This article first appeared in The Edge Malaysia Weekly on July 13, 2026 - July 19, 2026

Insas Bhd’s (KL:INSAS) latest disposal of 150 million Inari Amertron Bhd (KL:INARI) shares for RM318.1 million raises a simple question: why does a company that is already in a sizeable net cash position need to sell one of its most valuable investments to fund “working capital”?

The disposal on July 2 at RM2.12 per share was at an 8.6% discount to Inari’s previous closing price. It follows an earlier sale of 100 million shares in May for RM186 million. Together, the two transactions have raised more than RM500 million while reducing Insas’ stake in Inari to 5.7%.

Management says RM259.7 million of the latest proceeds will be used for working capital, RM50 million for the repayment of revolving credit facilities and the balance for transaction costs and taxes. However, this explanation is difficult to reconcile with Insas’ balance sheet.

As at end-March, the group held RM232.1 million in cash and another RM913.6 million in bank deposits. Against total borrowings of RM511.3 million, Insas was in a net cash position of about RM643 million. After the latest disposal, its net cash pile could approach RM1 billion.

Insas’ balance sheet is probably the envy of many. Yet this conservatism has not translated into generous shareholder returns. From FY2022 to FY2025, annual dividends have remained largely unchanged at about RM16.6 million, with payout ratios ranging from just 7.7% to 20%.

Even if the company genuinely needed additional liquidity for its stockbroking or money-lending operations, investors deserve a clearer explanation as to why its existing cash resources are insufficient. Holding excess cash carries an opportunity cost, particularly when shareholders receive only modest dividends.

Another possibility is that the disposal reflects Insas’ view of Inari’s prospects. Inari has struggled with concerns about its heavy reliance on radio-frequency components for smartphones, a business many investors now view as mature. However, management has been steering the company towards optical photonics-related products, which could become its next growth driver. The question, then, is whether Insas is simply monetising a long held investment or signalling that it sees limited upside ahead.

Either way, Insas shareholders deserve more than a generic “working capital” explanation.

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