Friday, 21 March 2014

Masterskill: who is Gary How?

Masterskill made an announcement on March 20, 2014:

MEGB wishes to announce that the Company had in the evening of 19 March 2014 received a notification from its substantial shareholder Mr. Siva Kumar A/L M Jeyapalan (“Mr. Siva Kumar”), who is also an Executive Director of the Company that he has entered into a Call and Put Option Agreement (“the Agreement”) on 19 March 2014 with Mr. Gary How Soong Khong (“Mr. Gary How”) (NRIC No. 690511-10-6087) of RM1705, 17/F, Hip Kwan Comm Bldg, 38 Pitt Street, Yaumatei, Hong Kong.

This came one day after its share had a decent run up from RM 0.32 to 0.38 (+19%) in much higher volume. Did some people know about this announcement beforehand and act upon it?

The Star writes:

Very little is known about How, a Malaysian who is based in Hong Kong, and why he is offering to buy the shares at a steep premium to the market price.

That seems to be true, searches by Google or LinkedIn don't seem to shed any more light on this person. Rather remarkably, since he might have to come up with RM 132 million, quite a nice and tidy amount.

So who is this Gary How, and how credible is this announcement?

Also, if he does exercise his call option, does he have to make a general offer for the remaining shares? The amount of shares is just below 30%, so I would guess that it is not needed.

I have written many times about Masterskill, a company that has performed horribly since being listed:

Year   Revenue   PAT
2008    203M     72M
2009    273M     97M
2010    316M    102M  <=== IPO
2011    250M     38M
2012    149M    -28M

2013     59M   -167M 

Its revenue is down by more than 80%, it booked horrible losses in 2013 (partly one-off losses that are hardly explained), and this all despite raising money during the IPO.


  1. Bursa Malaysia should probe whether this offer from Gary is credible or just a hollow Agreement with no other intention but to create excitement in the market. Time will tell.

  2. Dear Mr Wind,

    How do we send you interesting reports or articles? Your blog is excellent.

  3. Thanks for the compliment.

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  4. The agreement is structured with Gary How having a call option and Siva Kumar having a put option. This is a bit strange in the sense that why they did not conclude the transaction now rather than entering into such an agreement. Most possible scenario resulted in a sale by Siva Kumar. If the business improve, Gary How will exercise his call. If the business deteriorate, Siva Kumar will exercise his put.

    Also, why does Gary How want to enter into an agreement in which, he, as an outsider of the company, would have a shorter time to make a decision (6 mths) while the insider (i.e. Siva Kumar) have a longer time (10 months) to decide on whether he want to sell the company. Surely, this is a very disadvantaged agreement to the outsider. If the outsider did have RM 132 mil, he should be quite a savvy businessperson/ investor or at least he would have some good advisors. So, why did he enter into an agreement that look to be no win for him?

  5. Mr Wind.

    What is your e-mail address please?

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