Thursday December 31, 2009
Fiery Ho Hup EGM in store
PETALING JAYA: Ho Hup Construction Co Bhd’s EGM today is shaping up to be an explosive affair, with a subtantial shareholder led by Datuk Low Tuck Choy, the company’s former managing director, expected to vote against the company’s plan to dispose two parcels of land.
The main contention appears to be over the valuation of the properties concerned.
Low’s company Low Chee & Sons Sdn Bhd (LCS) had put up a notice last Friday in several major newspapers, saying that the two parcels of land were being sold at “below market price”.
LCS is the second-biggest shareholder in Ho Hup with 23.1 million shares, or a 22.66% stake.
On Tuesday, Ho Hup’s management issued its own notice to shareholders through a filing with Bursa Malaysia to assure them that the disposals were proposed “in the best interest of Ho Hup and its shareholders’’.
It is believed that Ho Hup’s biggest shareholder, Extreme System Sdn Bhd (28.5 million shares, or 27.95% stake), would vote in favour of the disposals.
Extreme System is linked to deputy executive chairman Datuk Lye Ek Seang.
Observers noted that it would only take a simple majority to either carry or defeat the resolutions concerning the land disposals.
Interestingly, about 5.6 million Ho Hup shares changed hands in the market yesterday, compared with 1.56 million transacted on Tuesday.
On Monday, the volume reached 9.6 million shares – the stock’s busiest day in more than two years.
Recent filings with Bursa Malaysia showed long-time director Lai Moo Chan had sold 800,000 shares in the company in the open market at 80 sen on Monday.
Ho Hup shares jumped 16.5 sen, or 25%, yesterday to close at 82.5 sen – its highest since October 2007.
At this level, the stock had more than doubled its value over the past one week. It is unclear at this juncture who is actually ramping up the stock.
In October this year, PN17 affected issuer Ho Hup had proposed a 95% capital reduction together with a plan to sell new shares to revive the company.
If the regularisation plan goes through, investors should be prepared to take a massive cut in their investments.