This article first appeared in Corporate, The Edge Malaysia Weekly, on July 18 - 24, 2016.

WHEN a troubled public-listed company secures a white knight, it is good news for the shareholders, but the story does not always have a happy ending. It is important to note that over the years, there have been numerous cases of ambitious plans — be it corporate turnarounds, restructuring exercises or business diversification projects — that never come to fruition or have yet to materialise.

A classic example is loss-making door manufacturer Anzo Holdings Bhd, previously known as Harvest Court Industries Bhd. In 2014, the company aborted plans to work with 1Green Enviro Sdn Bhd and Sagajuta (Sabah) Sdn Bhd, whose chairman was Datuk Mohd Nazifuddin Najib, the son of Prime Minister Datuk Seri Najib Razak.

During Nazifuddin’s brief tenure as a director of Harvest Court — from Oct 28 to Nov 21, 2011 — the company signed an agreement to design and build a RM70 million pulp and paper plant in Negeri Sembilan to process oil palm empty fruit bunches for 1Green Enviro, and another for a RM129 million contract to participate in Sagajuta’s mixed-use development in Kota Kinabalu, Sabah.

Nazifuddin and Harvest Court’s then CEO cum managing director Datuk Raymond Chan Boon Siew were founders, directors and shareholders of 1Green Enviro as well as the management behind Sagajuta.

Eventually, both business diversification plans were called off and Harvest Court remains in the red with a net loss of RM10.85 million in the financial year ended March 31, 2016.

Sterling Progress Bhd, formerly known as 1 Utopia Bhd, also had plans to reactivate its former core business of designing, manufacturing and distribution of industrial and mobile hydraulic equipment by the first quarter of this year, in view of the challenging operating situation faced by its ICT retail segment.

The company changed its name last November to better reflect its new corporate identity following the emergence of a new substantial shareholder — Leong Seng Wui, who is also the executive director of the company.

Sterling Progress reported a net loss of RM34.31 million in its financial year ended March 31, 2016, and the hydraulic division remains a minor revenue contributor to the group.

Masterskill Education Group Bhd had briefly diversified into a Chinese chain of restaurants in Hong Kong and China by acquiring shares in Gayety Holdings Ltd for RM19.9 million in April 2014.

To recap, the acquisition of Gayety came on the back of Masterskill’s then executive director and single largest shareholder Siva Kumar M Jeyapalan selling his entire 29.76% stake to Hong Kong-based businessman Gary How Soong Khong.

Subsequently, Masterskill sold its entire stake in Gayety for RM33.2 million between June and August 2014. Despite making an estimated gain of more than RM12.2 million in that particular quarter, the recovery proved to be short-lived as the company has never been able to return to profitability since then.

Now known as Asiamet Education Group Bhd, the company reported a net loss of RM21.73 million in its financial year ended Dec 31, 2015.

For private equity firm Creador and locally listed education services provider SMRT Holdings Bhd, which came in as white knights after accumulating substantial stakes in Asiamet early last year, the journey to profitability looks like a long one.

Four years ago, Ingenuity Solutions Bhd hogged the limelight when Ninetology Marketing Sdn Bhd offered to acquire a 39.44% stake in the company at 55 sen per share.

Ninetology has said it wanted to acquire the shares from major shareholder Chin Boon Long, Firstwide Success Sdn Bhd, Landasan Simfoni Sdn Bhd and Titanium Hallmark Sdn Bhd.

Having introduced the Ninetology brand of tablets in a soft launch in August 2012, Ninetology CEO and managing director Sean Ng reportedly said he intended to bid for “a few regional projects”, which would “only be possible” pursuant to its acquisition of Ingenuity.

It is worth noting that Chin turned down the restricted buyout offer, a deal that would have made him richer by RM90 million. He ceased to be a substantial shareholder in the company in March last year. And the rest, as they say, is history.

Now known as MMAG Holdings Bhd, the company incurred a net loss of RM18.7 million in its financial year ended March 31, 2016. It has seen better days. 

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.