This article first appeared in The Edge Malaysia Weekly on September 5, 2022 - September 11, 2022

SCGM Bhd has not wasted any time in rewarding shareholders after the sale of its core business to a joint venture comprising two companies from Japan.

Flush with cash of RM544.38 million following the sale of its wholly-owned subsidiary Lee Soon Seng Plastic Industries Sdn Bhd to Mitsui Co Ltd and FP Corp, SCGM declared a special dividend of RM1.85 per share to shareholders.

The company, which is now left without a core business, is poised to declare another 36 sen payout in the form of a capital repayment to make it a total of RM2.21 per share in payouts. This makes up 78.17% of the total disposal consideration, leaving the company with another RM118 million to look for a new business.

That amount is more than decent enough to turn SCGM into an attractive takeover target, which is probably why an interesting set of shareholders have emerged in the company.

Based on its latest annual report, Signature International Bhd, which is controlled by the Chin Hin Group, is among the top 30 shareholders with a 1.12% stake. Another company, Tenyin Holding Sdn Bhd, which is a shareholder of Signature International, has a 1.02% stake in SCGM.

The Chin Hin Group, which is led by Datuk Seri Chiau Beng Teik, has acquired controlling stakes in a few listed companies in the property development segment. Another shareholder in Signature International is Datuk Eddy Ong, who has also established a reputation for picking up controlling stakes in listed companies.

Both these personalities are on a spree to acquire listed companies. So far, however, they have not proved to be builders of the businesses of the companies they have acquired.

So why did Chiau’s Signature International take a stake in SCGM? It surely cannot be for the cash payout as the company’s share price of RM2.41 exceeds the total payout, which comes to RM2.21 per share.

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