KUALA LUMPUR (Feb 9): Reneuco Bhd’s executive chairman Datuk Mustakim Mat Nun had disposed of a 6.9% stake in the company, a day before the release of the company’s delayed annual report on Thursday (Feb 8).
Some 77.26 million shares in Reneuco, representing a 6.88% stake, were disposed of on Feb 7, company filing showed.
The stake — 3.19% or 35.82 million shares held directly by Mustakim, and 3.7% held or 41.44 million shares through private companies OHP Ventures Sdn Bhd and Grand Deal Vision Sdn Bhd — were disposed of in the open market, checks on Bloomberg showed.
Shares of Reneuco traded between 3.5 sen and 7.5 sen on Feb 7.
Mustakim had also sold 380,000 shares or 0.34% stake in the company on Jan 31 — the first deadline for the company to submit its annual report, before the subsequent Feb 8 deadline was given by Bursa Securities.
With the disposals, Mustakim now holds a 0.08% direct and 16.98% indirect stake in the Practice Note 17 (PN17) company.
Reneuco’s annual report, released on Feb 8, dragged the company into PN17, following a disclaimer of opinion by external auditor Messrs Al Jafree Salihin Kuzaimi PLT, due to insufficient appropriate audit evidence.
Among others, the external auditor said it could not obtain enough evidence for the cumulative trade receivables balances of RM321.26 million, and RM196.31 million in trade payables balances from July 1, 2019 to June 30, 2023.
Upon request by the external auditor, Reneuco conducted a special independent review (SIR), which it said found that the sales transactions and costs with identified customers and suppliers “were sufficiently supported” by relevant documentation.
The SIR, conducted by Messrs UHY FLVS Sdn Bhd, also “received confirmation from the respective parties” for the sales transactions and cost of sales transactions, Reneuco said.
However, Al Jafree Salihin Kuzaimi PLT said the completion of the evaluation of the appropriateness of the management’s expert work on the SIR has been impeded by time limitation, adding that it had yet to obtain and complete the assessment on the reply of the queries to the management’s expert and has yet to perform other required procedures as at the date of the annual report.
The SIR was provided to Al Jafree Salihin Kuzaimi PLT on Jan 24 this year, it added. As for the three technical reports, only one had been received by the auditor on Jan 23. The remaining two project reports are still outstanding as of the date of the annual report on Feb 8, it said.
Separately, Reneuco also undertook an independent technical review on three hydroelectric projects by KBM Konsult Sdn Bhd, which found that two of them (in Perak and Sabah) demonstrate “strong financial viability” and "reasonable annualised rate of return”.
For the third project, located in Pahang, KBM Konsult said its success “hinges on effective execution”, adding that the project is progressing in accordance with the overall set milestones.
Prior to the release of the annual report, Reneuco changed its financial year end to September from June, after it booked an impairment loss of RM132.53 million in its quarter ended September, which brought its quarterly net loss to RM125.05 million.
Aside from Mustakim, Reneuco has E&E Catalyst Sdn Bhd as another substantial shareholder with 7.61% direct stake.
Reneuco closed 1.5 sen lower at 5.5 sen on Friday, giving it a market capitalisation of RM61.7 million.