It's about Accountability

My Dearest Moo Moo Cow,

I am well aware of the your blog posting; Trading Idea: KHSB

• Saturday April 21, 2007
  
  Syabas shake-up in the pipeline?
  
  By JOSE BARROCK
  
  THE possibility of a shake-up is looming over the water supply landscape of Selangor, Kuala Lumpur and Putrajaya, sources familiar with the matter tell BizWeek.
  
  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.
  
  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.
  
  KPSB has a 57% shareholding in Kumpulan Hartanah Selangor Bhd (KHSB), another main board company with several property development projects and a few hotels and golf clubs under its belt. Industry sources say KHSB may be involved in the Syabas deal by providing the consideration for the acquisition.
  
  KPSB shares have been actively traded lately, and closed last Thursday at RM1.34. The day before, the share price went up to RM1.54, the highest in about three years, before closing at RM1.42.

All about Accountability, said the source?

Goodness me, where is the accountability here?

How many times have we seen the companies involved deny articles written based on sources?

And where is the accountability in this news article?

• 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.

First, the above statements are facts however they are simply lacking in the exact detail. See KPS latest earnings report here, Quarterly rpt on consolidated results for the financial period ended 31/12/2006, and also see excel file of KPS latest earnings here.

1. KPS reported a loss for the quarter. Why isn't it NOT mentioned? Why only highlight the nicer part where KPS made profit for the full fiscal year?
2. Reporter starts to talk about deposits. Fine. That figure is indeed accurate but what the interest bearing loans which totals some 1.378 BILLION??? ( you can get the figure here ) And again the issue is simple, why highlight the cash and discount the borrowings??

Based on the 2 points above, is there intent to highlight only the good stuff and discount the bad?

Where is the accountability in such a financial article?

How my dearest Moo Moo Cow?