This article first appeared in The Edge Financial Daily on November 16, 2017

KUALA LUMPUR: Palette Multimedia Bhd chairman and managing director Eg Kah Yee has lambasted My EG Services Bhd (MyEG) group managing director Wong Thean Soon for revealing the latter had disposed of his holdings in Palette, saying his statement is unprofessional and uncalled for.

“Actually, he had sold off [the stake] a long time ago; the sad thing is why he (Wong) [has to] go to the media, I don’t know. I have no idea [as to] why he has to go to the media and announce it,” Eg told reporters after the group’s annual general meeting yesterday.

“He (Wong) probably sold it (his stake) 10 days ago. We have checked the list of shareholders — his name was not there. He announced to the media on Nov 13. To me, that was uncalled for. No one asked you (Wong) to do [it]. It’s a surprise,” he said.

Shares in Palette fell as much as 19.5% on Tuesday, after Wong said he had disposed of his holdings in Palette and will refrain from making any passive investments in listed equities in future. About RM18 million of Palette’s market value was wiped off in a single day.

On Monday, Wong issued a brief statement in response to news reports which insinuated he was planning to acquire Malayan United Industries Bhd (MUI). Wong said then that he had disposed of all his shareholding in Palette and MUI because certain media had picked up the information in the annual reports and created a misconception of an impending corporate exercise in the companies.

Eg said Wong could have actually made a general statement that he will not make passive investments in listed companies. “You can make the statement [in a] general [manner]. That’s it. You don’t have to name it because it is really unprofessional.”

He also noted that people will only find out about Wong’s name in the vested companies’ annual reports.

“If his [shareholding] is not above or at 5%, he doesn’t have to announce. You will only find him in the annual report and that’s how he will be identified. Other than that, there is no way to actually find out whether he is in or he is out [of the company],” said Eg.

Palette’s share price had rallied after Wong emerged as one of the group’s investors. Wong was listed in Palette’s annual report as the fifth-largest shareholder with a 3.92% stake. Wong was also reported as holding a 0.31% stake in MUI.

Eg urges investors to look at the long-term health of the company, adding that the group’s fundamentals will not be changed overnight. “Investors should be looking at the long term because a company runs a business for the long term. A company doesn’t run a business on a short-term basis ... My job is to build the business,” he quipped.

Palette’s share price rebounded yesterday, rising as much as 16% to an intraday high of 40.5 sen before closing 3.5 sen or 9.86% higher at 39 sen, with 46.16 million shares done, making the stock one of the top active counters on Bursa Malaysia. Its market capitalisation stood at RM128.41 million.

Eg said for the current financial year ending May 31, 2018 (FY18), the group aims to expand its presence in existing markets by pushing its products more particularly in Russia.

“Russia has contributed about 90% of the group’s revenue, while i-medic software for healthcare and the cloud service contributed equally to the revenue.

“The Russian market is taking off now because the government there is driving the market [in terms of technology adoption for the healthcare sector], while for the other markets, the governments have not passed the laws to allow that yet.”

Palette will also strengthen and deepen its presence in Asean countries such as Singapore and Malaysia, as well as countries like China and Taiwan.

“We want to expand our market coverage. Russia and China are the biggest markets for us so far,” he added.

Eg said as Malaysia and Singapore have become the hub for medical tourism, Palette indirectly can penetrate into these countries by rolling out its i-medic application.

I-medic connects to multiple wireless intelligent medical or healthcare devices used by doctors, caretakers and hospitals. It is ideal for healthcare management of patients, as well as step-down care after patients are discharged from hospitals.

Palette is a technology-focused company with strengths in network design, and product  and software development.

For the first financial quarter ended Aug 31, 2017, Palette returned to the black with a net profit of RM3 million from a net loss of RM516,000 a year ago. Its board of directors is of the opinion that the group will be profitable in FY18.