This article first appeared in The Edge Malaysia Weekly on May 5, 2025 - May 11, 2025

IN the wee hours of the morning on April 24, hours before the market opened at Bursa Malaysia, a WhatsApp message on Bina Puri Holdings Bhd (KL:­BPURI) was being circulated. The message read, “Bank suing, originating summons on Bina Puri. Exim RM20 million. Can’t settle.”

That Thursday morning, the trading accounts of a group of investors were hacked and used for the unauthorised purchase of Bina Puri shares and its Warrant B securities.

To recap, Bina Puri on Feb 6 announced to Bursa Malaysia in a filing that it was looking at restructuring the US$7.65 million (RM33.93 million) loan, which carried an interest rate of 4%, granted by Export-Import Bank of Malaysia Bhd (Exim Bank). The announcement on the restructuring came after the company had defaulted on the loan and had been served a winding-up petition by Exim Bank a few days earlier.

The WhatsApp message in the wee hours of the morning was off the mark. Who was responsible for its contents was not known when checked with the parties who had seen the message.

More than 10 hours after the WhatsApp message was sent, at between 3.15pm and 3.30pm, the price of Bina Puri-Warrant B (BPURI-WB) doubled to 60 sen, before closing at 48.5 sen that Thursday. Still, the derivative was up nearly 62% from the previous day’s closing price.

The trading volume of the warrants swelled to 41.17 million, of which 33.15 million units changed hands at 60 sen. Notably, at 48.5 sen, the price of BPURI-WB was higher than that of the company’s shares.

On the same day, Bina Puri’s share price soared to the day’s high of 40 sen apiece — the highest level since end-August last year — before closing at 37.5 sen, a three sen rise.

After the market closed, Bina Puri announced that the hearing of the petition, scheduled for April 24, had been adjourned to June 11 by the High Court for Exim Bank and Bina Puri “to explore and facilitate a potential settlement”.

The following day, Bina Puri said, “The group views this matter seriously and is monitoring the situation closely. The group is ready to extend full cooperation to the relevant authorities, including the Securities Commission Malaysia and Bursa Malaysia, should they require any information or assistance during their investigations.”

The Bina Puri shares and warrants tumbled after April 24. The stock slid to 26 sen apiece while BPURI-WB plunged to 15.5 sen last Friday.

BPURI-WB was a free detachable warrant that came with the company’s cash call in 2023. It had issued 258.55 million units of BPURI-WB, with an exercise price of four sen and expiry on April 17, 2028.

In May last year, the number of warrants shrunk to 51.7 million as a result of a five-to-one consolidation exercise the company had undertaken. The trading volume of 41.17 million was equivalent to nearly 80% of the total warrants issued.

Bina Puri’s 2024 annual report shows that Chai Chan Tong was the largest holder of the warrants (15.11 million or 29.23%) as at Sept 30, 2024, followed by Datuk Matthew Tee Kai Woon (10.18 million or 19.7%), Maju Offshore Capital Sdn Bhd (6.78 million or 13.12%), Tan Sri Tee Hock Seng (4.94 million or 9.56%) and Andy Lai Wee Young (4.18 million or 8.09%).

Chai is the single largest shareholder of Bina Puri with a 20.53% stake (after the private placement in November last year). He emerged as a substantial shareholder in December 2022 after taking up 423.29 million shares in a private placement at 3.5 sen apiece (pre-consolidation exercise).

The Tee family, which previously controlled the construction firm, currently holds an 8.6% stake.

A few months later in April 2023, Bina Puri made a cash call, proposing a two-for-three rights issue of shares with free detachable warrants. Shareholders would be given one BPURI-WB for every five rights shares subscribed.

Chai joined the board as executive director in January. He was redesignated as group managing director of Bina Puri in October 2023, taking over the role from Hock Seng, who was then made deputy executive chairman. Chai, 36, is also group CEO.

According to Bina Puri’s 2024 annual report, Chai controls property development companies Oaks Group and Oaksworth Development, which are active in Kuching, Kota Samarahan and Matang in Sarawak, and whose projects have a cumulative gross development value of RM1.272 billion. He is also the founder and owner of Choon Eng (Sarawak) Sdn Bhd and CE Freight Sdn Bhd, which is involved in trading petroleum and petrochemical products as well as the freight business.

In an interview in October 2023, its executive director Matthew (Hock Seng’s son) told The Edge, “We are confident and hopeful of clinching more contracts in East Malaysia going forward. If everything works out well, we should be able to turn around as early as the next financial year ending June 30, 2024 (FY2024).”

Bina Puri has been loss-making since FY2020, with accumulated losses of RM211.18 million at end-2024. For the six months ended Dec 31, 2024, its net loss narrowed to RM18,000 on revenue of RM111.31 million. Its finance costs amounted to RM13.91 million.

At end-2024, Bina Puri had cash balances of RM22.49 million and fixed deposits of RM5 million. Its long-term borrowings totalled RM204.84 million while its short-term debts stood at RM122.04 million.

Bina Puri undertook two rights issues in a span of four years, from 2019 to 2023 (see table). In addition, it also issued new shares via private placements, which were equivalent to 30% of its paid-up share capital, and its Employee Share Option Scheme, equivalent to 15% of its paid-up share capital.

The latest private placement, of 131.136 million shares at 29.2 sen each, was completed in November last year. The company is seeking another extension of the completion date, until mid-September this year, for the remaining tranche of the placement.

Bina Puri’s share base would have been more than three billion shares if it had not undertaken the consolidation exercise. Its issued share capital now stands at 811 million shares.

Bina Puri had been in the news for the wrong reasons just a few months before the recent issues. The Minority Shareholders Watch Group (MSWG), in its official newsletter in February, pointed out five instances between November last year and February this year where the company was late in making an announcement to the stock exchange regulator, for various reasons.

The issues highlighted by MSWG put Bina Puri in a negative light.

“A review of the announcements above suggests that Bina Puri has not been making timely disclosures on three winding-up petitions, a lawsuit and a default in payment. The company’s disclosures consistently cited ongoing discussions, negotiations and procedural resolutions as reasons for delaying announcements. However, these explanations do not align with the clear requirements of the Main Market Listing Requirements. We find these justifications unconvincing,” says MSWG. 

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