More and more developments in Stone Master, things are getting really murky.
The Edge Malaysia wrote an article "Stone Master Expose?"
From The Star's website "Another one bites the dust", one snippet:
"Apparently, in consideration of the exclusive right to distribute the products of the Chinese companies, certain local representatives were paid a sum amounting to RM11.59mil in the form of a non-refundable deposit, of which RM11.54mil was subsequently paid by these local representatives to Chan, who is still a member of the board."
Luckily the last part is not correct, I wrote about this subject before, since then Chan has since retired, according to this announcement. Half a year too late, but at least it was done.
The article in The Star further writes about interesting developments in Samchem Holdings, one snippet:
Industrial chemicals distributor Samchem Holdings Bhd earlier in the week received a special notice from seven of its shareholders, who collectively hold 19.8 % in the company, asking for the removal of Ng Soh Kian as an executive director of the company.
Soh Kian was appointed as an executive director in February 2009, just four months before the company was listed. Interestingly, Samchem’s CEO Datuk Ng Lian Poh, the brother of the company’s founder and executive chairman, Thin Poh, resigned earlier this month. He resigned due to personal reasons.
Thin Poh, who has stepped in as acting CEO, holds a 44.14% stake in the company. Soh Kian has been steadily whittling down his stake in the company and now has only 0.26%.
No reasons were given for wanting to remove Soh Kian from the board by the seven .....
Showing posts with label Stone Master. Show all posts
Showing posts with label Stone Master. Show all posts
Saturday, 27 May 2017
Monday, 13 February 2017
SC sues Stone Master executive (2)
Some updates in this case.
From The Edge: Stone Master deputy MD fails to strike out Securities Commission's civil suit
A few snippets:
Stone Master Corp Bhd deputy managing director Datin Chan Chui Mei failed in her application to strike out the Securities Commission's (SC) claims against her for allegedly causing wrongful loss to the company.
Following the decision by High Court Judge Datuk Has Zainah Mehat, the hearing of SC’s application for an injunction restraining her from dealing with monies in her bank account up to the amount of RM11.54 million, pending the disposal of the trial, is set for decision or clarification on March 20.
In September 2016, SC obtained an ex-parte injunction against Chan.
Chan was charged under sections 179 and 317A (1) of the Capital Markets and Services Act 2007 (CMSA). She received RM11.54 million out of RM11.59 million meant to be paid by Stone Master to local representatives of 23 foreign companies, relating to the exclusive rights to market and promote their products in Malaysia and Singapore.
Section 179 of the CMSA prohibits a person from using any manipulative device for subscription, purchase or sale of any securities.
Under section 317A, a director or an officer of a listed corporation is prohibited from doing anything with the intention of causing wrongful loss to the listed corporation.
The SC wants Chan to pay the regulator the sum of RM11.54 million, which is to be held in trust for Stone Master, and for Chan to be barred from being a director of a public-listed company for a period of five years.
In addition, the SC is also seeking a civil penalty of RM1 million against Chan.
Despite facing the charges, Chan remains as Stone Master's deputy managing director.
That last sentence sounds very strange, of course the deputy MD should have been suspended immediately, at least temporarily. It seems to me that the other Directors of the company also have a responsibility in this matter.
Also, it seems surprising (given the seriousness of the allegations of the SC) that things have not yet moved to the criminal court, apart from the civil penalty sought by the SC.
Stone Master issued its Annual Report 2016.
If one would read the Chairman's statement, one would not get a very accurate picture of what is really going on with the company. For that one would have to dive into the notes that accompany the accounts.
Note 26 (page 107 contains numerous Related Party Transactions. For instance Starfield Capital, a company related to the deputy MD, made a loan to the company of RM 18 Million.
Note 32 (page 117) details significant events during and after the financial year, a whopping 27 pages packed with information, some of it simply astonishing. Amounts in the Billions of RM are mentioned, and this for a company with a current market cap of only RM 9 Million (and consistently losing money).
If anybody would like to jump into the action, based on those Billions mentioned, one should first read the following paragraph (the current share price of Stone Master is RM 0.10):
My question: was the original business model based on the Exclusive Agencies and mentioning those Billions of RM really ever viable?
Also the action by the Securities Commission and the current PN17 status are mentioned in the annual report. And on page 146 one can find the disclaimer of opinion by the auditor, another clear red flag.
From The Edge: Stone Master deputy MD fails to strike out Securities Commission's civil suit
A few snippets:
Stone Master Corp Bhd deputy managing director Datin Chan Chui Mei failed in her application to strike out the Securities Commission's (SC) claims against her for allegedly causing wrongful loss to the company.
Following the decision by High Court Judge Datuk Has Zainah Mehat, the hearing of SC’s application for an injunction restraining her from dealing with monies in her bank account up to the amount of RM11.54 million, pending the disposal of the trial, is set for decision or clarification on March 20.
In September 2016, SC obtained an ex-parte injunction against Chan.
Chan was charged under sections 179 and 317A (1) of the Capital Markets and Services Act 2007 (CMSA). She received RM11.54 million out of RM11.59 million meant to be paid by Stone Master to local representatives of 23 foreign companies, relating to the exclusive rights to market and promote their products in Malaysia and Singapore.
Section 179 of the CMSA prohibits a person from using any manipulative device for subscription, purchase or sale of any securities.
Under section 317A, a director or an officer of a listed corporation is prohibited from doing anything with the intention of causing wrongful loss to the listed corporation.
The SC wants Chan to pay the regulator the sum of RM11.54 million, which is to be held in trust for Stone Master, and for Chan to be barred from being a director of a public-listed company for a period of five years.
In addition, the SC is also seeking a civil penalty of RM1 million against Chan.
Despite facing the charges, Chan remains as Stone Master's deputy managing director.
That last sentence sounds very strange, of course the deputy MD should have been suspended immediately, at least temporarily. It seems to me that the other Directors of the company also have a responsibility in this matter.
Also, it seems surprising (given the seriousness of the allegations of the SC) that things have not yet moved to the criminal court, apart from the civil penalty sought by the SC.
Stone Master issued its Annual Report 2016.
If one would read the Chairman's statement, one would not get a very accurate picture of what is really going on with the company. For that one would have to dive into the notes that accompany the accounts.
Note 26 (page 107 contains numerous Related Party Transactions. For instance Starfield Capital, a company related to the deputy MD, made a loan to the company of RM 18 Million.
Note 32 (page 117) details significant events during and after the financial year, a whopping 27 pages packed with information, some of it simply astonishing. Amounts in the Billions of RM are mentioned, and this for a company with a current market cap of only RM 9 Million (and consistently losing money).
If anybody would like to jump into the action, based on those Billions mentioned, one should first read the following paragraph (the current share price of Stone Master is RM 0.10):
My question: was the original business model based on the Exclusive Agencies and mentioning those Billions of RM really ever viable?
Also the action by the Securities Commission and the current PN17 status are mentioned in the annual report. And on page 146 one can find the disclaimer of opinion by the auditor, another clear red flag.
Monday, 17 October 2016
SC sues Stone Master executive
The Securities Commission announced:
Securities Commission Malaysia (SC) recently filed a suit against Datin Chan Chui Mei, Deputy Managing Director, Stone Master Corporation Bhd (Stone Master) for allegedly causing wrongful loss to the listed corporation.
In the claim, the SC alleged that Stone Master had entered into several agency agreements with 23 foreign companies for the exclusive rights to market and promote, in Malaysia and Singapore, products belonging to the foreign companies. In consideration of the exclusive rights granted to it, Stone Master paid several local representatives of the 23 foreign companies a sum amounting to RM11.59 million in the form of a non-refundable deposit. The SC alleged that of the RM11.59 million, a sum of RM11.54 million was subsequently paid by the local representatives to Datin Chan’s personal account, in breach of sections 179 and 317A(1) of the Capital Markets and Services Act 2007 (CMSA).
Section 179 of the CMSA prohibits a person from using any manipulative device for the subscription, purchase or sale of any securities. Under section 317A, a director or an officer of a listed corporation shall not do anything with the intention of causing wrongful loss to the listed corporation.
In order to prevent dissipation of the RM11.54 million paid into Datin Chan’s banks accounts, the SC had, on 28 September 2016, obtained an injunction from the Kuala Lumpur High Court to restrain Datin Chan from dealing with the monies in her bank accounts up to the amount of RM11.54 million. In granting the injunction, the High Court also ordered her to provide a detailed account of the RM11.54 million which she had received.
In the suit, the SC is seeking various orders, including an order that Datin Chan:
SC is also seeking a civil penalty for the sum of RM1 million against Chan.
The High Court has fixed 14 October 2016 for her to respond to the injunction application.
Well, that is quite heavy stuff and rather specific in amounts and payments made (except for the exact time line).
Not surprisingly, the share dropped like a stone (pun intended) after the news.
Bursa queried the company on the above, and the company replied in a rather disappointing way, without giving much specifics.
It also appears that Datin Chan stays on as an executive director, no announcement of her resignation has been made.
Would it not be much better if she steps down for the time being given the seriousness of the allegations, as long as the air is not cleared?
Securities Commission Malaysia (SC) recently filed a suit against Datin Chan Chui Mei, Deputy Managing Director, Stone Master Corporation Bhd (Stone Master) for allegedly causing wrongful loss to the listed corporation.
In the claim, the SC alleged that Stone Master had entered into several agency agreements with 23 foreign companies for the exclusive rights to market and promote, in Malaysia and Singapore, products belonging to the foreign companies. In consideration of the exclusive rights granted to it, Stone Master paid several local representatives of the 23 foreign companies a sum amounting to RM11.59 million in the form of a non-refundable deposit. The SC alleged that of the RM11.59 million, a sum of RM11.54 million was subsequently paid by the local representatives to Datin Chan’s personal account, in breach of sections 179 and 317A(1) of the Capital Markets and Services Act 2007 (CMSA).
Section 179 of the CMSA prohibits a person from using any manipulative device for the subscription, purchase or sale of any securities. Under section 317A, a director or an officer of a listed corporation shall not do anything with the intention of causing wrongful loss to the listed corporation.
In order to prevent dissipation of the RM11.54 million paid into Datin Chan’s banks accounts, the SC had, on 28 September 2016, obtained an injunction from the Kuala Lumpur High Court to restrain Datin Chan from dealing with the monies in her bank accounts up to the amount of RM11.54 million. In granting the injunction, the High Court also ordered her to provide a detailed account of the RM11.54 million which she had received.
In the suit, the SC is seeking various orders, including an order that Datin Chan:
| a. | contravened sections 179 and 317A of the CMSA; |
| b. | makes restitution to persons aggrieved by the contravention; |
| c. | pays the SC the said sum of RM11.54million, to be held in trust for Stone Master; |
| d. | be barred from being a director of a public-listed company for a period of five years. |
SC is also seeking a civil penalty for the sum of RM1 million against Chan.
The High Court has fixed 14 October 2016 for her to respond to the injunction application.
Well, that is quite heavy stuff and rather specific in amounts and payments made (except for the exact time line).
Not surprisingly, the share dropped like a stone (pun intended) after the news.
Bursa queried the company on the above, and the company replied in a rather disappointing way, without giving much specifics.
It also appears that Datin Chan stays on as an executive director, no announcement of her resignation has been made.
Would it not be much better if she steps down for the time being given the seriousness of the allegations, as long as the air is not cleared?
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