This article first appeared in The Edge Malaysia Weekly on January 31, 2022 - February 6, 2022

A deal undertaken by Muar Ban Lee Group Bhd (MBL) for the sale of some of its plantation assets held under Sokor Gemilang Ladang Sdn Bhd to Doa Huat Holdings Sdn Bhd in April 2021 has come back to haunt the company.

The sale of Sokor Gemilang was undertaken in April 2021 for a cash consideration of RM25 million, but the announcement of the sale to Bursa Malaysia was only made on Jan 21 this year — or nine months later.

In a reply to a query by Bursa on the delay in announcing the sale, MBL says, “The reason for the delay of the announcement was … a misinterpretation of the Listing Requirements where the company was under the impression that the announcement was only to be made after the relevant regulatory approval had been obtained, in this case, the consent from the state authority (of Kelantan) for the transfer of 100% equity interest in Sokor Gemilang to Doa Huat.”

In a brief phone conversation with The Edge, MBL managing director Datuk Chua Heok Wee says, “[The delay] was because we were dealing with the state government of Kelantan. They didn’t reply to us, then there was the MCO [Movement Control Order brought about by the Covid-19 pandemic].”

The Kelantan government’s approval is understood to be still pending, which means the transfer of shareholding in Sokor Gemilang to Doa Huat has yet to be completed.

While Chua downplays the issue, MBL seems to be in the crosshairs of market watchers and commentators, who are questioning the delay in announcing the sale.

Chua says, “[There is] no wrongdoing. We welcome any check on us. We didn’t do anything [wrong],” he says.

Asked about the market commentators who are insinuating wrongdoings at MBL, he says, “That [the news and analysis on blogs] is created by someone.”

Doa Huat is the vehicle of Datin Chok Chew Lan, the wife of businessman Datuk David Goh Hock Choy. Goh and the management of MBL were on good terms in April 2021, when the sale of Sokor Gemilang took place. But since then, the relationship between Goh and MBL has soured.

At presstime, Goh had not responded to a question put to him by The Edge as to whether he was seeking the return of the RM25 million.

At the centre of the feud between MBL and Goh is property company Symphony Life Bhd (SLB). MBL says Goh had used SLB’s funds to buy shares in Cycle & Carriage Bhd and attempted to block the privatisation undertaken by the auto player’s parent Jardine Matheson Holdings Ltd in the second quarter of last year. SLB is understood to have suffered losses as a result of this move.

Meanwhile, Goh said he and MBL were partners in SLB, and he even brandished a calling card with his name and the MBL logo on it. MBL’s Chua and executive director Tan Sri Tan King Tai @ Tan Khoon Hai were appointed to the board of SLB, replacing parties close to Goh. When this move took place, many wrote Goh off.

However, SLB CEO Chin Jit Pyng, who at one time was friendly with Goh, said during an interview with The Edge last year, “With Datuk David Goh, it’s never game over.”

Nevertheless, sources say the announcement to Bursa, pertaining to the sale of Sokor Gemilang, came about after Goh made overtures claiming that the conditions for the RM25 million purchase consideration had not been fulfilled.

Parties close to Goh have asserted that MBL used the funds from the sale of Sokor Gemilang to buy shares in SLB. MBL has a 17.66% stake in the property developer and is its largest shareholder.

Asked during his brief phone conversation with The Edge whether the funds from the sale of Sokor Gemilang were used to buy shares in SLB, Chua says, “Some [of the funds from the sale of Sokor Gemilang] were used [to buy shares in SLB].”

MBL’s announcement to the local bourse on the utilisation of the proceeds when queried on the delay in announcing the sale says, “As at Jan 24, 2022, a total of RM23.9 million has been collected from Doa Huat by the company (MBL) which comprises the down payment and part payments of the disposal consideration ...  The RM23.9 million collected has been fully utilised.”

MBL goes on to say that its unit that owned Sokor Gemilang, MBL Plantation Sdn Bhd, had paid RM18.8 million to its parent MBL, and RM5.1 million was paid to settle debts to other subsidiaries of MBL.

MBL also says it obtained borrowings of RM50.22 million to fund the acquisition of 67 million SLB shares from Gajahrimau Capital Sdn Bhd, the privately held vehicle of corporate player Tan Sri Azman Yahya.

To recap, MLB first emerged in SLB in April 2021 with 7.91% equity interest, or 49.92 million shares. In August, MBL acquired 67 million shares from Azman, raising its stake to 17.92%. MBL forked out 93.8 sen a share, or RM83.45 million, for Azman’s 14.1% stake.

Last Friday, SLB’s share price closed at 45 sen, translating into a market capitalisation of RM322.2 million. This means MBL’s 16.76% stake now has a market value of RM54 million.

For the nine months ended September 2021, MBL chalked up a profit of RM6.54 million from RM221.53 million in sales. As at end-September, it had cash and bank balances of RM18.18 million and fixed deposits of RM2 million with licensed banks. It is noteworthy that the company had retained profits of RM89.42 million.

Last Friday, MBL’s share price closed at 39.5 sen, giving the company a market value of RM90.2 million.

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