This article first appeared in The Edge Malaysia Weekly on May 1, 2017 - May 7, 2017

SHARES of China-based sports shoes and apparel manufacturer Multi Sports Holdings Ltd have been suspended from trading for almost a year as the company was unable to submit its 2015 annual report.

Now, minority shareholders who have been stuck in limbo are hoping that Paramjit Singh Gill, an investor who surfaced as a substantial shareholder in February last year, can pull a rabbit out of the hat.

To recap, Paramjit first emerged as a substantial shareholder with a 5.11% direct stake after buying 30.4 million shares on the open market on Feb 10, 2016. He continued to mop up more shares, raising his stake to 12.13% in March that year.

The buying stopped when external auditors dropped a bombshell last April, which caused a delay in the release of the company’s annual report 2015, including audited financial statements as well as the auditors’ and directors’ reports.

A filing with Bursa Malaysia on April 25 last year states that the delay was due to additional work to be performed by the external auditors, RT LLP, to verify expenditure incurred and bank balances.

Apart from that, Deloitte & Touche, the external auditors from Taiwan, were also unable to carry out their review in line with Taiwan Accounting Standard Requirements. Multi Sports had taken part in the Taiwan Depository Receipts (TDR) Programme to seek a secondary listing on the Taiwan Stock Exchange in 2011.

Subsequently, trading in Multi Sports shares was suspended on May 10 last year.

After he noticed something amiss at Multi Sports, Paramjit, a lawyer who was called to The Malaysian Bar in 1972, had on May 20 requisitioned the company to call a special general meeting in a bid to appoint five new directors. The requisition was ignored.

He then sent a second requisition in August but Multi Sports again failed to call for a meeting.

Paramjit said one of his main concerns was that the company had “clearly failed to perform or to convince the market of its value” as its share price had fallen about 95% from its initial public offering price of 80 sen.

Besides, he pointed out that the company failed to declare regular dividend payouts despite reporting profits until 2015, as well as retaining a “massive cash reserve” of about RMB575 million. He added it was “extremely worrying” that the company had failed to furnish its 2015 accounts.

Eventually, Paramjit — as a shareholder with more than a 10% stake — called for a meeting himself in September.  A special general meeting, held in October, saw six new directors appointed to the board: Clarence Yeoh Kong Chew, Guan Swee Kwee, Cheh Chee Mun, Terence Selvarajah, Kasinathan Tulasi and Naren Anand Gill.

So, what’s next?

While there may have been a boardroom shuffle, the trading suspension of Multi Sports shares will continue until further notice as the company has yet to issue its 2015 annual report as well as quarterly results for 2Q, 3Q and 4Q last year.

In the first financial quarter ended March 31, 2016 (1Q FY2016), Multi Sports slipped into the red with a net loss of RM8.9 million, compared to a net profit of RM6.1 million a year ago. For the full year ended Dec 31, 2015, the group remained in the red with a net loss of RM18.9 million, compared to a net profit of RM33.1 million the year before.

With the growing influence of Paramjit, some quarters are wondering whether he will inject his private businesses into Multi Sports in efforts to revive the company.

It is noteworthy that Paramjit, 73, is the chairman and ultimate shareholder of Virtus Green Plantations (Cambodia) Pte Ltd (VGP), which is involved in the oil palm business. According to its website, VGP only had 110 hectares planted in 2013. By 2020, it hopes to cultivate up to 6,000 ha of oil palm and set up a state-of-the-art crude palm oil mill.

VGP, which employs 150 Cambodian workers, 80 of whom are paid daily, is a wholly-owned subsidiary of Bluemac Resources Sdn Bhd.

A quick search with the Companies Commission of Malaysia reveals that Paramjit is the single largest shareholder of Bluemac Resources with a 50% stake, and is also a director and secretary.

An Australian, Robert Jean Christian Lefort, owns a 30% stake, with the remaining 20% held by one Mohan Tirugmanasam Bandam.

Lefort and Mohan, as well as Naren — a newly appointed director of Multi Sports — are listed as directors of Bluemac Resources.

It is not known what the relationship is between Paramjit and Naren. They share the same surname and address, and both are lawyers with KL-based law firm Messrs Gill & Tang.

Bluemac Resources, which has no financial records publicly available at the moment, was incorporated and registered on July 7, 2011, with its registered address at Bangunan Gill, Jalan Choo Cheng Khay, Kuala Lumpur.

Its nature of business is described as “general trading, land and property investment, investment holding”.

Multi Sports is not the only China-based company that has been thrust into the limelight for the wrong reasons. It will be interesting to see if a group of Malaysians can give it a new lease of life.

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