Wednesday, November 30, 2011

Featured Posting: REITS: Where Is The Moolah?

Read the following posting on The Reit myth busted

It's an incredibly good posting, one that deserves to be featured.

Let me reproduce the entire posting:

Very interesting article in The Business Times (Singapore) about REIT's. The rules of the MAS (Monetary Authority Singapore) do not align the interests of REIT managers and their shareholders. Shareholders like steady, large dividends. But REIT managers are paid for the amount of assets under management. So after paying out juicy dividends, they like to recoup the lost assets with rights issues, to which the shareholders have to subscribe if they don't want to get diluted (at a cheap price). Instead of receiving money in the form of dividends shareholders are actually transferring more money out in the form of rights issues.

I hope things are better in Malaysia, haven't really followed the REIT's very much. In general, this is also a very good warning against companies who often are involved in rights issues.

  • Published November 26, 2011
    "Show me the money"

    The Reit myth busted
    Whatever Reits pay out in dividends, they will take back a few years later in the form of rights issuesBy TEH HOOI LING, SENIOR CORRESPONDENT

    THE high yields of real estate investment trusts (Reits) are tempting. And indeed, they have been touted as a relatively safe and stable instrument to own if one is looking for a steady stream of income. As such, many investors see Reits as a good asset class to have in one's retirement accounts.

    But you know what? That Reits are good income-yielding instruments is but a myth. The thing is, whatever they pay out in dividends, they will take back - all and more - a few years later in the form of rights issues.

    Here's what I found. Of the 17 Reits which have a listing history of at least four years on the Singapore Exchange, only three have not had any cash calls or secondary equity raising. The remaining 13 have had cash calls, and many had raised cash multiple times. One had a few rounds of private placement of new units which diluted the stake of existing unitholders somewhat.
    For many of these Reits, the cash called back far exceeded the cash received. So, the myth of Reits as almost comparable to a fixed income instrument is really busted.
    Take CapitaMall Trust (CMT) which was listed in July 2002. Assuming that Ms Retiree bought one lot or 1,000 units at the initial public offering (IPO) for a total sum of $960. For the whole of 2003, she received $57 in dividends. However in that year, CMT also had a one-for-10 rights issue. To subscribe for her entitlement, Ms Retiree would have to cough out $107.

    In 2004, she would received $89 for the total number of CMT units she owned. That year, CMT had another rights issue, also one-for-10. The exercise price was higher at $1.62. To subscribe, Ms Retiree would have to fork out $178.

    In 2005, CMT again had another fund raising exercise via rights issue. Ms R would pocket $124 in dividends but in that same year, had to return $282 back to the Reit.

    In the next three years - 2006 to 2008 - Ms Retiree felt rich and happy. She merrily banked in her quarterly distributions which amounted to $404 for her holdings of CMT. Her one lot, after three rights issues, had grown to 1,331 units.

    In the following year, another $175 was distributed. But CMT wasn't going to let Ms R be happy for long. It launched a big one - a 9-for10 rights issue. To fully subscribe for her entitlement, Ms R had to empty her bank account of a whopping $982.

    And you know what, the cash call came in March 2009, when the Straits Times Index fell below 1,600 points, and many retirees were dismayed to see their investment portfolios plunge by half or more. Many fret if they would have enough left in the pot to sustain their lifestyle. Having to cough up more money for a Reit was the last thing that they wanted to do!

    Negative cash flowAnd here's the final tally. Since its IPO until today, a holder of one lot of CMT would have received $1,264 in cash distributions. However, in all, he or she had to return $1,549 back to the Reit so as to subscribe to their entitlement of new issues. That's a net outflow of $284 per lot.
    It's the same story with K-Reit Asia, Capitacommercial Trust, Frasers Commercial Trust, Mapletree Logistics, First Reit, Lippo Malls Indo Retail Trust, AIMS AMP CAP and Saizen REIT in that what was taken back from investors was more than what was given out.

    K-Reit has been one of the most aggressive fund raising Reits. Had you started with just one lot when it was listed in April 2006, you would have to dish out $8,399 to subscribe to your rights issue. Distributions amounted to $1,110, resulting in a net outflow of $7,289.
    For Reits with at least four years of track record, only Fraser Centrepoint, Parkway Life and CapitaRetail China have not had any cash calls.

    Instead of a rights issue, Suntec Reit raised funds by issuing new units to some institutional investors at a slight discount. Existing unitholders don't have to cough out additional cash, but they would have their share of earnings diluted somewhat.

    Misalignment of interests
    Reits are managed by managers, and managers are paid based on the size of the portfolio that they manage. So the incentive is for the managers to continue to raise money and expand the portfolio size. Sometimes this is not done in the best interest of unitholders.

    The most recent controversy was over K-Reit's purchase of Ocean Financial Centre (OFC) from its sponsor Keppel Land. K-Reit has launched a 17-for-20 rights issue to pay for the purchase which was deemed by the market to be expensive at a time of uncertain outlook and when office rental is expected to ease.

    BT reader Bobby Jayaraman argued that rather than be compensated based on factors such as the value of assets, net property income and acquisition fees, Reit managers should be paid based on a combination of growth in distribution per unit and market valuation of the Reit.
    'If Reit managers were paid on the basis of distribution per unit and market valuation growth, would K-Reit have bulldozed its way through the OFC acquisition like they have done?

    'The day K-Reit announced the OFC acquisition, its stock price fell close to 10 per cent and has continued sliding. Yet, its Reit manager will take home significantly increased management fees while shareholders would have lost a good chunk of their capital even as they bear significantly more risk in the form of higher leverage and potential property devaluations given the uncertain environment,' he wrote to BT.

    Misalignment of interests aside, there are also unitholders who clamour for growth.

    But while Reits may not be the perfect income yielding instrument that they are made out to be, they have proven their capacity for capital appreciation. Relative to the capital ploughed in, CapitaMall Trust has rewarded its unitholders with a return of 127 per cent. Most Reits have yielded positive total returns.

    Instead of buying Reits for yields, some savvy investors only buy them when they see those with good quality assets trade at sharp discounts to their book value. For example in the first half of 2009, CMT was trading at 50 per cent its book value. Today, it is not as cheap. At $1.755, CMT is now trading at 13 per cent premium to its net asset value of $1.55.

    Hence, valuation metrics which apply to a typical asset heavy stock would apply to Reits as well.
Hats tip for M.A Wind for this article.

And CIMB Nicely Upgrades JCY from 58 sen to 1.14

Since I had blogged on JCY this morning in the posting A Look At JCY's 'Earnings Turnaround', I was rather 'excited' when I got hold of the JCY report from CIMB.

I wonder what they would say......

Well, CIMB UPGRADED JCY to a TRADING BUY with a target price of 1.14.

And this HOW they changed their earning estimate.

CIMB changed their previous JCY's fy 2012 earnings estimate of 138 million to 373.8 million!!.


The earnings estimate for JCY is now 373.8 million!!!!

I guess with such a nice, juicy, fantastic, lovely and sexy earnings estimate, JCY is worth 1.14.

**** JCY total earnings for its fy 2011 is only 14.553 million. ( CIMB estimate was 138 million!!! LOL! )

****  I can still remember CIMB giving an estimate of 359 million for JCY's fy 2010!! And how much did JCY actually earn for its FY 2010? 173.763 million only!!!!

**** Currently JCY last traded 73.5 sen. Down 3.3%.

A Look At JCY's 'Earnings Turnaround'

JCY reported its earnings last night. It did MUCH BETTER than I had expected.

From the edge:

  • JCY records turnaround with 4Q net profit of RM26.4m
    Written by Joseph Chin of
    Tuesday, 29 November 2011 18:16

    KUALA LUMPUR (Nov 29): Hard-disk drive manufacturer JCY International Bhd posted net profit of RM26.44 million in the fourth quarter ended Sept 30, 2011, boosted by higher shipments and a favourable US dollar exchange.
    It said on Tuesday that the fourth quarter financial performance was a turnaround from the net loss of RM25.18 million a year ago. Rrevenue dipped 1.5% to RM439.92 million from RM474.71 million while earnings per share were 1.29 sen compared with loss per share of 1.23 sen.

    JCY said when compared with the third quarter, its revenue rose 11.3% while profit before tax of RM26.4 million was also a turnaround from the pre-tax loss of RM31.8 million in the third quarter.

    For the 12-month period, its earnings plunged 92% to RM14.55 million from RM173.76 million in the previous financial year. Its revenue fell 17.8% to RM1.671 billion from RM2.033 billion.

    Elaborating on the fourth quarter performance, it said the increase in turnover was due to the overall increase in revenues arising mainly from increases in the shipment quantity and favourable US dollar exchange rates.

    “The cost of sales decreased despite the increase in the overall sales due to efficient cost management and improvement in output through the better yield and improvements in operational efficiency,” it said.

    JCY group chairman Dr Rozali Mohamed Ali said the results were satisfactory given the challenging business environment.

    “We are very comfortable with our improvement in the operational efficiency, and we will continue to focus our efforts in improving our yields to maintain our sustainable profit improvement for the next financial year,” he added.

    JCY is fortunate as its facilities in Thailand were not affected by the recent flooding. JCY continues to operate at full capacity in Thailand.

    Rozali said JCY was taking a number of steps to increase its output from its factories in Malaysia and elsewhere, including restructuring its production output and product mix, and accelerating its expansion for its plants in China.

    “We will continue to work closely with our key customers to meet their requirements for our HDD components over the next few quarters.

    “However, the biggest challenge facing JCY in Malaysia continues to be shortages of its work force which constraints its output. JCY has increasingly implemented automation for its production and this has resulted in the improvement of its output yield recently,” he said.
And here's a look at JCY's earnings performance.

For its FY 2010, JCY recorded profits of 173.763 million. ( I can still remember CIMB giving an estimate of 359 million for JCY's fy 2010!!)

Last night, after its 'earnings turnaround', JCY made only 14.553 million.

Yeah, the EPS is rather so meaningless (if you have to know, it's only 0.71 sen!)

So how shall I put this 14.553 million into perspective?

RHB's research report back in Feb 2011, would be an excellent example. Back then, JCY was trading at 66 sen, RHB gave an extremely bold call, saying JCY should be valued at 22 sen!

See the arrow?

RHB had estimated that JCY earnings for its fy 2011 should be around 44.9 million. Based on an earnings of 44.9 million, JCY's EPS should be 2.2 sen. With an EPS of 2.2 sen, RHB reckoned that JCY should only be worth 22 sen.

Remember, on that Feb day, JCY was trading at 66 sen.

Today. JCY made only 14.553 million for its fy 2011. (RHB estimate was 44.9 million).

JCY is now trading at 76 sen. (Back then JCY was trading at 66 sen)


ps: I don't think RHB has a report out on JCY. What a bummer! I would have loved to see what RHB had to say on JCY's earnings.

ps: SpAM postings would not be published.

Thursday, November 24, 2011

Green Packet Makes Bullish Pledge Again Despite Losing Money For The 15th Consecutive Quarter

I saw the Star Biz headline on Green Packet's earnings: Green Packet makes profit pledge again

  • PETALING JAYA: After reporting yet another loss-making quarter, wireless services provider Green Packet Bhd has again given a promise of profitability.

    This time around, at a media briefing yesterday on the company’s third-quarter results, group managing director CC Puan said Green Packet aimed to report profits by the second half of next year.

    It is a pledge familiar to shareholders. At the briefing, Puan was asked twice if he was indeed confident of delivering an earnings before interest, tax and amortisation (EBITDA) break-even by the end of this year. He did not clearly answer in the affirmative but said that looking at the current figures, he believed that the company was on its way to achieving that goal.

    Green Packet has seen improvements of late and has narrowed its losses since a year ago.

    Puan said the company could post a profit for 2013 on condition that it registered positive net additions in subscribers for every month in the next year.

'Makes profit pledge again ...'

Oh yeah we heard it too many times before and it's great to see the Star biz actually write 'It is a pledge familiar to shareholders'!

And more interesting was Puan was asked TWICE if he was confident of delivering EBITDA positive by end of the year, after all if one had followed past posting, Puan had declared only on Aug 2011 that he remained bullish that the company will be 'ebitda positive' by the end of this fiscal year!

To recap the never ending record....
  • Feb 2008: we expect the WiMAX business to be ebitda (earnings before interest, taxes, depreciation and amortisation ) break-even this year,"
  • May 2008: we are targeting EBITDA positive by end of next year.
  • May 2009: P1 will be EBITDA will break-even from next year.
  • Feb 2010: concurred that will be EBITDA positive in the second half of this year.
  • May 10: the company remained optimistic that it will be able to achieve an Ebitda break even
  • June 2010: Green Packet Bhd’s target to turn earnings before interest, tax, depreciation and amortisation (Ebitda) positive by year-end may be delayed to next year
  • Sep 2010: Puan added that Green Packet is maintaining that its Ebitda (earnings before interest, tax, depreciation and amortisation) will break even by the end of this year.
  • Nov 2010: "We're confident of breaking even no later than the first quarter. Ebitda (earnings before interest, tax depreciation and amortisation) turnaround is really at the corner," chief executive officer C.C. Puan said at a press conference in Petaling Jaya, Selangor, yesterday.
  • Feb 2011: defers its target of being EBITDA (earnings before interest, taxation, depreciation and amortisation) positive to end-2011.
  • May 2011: Green Packet Bhd is on track to achieve its EBITDA (earnings before interest, taxes, depreciation and amortisation) break-even target by this year-end, according to the group's managing director and chief executive officer Puan Chan Cheong.
  • Aug 2011: ... remained bullish that it will be a "ebitda positive" company by year-end
Yes, since Feb 2008, Green Packet sang the same tune, over and over again. And everytime, the company fell short.

And for the record, this is the 15th consecutive quarters of losses and total net losses amount to 547.648 million!

Wednesday, November 23, 2011

And What About AirAsia's Earnings?

My last update of AirAsia's earnings was done on May 2011 : Update On AirAsia Earnings.

Last night AirAsia reported its earnings. It's earnings wasn't impressive at all. That was expected as a stronger USD will cause huge damage to its books. ( Most of AirAsia's borrowings are denominated in US$ )

Here's some flashback. I think it's rather important to know what has happened.

Well, I had noted the positive changes in the company since Aug 2010.

In the posting , Positive Move That AirAsia Defers Their AirBus Order I had said the following...

  • However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.

    Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!
And AirAsia the stock had done fairly well since then.

On 4 Dec 2010: A Look At AirAsia Stellar Earnings.

The positive moves from the deferment of the aircrafts was visible on the balance sheet. I made the following remarks.

  • The cash/debt level, has it improved?
  • The c.c or capital commitment column 'improved'. Would I pay attention to the value? Or should I pay attention to the number of aircraft to be delivered?
On 24 Feb 2011: What Do You Thnk Of AirAsia's Earnings?
  • Cash actually improved a lot compared to the previous quarter.
  • And debt increased slightly.
  • But the capital commitment... there was a huge improvement, yes?
I was focused on the improvement in the balance sheet.
For me, this is the MOST crucial thing. AirAsia used the debt leverage game to build its empire. Instead of just borrowing, it BORROWED. Way too hedge and in my opinion, it's like it's building a corporate which will be too huge to fail. And the massive borrowings is of course used to finance that rather insane order of aircrafts. Capital commitment contracted to purchased new aircrafts at one time stood close to 28 billion ringgit. ( do refer fy 2007 earnings ) and with AirAsia already saddled with a debt of 3.7 billion then (in fy 2007), the risk was so huge. My mind was thinking, how was AirAsia going to repay the debts, let alone finance its rather grossly optimistic aircraft purchase. That was my reasoning.
But as mentioned in Aug 2010, when AirAsia deferred its aircraft delivery, it gave itself a chance to survive. By not accepting new aircraft delivery, its loans ( which now has ballooned to some 7.8 billion - remember back in fy 2007, AirAsia loans was only 3.7 billion! - yeah it's loans doubled!!) stopped growing. The cash flow from AirAsia's operations is now used to rebuild its piggy bank and it also managed to pare down its debts. ( Ah.. that one private placement of shares did helped its balance sheet too!)
The chances could be seen.
Then came June 2011. 
Another historical purchase order of aircrafts was made.
It blew my mind. 
At that moment of time, out of an order of 175 new aircrafts, AirAsia only receive 89. Yeah remember in Aug 2010, it had to get a deferment in aircraft deliveries.  

And less than a year later, in June 2011, after some improvement in its balance sheet, AirAsia did the unthinkable! It ordered 200 new aircrafts!


I was thinking what grandiosity!

How will AirAsia finance its aircraft purchase???

Why the need to order so soon and so big??????

It blew my small mind. I was left speechless. So there's where we are at now.

So last night, when I saw AirAsia released its earnings, I was so interested to see its balance sheet.

Here's the updated earnings table I made. C.C stands for Capital Commitment for new aircrafts.

Cash shrunk a little and its debts were relatively unchanged but the most glaring thing is the current capital commitment of 57.450 BILLION!


AirAsia is committed to purchase aircrafts worth some 57.4 billion!

And what does AirAsia currently have in its balance sheet? 1.6 billion cash and loans of 7.6 billion.

And the question on my mind is how will AirAsia going to finance this order of such grandiosity???

Tuesday, November 22, 2011

KNM's Earnings Falling Way Short Of Its OWN FY2011 Profit Guidance

On the Edge:

  • KNM posts net loss RM116.29m in 3Q Written by Surin Murugiah of
    Tuesday, 22 November 2011 18:58

    KUALA LUMPUR (Nov 22): KNM GROUP BHD [] posted net loss RM116.29 million for third quarter ended Sept 30, 2011 compared to net profit RM56.09 million a year earlier, due mainly to one off provision for foreseeable losses and credit impairments.

    The company said on Tuesday that revenue for the quarter rose 6.41% to RM445.18 million from RM418.36 million in 2010.

    Loss per share for the quarter was 11.88 sen compared to earnings per share of 5.69 sen a year earlier, while net assets per share was RM1.69.

    There was no dividend declared or recommended during quarter under review.

    However, KNM said it had adopted a dividend policy of distributing at least 50% of its consolidated net attributable after tax profit (subject to the availability of distributable reserves and compliance of financial covenants) with effect from financial year ending Dec 31, 2012.

    For the nine months ended Sept 30, KNM posted net loss RM86.42 million compared to net profit RM110.57 million in 2010, while its revenue grew 19% to RM1.4 billion from RM1.17 billion.

    Reviewing its performance, KNM said the higher revenue in this year was due to higher job recognition.

    On its prospects, KNM said notwithstanding its strong order book, the company expects the business environment for the remaining quarter to remain challenging due to global uncertainties.

    “However, the board is optimistic that going forward the prospects for the oil & gas industry remains positive,” it said.
For the current nine months KNM posted net loss of rm 86.42 million.

The most interesting me was KNM guidance issue. Posted on 9th March 2011: What I Think Of KNM's Earnings Guidance
  • KNM’s management had met with analysts earlier in the week and guided earnings before interest, tax, depreciation and amortisation (Ebitda) of RM363 million for its FY11 (ending Dec 31, 2011), while the Ebitda for FY12 is targeted at RM564 million.
KNM met and TOLD analysts they would have a EBITDA of RM 363 million this fiscal year but for the current nine months KNM posted net loss of rm 86.42 million.

And like mentioned before...

Let's compare KNM's guidance versus actual performance.
  • fy 2008, KNM made 336.175 million. (KNM guided 450 million)
  • fy 2009, KNM made 257.847 million. (KMM guided 700 million)
Do refer also this August posting: KNM: Of Profit Guidance And Corporate Governance

Friday, November 18, 2011

Open Letter For Samgoss: Allegations Of Being A Liar And A Cheater

Dear Ah sam,

It was a change to see that you finally have the guts to post under your own blogger profile Samgoss.You certainly caught me by surprise after all these many years of posting under multiple blogger nicks. For me, it was an act of cowardice. Hiding under these multiple nicks you had made continued meaningless comments harassing other blogs, like fusioninvestor, malaysiafinance and nexttrade. And you even went on to make continued posting against these bloggers. And your continued war of words against nexttrade simply blew my mind. Why the need for such childish acts?

Makes me wonder. You claim you have 3000 subscribers. WOW! Good for you.

But as you are aware, ms. jackie made a serious allegation against you.

Let me repeat again what was written, just in case you forgotten all about it. You know, just to refresh your memory.

  • Moola, that guy is a cheater and liar and screwing his subscribers left right center. My girlfriend, who followed him, just complained to me that he is an unscrupulous man.
    Why she said that ?
    She told me that he made a call on PJDEV-WC long before market downturn. Price went down from more than 0.30 to less than 0.20, but not before most of his subscribers bought in at more than 0.35, because he always made the call to buy after he load up on the stock first (you get what I mean by cheater), so most will chase it up.
    I was told that his average price was also slightly higher than 0.30 for 300 lots. and when market downturn, he advised his subscribers not to average down but hold onto whatever they have bought, because he himself is not buying and selling this counter.
    then all of a sudden today, he posted up that his average price for PJDEV WC is now 0.24. when queried, he said he made a deal with one of his fan to share the fan's holding of this counter at sharing of profit and loss at 50/60 ratio.
    she was really upset with this cos it showed that he can say whatever he wants to defend himself. He will always be right, no matter what. THat is why she is calling him a liar and cheater.
    Well , what do i know, i am just a housewife who listens to my girlfriends' rants.
    anyone is welcome to comment about this, including sam.
Now that's a very, very serious allegation. You charged members for subscriptions. Members pay because they wanted your so-called stock tip. When the stock fell good, you are accused of fudging your average buy price. By changing this average buying price lower, your stock portfolio certainly would look good. And yeah, a good looking stock portfolio is very important for your business.

According to jackie, you then told your subscribed members that your buying prices for PJDEV-WC is much lower. From an average buying price of 30 sen, your buying price suddenly became 24 sen.

Fudging and changing such important data is a massive no-no. You cannot be doing such a thing. It's bad for your subscription business. And yes, you will be called a liar and a cheater.

Oh yes, I shall give you credit for being brave enough to reply to jackie on this small blog of mine. However, I was utterly appalled by your shocking behaviour in your reply for it was simply unsavoury. Jackie declared that she was a housewife and her friend (which is girl) made these allegations. And what did you do? You asked if she was a lesbian!!


Here's your exact comments.
  • to jackie..just curious...on first sentence , u put girlfriend subscribed to sam blog, at last sentence u said " i am just a house wife " woww which is which..r u a lesbian ?
    so... who is liar n cheater ^_-LOL!

    Pjdev-wc? woww... asked ppl not 2 catch d falling knife oso wrong arh ? so.. r u guys making now ?
    perhaps u should tell me those who hv made from " stocks in my radar 2 " a months ago... r there get cheated by me oso ? LOL!

    u wanna 2 tell lie..pls make sense abit lah.. dun be so cheap like mo mo cow mah !

    hello mo..thanks 4 posting up my ? aiyahh..where got free lunch in this world ... fyi... ppl only cares how much u can help them 2 make money ..d rest who cares..more over when come 2 shares info n integrity is always there , on earth I can get >3,000 members 4 my private blog ? how on earth I can survived since year 2000 ?
    k..that is enuf 4 today..wait till this week end ok ? i will give u a good write up later! 88 n take care
And you refrained from answering the accusation that you changed your average buying price from 30 sen to 24 sen. That's a serious allegation. And you simply refused to answer. Instead you start of by asking if she is a lesbian! And then you divert the whole thing by saying others have made money from your other tips.

But that's not the point isn't it?

I can understand, you as a owner of a private subscription webstite, a website which charges a fee, that you want to look good with ALL of your stock tips. You cannot have a stinker of a stock recommendation. That stock you recommended to your subscribers at 35 sen fell to 20 sen. That obviously look really bad.

But for you to change your average buying price from 35 sen to 20 sen, is a big no-no. It's cheating and it's bad for business.

And the last passage in your reply to jackie:
  • aiyahh..where got free lunch in this world ... fyi... ppl only cares how much u can help them 2 make money ..
Oh yes, I agree so much in what you are saying on the free lunch thing. It's like Alex Lu of nexttrade. He post his own reasoning and recommendations free of charge in his free website.  Hmm ... everything is FREE from Alex but the difference for you sam is that you charge money.

You charge your subscribers money. No money no entry to your private blog.

From this perspective, I am sorry but sam, by collecting these subscription monies, you no longer have the right to make such a statement. Yes, you collect money and when your stock tips go bad, you CANNOT tell your subscribers 'where got free lunch in the world'.

So it's so important that you answer that allegation against you.

Did you not change your average buying price from 30 sen to 24 sen?

And your subsequent reply to jackie...
  • 2 jackie , another proof to show that samgoss is a conman, dare to click this ?;

    TDM cost 2.68+ ^_-
    latest update..sold all my remaining tdm @ 3.27 just now...bal is now arh ? y yr friend never tell u about this meh ?

    still cheating arh ? LOL!
Sorry but I have to LOL now!


Diverting the main issue is simply pathetic.

What has your buying and selling of TDM got anything to with you changing the average buying price of your PJDEV WC?

And oh, your TDM.

Here's another good one.

On that reply of yours, you boasted your cost of TDM was 2.68 and you sold at 3.27.


Now take a look at your last reply.

  • yah almost jackie... TDM closed @3.42 in mid day...another 12 cts up, yr so called "girl friend " still holding arh ? LOL
Ah.... I find it very strange you bring out TDM. Why? Because you have already state that you sold at 3.27 and you have zero balance. How nice. You sold and the stock moved higher and you still want to brag about it?

And then you now insist jackie is mr. From a lesbian to a mr. You seriously have something against female, ah? Do you have an inferior complex when you speak to a female?

But all this is still besides the point.

DID you change the average buying price for PJDEV-WC from 0.30 to 0.24?

This is an important issue for your business and for jackie and her girlfriend, I believe you owe them a sincere reply. No more beating around the bush, no more rudeness and just answer the question.
Not answering would simply be bad for your business.
Do take care.
Have a good weekend.

Wednesday, November 16, 2011

Yet Another Meaningless Attack From Samgoss

Must be the season.

Hey do you remember this posting: Do You Want To Know ...... Oh yeah, the posting about the utterly meaningless. He created multiple blog user names to spam posting of hatreds on other blogs ( see how he attacked Alex Lu's blog shown in the posting Totally Meaningless  and to top that, he was caught red handed using multiple blogger nicks to promote himself on his blog!

Check out this link on his blog. All the comments. under different names, comes from the same blogger profile! LOL! - 

A blog where the owner creates multiple users promoting how good the owner is. LMAO! What a tosser!

And as I said, this must be the season. This time Samgoss decided he was brave enough to post under his own nick!


Good that he finally has the balls to make an utter nonsense posting under his own blogger profile and not be a coward hiding under multiple nicks.

And by doing so, he has given yet another conclusive evidence of his past shenanigans ( I wonder if he understands this word. )

Now check this out. In the posting:

  • Samgoss said...

    to all bloggers in town , read this >

    Tastless ?

    Talk about low class n tastless, no one can beat mo mo cow !

    critics Tan Teng Boon n osk r even low class than tony, not only akagi shigeru agreed on that, we samgang oso 100% agreed on how cheap ze mooloah can be !LOL!

    Thief calling to catch thief !LOL!

    Moolah always thought he got class n taste..LOL! ha ha

    He always thought he is a class above others ^_- LOL!

    Who r u moolah ? u r just an arrogant low class banana ! what better name can be awarded than this !? LOL !
Like I had mentioned in the posting, Do You Want To Know ...... , scroll over the name Samgoss, and you will get the blogger profile Remember that profile number.

And the key phrase is this 'to all bloggers in town' .....

Hmm.... now where have I heard this phrase before?

Oh.... check this comments from the posting...
  • Clearwater said...

    To all bloggers in town , read what moolah's fan describe the character of mad cow .....
Now Clearwater blogger profile is the very same blogger profile highlighted in the posting Do You Want To Know ..... and the blogger profile number is 13845454760825339051.

Now check out this comments from the posting... Can you the posting from Ms. Emily Leong? Yeah, she decided to join the fun. But Emily Leong has the very same profile as Clearwater which is 13845454760825339051. LOL!

One blogger profile, two blogger names but both using the same phrase 'to all the bloggers in town'...

LOL! Utterly childish or what?

Then in the posting The same blogger profile 13845454760825339051 struck again. This time, the user name is jeremy tan and Mr. Jeremy Tan also decided to use 'to all the bloggers in town...'


And then there is more! In the posting, the same blogger profile strikes again. This time, the user name is KC  and KC also uses 'to all the bloggers in town...'.

And check out all the contents. Why exactly the same like Samgoss one?


I could show more but it's really getting boring and meaningless, yes?

Hmmm.... where should I file this posting?

Oh yeah... it goes under the label

AirAsia's Tony Fernandes Utterly TASTELESS Rant On Facebook

On most newspapers (this was taken from

  • AirAsia chief launches attack on MAHB on social mediaPosted on 15 November 2011 - 11:19pm
    Last updated on 15 November 2011 - 11:25pm


    PETALING JAYA (Nov 15, 2011): AirAsia chief Tan Sri Tony Fernandes is in the news again, this time attacking Malaysia Airports Holdings Bhd (MAHB) in the social media realm, the same day the airport operator was raising the airport departure tax for international passengers as well as aircraft landing and parking charges for airlines.

    Slamming MAHB's move, Fernandes, who is also a director of Malaysia Airlines (MAS), said: "With economic conditions as they are, MAS and AirAsia have given MAHB great ideas to increase their income by working with us and attract more (new) airlines (to operate from Malaysia)... then (MAHB should) reduce (airport) charges to the people.

    "It's the passengers who pay airport tax. We are fighting for the people of Malaysia!" he posted on his Facebook page.

    Incidentally, AirAsia had scheduled a press conference yesterday to address the hike in airport taxes by MAHB, but had cancelled it at the last minute, "due to an unforeseen circumstance".

    MAHB had last month received the Transport Ministry's nod to raise airport tax at the country's 39 airports it manages, excluding low-cost carrier terminals (LCCTs), to RM65 from RM51 for international travellers. For departing international passengers at the LCCT in Sepang and Terminal 2 Kota Kinabalu, the airport tax will be raised to RM32 from RM25.

    The aircraft landing and parking charges, meanwhile, will be gradually raised by up to 30% and 64%, respectively.

    "Too many empty promises from MAHB. We as airlines get blamed for their poor performance," Fernandes said.

    He also took a swipe at the Transport Ministry's decision to approve the hike, asking why it wasn't defending the people "to make sure they get good value for the (old) RM25 airport tax".

    "They are the regulators. The ministry's secretary-general, Datuk Long See Wool, sits on the board of MAHB. How can he be objective and play fair to the airlines?" he asked.

    Fernandes also questioned MAHB's recent move to build a 3.96km third runway at the new LCCT called KLIA2 in Sepang, the delay in its completion as well as the escalating cost of building KLIA2.

    "Why is KLIA building a third runway when they don't use dual mode on two runways. London's Heathrow Airport has 60 million passengers with two runways. Fix the air traffic system, MAHB. That would have been cheaper than building another runway," he said.

    "AirAsia wants MAHB to come clean. Terminal (KLIA2) is supposed to be operational by June 2012 and supposed to cost RM2 billion. What's the truth?"

    When contacted by SunBiz yesterday, MAHB CEO and managing director Tan Sri Bashir Ahmad Abdul Majid said the airport operator will respond in due course.

    Fernandes also hit out at the four MPs who had on Monday criticised him and Khazanah Nasional Bhd CEO and managing director Tan Sri Azman Mokhtar over the recent MAS-AirAsia share-swap deal.

    "(The) four MPs have...made it very personal for five years. One MP said I rape poor villagers.

    "(But) villagers could never fly before. We have worked so hard to make flying affordable and 130 million people have flown due to us. Why are these members of parliament not questioning the cost of airports and fighting for lower taxes for the rakyat?" he wrote.
Oh my dearest moo moo cow.

What are we, Malaysians, turning ourselves into???

A CEO using a social media network to launch a verbal attack on another corporation?

It now appears irrelevant on who is right and who is wrong but such verbal attack is utterly tasteless and low class. Seriously? That is not the right platform and as a 'leading' Malaysian CEO, Tony should have known better on what and what not to do.

Using Facebook to make a rant?


That's utterly childish.

Saturday, November 12, 2011

Letter On XingQuan Again

Got this new set of comments from gwynwelsh.

  • Dear Investors,

    Please excuse me for heading towards a different subject i.e. on Xingquan. I have just received the annual report and I have also went through analysing the top thirty largest shareholders of this company. I have been a shareholder of Xingquan for more than a year now and I must admit to all of you that my investment had been dismal. My investment shrunk more than 45% as of the time of this note. This is also why I pay particular attention on Xingquan and would very much glad to hear from fellow investors on this counter. The annual reports reveals that Koon Yew Yin, dubbed to be the Warren Buffet of Malaysia has holdings more than 11.12% in Xingquan. His holdings were held through his wife, family and himself. 11.12% means more than 34 million shares. The other notable shareholder of Xingquan is Dato Koh Kin Lip, through Rickoh Corp and himself. Dato Koh has 2.52% or more than 4.7 million shares. Malaysian government backed retirement funds were recorded to have some 6.15% holdings as well. Foreign banks have some 4.65% holdings. A major shareholder of IOI Corp, Madam Lai owns 0.26% in Xingquan too. From the report, we can safely say that all major shareholders apart from the Chinese themselves, are smart and perhaps long term investors. Xingquan is currently muddled in the ruts and its share price fell like a stone. Multiple issues were raised on this counter from non-payment of dividends to allegedly producing dubious accounting. These are detrimental news and until or unless views from Malaysian investors change, Xingquan would just continue to be in the rut. However, it was recently reported in the Taikors and Taikons under its private eye column that MBMR is planning a loan of RM50 million to Xingquan. The deal was purportedly to be announced this Nov 15 with MBMR holding Xingquan's preferential shares and a commitment that 35% of all future profits of Xingquan be declared as dividends. My fervent hope is that the deal as reported by Taikors and Taikons is true and the perception of Malaysian investors on this counter change thereafter. `
Hello there gwynwelsh.

It's not a problem that you have posted your opinions and views on this stock.

Hmm... Koon Yew Yin investment in XQ again? Well, here's food for thought. Even the man himself, Warren Buffett has acknowledged he has many a mistakes before. From this perspective, I am just wondering what's the chances of Koon Yew Yin (KYY) not making a mistake? KYY bought his initial 5.5% stake on 27/09/2010. Has his investment in the stock performed or has it under perform?

Why am I saying this?

Sorry but I get this feeling that you appear to me that you are anchoring your investment decision to STAY in this stock simply because Koon Yew Yin is a shareholder. Yes, I could be WRONG but I feel that you are still invested in this stock simply because of KYY.

Is that wise? But what if KYY is wrong? Have you thught about it from this perspective?

And I am aware you have posted several comments on XQ on this site before. Many thanks for sharing your views. And here's one from the posting:

Quote: I have a feeling that Xingquan is reporting a pack of lies like any other Chinese based companies. It is definitely doesn't make sense to suddenly switch product brand and go through the re-branding exercise after establishing the old brand name. I think it is a way to siphon out money in the form or name of re-branding exercise. I have also found out that the real owner of XQ is the brother-in-law of the CEO who is not in the board. This Chinaman is the actual person running the show behind those iron curtains.

I have invested into XQ and I regretted of my mistake. I thought it was good to invest in such a low PE share but it turned out to be a farce.

I have also the feeling that the IR chap, Ooi Guan Hoe is posting his comments in this blog as well. I have screwed him up and he didn't reply any of my emails to him.

If XQ is good then why it is trading below IPO price and keep falling like a stone? F XQ

How? You felt you had made a mistake back then and some of the reasoning does support that decision but yet you have decided to stay invested in this stock. Is this because of the KYY factor?

Anyway did you consider some of the points mentioned in the last posting

ps: Market sentiments towards penny stocks are extremely strong. Anything could happen, yeah? So let me say again, I have no idea and I certainly have no interest on how XQ the stock will fare in the future. ;)

ps: for investors perception to change.... hmmmm.... I think balance sheet improvement is one major factor. I am really sceptical to see companies saying they have tons of money in their balance sheet but yet they seem to get 'value' or interest income from their vast pot of money. Why? Is the money real or not? And worse still, despite all these cash, these chinese companies still wants to raise money via share placement sale and TDR. Why? Got tons of money mah... but still want to raise more? Errrr.... and then some of the capex made by these Chinese companies seems rather exuberant. In XQ's case, the rebranding exercise simply blew my mind. In short, it's simple. For the perception to change, investors do not want to see questionable issues in the company they are investing in. And sadly for the Chinese stocks listed here, these questionable issues are the very same issue raised in Chinese stcoks charged with fraud.

ps: XQ balance sheet issue. Ok, sales and improved a lot the last quarter but sadly, I would ask the same old question, so what? My last posting on XQ, Chat On Koon Yew Yin's Investment In Xingquan Again
 , I wrote
  • Balance sheet cash. Cash is shrinking but most important thing is interest received. As mentioned several times by blogger snowball, why is the interest so low? Why is Xingquan getting so low value for its money? From the table above, we know that at the end of 4th Q FY2010, Xingquan had some 280 million cash. Nine months later, cash left is only RM 168.850 million. 168 million is a lot of money, yes? But from the cash flow, Xingquan said it's only getting some 563 thousand in interest. Err.. why so little value for their money?
Ok... cash as per their quarterly earnings report in Aug 2011. Cash did improve back to RM214.484 million. Lot's of cash right? Why still want the TDR? And what will it do with the money they get? What if they do another crazy rebranding stunt once more?

But the main issue... interest paid and interest received column in their cash flow.

Now as you are aware, XQ has 'very little borrowings' compared with its huge cash pile.

As per its quarterly earnings, XQ said it has some RM27.083 million in borrowings. Their cash pile totals some RM214.484 million.

Now surely, one would expect XQ to be getting more interest than paying yes?

Any well managed and prudent company would easily manage such a cash balance, yes?

But ... if you look at the cash flow statement....

Interest paid is rm1.839 million.
Interest received is 810k.

Ahem... for a company holding some 214 million cash and some 27 million loans, why so low value for its money????

And for me... I can't really understand this. I am sceptical. I am forced to ask two questions. (1) Why such a poor management of the company's cash? (2) Is the cash even real?

I dunno and I dun have any answer.

ps: The receivables.... 18 May 2011, this was posted A Quick Look At Xingquan's Earnings.The one statement from Jupiter Research stood out.
  • Higher receivables of RMB261.3m in 1HFY11 were due to higher sales in November and December and was within the 2-months credit period. Xingquan explained that the total amount has since been collected
Let me highlight my old table on XQ once more.

Now as you can see before 2011 Q1, receivables were less than 100 million.

But for 2011 Q2, receivables 'suddenly' rocketed by more than 100 million to 180+ million.

This made investors very sceptical.

Won't you?

But in May 2011, XQ TOLD Jupiter Research that the total amount has been collected.

But if you look at their Aug quarterly earnings, receivables stood rm167.352 million.

Errr....... how??????

So....... are these issues 'negative perceptions' or are they really questionable issues within the company itself?

Dutaland's Reason

And Dutaland finally gives its reason why it rescinded the S&P with IOI.

  • Dutaland: deal rescinded to avoid prolonged legal tussle
    Written by
    Friday, 11 November 2011 20:04

    KUALA LUMPUR (Nov 11): DUTALAND BHD [] and IOI CORPORATION BHD [], which mutually rescinded the sale and purchase agreement over the disputed RM830 million oil palm PLANTATION [] deal, had done so with a view not to prolong the legal dispute arising from the termination of the deal.
    In a reply to a query from Bursa Malaysia Securities Bhd on Friday, Nov 11, Dutaland said the Deed of Rescission entered by the parties on Nov 9 would avoid protracted litigation, the outcome of which can be uncertain and this may have adverse implications on the company.

    “Moreover a prolonged litigation would hinder any potential sales of the PROPERTIES [] in future,”
    it said.

    Dutaland said that by entering into the Deed of Rescission, Sri Mayvin had retracted all its allegations and assertions made against Pertama Land.

    It said Pertama Land had consistently maintained that Pertama Land has complied with and is not in breach of the SPA as alleged or at all by Sri Mayvin.

    “In the absence of the sale proceeds from the Proposed Disposal, the Group may obtain bank borrowings and/or internally generated funds to fund/support the items stated in the intended utilisation of sale proceeds (i.e. purchase of Irredeemable Convertible Bonds, settlement of debts, funding of Kenny Heights project, etc),” said Dutaland.

    To recap, IOI Corp and Dutaland on Nov 9 said they had agreed to mutually rescind the sale and purchase agreement over the disputed RM830 million oil palm plantation deal.

    IOI Corp said on Wednesday that its unit Sri Mayvin Plantation Sdn Bhd and Dutaland’s Pertama Land & Development Sdn Bhd had entered into a deed of rescission in a move to resolve all issues and disputes relating to the SPA that involved 11,977.91 ha (29,597.42 acres).

    “With immediate effect whereupon the parties are released from all obligations and liabilities in connection with the SPA and neither party shall have any further claim against the other in respect thereto,” it said.

    IOI Corp said following from the execution of the deed of rescission, OSK Trustees Bhd, being the stakeholder jointly appointed by the parties, will proceed to refund the deposit earlier paid by Sri Mayvin pursuant to the terms of the SPA together with all interest accrued thereon to Sri Mayvin.

    On Oct 25, IOI Corp terminated its proposed acquisition of the land from Dutaland, citing the cancellation was “due to non-compliance of certain terms and conditions”.

    However, Dutaland had then said it did not accept the reasons for termination of the sales and purchase agreement and directed the stakeholder, OSK Trustees Bhd not to remit the deposit of RM83 million, which was the 10% deposit paid.

    In a separate statement on Nov 9, Dutaland said that with the rescission, Sri Mayvin has retracted all its allegations and assertions made against Pertama Land as contained in Sri Mayvin’s letters dated Oct 4, 20 and the 21.

    "Pursuant to the deed, Sri Mayvin has further confirmed that it has not lodged and will not lodge any private caveat(s) or any encumbrances(s) over the properties," it said.

    Dutaland also said its board having sought legal advice and after taking into consideration all relevant aspects of the termination of the SPA, was of the view that protracted litigation would hinder any future sales of the properties.

    "Furthermore, the outcome of litigation can be uncertain and this may have adverse implications on the group. In the meantime, the group shall continue to manage the properties to generate positive returns," it added.

Thursday, November 10, 2011

And Dutaland and IOI Both Rescind Their 830 Million Ringgit Deal

Posted last month: Yet Another Multi Million Screw Up From IOI Corp? and And IOI Corp Gave Its 83 Million Reasoning Why It's Cancelling The Deal With Dutaland

On the Edge: IOI Corp, Dutaland rescind RM830m oil palm estate deal

  • IOI Corp, Dutaland rescind RM830m oil palm estate deal
    Written by Joseph Chin of
    Wednesday, 09 November 2011 19:34

    KUALA LUMPUR (Nov 9): IOI Corp Bhd and DUTALAND BHD [] have agreed to mutually rescind the sale and purchase agreement over the disputed RM830 million oil palm PLANTATION [] deal.

    IOI Corp said on Wednesday that its unit Sri Mayvin Plantation Sdn Bhd and Dutaland’s Pertama Land & Development Sdn Bhd had entered into a deed of rescission in a move to resolve all issues and disputes relating to the SPA that involved 11,977.91 ha (29,597.42 acres).

    “With immediate effect whereupon the parties are released from all obligations and liabilities in connection with the SPA and neither party shall have any further claim against the other in respect thereto,” it said.

    IOI Corp said following from the execution of the deed of rescission, OSK Trustees Bhd, being the stakeholder jointly appointed by the parties, will proceed to refund the deposit earlier paid by Sri Mayvin pursuant to the terms of the SPA together with all interest accrued thereon to Sri Mayvin.

    To recap, on Oct 25, IOI Corp terminated its proposed acquisition of the land from Dutaland, citing the cancellation was “due to non-compliance of certain terms and conditions”.

    However, in a separate statement, Dutaland said it did not accept the reasons for termination of the sales and purchase agreement and directed the stakeholder, OSK Trustees Bhd not to remit the deposit of RM83 million, which was the 10% deposit paid.

That's it?


Comeon... this is a 830 million ringgit transaction. Surely, both companies have a duty to show some respect to the investing public by explaining why the deal was rescinded. Mind you, when the deal was first announced, Dutaland shares soared. The investing public chased the stock because they speculated that there could be a potential cash windfall arising from this sales and purchase agreement. And Dutaland minority shareholders would like to know why the company is NOT fighting for the 83 million deposit paid.

Here's Dutaland announcement on Bursa.

  • We refer to the announcements made by the Company dated 28 July 2011, 26 September 2011, 11 October 2011, 25 October 2011 and 27 October 2011, in relation to the Proposed Disposal. (Unless otherwise defined, all terms used in this announcement shall have the same meaning ascribed to them in the aforementioned announcements)

    The Board of Directors of the Company (“Board”) wishes to inform that the Company’s wholly-owned sub-subsidiary, Pertama Land as Vendor and Sri Mayvin as Purchaser have, on 9 November 2011, entered into a Deed of Rescission (“Deed”) to rescind the SPA and to record the arrangements consequential to the rescission (“Rescission”). Pertama Land had vide its letter dated 25 October 2011 disputed Sri Mayvin’s termination of the SPA on 25 October 2011. The primary objective of the Deed is to resolve all issues and disputes relating to the termination of the SPA by Sri Mayvin.

    The salient terms of the Rescission are as follows: -

    1. With the execution of the Deed, the SPA has been rescinded whereby both Pertama Land and Sri Mayvin have been released from all obligations and liabilities in connection with the SPA and neither party shall have any claim against the other in respect thereof.

    2. With the Rescission, Sri Mayvin has retracted all its allegations and assertions made against Pertama Land as contained in Sri Mayvin’s letters dated 4 October 2011, 20 October 2011 and 21 October 2011.

    3. Pursuant to the Deed, Sri Mayvin has further confirmed that it has not lodged and will not lodge any private caveat(s) or any encumbrances(s) over the Properties.

    4. The Stakeholder shall, simultaneous with the execution of the Deed, refund the Deposit of 10% of the Sale Consideration amounting to RM83 million together with all interest accrued thereon to Sri Mayvin.

    The Board having sought legal advice and after taking into consideration all relevant aspects of the termination of the SPA, is of the view that protracted litigation would hinder any future sales of the Properties. Furthermore, the outcome of litigation can be uncertain and this may have adverse implications on the Group.

    In the meantime, the Group shall continue to manage the Properties to generate positive returns.

    After considering the above, the Board is of the view that the Rescission is in the best interest of the Company.

    The Rescission is not expected to have a material effect on the earnings, net assets and gearing of the Company and the Group for the financial year ending 30 June 2012 as well as the issued and paid up share capital of the Company and the shareholdings of the Company’s substantial shareholders.
What's the main reason to rescind?

Why the lack of transparency?

This is from IOI.
  • Reference is made to the Company’s announcements dated 25 October 2011 and 27 October 2011 relating to the termination of sale and purchase agreement ("SPA") entered into between Sri Mayvin Plantation Sdn Bhd (“Sri Mayvin”) and Pertama Land & Development Sdn Bhd (“Pertama Land”) for the Proposed Acquisition.

    To resolve all issues and disputes relating to the termination of the SPA, both Pertama Land and Sri Mayvin have on 9 November 2011 entered into a Deed of Rescission to mutually rescind the SPA with immediate effect whereupon the parties are released from all obligations and liabilities in connection with the SPA and neither party shall have any further claim against the other in respect thereto.

    Following from the execution of the Deed of Rescission, OSK Trustees Berhad, being the stakeholder jointly appointed by the parties, will proceed to refund the deposit earlier paid by Sri Mayvin pursuant to the terms of the SPA together with all interest accrued thereon to Sri Mayvin.

    This is announcement is dated 9 November 2011.
Just like that?

Case closed?

Here's Dutaland chart...

See how Dutaland, with the announcement of this 830 million transaction, soared from 50 sen to a high of 68 sen?

Yeah, see how Dutaland crash and burned once IOI said it was pulling out from this deal?


Is this acceptable?

Look at the bigger picture. One of the bigger Malaysia corporate signed a S&P to make a 830 million land purchase. Deposit is even paid but yet..... such a deal can have be 'GOSTAN-ED' ..........

If this is going to be the normal practice amongst corporate Malaysia, can you wonder the future of investment in Malaysia stocks? How's Malaysia going to attract foreign investors when our corporations behave so unprofessional? One buys and signs the agreement but the next minute, the agreement is cancelled.

Yeah and what good is signing an S&P?

Could investors trust the signing of any S&P in the future when IOI and Dutaland have shown how easily the S&P could be rescinded?


Ok, assuming IOI reasoning to withdraw from the deal is valid. However, the main question is why didn't IOI make a thorough inspection before they sign the S&P? Why sign and pay deposit then only say they want to withdraw? Very unprofessional isn't it? And they put their 83 million deposit at risk.

Wednesday, November 09, 2011

They Call Mems A Landmark Case For SC?

Posted earlier this year: How Much Fine For Cooking Your Books? Part III

  • THE High Court has allowed the Securities Commission Malaysia’s (SC) appeal against the Sessions Court’s sentence of RM300,000 fine each on the former directors of MEMS Technology Bhd, Ooi Boon Leong and Tan Yeow Teck.

    The High Court retained the Sessions Court’s original fine and enhanced the sentence with a six-month imprisonment term each following the appeal by SC for a higher sentence in view of the severity of the offence.

    In February last year, Ooi and Tan, had pleaded guilty before the Sessions Court and were fined RM300,000 each for authorising the furnishing of misleading information to Bursa.
I thought the sentence was way too light!


They recorded sales transactions that NEVER took place!

That's downright cheating in my opinion!!!

By recording sales transactions that NEVER existed and the stock market valued Mems as a growth stock and the company was handsomely valued some extra 500 million!

And the description of the fine? 'Providing misleading information' was way too kind. They fudged and they cheated on their books! And the fine of 300,000 and jail term of 6 months? That is absurb. Too kind.

With such a crime, how are we ever going to stop corporate crimes like this?

On Star Biz: Landmark decision for securities cases

  • Wednesday November 9, 2011
    Landmark decision for securities cases

    PETALING JAYA: In a landmark decision for securities cases, two former directors of MEMS Technology Bhd saw their six-month jail terms imposed by the High Court being upheld by the Court of Appeal last Friday.
    The Securities Commission said in a statement that the Court of Appeal affirmed that a custodial sentence was necessary in order to ensure that investors would not lose confidence in the local market and to deter potential wrongdoers.

    “The Court of Appeal emphasised that knowingly furnishing misleading information to the stock exchange is a serious offence because potential investors, both foreign and local, rely on such information,” the commission said.
    The two former directors of MEMS, which was de-listed in November 2010, were charged for authorising the furnishing of a misleading statement to Bursa Malaysia in MEMS's condensed consolidated income statement for the 12-month period ended July 31, 2007.

    They were charged in the Sessions Court in Kuala Lumpur in 2009 for falsifying the company's reported revenue of RM73.416mil which contained over RM30mil of sales that did not take place.

    Both Ooi Boon Leong and Tan Yeow Teck had on Feb 25, 2010 pleaded guilty to committing the offence and were fined RM300,000 each, upon which the public prosecutor appealed to the High Court on the ground that the sentence was manifestly inadequate.

    Then in January 2011, High Court Judge Datuk Ghazali Cha imposed an additional six-months jail sentence to the fine of RM300,000, citing public interest as a reason for the increased sentence, pointing out that the offence affected the integrity of the capital market.

    Ooi and Tan had then appealed to the Court of Appeal.
I still think it's inadequate.  It's way too light.

And how can they call it a landmark case?

Really? Comeon!

Ironicaly on Star Biz also: Rajaratnam ordered to pay $92.8 million in SEC case
  • Rajaratnam ordered to pay $92.8 million in SEC case

    NEW YORK (Reuters): A federal judge ordered Raj Rajaratnam, the Galleon Group hedge fund founder sentenced to 11 years in prison for insider trading, to pay a record $92.8 million penalty in a related Securities and Exchange Commission civil case.
( See past postings Rajaratnam: Guilty On All Counts! and Trading: Is success guaranteed from INSIDER NEWS/TIPS? )

11 years in prison and US$92.8 million penalty!!!

Now this is what I will call a LANDMARK case!

Mems? It's still a joke. The penalty is way too light!

And do consider this May 2008 posting:  Mems Asks For Support!!

Saturday, November 05, 2011

Bernama's Amazing Article On Lingui

Just noticed the following article from Bernama published on Star Biz: Lingui first quarter pretax profit up 65%

  • Saturday November 5, 2011

    Lingui first quarter pretax profit up 65%

    KUALA LUMPUR: Lingui Developments Bhd registered a 65.15% increase in pretax profit for the first quarter ended Sept 30, 2011 to RM24.04mil from RM14.56mil in the corresponding three-month period.

    Its revenue grew 19.16% to RM435.01mil from RM365.06mil.
    In a statement, Lingui said gross profit for the period increased 58.61% to RM34.03mil from RM21.46mil previously.

    “The increase in the group’s core profit before taxation was mainly attributed to strong operating results from the logs segment. In addition, the return to profitability of the group’s plywood and veneer operation also contributed significantly to this quarter’s performance,” it said.

    Lingui said the group’s performance in future quarters might be affected if the correction in timber prices following Japan’s delay in commencing its post earth quake reconstruction, was prolonged.

    “Although faced with a volatile and uncertain operating environment, the group continues to work on improving operational efficiency by enhancing the productivity of its workforce and equipment fleet and emphasising tight control over cash cost of production,” it added. — Bernama

Sounds pretty good, yes?

Now compare that article to this one from the Edge: Lingui posts RM28m 1Q net loss

  • Lingui posts RM28m 1Q net loss Written by Max Koh
    Friday, 04 November 2011 11:52

    KUALA LUMPUR: Lingui Developments Bhd posted a net loss of RM28.1 million for 1QFY12 ended Sept 30, compared with a net profit of RM39 million a year earlier. Revenue was up 19% year-on-year to RM435 million.

    In its notes to Bursa Malaysia, the timber company attributed the net loss to changes in fair value of biological assets less estimated point-of-sale costs of RM25.9 million, foreign exchange differences amounting to RM15 million, and losses in associates and joint-controlled entities of RM8.6 million.

    Lingui also noted that it saw lower sales of its timber products during the quarter.

    Lingui sold 186,501 cubic metres of hardwood logs at an average price of RM484 per cu m during the quarter. “Prices for hardwood logs achieved by the group remain stable due to tight log supply and relatively robust demand from India and China,” it said. It also sold 133,188 cu m of softwood logs at RM299 per cu m, and 55,910 cu m of plywood at RM1,902 per cu m.

    Lingui posted an operating profit of RM19.5 million in the quarter compared with RM9.6 million a year earlier.

    At the company AGM yesterday, managing director Yaw Chee Ming said Lingui is planning to invest RM143 million in FY12 for timber replanting efforts, infrastructure and upgrading of equipment. He said Lingui is looking at replanting 10,000ha to 15,000ha of its Sarawak timber plantation in FY12.

    “Our hardwood trees mature between eight and 10 years. We have planted some 30,000ha and hope to replant up to 15,000ha,” he said, adding that replanting costs RM4,000 to RM5,000 per ha.

    Lingui is planning to invest in and upgrade its machinery to cope with the worker shortage in Indonesia.

    On its softwood plantations in New Zealand, Yaw said Lingui plans to increase its harvest to 800,000 cu m per year in the next two to three years, with the upgrading of infrastructure and amenities.

    “We are investing between RM8 million and RM12 million to build roads and other infrastructure that will help increase our harvest,” he said. Lingui harvested 520,000 cu m of softwood for FY11.

    On its outlook, Yaw said hardwood prices have softened and are expected to maintain at current levels given the stable demand from China and India. “Demand for hardwood from India has been quite stable despite concerns of inflation. Demand from China has remained stable although there was a slight decline,” said Yaw.

    He added that plywood prices have already peaked on speculation on the rebuilding in Japan after the March 11 disaster. “The price has eased since. We expect prices to pick up again once the rebuilding in Japan begins and the stock depletes,” said Yaw.

    Analysts are expecting the rebuilding in Japan to begin next year, which would increase demand for plywood. Lingui exports 60% of its plywood to Japan.

    For FY11, Lingui posted RM191.7 million in net profit on the back of RM1.65 billion in revenue. It has 721,00ha of forest concessions in Sarawak and 35,000ha of forest plantations in New Zealand. It also has an associate stake in Glenealy Plantations (Malaya) Bhd.

    Lingui’s stock has fallen 40% in the last six months to a low of RM1.10 before closing at RM1.54 yesterday.

    This article appeared in The Edge Financial Daily, November 4, 2011
In short..


Hello Bernama!!!