Frankly Speaking: More questions than answers at Multi Sports

This article first appeared in The Edge Malaysia Weekly, on March 16, 2020 - March 22, 2020.
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Multi Sports Holdings Ltd announced last Wednesday that it had entered into a memorandum of understanding (MoU) with local shoe wholesaler Resta Enterprise Sdn Bhd to acquire shares in the latter. The announcement seemed fairly straightforward, except that it came nearly two months late.

According to the Bursa Malaysia filing, the MoU was signed on Jan 24 and it was an important one, judging from the fact that Multi Sports said the proposed acquisition would enable the loss-making, China-based shoe manufacturer to turn around. So, why the delay in announcing it to the public?

Details were also scarce on the size of Multi Sport’s purchase and how much it would pay for the stake. What was disclosed was the fact that the two parties had agreed to enter into a sale share agreement within three months of the date of the MoU.

But if investors expect more details on the MoU to be released, they will be disappointed.

On Friday, Multi Sports announced that it would be delisted from the Main Market of Bursa Malaysia on March 18 after Bursa dismissed its appeal for an extension of time to submit its regularisation plan. Multi Sports, a Practice Note 17 company, had on Jan 28 submitted an appeal against the exchange’s earlier rejection for an extension.

As a private company, Multi Sports will have no obligation to disclose details about its operations and financial statements.

Investors will also be left in the dark over its proposed acquisition of 100% equity interest in footwear manufacturer Lewre Holdings Sdn Bhd that was announced on Nov 5. Till today, no additional details have been given.

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