This article first appeared in The Edge Malaysia Weekly on October 18, 2021 - October 24, 2021

LAST week, Datuk Seri Anne Teo, who has helmed outdoor advertising outfit Seni Jaya Corp Bhd as managing director and executive chairman since March 2005, ceased to be a substantial shareholder of the company. During the week, she sold 5.46 million shares, or 13.67%, in the company.

Teo, who stepped down as executive chairman in July and relinquished her positions in the audit, remuneration and nomination committees a month later, is still a director of Seni Jaya but has a stake of only 1.02% in the company.

It is not known at press time who Teo sold her stake to.

“It (Teo divesting) took me by surprise. She has been synonymous with the company for many years, she and her sister-in-law, but after looking at the company’s announcements and annual report, there is clearly something going on at Seni Jaya,” one market watcher says.

Teo’s sister-in-law, Datin Lee Nai Yee, is a non-independent non-executive director of Seni Jaya with 13.18% equity interest. Lee has been selling off small blocks of shares in the company.

There has been a lot happening at Seni Jaya, but no clear picture has emerged to indicate what is actually going on.

At end-August, CIMB Commerce Trustee Bhd surfaced as a substantial shareholder with 8.24% after taking up a four million share placement. According to Bursa Malaysia shareholding change announcements, CIMB Commerce Trustee is holding the shares for Kenanga Growth Fund. CIMB Commerce Trustee also sold small blocks of shares in Seni Jaya recently and reduced its shareholding to 8.03%.

At end-August, Seni Jaya changed its registrar from Securities Services (Holdings) Sdn Bhd to Shareworks Sdn Bhd, and the company secretaries, Yau Jye Yee and Chua Siew Chuan, resigned and were replaced by Tan Tong Lang.

Amid all these changes, two appointments to Seni Jaya’s board stand out — those of Julian Koh Lu Ern in early May and Lee Chin Cheh in early August.

Koh, an independent non-executive director of property developer OCR Group Bhd as well as Seni Jaya, took over Teo’s positions in the audit, nomination and remuneration committees. Chin Cheh, who is now an independent non-executive director of Seni Jaya, was until June a non-independent non-executive director of OCR.

According to Seni Jaya’s FY2020 annual report, OCR had accumulated 4.88% in the company as at May 17.

Seni Jaya’s new company secretary Tan is also OCR’s company secretary and Shareworks is also OCR’s share registrar.

According to Seni Jaya’s FY2020 annual report, Ace Credit (M) Sdn Bhd, which has a 7.75% stake in OCR and is the second-largest shareholder in the property development outfit, has accumulated two million shares, or 4.93%, in Seni Jaya.

Ong Kah Hoe — OCR’s largest shareholder, with 11.22% equity interest, and its managing director — has acquired 1.29 million shares, or 3.19%, in Seni Jaya. This would mean that OCR and parties linked to it have at least 13% in Seni Jaya and have an almost similar shareholding as Lee in the outdoor advertising company. Neither OCR, Ace Credit or Ong held any shares in Seni Jaya, according to the company’s FY2019 annual report.

OCR has been in property development and construction since 1989 and emerged on Bursa Malaysia via a reverse takeover of Takaso Resources Bhd in 2015.

What OCR has planned at Seni Jaya is anyone’s guess.

For its six months ended June, Seni Jaya suffered a net loss of RM3.46 million from RM2.8 million in revenue. As at end-June, the company had cash and cash equivalents of RM3.97 million and no borrowings.

Seni Jaya’s kitty is likely to have received a shot in the arm in August, however, from a private placement of eight million shares at RM1.98 each, which raised RM15.84 million but was not reflected in its June financials.

Seni Jaya had negative cash flow from operating activities amounting to RM3.96 million at end-June.

On its prospects, the company says, “Barring unforeseen circumstances such as the Covid-19 pandemic, the board is of the opinion that the group’s performance will remain challenging in FY2021.”

Seni Jaya last made a profit in FY2016, when it raked in RM595,454 in earnings from RM17.95 million in revenue.

Its annual report shows that its properties were shop lots, apartments, offices and factory spaces. A notable asset is a 40% stake in Big Tree Seni Jaya Sdn Bhd, which was awarded a 10-year concession in September 2016 for exterior advertising on Mass Rapid Transit Corp Sdn Bhd’s Sungai Buloh-Kajang MRT Line.

At its close of RM2.49 last Thursday, Seni Jaya had a market capitalisation of RM120.55 million.

Meanwhile, OCR suffered a net loss of RM12.58 million from RM24.58 million in revenue for its six months ended June. As at end-June, the company had cash and cash equivalents of RM48.69 million, short-term borrowings of RM43.64 million and long-term debt commitments amounting to RM44.31 million.

Of its prospects, OCR says, “The group remains vigilant over the current endemic and wishes to caution that its financial results for the remaining period may be adversely affected. However, we are broadly optimistic on the mid- to long-term outlook for the group and the [property] industry as a whole.”

During the last five years, OCR’s best financial performance was in FY2019, when it chalked up RM8.88 million in after-tax profits on the back of RM81.87 million in revenue.

At its close of 14 sen last Thursday, OCR had a market value of about RM82 million.

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