KUALA LUMPUR(Aug 15): Menang Corp (M) Bhd said that the company is unaware of investigations into its wholly-owned property development unit Menang Development (M) Sdn Bhd, as stated in The Edge Malaysia’s recent article.
The article, published in the Edge's Aug 14-Aug 20, 2017 issue, entitled “More Issues Cropping up at Menang Corp” quoted industry sources who said the investigations have led to charges against its former managing director and chief executive officer Datuk Eddie Shun Leong Kwong.
It also reported that Shun had allegedly sold some pieces of land belonging to Menang and acquired some for himself but these transactions had not been disclosed in the company’s books.
In response to a Bursa query over the article, Menang said “it is clear and obvious that being the group managing director he [Shun] had the authority to enter into land transactions for and on behalf of the company in the ordinary course of business".
Menang added it has no recorded transactions of sale of properties to Shun, as alleged.
Menang said it was informed that the charges against Shun arose from a report made by the then suspended director Toh May Fook, a day after his suspension, relating to two land transactions in 2007 and 2009.
“It is to be noted that neither the company nor the relevant parties in the sale and purchase agreement of the said land transaction lodged any complaints or reports to the authorities,” the company said.
The company said that an investigative committee (IC) was set up on Aug 26 last year to review Toh’s conduct that led to his suspension as a director.
Menang said Toh had refused to cooperate with the IC and failed to provide any substantive written reply to the IC regarding his conduct that led to his suspension.
“Further at the company’s annual general meeting on Nov 29, 2016 he failed to obtain sufficient votes to get re-elected as a director,” the company said.
Menang said that it has, at all times, taken the necessary steps to comply with Bursa Malaysia Securities Bhd’s Listing Requirements.
The company also said that the article’s mention of its “debt laden balance sheet” is misleading.
The Edge Article had stated that Menang has long-term debts of RM599.28 million as at March 31 and short-term borrowings of RM80.8 million, while its cash balance stood at RM37.88 million.
In response, Menang stated that the said borrowings are derived from loan facilities to finance three Private Finance Initiative (PFI) projects as disclosed in the group’s annual report. The company added that the PFI projects are generating annual cash flows of RM104.27 million per annum for next 18 years, totalling approximate cash inflow of RM1.88 billion, against total borrowings of RM680 million as reported.
“This cash flow is to repay PFIs’ borrowings with a surplus to the group. The group has no issue in meeting loan repayment deadlines as all cash inflows are from the government and assigned directly to our financiers,” the group said.
The Edge had also stated that Menang has an errata in its FY2016 annual report, and in an announcement on the amendment, Menang noted that a 5.36 acre parcel in Seremban should be omitted from the company’s list of properties.
In its response, Menang said that the errata was not an omission as alleged.
“It is to clarify that the said land was already included in the company’s list of properties under “Seremban three various subdivided lots” in the Annual Report 2016, pages 101 & 102.
“This is consistent with the manner of disclosure of the company’s list of properties in the annual report 2015,” said Menang.
Menang shares closed down 0.5 sen or 0.59% to 83.5 sen today, for a market capitalisation of RM223.04 million.