This article first appeared in The Edge Malaysia Weekly on November 27, 2017 - December 3, 2017

A couple of weeks ago, the Sessions Court granted property company Menang Corp Bhd’s former managing director, Datuk Eddie Shun Leong Kwong, a discharge not amounting to an acquittal (DNAA) for a charge under Section 420 of the Penal Code, involving certain land deals.

A DNAA happens when a charge lacks grounds, or where there is insufficient evi-dence, or even where an investigation is incomplete and can be strengthened, among others.

According to legal sources, a DNAA is a double-edged sword as while it may allow Shun to walk free now, he could be charged again later.

The Edge understands that there may be other investigations being undertaken by other enforcement agencies.

However,  efforts to verify this were unsuccessful as questions to both Bursa Malaysia and the Securities Commission Malaysia were not answered at press time.

Toh May Fook, the 12.5% shareholder of Menang who was instrumental in bringing the charge against Shun, was unsure of his plans with his shareholding.

“Given the latest confusing development, I will have to weigh all available options after issues and events are clarified by the relevant regulatory institutions,” Toh says.

Menang managing director Collin Too Kok Leng declined to comment when contacted, but had told The Edge in August that “we actually did call a special board meeting to discuss the issue, we got Datuk Eddie [Shun] to come, to explain, and we are satisfied with his explanation at this juncture”.

On questions as to why Shun is still on the board of Menang Development (M) Sdn Bhd and how his family is controlling Menang, Too says Shun only holds a non-executive position and his children are part of his succession plan.

Menang did not announce the charge against Shun.

Shun has a 10% stake held under his son, Christopher Shun Kong Leng, and 11.29% under his vehicle, Titian Hartanah (M) Sdn Bhd, which he controls with Datin Mariam Eusoff and Datuk Abdul Mokhtar Ahmad.

Shun may have retired from Menang in end-November last year but he still has clout as his son-in-law, Raja Shahruddin Rashid, is the deputy managing director and his daughter, Marianna Aly Shun, is an executive director while Christopher a non-executive director in the group.

To recap, in July, Shun was charged under Section 420 of the Penal Code for allegedly cheating and dishonestly inducing delivery of property. He had pleaded not guilty on Aug 2.  The land dealings involved two companies — The Continuum Sanctuary Commercial Sdn Bhd and Menang’s wholly-owned Menang Development.

Toh was appointed executive director on April 22 last year and redesignated as deputy managing director four days later. However, he was redesignated as non-independent non-executive director three months later, on July 19, and retired in end-November last year.

On Aug 26, 2016, Menang set up an investigation committee to review Toh’s conduct as a director. When queried by the local bourse about the establishment of an investigation committee, Menang explained that Toh had appointed a financial consultant to look at land transactions going back as far as 2005.

“The said appointment was done without the knowledge or approval of the group managing director and the board directors of the company and Menang Development, a wholly-owned subsidiary of the company, although the letter of appointment was made on behalf of the board of Menang Development,” it said.

This was a “matter of extreme and grave concern that Toh has inappropriately and without approval of the board appointed a third party to conduct an investigation of internal matters”, Menang said. It resulted in Toh’s suspension.

Toh gave his side of the story in a meeting with The Edge a couple of months ago.

“During my time there, I discovered a questionable transaction. Being a chartered accountant and involved in forensic audit, I could sense something was wrong. I asked an accounting firm to independently review [the matter]. And upon review, it found more,” Toh said.

On whether he should have got board approval for the audit, he said, “What’s wrong with a director conducting an internal audit of the company? If there is nothing wrong in the company, the board can reprimand me by making me pay the bill for the audit. This is all an excuse to me [to keep mismanaging the company]. They deprived me of the opportunity to enter the office, so how do I give them the documents?”

Last Thursday, Menang closed at 90 sen, giving it a market capitalisation of RM240.4 million. This would mean that Toh’s 12.5% stake or 33.39 million shares have a market value of RM30.05 million.

Menang has not paid any dividend since 1999.

It is unclear at what price Toh bought in, but he first surfaced as a substantial shareholder in February 2014 with 17.12 million shares or a 6.41% stake, but this fell below the 5% disclosure threshold in August 2014 when he sold 12.38 million shares.

He resurfaced as a substantial shareholder on Nov 20, 2015, with 13.84 million shares or a 5.18% stake, and continued to accumulate the company’s shares until June last year, when it traded at between 64.5 sen and 95.5 sen.

Menang’s net assets per share as at end-June this year was RM1.14, but could be much higher. According to its FY2017 annual report, Menang has 13 parcels of land, totalling close to 715 acres. Nine of the parcels were last valued in 1998 and the rest, in 2001 and 2004.

For its financial year ended June 30, 2017, Menang posted a net profit of RM11.32 million on revenue of RM105.10 million. The group’s cash and cash equivalents stood at RM41.43 million while its long-term debt commitments amounted RM621.05 million and short-term borrowings, RM50.68 million.

Menang has delivered three private financing initiative projects — UiTM Seremban 3, UiTM Puncak Alam and UiTM Nilai — to Universiti Teknologi Mara and the government, and stands to receive availability and maintenance charges amounting to RM1.8 billion over the next 18 years, which means it is in good shape.

Given the development thus far, will Toh sell out of Menang?

As for Shun, will he face more legal battles ahead?

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.