Trading in Singapore listed, Malaysia based, software solution provider Silverlake Axis was halted today after the share plunged 24%, as reported by The Edge.
The reason for the plunge and the trading halt is the following anonymous report:
"The Unbelievable Financial Alchemy of Silverlake Axis"
It is a rather comprehensive report with quite a lot of detail. I leave it to the readers to draw their own conclusions.
A bit more background about the company and its founder can be found in two recent articles in The Star, here and here. From the last article, one worrisome sentence:
"But investors find it hard to comprehend technology-based companies and even in the region, where Singapore-listed Silverlake Axis has a S$3.19bil market capitalisation, and where the bulk of its business derives from, many do not understand the company."
What now is needed from Silverlake Axis is a comprehensive, blow-by-blow, answer on all allegations in a very short time, preferably over the weekend. A flat denial, a superfluous answer or an attempt to shoot the messenger will simply not do (I guess Noble Group will agree with that, they have tried them all before).
Silverlake Axis should also be able to come up with a quick answer since this report does not come as a surprise. Rumours have been flying regarding this company for quite some time (I was aware of them), witnessed for instance by this article or this posting. In other words, the company was warned and should be prepared.
For Malaysia, it is another blow to its decreasing credibility.
First of all, there are simply too many scandals recently.
Secondly, corruption (one of the country's largest problems) is mentioned in the report as a possibility:
The corruption is not actually proven (that would be very hard to do for an outsider), but in the main report itself there is clearly more detail given than the above.