands and, ultimately, improve our market position and market share,” he said.
  
  At the start of trading yesterday, shares of Silver Bird put on 3 sen to RM1.23 with 50,000 shares changing hands. The counter closed the day at RM1.15 on total volume 1,074,000 shares.

100 million for a bread factory????

100 million???

I like one comment posted on this blog the other day. "Lot's of dough for a bread factory!"

Tell me.... are you impressed?

 And then came Nilai Sept 2006. SIlver Bird's Nilai plant was forced to closed for a couple of weeks when it was alleged that the plant was unhygienic.

The following was posted by Star Biz on 16 Sep 2006: Silver Bird plans to fly past storm

And come Dec 2006: Quarterly rpt on consolidated results for the financial period ended 31/10/2006

Silver Bird posts 51.1 million in losses for that quarter!

Their excuse?

• Silver Bird says Q4 loss due to provisions
  
  December 27 2006
  
  SILVER Bird Group Bhd, a bakery firm, plunged into a fourth quarter net loss due to provisions or money set aside to cover potential losses from its cake and frozen products business.
  
  Its fourth quarter loss for the period to October 31 2006, dragged the full-year numbers into the red as well.
  
  “For the financial year ending 2007, given a challenging environment, the group is focused on regaining market share based on an aggressive promotion and expansion campaign,” it said in a statement to Bursa Malaysia.
  
  The company also planned to reduce costs further.
  
  Silver Bird fell into a net loss of RM51 million in the fourth quarter as against a net profit of RM7 million in the same period a year ago.
  
  Quarterly revenue rose 11 per cent to RM150.1 million.
  
  For the full year, Silver Bird made a net loss of RM48.2 million compared with a net profit of RM22.2 million in 2005.
  
  It blamed the fourth quarter losses on a RM28 million impairment loss and a RM7.8 million write off. The impairment losses were from its cake and frozen products business.
  
  “Our sales in cake and frozen products have declined significantly and the trend is foreseeable not to reverse in the near future,” it said.
  
  The directors decided on the provision “as the budgeted net cashflow or operating profits from the cake and frozen products, which were significantly lower than expected.” As for the write off, the amount was due to the assets of its discontinued bakery café business.

Hmmm.... remember Stanson Group? Still remember Silver Bird's purchase of Stanson Group at 46.6 million????

And Here Comes The Forced Selling At Silver Bird

When it rains it pours....

Announced tonight...

Silver Bird: Where Is The Moola??

So we know the 'problem' in Silver Bird is dead serious.

The company has suspended the managing director Datuk Jackson Tan Han Kook, executive director Derek Ching Siew Cheong and general manager of accounts and finance Lai Poh Mei. To make it more serious, Jackson Tan Han Kook owns is a major shareholder as he owns some 44 million shares in the company.

The auditors had made a huge statement by claiming many discrepancies and financial irregularities in the company's accounts. ( See announcement made on Bursa: OTHERS )

And to top if all, Silver Bird has defaulted some 5.368 million of banking facilities repayment. ( see Microsoft Word - Appendix A for PN1 Announcement.pdf )

Now this is where it was puzzling for some.

The following link is Silver Bird's last quarterly announcement made on Dec 2011: Quarterly rpt on consolidated results for the financial period ended 31/10/2011

Open the pdf file attached. : SBGB_Q4 2011.pdf

Page 2, under Silver Bird's current assets, it states

Fixed deposits with licensed banks: 3.704 million
Cash and bank balances: 34.699 million.

( note: the previous year Silver Bird had much more moeny! )

So much money and yet Silver Bird has now defaulted in banking loans repayment of 5.368 million?

What is happening here?

Well, for starters, that link and the pdf represents Silver Bird's un-audited accounts. And we all know that Crowe Horwath has now stated that there's so many financial irregularities. ( Financial irregularities? Isn't that a nice way too say it? )

Do see the audited accounts:  Annual Audited Accounts - 31 October 2011. And if you open the pdf file, Crowe Horwath is saying that the cash balances should be much less!

Which begs the question, where is the Moola???

Did some hungry and angry bird wallop all the moola??

Did the moola went to moola heaven?

With Silver Bird defaulting in its payment, one really wonders how much REAL money is there in Silver Bird's accounts.

See the mess? With such a mess, it's understandable why the MD is suspended. Was it poor management? Or is there something worse? I dunno.

Which begs us to ask about the other financial discrepancies addressed by the auditors. What is real and what isn't?

And finally, this leaves one with Silver Bird's total borrowings of 147 million!!!!

Where and how is Silver Bird gonna fix this massive problem?

And Lembaga Tabung Haji, which is a major shareholder ( you can note that LTH had been a frequent seller of Silver Bird's shares last year), is left with a huge fine mess. Frankly, I have no idea why LTH wanted to be a shareholder in the first place. Why? Was there real justifications to invest in this company? Me thinks? I think they being caught with their pants down on a lousy investment gotten much, much, much worst!

And According To Sources ....

Yeah, our financial news can be really incredible at times. Many a times, a story will be spun by our financial news wizard reporters. The way they write, the way they spin the story around and around, they can really make any given stock sounds soooooo sexy.

Let me highlight one OLD sexy told back in 2007.

Here's the article in full.

• Saturday May 19, 2007
  DiGi and Green Packet may join forces
  By JOSE BARROCK
  
  RELENTLESS best describes the speculative hype over DiGi.Com Bhd's rumoured tie-up with Time dotCom Bhd. Yet, both companies have consistently denied such a possibility when queried by Bursa Malaysia.
  
  It appears now that there may be another tie-up being thrashed out by DiGi, but only this time it involves Mesdaq favourite Green Packet Bhd. A source says DiGi is in talks to take over Green Packet in an exercise that may involve share swaps. The planned merger will result in existing Green Packet shareholders owning an interest in an enlarged entity instead.
  
  It is understood that talks are ongoing and the issue of pricing is being thrashed out. As at end-March this year, Green Packet's net asset per share stood at some 96 sen. The counter finished on Thursday at RM4.20 while DiGi ended the same day at RM20.40.
  
  Green Packet has proposed a transfer to the main board of Bursa Malaysia upon the completion of a proposed bonus issue and share consolidation, which got the nod from shareholders at its recent EGM.
  
  An analyst from a local brokerage says, “For tech companies such as Green Packet, the net asset per share is of little significance as the share price actually reflects the potential in the company's business. So the valuation will have to be based on that premise.”
  
  “There were talks between DiGi and Time dotCom, but that was a cash deal. This one (DiGi and Green Packet) may involve a share swap which DiGi may more inclined towards,” says the source.
  
  Company officials have stated that DiGi is looking to spend in the region of RM900mil this year to upgrade its network.
  
  The impetus for DiGi to stage such a corporate manoeuvre is quite clear, in fact it has been chronicled umpteen times and yet the company has remained resilient throughout. To recap, it was not awarded a 3G license and was unable to secure a WiMax license, which would have enabled it to roll out broadband initiatives. Yet, the need to move into broadband is compelling for the telco as it continues to drive its business and expand its revenue stream.
  
  On the other hand, Green Packet was one of the lucky four who clinched a WiMax licence earlier this year. The company via its unit Packet One International Sdn Bhd bought 55% equity in MIB Comm Sdn Bhd (a company awarded a WiMax licence recently) late last year for about RM6mil. With that, Green Packet's appeal to DiGi is easy to appreciate; it is eyeing the WiMax licence.
  
  DiGi’s chief executive officer Morten Lundal dropped some vague hints recently at the company’s annual general meeting: “We are not against any acquisitions, but we are not on an acquisition hunt either. We’re looking at a long-term situation and we would like to have a broadband platform. We’ll seek spectrums and we’ll look at partnerships. When it arrives in a positive way for us, we’ll go further.”
  
  Green Packet, presently the largest company by market capitalisation on the Mesdaq market, has already laid the groundwork to roll out its WiMax initiative, SONmetro solutions, which is both WiMax and Wi-Fi compatible, by year-end.
  
  The company has a presence in China, the Middle East and North Africa among others and has an associate stake in GMO Ltd a company listed on the London Stock Exchange’s Alternative Investment Market. For its first financial quarter ended March this year, Green Packet posted a net profit of RM10mil on the back of RM31.4mil in sales, which is a gain of about 26% and 173% respectively from a year ago.
  
  The company’s chief executive officer Puan Chan Cheong is the company's main driving force.

Since article is back in 2007, the Star Biz link is broken but the article can still be viewed at http://www.mobile88.com/news/read.asp?file=/2007/5/19/20070518222114

Here's my inteprtation of the article...

• Saturday May 19, 2007
  DiGi and Green Packet may join forces
  By JOSE BARROCK

Try to remember the wizard who wrote the article...

• RELENTLESS best describes the speculative hype over DiGi.Com Bhd's rumoured tie-up with Time dotCom Bhd. Yet, both companies have consistently denied such a possibility when queried by Bursa Malaysia.

So at first, the market speculation was the tie-up between Digi and Time dotCom. But both companies had strongly ruled out such possibility.

So what's next?

Worry not. There's still a story to be spun....

Here comes Green Packet. Notice how this particular wizard, Jose Barrock, spins the story.

• It appears now that there may be another tie-up being thrashed out by DiGi, but only this time it involves Mesdaq favourite Green Packet Bhd. A source says DiGi is in talks to take over Green Packet in an exercise that may involve share swaps. The planned merger will result in existing Green Packet shareholders owning an interest in an enlarged entity instead

It appears, may, according to a source.

Sounds familiar? Where have you hear such words before?

Compare it to financial articles written nowadays. Any different?

• It is understood that talks are ongoing and the issue of pricing is being thrashed out. As at end-March this year, Green Packet's net asset per share stood at some 96 sen. The counter finished on Thursday at RM4.20 while DiGi ended the same day at RM20.40. 

It is understood.

• “There were talks between DiGi and Time dotCom, but that was a cash deal. This one (DiGi and Green Packet) may involve a share swap which DiGi may more inclined towards,” says the source. 

So says the source.

Of course it's now 2012.

Look at DiGi and then look at Green Packet now.

How?

Don't you admire our financial wizard reporters who can spin out endless stories based on unknown sources?
Oh yeah... big wheels keep on spinning.....