Wednesday June 16, 2010
Mystery still shrouds Kenmark; shares dive
By B.K. SIDHU
No controlling shareholder has emerged yet
PETALING JAYA: The exit of Datuk Ishak Ismail adds more confusion to the already mysterious Kenmark Industrial Co (M) Bhd, the share price of which took another beating in yesterday’s trading, falling 15% to 11 sen.
No controlling shareholder has emerged so far after Ishak sold out on June 9, even though the trading volume in the past few days has been high. Yesterday, 38 million shares changed hands.
Despite that the four directors entrusted to revive the operations are saying they are working around the clock to resolve issues and restart operations, that is not likely any time soon.
“The state of affairs in Kenmark is worrying. We are very concerned about the apparent failure of checks and balances that are expected in the running of a public-listed company.
“The exit of its new substantial shareholder (Ishak) in just 10 days after he bought the shares further adds to the murkiness of the situation in Kenmark,’’ Minority Shareholder Watchdog Group (MSWG) chief executive officer Rita Benoy Bushon said.
Ishak, when asked about his change of heart after he was so gusto about the prospects of Kenmark when he bought into the company, said: “James was supposed to return and manage the company; that was our initial agreement and it was on that basis that I bought into the company. Obviously things have changed.
“I have tried persuading James to return up to last week but he does not seem keen. He has not kept to his word and I cannot hang around if he cannot fulfil his promise.’’
Ishak was referring to James Hwang, the Taiwanese managing director of Kenmark and major shareholder until Ishak emerged.
Kenmark said Ishak ceased to be a substantial shareholder on June 9. He divested his entire 32% in the company.
Hwang and fellow Taiwanese, Chen Wen-Ling, have shaved their stakes in Kenmark as well. Hwang reduced his stake to 8.41% from 29%, while Chen cut hers to 7.76% from 16%. The two now have a combined 15.17% stake in Kenmark.
Hwang’s disappearance in late May created enough chaos for the company’s share price to plunge and its plants in Port Klang and Vietnam to be shut down.
Rita is questioning why there were no red flags raised by the board, independent directors or auditors.
She said the investing community and stakeholders had no inkling what was going on at Kenmark until the spectacular collapse in the share price on May 31, putting Kenmark’s minority shareholders in serious jeopardy.
“Corporate governance and transparency is very lacking in Kenmark based on the events which have unfolded – from the spectacular collapse in its share price, un-contactable MD to the emergence of a new controlling shareholder, inability to issue financial statements and now, question mark over who is the current substantial shareholder,’’ Rita said.
She wants those responsible brought to the book.
Bursa Malaysia says it is in the thick of its investigations and does not want to let the cat out the bag until it completes its investigations. It would not say how long it needs to investigate but continues to monitor Kenmark for necessary disclosures.
“We will not hesitate to take appropriate action for any breaches found,’’ said a Bursa official.
The Securities Commission (SC) is undertaking a detailed investigation, covering all dimensions of trading activities and accounting reports.
“It is done with necessary urgency and we will take appropriate action should our investigation disclose breaches of securities laws,” it said.
“The SC will not tolerate any action that undermines investor confidence and will take all measures to protect the integrity of the market,’’ it added.
Kenmark executive chairman Datuk Abd Gani Yusof said “whether there is a controlling shareholder or not, the four directors are carrying on with the mandate they have been given.”
Gani and another director were appointed by BHLB Trustees and the other two by some lawyers.
“We will go on doing what we are entrusted to do until such time there is a controlling shareholder. If the new shareholders want us to continue we will do so, if not we will leave. But for now some serious work is getting done at Kenmark,’’ Gani said.
He said the company had managed to recover some of the stolen machinery and that many of the employees had returned to work at the Port Klang plant.
Now it is a matter to starting the operations, but he could not say when.
“Our next task would be to get the markets and suppliers that we have lost, and we will get our key people to work on that,’’ Gani said.
Ishak no longer substantial shareholder of Kenmark
Obligations of independent directors - Kenmark eye opener
Kenmark still under SC, Bursa probe
Bursa CEO calls Kenmark MD’s behaviour irresponsible
Hwang hives Kenmark stake to 8%
Kenmark shares down