KUALA LUMPUR (July 15): Mah Sau Cheong — a substantial shareholder of South Malaysia Industries Bhd (KL:SMI) — is suing two companies, Techbase Industries Bhd (KL:TECHBASE) and YB Ventures Bhd (KL:YB), over alleged share manipulation at SMI.
Techbase and YB Ventures are among defendants in the suits filed by Mah through his solicitors, Messrs Alfred Lai & Partners. Both companies were served with a writ of summons and a statement of claim dated July 4, last Friday, accusing them of conspiring to violate Sections 176 and 202 of the Capital Markets and Services Act 2007.
Mah claimed this has adversely affected all SMI shareholders, including himself, who holds a 7.65% stake amounting to 16.06 million shares.
Mah is seeking financial compensation from the second to the 30th defendants in the suits. They include Techbase and its subsidiaries, Honsin Apparel Sdn Bhd, HiQ Media (Malaysia) Sdn Bhd and Laser Capital Holdings Sdn Bhd, as well as YB Ventures and its subsidiaries, Yi-Lai Marketing Sdn Bhd, Yi-Lai Industry Bhd, YB Technologies Sdn Bhd,and its 49%-owned associate Techbase System Sdn Bhd.
He is demanding RM24.08 million in compensation for the lost opportunity to receive a mandatory general offer (MGO) for his SMI shares at RM1.50 per share. Alternatively, he seeks RM17.02 million for the missed opportunity to receive an MGO at RM1.06 per share.
Having slipped 23% year to date, SMI’s share price closed at 48.5 sen on Monday that valued it at RM101.8 million.
As another option, Mah requested that the defendants jointly and severally pay general damages, which will be assessed by the Johor High Court, for depriving him of the chance to receive an MGO for his shares in SMI.
In response to this, Techbase and YB Ventures told Bursa Malaysia that they are seeking the necessary legal advice to defend against the claim. They do not expect any financial and operational impact arising from the claim pending the final decision from the court, save for the legal fees, disbursements and any other incidental costs.
Case management has been fixed on August 13.
Apart from Techbase and YB Ventures, Mah has also sued SMI, accusing the company of manipulating its shares, according to SMI’s filing with the stock exchange last Friday.
In February last year, Techbase, then known as Prolexus, emerged as SMI’s substantial shareholder with a 10.01% stake through Honsin Apparel and HiQ Media (M) Sdn Bhd. Honsin Apparel is now SMI’s largest shareholder with a 19.38% stake, according to Bloomberg data.
Businessman Au Yee Boon is ultimately the largest shareholder in Techbase via his shareholding in YB Ventures (formerly known as Yi-Lai Bhd), with an indirect stake of 17.29% stake. Au also holds a 4.51% direct stake in the company.
Shares of Techbase closed down half a sen or 2.38% to 20.5 sen on Monday, giving it a market valuation of RM59.69 million. YB Ventures was up half a sen or 2.38% at 21.5 sen, valuing it at RM62.65 million.