Wednesday, 13 December 2017

Maxwells Mysterious Marketing (5)

The company announced:


" .... Beijing Taojin Law Office had on 11 December 2017 tendered their resignation due to the difficulty faced by Beijing Taojin Law Office in conducting the due diligence in relation to the litigations investigation such as (i) the Courts had not been cooperative; and (ii) the number of court cases and the amounts claimed cannot be conclusively determined yet at this juncture.

In view of Beijing Taojin Law Office’s resignation, the subsidiaries of the Company, Jinjiang Zhenxing Shoes & Plastic Co. Ltd and Maxwell (Xiamen) Co. Ltd, have appointed Guangdong Kingbridge Law Firm in the People’s Republic of China, who are familiar with Guangdong and Fujian provinces area legal matters, to conduct special due diligence on the litigations investigations involving the subsidiary of MAXWELL.


Guangdong Kingbridge Law Firm will also conduct special due diligence on the cash deposits placed with the asset management company and Maxwell (Xiamen) Co. Ltd’s advertisement expenses.
The Company has requested Guangdong Kingbridge Law Firm to issue the special due diligence legal opinion report by middle of January 2018."



This is a case that is dragging on for more than two years. Shareholders should not expect to get the clarity that is very much needed suddenly in one month time.

Monday, 11 December 2017

Sapura Energy "eking out profits in the majority of quarters"?

Article in The Star "Blip for Sapura Energy", one snippet:


"The stock ..... has been eking out profits in the majority of quarters since the collapse of crude oil prices in late 2014 ......"


Strictly speaking, this is correct, the majority of the quarters were indeed positive.

But ..... overall the company has bled a lot of money over those same quarteres since the losses were much larger than the profits.

The exact amount of the losses over the last 11 quarters is RM 800,000,000.00.

That is a lot of money and that would describe the current situation of Sapura Energy much better than "eking out profits in the majority of quarters". Good journalists should perform this kind of checks to give a more balanced picture.

Other interesting facts that are not revealed in the article are the total amount of liabilities of Sapura Energy (RM 22 Billion) versus only RM 1.9 Billion cash, and the rather high rewards for the controlling shareholder while the company is bleeding money.

Thursday, 30 November 2017

Maxwell: what does Mdm Li know?

I have written several times about Maxwell International, not in a very positive way, to put it mildly.

The company announced its quarterly results and again the revenue was exactly RM 0.00.

Optimists will say that it can't get much worse than that.

According to the balance sheet, the asset value per share is RM 1.00, mostly backed by cash.

The share price is lingering around RM 0.02.

So apparently not many people believe the balance sheet. I can't blame them for that.

Mdm Li, President and major shareholder, disposed of 20 Million shares at a price of RM 0.02 each.

Does she not believe the balance sheet either? If the cash is real, then surely the company can distribute it to the shareholders, who would hugely gain from it. And Mdm Li, as the controlling shareholder, can set that process in motion.

So why does she sell her shares, what does she know?

This is one of several China based companies listed on Bursa where the regulators should have acted in a decisive manner a long time ago.



Raine & Horne: was their punishment sufficient?

I wrote six years ago: "Are SC's administrative actions a real deterrent?".

The relevant punishment by the SC can be found here.




In March of this year I wrote "Land value increased 10 times in 3 years?"

One snippet:

  • Boustead Plantations proposes to sell a piece of land for RM 620.1 Million based on a valuation report by Raine & Horne dated December 1, 2016.
  • The land was acquired for only RM 60.4 Million three years earlier based on a valuation report by WTW dated September 5, 2013.
  • The difference in valuation is more than ten times over only three years, which seems shocking.



One snippet:


"The Malaysian Anti-Corruption Commission (MACC) has arrested two former real estate executives as part of its investigation into Felda investment Corporation's (FIC) purchase of the four-star Kensington Hotel in London.
MACC in a statement today said the duo were arrested at 1pm when they presented themselves at the MACC headquarters to give their statement.

"Based on the investigation, the two were suspected of manipulating the hotel price (valuation) resulting in FIC overpaying tens of millions," it said.

MACC said when the purchase of the hotel was underway between 2013 and 2015, the two served as chief corporate adviser and director respectively at the real estate agency Raine and Home."

Most likely the writer means Raine and Horne (not Home), a valuer that has also done many valuations regarding property owned by Bursa listed companies, so I assume that Bursa and the SC will follow this case with interest. If the allegations of the above deal are true, then other valuations done by the same people might have to be reviewed as well.


Today an article was published on Malaykini's website: "Valuer defends A$43m valuation for Mara’s UniLodge".

Two snippets:


A Malaysian-based chartered surveyor and valuer hired by Mara Incorporated Sdn Bhd (Mara Inc) to assess the price of the UniLodge building in Australia in 2012, has defended its allegedly inflated A$43 million (about RM133 million) valuation.

Raine & Horne International Zaki + Partners executive director Rosli Atan told Malaysiakini he was “confident” that the survey conducted five years ago was carried out according to the proper methods.

On Aug 28, 2012, based on the A$43 million valuation of UniLodge by Raine & Horne, Mara Inc paid A$41.8 million to purchase “all interests” in a BVI company called Thrushcross Ltd, despite that the company did not legally own the building at that time.

Rosli’s valuation report was an annexure to the sale and purchase agreement of Thrushcross. The seller was Scarlett Nominees Limited, another BVI-registered company.

The UniLodge valuation raised a red flag as Thrushcross eventually bought the building five months later for only A$23.5 million – a whopping A$19.5 million lower than Raine & Horne’s appraisal.


I am sure that the reader noticed the common link in all of the above articles.

Of course, a party is innocent until proven guilty. 

That brings me back to my original article written six years ago. I wrote, referring to the administrative actions (mostly reprimands) taken by the SC:


Is there any deterrent in these kind of punishments?