This article first appeared in The Edge Malaysia Weekly on December 19, 2022 - December 25, 2022

The long-standing issue between the Securities Commission Malaysia (SC) and the major shareholder of Apex Equity Holdings Bhd took a twist last week.

Ace Holdings Bhd, the major shareholder of Apex Equity, disposed of its shares in the brokerage. The shares, amounting to 25.6% equity interest, had been largely held by Ace Credit Sdn Bhd and through a fund.

The disposal followed the SC’s suit in the High Court seeking an order that Apex Equity’s wholly owned subsidiary Apex Securities Sdn Bhd and 11 individuals had contravened securities laws because Ace Holdings was not a “fit and proper” person to control the brokerage.

What’s perplexing is that the shares, amounting to more than 50 million, were offloaded on the open market over several days starting from Dec 9.

Generally, when such a large number of shares of an illiquid counter such as Apex Equity comes on the market, there is a tendency for the price to come under pressure. But the disposal of shares over a few days from Dec 9 did not cause the stock price to fall.

Instead, the share price went higher, suggesting that the selling was well absorbed by the market. So, was the selling orchestrated?

So far, the new shareholders have yet to emerge. But it has to be noted that the disposed shares were substantial and would determine who the controlling shareholder of Apex Equity would be.

The second-largest block of shares in Apex Equity is held by the family of the late Lim Siew Kim. But there has not been any indication so far that they would be taking over the company.

Hence, the key question is whether the new shareholder would need to meet the SC’s “fit and proper” criteria?

That is crucial in ensuring the future of Apex Equity because its licence to operate as a broker is at stake should the company not comply with the SC’s rules.

The rumble between Ace and the SC has been going on for some time, resulting in the exit of the former. Eventually, the identity of the new shareholders will be disclosed.

Until then, watch this space.

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