KUALA LUMPUR (May 30): Shares in Lagenda Properties Bhd (KL:LAGENDA) hit their lowest in nearly four years on Thursday, amid a fallout from anti-corruption investigations into one of the developer’s key personnel.
The counter fell as much as 27% or 31.5 sen to 85.5 sen, its lowest since November 2020, adding to Wednesday’s (May 29) 30% plunge. The two-day decline wiped out some RM674 million from the stock’s market capitalisation.
At market close on Thursday, shares in Lagenda settled at five sen or 4.27% lower at RM1.12 after 289.81 million shares traded, valuing the company at RM937.81 million.
Bursa Malaysia has suspended intraday short selling (IDSS) for Lagenda Properties again on Thursday, after the stock hit the limit down. Lagenda’s IDSS will only be reactivated on May 31 (Friday) at 8:30am, according to the local bourse.
Apex Securities, who is the sole research house that has a “hold” call on the counter, noted that “the ongoing investigation has indirectly tarnished the group’s reputation”.
Apex emphasised the need for proactive communication from Lagenda’s management in addressing key stakeholders’ queries regarding financial impact, business operations and the group’s sustainability to restoring investors’ confidence.
The research house has trimmed its target price for Lagenda Properties to RM1.12 (based on a higher discount rate at 50% to RNAV), to account for perceived “weak effective management practices”. Still, there is potential for an upward re-rating if the investigation yields a favourable outcome and subsequently restores Lagenda’s reputation, it noted.
Lagenda currently has four “buy” ratings, with the consensus 12-month target price standing at RM2.04, according to Bloomberg data.
On Tuesday, Jasrinderjit Singh Dhillon, Lagenda’s head of investments and investor relations, assured analysts that it is “business as usual” for the property developer, despite the detention of one of its senior personnel by the Malaysian Anti-Corruption Commission (MACC) for a four-day period.
The detention was related to an investigation into the alleged subdivision of 650 hectares of Malay reserve land into non-Malay land in Manjung, Sitiawan, Perak.
Jasrinderjit did not disclose the identity of the detained personnel. However, the Board of Directors and executive director Andy Chua Seng Hooi will temporarily assume leadership responsibilities.
Lagenda’s six-member board primarily consists of non-executive directors, with managing director Datuk Doh Jee Ming being an exception. Doh, who controls a 57.33% stake in the property developer, holds the majority of shares through his investment vehicle, Lagenda Land Sdn Bhd.
Bursa Malaysia disclosures reveal that Lagenda Land offloaded an 11.35% stake (equivalent to 95 million shares) in Lagenda at RM1.40 apiece, or RM133 million, in February this year. As a result of this transaction, the vehicle’s stake in Lagenda fell to 51.59%.
Local media reported on Tuesday (May 28) that a managing director of a real estate company was remanded by the anti-graft body. to assist in an investigation concerning the subdivision of Malay reserve land in Manjung, Perak.
Jasrinderjit noted that as far as Lagenda is aware, that sole senior personnel is the only individual to be remanded and the investigation does not concern the group, nor any of its units.
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