This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025
Some deals by corporate figures and persons of influence took the market by surprise. What will they do next?
Lee Yeow Seng
CEO of IOI Properties Group Bhd
All eyes are on how a conflict of interest (COI) situation hanging over IOI Properties Group Bhd (IOIPG) (KL:IOIPG) and its CEO and major shareholder of IOI Group Lee Yeow Seng will pan out.
A proposal by Lee pertaining to the redevelopment of the S$538 million Shenton House, a property in Singapore that Lee privately acquired in November 2023 in a tender via his vehicle Shenton 101 Pte Ltd, raised investor concerns, particularly from institutional shareholders like the Employees Provident Fund (EPF), which holds a 7.74% stake in IOIPG.
Yeow Seng, who controls IOI Properties with his brother Datuk Lee Yeow Chor, in June offered to sell Shenton 101 to IOIPG at the price he had purchased it for plus upfront costs incurred, including expenses for consultants and the tender.
However, on Aug 28, IOI Properties’ board decided not to accept the offer due to its ongoing capital commitments. Nevertheless, the board (with the exception of the Lees) agreed to enter into management agreements to develop the project.
Over the following months, Yeow Seng would request a shareholders’ meeting to get their consent to be engaged in a business that is in competition with IOI Properties, only to retract it subsequently, citing that “Lee wishes to reconsider the options available to address the potential conflict of interest (COI) position and plans to engage further with the institutional shareholders to constructively address their concerns”.
Yeow Seng’s move to retract the proposal is said to have been wise to avert it being rejected, given the concerns raised by the institutional shareholders. He has up to the first quarter of 2027 to reconsider the options and “address concerns held by all relevant stakeholders” as redevelopment work is scheduled to commence then.
Ultimately, will he be successful in his quest to develop Shenton House into a commercial development? — By Cheryl Poo
Christina Tee Kim Chin
CEO and managing director of Cape EMS Bhd
Christina Tee Kim Chin, the group CEO and managing director of Cape EMS Bhd (KL:CEB), has seen her stake in the company drastically reduced due to margin calls triggered by a sharp drop in the company’s share price.
Tee, who once controlled 38% of the Johor-based electronics manufacturing services provider that debuted on Bursa Malaysia in March 2023, now owns just 11.12%, following forced sales of her pledged shares under margin financing accounts.
The situation unfolded after Cape EMS’ share price nosedived by 60%, from RM1.02 on July 15 to 40.5 sen on Aug 6, wiping out RM610 million in market value within less than a month. The plunge coincided with the company revising its earnings guidance for the financial year ending Dec 31, 2024 (FY2024).
It is learnt that Cape EMS’ initial revenue guidance was about RM700 million but it was later revised to RM650 million after an operational review. Meanwhile, its revised earnings forecast for FY2024 stood at around RM45 million to RM46 million, against the consensus of RM74 million. The revisions, coupled with weaker investor sentiment, triggered selling pressure and margin calls.
Tee had pledged her entire stake in Cape EMS as collateral for margin loans, a risky strategy that backfired when the stock price plummeted. Forced disposals of her shares further contributed to the stock’s slide.
Despite the turmoil, Tee remains in her leadership role and has pledged to steer the company through its challenges. Analysts are now closely watching Cape EMS’s ability to stabilise its business and win back investor confidence.
At the time of writing, shares of Cape EMS had declined by 64% year to date, to close at 38 sen, giving it a market capitalisation of RM372.13 million. The company posted a quarterly loss of RM18.95 million in the third quarter ended Sept 30, 2024 (3QFY2024), dragging its nine-month cumulative net profit to RM3.15 million.
Interestingly, in mid-November, businessman Chung Chee Yang surfaced as a new substantial shareholder of Cape EMS with a 5% stake. He has been mopping up shares in the open market and now has an 8.09% interest.
The Edge had in November reported that Ekuiti Nasional Bhd (Ekuinas) is said to be among the suitors keen on buying a block of shares in Cape EMS. — By Liew Jia Teng
Datuk Farhash Wafa Salvador
Former political secretary to Prime Minister Datuk Seri Anwar Ibrahim
Datuk Farhash Wafa Salvador, who is known for his role as the former political secretary to Prime Minister Datuk Seri Anwar Ibrahim, is making waves in corporate Malaysia.
The 42-year-old former political aide appears to have connections with two prominent businessmen, namely Tan Sri Vincent Tan and Wong Thean Soon, also known as T S Wong.
Farhash first made the news in the business pages in early 2023, when he was appointed to the boards of Berjaya Land Bhd (KL:BJLAND) and 7-Eleven Malaysia Holdings Bhd (KL:SEM), both majority owned by Tan.
This year, his involvement with Heitech Padu Bhd (KL:HTPADU) thrust him into the limelight, particularly due to the company’s position as the front runner for the National Integrated Immigration System (NIISe) project.
On March 12, Rosetta Partners Sdn Bhd, a vehicle linked to Farhash, bought a 15.91% stake in HeiTech Padu, making the former the single largest shareholder in the company involved in the provision of systems integration, network-related services, data centre management, disaster recovery services and other information technology-related services.
The acquisition came just a week after MyEG Services Bhd (KL:MYEG), a company controlled by Wong, acquired a 14.99% stake in Heitech Padu.
Further courting controversy, Farhash ceased to be a substantial shareholder of HeiTech Padu, just a month after acquiring the block.
In a bourse filing, Heitech Padu said Farhash is no longer a substantial shareholder following the “cessation of his deemed interest by virtue of the change in shareholdings in Mfivesouthsea Sdn Bhd, the holding company of Rosetta Partners”.
According to Farhash, the shares he held in HeiTech Padu through Rosetta Partners were jointly owned with Sultan Muhammad V of Kelantan. He also emphasised that he has never been involved in any part of government administration and political activities and is now fully focused on business and corporate matters.
Aside from Heitech Padu and MyEG, Farhash via Rosetta Partners is also linked to two other companies in which Wong has interest, namely Excel Force MSC Bhd (KL:EFORCE) and Cuscapi Bhd (KL:CUSCAPI). It was reported that he emerged in Rosetta Partners as a director on March 11, just a day before the vehicle acquired a block in Heitech Padu. — By Intan Farhana Zainul
Wong Thean Soon
Co-founder and group managing director of MyEG Services Bhd
Wong Thean Soon, or T S Wong as he is famously known, had been a shareholder of Heitech Padu Bhd back in 2018. The co-founder of MyEG Services Bhd first emerged as a substantial shareholder in Heitech Padu with a 5.38% stake through his vehicle Asia Internet Sdn Bhd but ceased to be a substantial shareholder after three years.
In March this year, it took the market by surprise when MyEG, the company in which Wong has direct and indirect interests of 28.87%, acquired almost 15% in HeiTech Padu. His move raised eyebrows, particularly given that Heitech’s share price had more than doubled at the time, fuelled by speculation that the company was the front runner for the RM1 billion National Integrated Immigration System (NIISe) contract.
However, Wong clarified that MyEG’s investment in Heitech Padu extends beyond the NIISe project, emphasising the strategic value of combining both companies’ expertise moving forward.
Wong made the right move as Heitech Padu announced on Oct 18 that it had won the RM892.2 million NIISe. Notably, HeiTech is the incumbent operator of the Malaysian Immigration System (MyIMMs), which has been in operation since 1993.
Interestingly, there had been fears that MyEG may lose its immigration concession contract with the Immigration Department with the implementation of NIISe. The plan is that in two years, third-party vendors such as MyEG will cease to process all services related to the Immigration Department once the NIISe goes online. MyEG has been providing immigration-related services since 2010.
Just days after Oct 18, both Heitech Padu and MyEG announced that they have formed a partnership for current and future e-government projects in Malaysia in which either one party is involved.
After many years of working separately as solutions providers to the government, Heitech Padu and MyEG will collaborate on the highly anticipated NIISe project. Following this, how Wong steers MyEG will be closely watched. — By Intan Farhana Zainul
Lim Aik Hoe, Lim Aik Kiat and Lim Aik Fu
Founders of Exsim Group
Boutique developer Exsim Group is no stranger to many property purchasers in the Klang Valley, having established a reputation in the development of high-rise buildings. Although Exsim itself is not listed, its founders — the Lim brothers — have been on an acquisition trail to buy stakes in a number of Bursa Malaysia-listed firms, namely Pan Malaysia Holdings Bhd (now Exsim Hospitality Bhd (KL:EXSIMHB), WMG Holdings Bhd (KL:WMG) and Milux Corp Bhd (KL:MILUX).
Lim Aik Hoe and Lim Aik Kiat are both managing directors of Exsim, while Lim Aik Fu is its deputy managing director. The brothers founded the real estate development group in 2008.
Exsim’s acquisition trail started with Exsim Hospitality Holdings Sdn Bhd’s purchase of a 65.9% stake in Pan Malaysia in March from three companies linked to prominent tycoon Tan Sri Khoo Kay Peng for RM36.73 million or six sen a share. Exsim later clarified that its property development business will not be injected into Pan Malaysia, which is involved in hotel and financial services businesses. Pan Malaysia was looking to diversify into interior design, fit-out and consultancy services.
The second firm that came under the spotlight is WMG, which received a takeover offer in October from Exsim Borneo Sdn Bhd and a person acting in concert Ben Kong Chung Vui, who collectively acquired a 70% interest in the Sabah-based property developer for 16.5 sen per share or a total of RM100.12 million.
However, WMG shareholders have been advised to reject the takeover offer as it was deemed “not fair and not reasonable”. The offer closed on Nov 22 and according to a Nov 27 announcement, WMG said it has until Dec 27 to comply with the exchange’s public spread requirement. Its public shareholding spread was 17.58% as at Oct 30.
Meanwhile, home appliance distributor Milux has become the latest target, following a takeover offer received from ABS Capital Sdn Bhd to acquire all the remaining shares it does not own at 43.2 sen per share.
In November, ABS Capital — in which Aik Hoe and Aik Kiat own a 55% stake — entered into eight share purchase agreements to acquire a 63.88% stake in Milux from executive vice-chairman Datuk Wira Ling Kah Chok and seven other shareholders for RM64.9 million, hence triggering the takeover offer for Milux.
The next move by the three brothers will be closely watched as they look to seize opportunities in the stock market. — By Lee Weng Khuen
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