I will reproduce the whole posting here....
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I have always felt uneasy seeing our local listed companies dabbling with their excess money. Sometimes they invest in the share market and sometimes they just invest! And one of the most disturbing issue is that there is ZERO transparency!
Most of the time, the companies do not let their shareholder knows the details of their so-called investment.
For example, we do NOT even know if it were investments in quoted shares and if it was, what shares did they buy, at what price was the investment made and most important, why!
Talk is cheap. Here's an example. Yung Kong Galvanised.
Let's go way back in time. 1999.
Quarterly rpt on consolidated results for the financial period ended 30/9/1999
If you open up the Balance Sheet notes, you find the following:
As you can see the results is not very good at all. Total investments at cost is at 23.600 million and total market value back then in 1999 was 15.660 million. A 'paper' loss of 7.94 million.
Besides that, remember the transparency issue mentioned above? Does the investor or minority shareholder what are these 'investments'?
Giving a lump sump total and the market value as above is simply not cutting it in my opinion.
The investor does not even know what Yung Kong had invested in!
And the below snapshot was taken of its balance sheet then.
Compare its cash versus its short term borrowings of 2.925 million cash versus 29.928 million borrowings. Surely one would question why was Yung Kong making these investments?
If it has the extra cash, isn't it better to pay off its loans?
Don't tell me it's ok to borrow to 'invest'?
Duh!!!!!!!!!!!!!
Ok that was back in 1999. Now it's 2008. Here is the link to Yung Kong's latest quarterly earning.
Quarterly rpt on consolidated results for the financial period ended 30/6/2008
Now Yung Kong still dabbles in the market.
Considering the fact that our market HAD ENJOYED one incredible stock rally recently, surely one would have assumed that Yung Kong would have enjoyed a much better luck with their UNKNOWN investments.
However, it would appears that life is simply unkind to them!
And here comes an even more horror show from Yung Kong!!
Total investments at cost is now at 42.200 million!!!!!!!!!!!!
Looks like they dabbled MORE into more investments.
And look at the end result.
Market value at end of reporting period is only 19.410 million! Which means the company is now carrying a 'paper' loss of 22.79 million!!!!!!!!!!!
So from 1999 to 2008, despite witnessing one incredible bull run, Yung Kong's unknown investment paper loss has increased from 7.94 million to a whopping 22.79 million!
Holy cow!
How?
Firstly, don't you think that Yung Kong should give up its so-called unknown investments?
Secondly, don't you think there should be more transparency here and that it's only right that Yung Kong disclose exact information on their investments?
How now my dearest MooMooCow?
---------------------------------------------------------May 2010..
Yung Kong announced its earnings yesterday. Here's the section I wanted to see.
Yung Kong doesn't even bother to write more on it. And if one did not stop and ponder for a moment, would they realise that this means that this investment, which started since 1998, is currently sitting on some 18.685 million worth of losses.
More than a decade.
More than 10 years.
And this investments justs sits there.
I know, Auntie Yee says that 'not sold, so it's only paper losses'.
But hey, Auntie Yee, we don't even know what these investments represents!
What if Yung Kong decides to recognise the losses one fine day? How then? Say if it was today, this would mean that Yung Kong have to take a whopping 18.685 million in losses!!!
But since it just sits there and no one else complain... why should Yung Kong even bother?
Yeah... good or what????
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