Explanation On Compugates Heavy Selling By MD

Posted earlier: Compugates: Bursa Queries And MD Selling Massive Stake

Saw an article on the Edge Financial Daily: Compugates MD’s margin facility revision caused heavy selling

• Comugates MD’s margin facility revision caused heavy selling
  Written by Joseph Chin
  Friday, 12 June 2009 10:22
  
  KUALA LUMPUR: The recent heavy selling of Compugates Holdings Bhd shares was due to the revision of margin facilities to its group managing director Goh Kheng Peow since November last year, the company said yesterday.
  
  It said yesterday there were instances when the margin facility for Goh, who is also a substantial shareholder, was either reduced, revised or cancelled while there were “share price cappings”.
  
  In its response to an unusual market activity (UMA) query from Bursa Malaysia Securities Bhd over the heavy volume yesterday, Compugates also disclosed there were several corporate developments. Compugates closed unchanged at 7.5 sen with 67.23 million shares done.
  
  Compugates said there was “share price capping at 3.5 sen on Nov 11 and Dec 12 last year that came into effect on Dec 1, 2008. The broking houses named were AmInvestment Bank Bhd and AmBank (M) Bhd.
  
  On Dec 1, HwangDBS Investment Bank Bhd had revised Goh’s margin facility from RM1 million to RM500,000 effective May 20 this year. On Dec 2, OSK Investment Bank Bhd had reduced his margin facility limit to RM2 million effective Feb 28 this year.
  
  On Dec 11, M&A Securities Sdn Bhd had cancelled his margin account. On April 9, 2009, Mercury Securities Sdn Bhd had revised Goh’s margin facility to RM200,000 effective April 15.
  
  The two latest instances were when TA Securities Holdings Bhd had on May 20 revised the margin facility from RM5 million to RM1.5 million effective the same day and it also had “share price capping” at nine sen.
  
  Compugates also disclosed that it was in preliminary talks to venture into a mixed property development and it was in talks with a third party to sell the Entertainment Village in Dengkil, Sepang.
  
  The company said it was in early discussions to buy 60% of Selama Muda Jaya Sdn Bhd, which owns 281 lots of land in Kuala Kangsar, for RM6 million.
  “The said land will later be developed into a mixed development project to be commenced later,” it said.
  
  It also said it was in preliminary discussion with a third party to franchise the Compugates kiosk. On sand mining, it said the operations would commence shortly pending the authorities’ approval.
  
  Meanwhile, Bursa Securities yesterday also issued an UMA query to SAAG Consolidated (M) Bhd over the high trading volume of its shares. The regulator said there was “persistent high trading interest” in the company’s securities recently.
  
  SAAG, in its response, said the number of shareholders of SAAG as at Dec 31, 2008 was 5,973 and this had increased to 10,980 on May 28.
  
  It added that on May 29 and June 2, it had announced that its unit SAAG (L) Ltd would be issuing the first and second tranche of exchangeable bonds comprising US$5 million (RM17.5 million) nominal value respectively.
  
  “The first quarter results of SAAG was announced on May 29. The SAAG group is continuously looking for business opportunities in the oil and gas industry,” it said. It also said the high volume could be due to the subdivision of the shares of RM1 each into 10 shares of 10 sen each on July 11 last year.
  
  SAAG closed 0.5 sen higher at 37 sen with 88.99 million shares done.

Caveat!

For example.. won't you ask why was Compugates MD's margins being cancelled / capped all over town?