This article first appeared in The Edge Malaysia Weekly on May 6, 2024 - May 12, 2024

It is uncommon to see a listed company being issued a show-cause notice by regulators.

Last Thursday, Annum Bhd, formerly Cymao Holdings Bhd, received the notice from Bursa Malaysia asking the company to explain why its shares should not be delisted from the local bourse following its failure to issue its annual report for the financial period ended June 30, 2023 (FY2023). The due date was Oct 31, 2023.

Although Annum finally managed to appoint SBY Partners PLT as its new auditor last March — after approaching 31 potential auditors — it said SBY was unable to form an audit opinion.

So, what caused the constraints? And how will the management deal with this?

The wood products manufacturer, whose shares have been suspended since last November, has been loss-making for the past four quarters. For 1HFY2024, it incurred a net loss of RM5.09 million — attributed to the cessation of its plywood trading business — versus a net profit of RM7.06 million the same period a year ago.

Annum’s management has said it is exploring the food trading business in other countries, as well as venturing into the smart office franchise business and Internet of Things.

A year ago, it launched the smart farming business, including the full spectrum of the agribusiness supply chain, after a diversification into the construction business.

It is not known how the new businesses have fared so far, as the company’s segmental contribution breakdown was not disclosed in its financial statements.

As at end-2013, it had cash and cash equivalents of RM2.52 million, substantially lower than the RM13.61 million recorded a year ago.

Interestingly, Datuk Seri Chin Kok Foong — a former director of Ageson Bhd — had re-emerged in February last year as Annum’s substantial shareholder when he bumped up his stake to 14.83%, from 2.02% previously, following the subscription of 29.13 million rights shares. He had ceased to be the company’s substantial shareholder in March 2022.

Since last July, there has been a slew of boardroom changes at Annum, with four board members stepping down.

Certainly, its minority shareholders have been left in the lurch amid the delisting risk.

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