ACE Holdings to return RM814 million to investors due to disclosure of false information

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KUALA LUMPUR (April 4): ACE Holdings Bhd, an investment company, is returning RM814 million to its investors who subscribed for the private placements in September 2015 and January 2018.

In a statement, the Securities Commission Malaysia’s (SC) said ACE Holdings has made an unconditional redemption offer to all investors who subscribed to the two private placements.

The unconditional redemption offer by ACE Holdings came after the SC sanctioned the company relating to provision of false or misleading information in its private placement memorandums (PPM) dated Sept 8, 2015, and Jan 5, 2018 (PPM 2015 and 2018).

Investors are given 21 days from April 1 to submit their applications for the unconditional redemption.

ACE Holdings, which also holds a 25.01% stake in Apex Equity Holdings Bhd, has also issued corrective disclosures after the SC’s sanctions.

To recap, on Feb 27, the SC had made a surprising move. It granted a conditional approval for the proposed merger between Apex Equity and Mercury Securities Sdn Bhd. The approval is conditional upon the exit of its largest shareholder, ACE Investment Bank Ltd, which is a unit of ACE Holdings.

However, ACE Investment was not agreeable to the terms imposed by the SC. It was not clear whether the SC had detailed the rationale behind imposing such conditions.

In the corrective disclosures issued by ACE Holdings for the PPM in 2015, the group said it raised RM586.56 million from the private placement, without issuing a supplemental memorandum for an invitation or offer to subscribe for more than RM250 million, which was its initial fundraising target.

The group had also amended an item that stated that “ACE Credit Sdn Bhd offers potential subscribers a stable investment in the consumer credit industry with secured dividends from a growing cash flow that is supported by a recurring income business model in line with the growing income and rising standard of living”.

The item has been amended to “AHB provides investors a unique investment opportunity in consumer credit industry”.

Additionally, ACE Holdings disclosed that its present authorised and paid up share capital was at 50 million ordinary shares of RM1 each, instead of 100 million ordinary shares of RM1 each.  

For PPM 2018, AHB amended a statement to reflect the raising of funds exceeding RM250 million under PPM 2015.

The group also appended the utilisation of the funds raised was meant for investment in Islamic financial products such as Islamic credit and leasing industry, Islamic capital market activities and Islamic pre-IPO investments.

However, the fund raised, of which RM142.47 million was invested in shares, RM33.72 million was invested in property, while RM64.7 million was used for internal financing. Meanwhile, RM423.42 million was earmarked for corporate financing and RM79.95 million for retail financing.

In terms of share investments, the group has holdings in ConnectCounty Holdings Bhd, AE Multi Holdings Bhd, OCR Group Bhd, Sanchem Holdings Bhd, Technodex Bhd and Apex Equity Holdings Bhd.