KUALA LUMPUR (Feb 11): The disposal of a 6.88% stake in Reneuco Bhd by its largest shareholder Datuk Mustakim Mat Nun on Feb 7 was not voluntary but due to forced selling, a spokesperson for the company said.
The shares, which were disposed of one day before the Feb 8 deadline for the release of the company’s annual report, were force-sold by share margin financiers, the spokesperson told The Edge.
The stake — 3.19% or 35.82 million shares held directly by Mustakim, and 3.7% or 41.44 million shares held through private companies OHP Ventures Sdn Bhd and Grand Deal Vision Sdn Bhd — were sold in the open market.
The disposal netted Mustakim between RM2.7 million and RM5.8 million, based on the traded prices of Reneuco shares of between 3.5 sen and 7.5 sen on Feb 7. The counter was last traded at 5.5 sen on Feb 9, giving the company a market capitalisation of RM61.71 million.
Mustakim, who is also the executive chairman of Reneuco, also saw 380,000 shares or a 0.34% stake in the company sold on Jan 31 — the first deadline for the company to submit its annual report. The deadline was subsequently extended to Feb 8 by Bursa Malaysia Securities.
With the disposals, Mustakim is now left with a 0.08% direct and 16.98% indirect stake in the Practice Note 17 (PN17) company.
Reneuco’s annual report and financial statement, released last Thursday, dragged the company into PN17 status, following a disclaimer of opinion by external auditor Al Jafree Salihin Kuzaimi PLT, due to insufficient appropriate audit evidence.
Among others, the 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.
At the request of the 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 UHY FLVS Sdn Bhd, also “received confirmation from the respective parties” for the sales transactions and cost of sales transactions, Reneuco said.