Thursday, March 29, 2012

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

Got the following comments:

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


    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%!


    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????

    Thursday, March 08, 2012

    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

      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.

    Tuesday, March 06, 2012

    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

      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????

    Monday, March 05, 2012

    And Here Comes The Forced Selling At Silver Bird

    When it rains it pours....

    Announced tonight...

    Sunday, March 04, 2012

    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!

    Friday, March 02, 2012

    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

      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

    Here's my inteprtation of the article...
    • Saturday May 19, 2007
      DiGi and Green Packet may join forces
    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.


    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.....

    More Shocking Revelations Made About Silver Bird

    Things are getting really serious at Silver Bird.

    Posted on Star Biz:

    • Independent auditors find poor record-keeping, unable to verify sales transactions at Silver Bird

      Friday March 2, 2012
      Independent auditors find poor record-keeping, unable to verify sales transactions at Silver Bird
      By FINTAN NG

      PETALING JAYA: Poor record-keeping and the inability to verify sales transactions at Silver Bird Group Bhd are the reasons why Crowe Horwath, the independent auditors, has not been able to provide a basis for an audit opinion to the financial report for the financial year ended Oct 31, 2011 (FY11).

      “During the course of our audit for FY11, we expressed concerns to the audit committee and the board of directors over the validity and recording of certain transactions for which we were not able to obtain the sufficient and appropriate audit evidence and satisfactory explanations from management,” Crowe Horwath said in the independent auditors' section of the financial report released on Wednesday.

      The auditors said they were unable to verify the veracity of payments made amounting to RM7.6mil for the refurbishment of an existing warehouse and factory, as well as not being able to obtain information to verify additions of plant and equipment amounting to RM4.9mil.

      Besides that, the auditors were not able to verify transactions undertaken with five customers for the sweetened creamer business with revenue and cost of sales amounting to RM31.9mil and RM31.3mil respectively, while they were not able to verify the veracity of sales transactions undertaken with six customers from the bakery and telecommunications businesses amounting to RM149mil, including RM83.9mil in gross telecommunications sales.

      The auditors said the transactions cast a significant doubt on the financial performance and position of the bread and confectionary maker.

      They added that the accounting and other records required by the Companies Act 1965 to be kept by the company and its subsidiaries “have not been properly kept in accordance with the provisions of the Act”.

      “The audits of the subsidiaries have commenced but have not been completed as at the date of this report.

      “As a result of the delay in the completion of the audit of the subsidiaries, we have not been able to consider the financial statements and the audit reports of the subsidiaries,” the auditors said.

      Silver Bird issued a number of announcements to Bursa Malaysia on Wednesday, including notification of the suspension of group managing director Datuk Jackson Tan, executive director Ching Siew Cheong and general manager for accounts and finance Lai Poh Mei from Feb 24 to facilitate an internal inquiry into allegations of, among others, irregularities in the accounts.

      The board also said in separate announcements that three of the subsidiaries were in default of payment to Bank Islam Malaysia Bhd, Malayan Banking Bhd and CIMB Bank Bhd amounting to RM5.37mil, and that the company had triggered the Practice Note 17 criteria after not being able to provide a solvency declaration.

      In response to an inquiry from StarBiz on the solvency declaration, the directors said the company was “working on getting the solvency statement out as soon as possible”.

      Meanwhile, Lembaga Tabung Haji (LTH) and Berjaya Corp Bhd, major shareholders of the company, declined to comment while Koperasi Permodalan Felda did not reply to inquiries.

      “We'll leave it to the Silver Bird directors to issue any statements,” an LTH official said.

      Silver Bird's share price fell 20 sen to 20.5 sen at close when trading resumed yesterday following a request by the company to suspend trading on Monday after its directors said the company was unable to comply with stock exchange requirements to issue the annual audited financial statements within four months from the end of the financial year.
    This is about as serious as it can get.

    The auditors cannot verify sales transactions, they cannot verify payments made ( so where did the money go???!!!! ) ... and the MD and ED are both suspended (go figure the implications ) .... and then ... there is default of payment!!!!!

      More Shocking Developments At China Ouhua ( CNOUHA )

      Posted just the other day: China Ouhua Winery Announces Quarterly Losses

      Last night, China Ouhua announced a shocker!

      • Ouhua COO, director quit after Q4 loss

        Published: 2012/03/02

        KUALA LUMPUR: China Ouhua Winery Holdings Ltd yesterday announced the resignations of its chief financial officer Zheng Le Le and director Tam Fook Cheong.

        This came a few days after the company posted a fourth quarter net loss of almost RM7 million, against a net profit of more than RM7.3 million same quarter a year ago.

        The company’s cash balances also fell during the financial year from more than RM300 million in 2010 to RM110 million, while trade receivables increased to RM228 million from a mere RM125 million a year ago.

        Zheng said the resignation was due to “some personal reasons”, while Tam resigned due to heavy commitment to consultancy works. Tam was also the chairman of the audit committee prior to his resignation.

      The CFO quits!!!!

      The Chairman of the audit committee also quits!!!!

      What???? What????? What????

      Good grief!!!! How can this be happening????

      How on earth could such a company be allowed to be listed in our stock exchange!!!!!

      Latest Development On Envair

      Got the following set of comments from the posting "Since Listing, Smartag Had Reported Losses Every Quarter!"

      • Furex said...

        Dear Moola, would you mind to share on your opinion on the latest development on Envair. Thanks

      The latest development on Envair?

      Well.... if I am not wrong... I think the stock is in play... but whether the current play would see the stock goes higher or lower... I have no idea.

      However on the corporate side.. so this ... 'carpetman' .... has announced that he had purchased back shares into Envair.

      LOL! Sorry for laughing but isn't this way too comical?

      So the said and much publicised plan is to push Envair into an O&G stock.

      And that's about it... that's the most educated opinion I can give.

      Will the O&G move payoff? Could Envair make big bucks in the future in the O&G sector?

      I dunno...

      Is it wise to invest based on this factor?

      Best opinion I can offer is.... perhaps from a sporting perspective. Enjoy footy? Say, I ... Moolah.... went and purchased a stake in a footy club in the English SECOND division.... and then ... following my purchase (with me being an unknown... one who owns a barnyard business ... and certainly no track record in the footy business) ... boldly announce that my team would be a future success and my team would make it into the English Premier League soon. And that's all I have announced. And I did not disclose any clear plans on the possibility of me injecting money into the team and no clear plans on the coach and the possibility of new players.

      Would you bet that my team would be a success? Would you bet on me and my new business?


      Now back to Envair...... all I can say for now is..... How?

      Thursday, March 01, 2012

      Deep Woes For Silver Bird

      From the EdgeMalaysia.

      • Silver Bird’s woes come to light
        Written by Chua Sue-Ann
        Thursday, 01 March 2012 10:43

        KUALA LUMPUR: Bread and confectionery maker Silver Bird Group Bhd yesterday confirmed the suspension of three key executives with effect from Feb 24.

        They are managing director Datuk Jackson Tan Han Kook, executive director Derek Ching Siew Cheong and general manager of accounts and finance Lai Poh Mei.

        Silver Bird said the suspension of the trio was to facilitate an internal probe into allegations of irregularities in the company’s accounts.

        The announcement confirms The Edge Financial Daily’s report yesterday that Silver Bird’s board had suspended Tan and two other managers to facilitate the internal investigation.

        Silver Bird’s board said it is currently unable to ascertain the extent of the financial and operational impact of the alleged irregularities but estimates the maximum exposure to be approximately RM111.5 million.

        Additionally, Silver Bird’s board has lodged a police report in relation to the alleged financial irregularities and reported the matter to the regulatory authorities.

        Adding to its woes is the classification of the company as a PN1 and PN17 counter. In a filing with Bursa Malaysia yesterday, Silver Bird said it had triggered the PN17 criteria given that its auditors Crowe Horwath had expressed a disclaimer opinion on the group’s latest audited accounts for its FY11 ended Oct 31.

        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.

        The three units were in default of a total of RM5.36 million in bankers acceptance facilities from three lenders, Bank Islam Malaysia Bhd, Malayan Banking Bhd and CIMB Bank Bhd.

        The bulk of the amount in default was incurred by Stanson Marketing, which owes RM4.42 million to its lenders

        Ironically, Silver Bird’s substantial shareholders include pilgrim fund Lembaga Tabung Haji with a 22.19% stake, tycoon Tan Sri Vincent Tan Chee Yioun’s Berjaya Corp Bhd (20.53%), Koperasi Permodalan Felda Malaysia Bhd (12.7%) and venture capital fund CVC Ltd (9.07%).

        Tan is Silver Bird’s fourth largest shareholder with his 10.84% direct equity interest and has been at the helm of the group for over 10 years.

        Silver Bird explained that the issues were brought to the board’s attention when the auditors expressed concerns over the validity and recording of certain transactions.

        According to Silver Bird, its auditors had expressed concern on eight main issues including a RM10.6 million contract to refurbish an existing warehouse and factory, payments of RM69 million made to an equipment supplier and the common parties relationships between the group’s customers and suppliers.

        Silver Bird added that its auditors also raised issues with the group’s new sweetened creamers trading business segment, the audit trail of all sales transactions and revenue recognition in the telecommunications segment.

        Its auditors had also pointed out that the credit period for trade receivables appeared to be unusually high and that the cash collected and payment made were cleared by the banks after more than seven days from the balance sheet date, Silver Bird said.

        What’s next for Silver Bird?
        Now that Silver Bird is an affected listed issuer, it will have to submit a regularisation plan to the authorities, failing which its shares and warrants will be suspended from trading and subsequently delisted.

        Nevertheless, Silver Bird said it intends to formulate a regularisation plan to address its PN17 status.

        On the operations front, Silver Bird’s board had formed a special committee comprising its five non-executive directors to oversee the group’s operations in the interim.

        Silver Bird also announced that it had appointed PKF Advisory Sdn Bhd to conduct a forensic review into the company’s affairs.

        It also appointed Messrs Wong Kian Kheong as legal advisors and intends to form an inquiry committee to look into the investigation of Silver Bird’s group accounts.

        The forensic accountants and inquiry committee have three months from Feb 29 to complete their investigations.

        Silver Bird’s cash dwindles
        In a separate announcement yesterday, Silver Bird’s board said that it had reversed its earlier decision to change its financial year end, opting to maintain it at Oct 31.

        The group yesterday also issued its annual audited accounts for its FY11 ended Oct 31, 2011 in which its auditors expressed a disclaimer opinion.

        In its FY11, Silver Bird’s net profit grew 35.12% to RM4.93 million from RM3.65 million a year ago, while revenue rose 22.13% to RM232.06 million from RM190.01 million.

        As at Oct 31, 2011, Silver Bird’s cash and cash equivalents had plunged to RM3.55 million from RM21.32 million.

        In its audited annual accounts, Silver Bird’s board warned that there may be bad debts and additional allowances that may need to be made for impairment losses on receivables.

        Silver Bird’s shares and warrants will resume trading today after it was suspended from Feb 24 at the group’s request.

        Prior to its suspension, Silver Bird’s shares took its steepest plunge in over two months, falling 5.81% to 40.5 sen on Feb 24 from 43 sen a day earlier.

        This article appeared in The Edge Financial Daily, March 1, 2012.
      I had posted on Silver Bird many times before. You can read them here:  Silver Bird

      Since Listing, Smartag Had Reported Losses Every Quarter!

      Posted several times before:

      June 2011: Is Smartag Worth A Bet?
      June 2011: Smartag: I Am Wrong Because The Stock Moved Higher?
      Aug 2011: A Quick Look At Smartag's Earnings.

      Smartag reported its earnings the other day. It reported losses again.

      But the lack of sales revenue was most glaring.

      Have a look.

      Now if you look at the above snapshot, on 13th April 2011, Smartag made two quarterly earnings report. But Smartag made its listing debut on 18th April 2011. Which means those 2 set of earnings was made before Smartag was listed.

      Now if I take this into consideration, since listing, Smartag had reported losses for every quarter!!!!



      Yet another QUALITY-LESS company being listed on our stock exchange.


      And Ideal Jacobs Posts Losses

      Last year, a few ACE (ACE? Bah! For me, it's still MESS-daq ) stocks were listed and because of their stock performance, they caught the attention for all the wrong reasoning.

      One of them was

      1. Ideal Jacobs Promising Debut? 
      2. Ideal Jacobs - Stinking Up The Whole Market 
      3. Yet Another Brilliant Performance From A Newly Listed ACE Stock!
      What happened was the stock opened at an incredible premium.

      It IPO-ed at 27 sen. Opened at 1.05, reach a high of 1.10... and then.... the stock collapsed and by the next day the stock reached a low of 35.5 sen.  ( Hmm.. what's the precise description for such a stock play? Anyone? )

      What irked me was the press had the gall to hail it as a promising debut.

      Three months later the company reported quarterly losses! ( see Yet Another Brilliant Performance From A Newly Listed ACE Stock! )

      Last night Ideal Jacobs announced its earnings.

      It lost money again!

      Below is the screen shot of what they have done since listing...

      Oh... Ideal Jacobs last traded yesterday at 17 sen!!!



      Yet another quality listing on Bursa Malaysia!

      Comeon... what's the point of listing such quality-less company in the exchange?

      Is it to turn the exchange into a bigger casino?

      Oh but wait... Bursa is business. It's a listed company. It has to make money!