Monday 1 December 2014

MOL Global's share price crashes 54% (3)

MOL Global just announced its results for the third quarter:

  • Consolidated revenue increased by 5.6% to MYR47.7 million (US$14.5 million) from MYR45.2 million in the corresponding period of 2013.
  • Profit attributable to shareholders of MOL Global Inc. decreased 61.5% to MYR2.4 million (US$0.7 million) in the third quarter of 2014 from MYR6.3 million in the corresponding period of 2013.
  • During the course of the Company's review of its financial results for the third quarter of 2014, the Company's auditor discovered that its Vietnamese subsidiary, Nganluong Joint Stock Company ("Nganluong"), which was acquired by the Company in March 2013, reported revenue from its payment business on a gross basis, and accounted for the corresponding fees payable to merchants being included in direct cost and other ancillary expenses. However, the Company's accounting policy is to account for such transactions on a net basis because the Company acts as an agent with respect to these revenue arrangements, such that the corresponding fees payable to merchants should have been netted out of revenue and not included in direct cost and other ancillary expenses.
  • Two putative class action complaints have been filed against the Company and certain of its officers and directors alleging certain untrue statements and omissions in its registration statement and prospectus for the Company's initial public offering and seeking unspecified damages and other relief.

Sounds not good.

4 comments:

  1. I did not know that Malaysia had class action suits. Thought that was only available in the United States

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  2. Correct, I am not a legal expert, but a Malaysian company listed in the US might be subject to certain US laws as well. So a class action suit could then be initiated.

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  3. Yes Malaysia allows class actions suits(or representative claims). The famous one was by Lim Kit Siang against UEM.
    The MOL Global prospectus was issued in the USA and subject to US securities laws, I am not sure if the directors were aware of their liabilities when they took office.
    If I am not wrong three law firms have already filed class actions suits in the Unites States District Court, New York. I have the statement of claim of one of them.

    DP

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  4. Thanks for the information, I would be quite interested, do you have a link to the statement of claim?

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