Sunday 7 June 2015

Tanjung Offshore: special auditor's report

Three announcements (here, here and here) by Tanjung Offshore regarding the report that was finalized by the special auditor, looking into several possible irregularities.

The first announcement writes that "....the Special Auditor is of the view that there does not appear to be any conflict of interest or related breach of duty with respect to Tan Sri Tan Kean Soon and Muhammad Sabri Ab Ghani.".

Although important news, that was a rather limited announcement, so the company followed up one week later with more detail:

First of all, good news for shareholders activism in Malaysia, because of the complaints by the minority shareholders the ball started rolling.

Six deals were being reviewed, unfortunately not the sale of their main business to Ekuinas, about which I wrote before.

The forensic report does not find any problem regarding the Bourbon deal, since anyhow the company "was legally not in a position to pursue due to the Non-Compete Clause" (which the company signed when it sold its business to Ekuinas.

That might very well be the case, but it is still rather strange, since the non-compete clause was all the time there, it didn't suddenly pop-up. It was also not mentioned in their announcement on June 5, 2014, which does not seem right, surely it should have been explicitly mentioned as condition precedent to the deal that the non complete clause had to be waived by Ekuinas for the deal to proceed.

The Gastec deal is under investigation with the MACC.

The UK property acquisition will be valued. There seems to be an issue with the refurbishment regarding non-performance.

The EPDM project does not appear to have followed the correct procedures.

Regarding the chromite mine, there are several breaches.

Lots of work to do, this is only a first stage of investigation, lawyers, Bursa, MACC and possible other agencies have their work cut our for them.

No comments:

Post a Comment