KUALA LUMPUR (Sept 14): Lion Group said its steel miller Megasteel Sdn Bhd has temporarily ceased operations after suffering losses in the past several years, due to excessive dumping of steel products by foreign millers.

Prior to the closure, the situation had resulted in the unit operating intermittently, depending on market conditions.

The government's announcement that the termination of investigation for the safeguard petition on imported hot rolled coils (HRC) had further impacted Megasteel's operations, which resulted in staff retrenchment.

Lion Diversified Holdings Bhd said this in a bourse filing today on its 21%-owned associate company. The balance 79% in Megasteel is owned by Lion Corp Bhd.

The filing was in response to a news report published in a local daily, quoting industry sources, that Megasteel has closed down its 17-year-old flat steel products plant in Banting, Selangor.

Lion Diversified said its wholly-owned subsidiary Lion DRI Sdn Bhd had also been similarly affected as Lion DRI supplies the entire production of hot direct reduced iron (DRI) to Megasteel as feedstock for the production of HRC.

As such, it noted it had, in its interim financial reports for the quarters ended Mar 31, 2016 and June 30, 2016, reported that the DRI plant had "temporarily shut down following Megasteel's temporary cessation of operation".