KUALA LUMPUR (Dec 23): Property developer Jiankun International Bhd’s share price fell as much as 12 sen or 17.52% to 56.5 sen today after the company said yesterday it received a special notice for the proposed removal of its directors and following today’s announcement on the conversion of Jiankun warrants into shares in the company.
Yesterday, Jiankun, which is also a construction company, said in a Bursa Malaysia filing that it received the director removal notice from Cita Realiti Sdn Bhd.
Cita Realiti’s notice, which was attached to Jiankun’s Bursa filing, claimed that Cita Realiti has 16.848% voting rights in Jiankun and that Cita Realiti intends to remove four Jiankun directors including executive deputy chairman Datuk Lim Siang Chai and newly appointed executive director Edwin Silvester Das.
Cita Realiti, which also intends to appoint five new directors in Jiankun, did not specify the reasons behind the intention.
Today, Jiankun also announced that it has issued 110,000 shares following the conversion of the company’s Warrants A 2014/2021 into ordinary shares in the company. After the conversion, Jiankun’s number of issued shares stand at 167.37 million units, according to the company.
In theory, a larger number of issued shares does not bode well for a company’s share price in anticipation of earnings per share dilution.
On market close, Jiankun’s share price pared a bit of the losses to settle at 57 sen — still down 11.5 sen or 16.79% — giving it a market value of about RM95.34 million. Despite today's decline, Jiankun's counter is still up 21.3% from when it was trading at 47 sen about a month ago on Nov 25.
The counter's trading volume today swelled to 158.5 million shares — about 4.6 times yesterday's 34 million shares, when the stock hit its 13-year high of 68.5 sen just as Jiankun announced it had inked a memorandum of understanding with nitrile rubber producer Chuanplus Industries Sdn Bhd to invest RM50 million to produce nitrile rubber.
Chuanplus is a nitrile rubber producer based in Nilai, Negeri Sembilan. The two companies agreed to form a special purpose vehicle — in which Jiankun will own 80% and Chuanplus 20% — to build a new nitrile rubber production plant and enter the lucrative upstream production of nitrile gloves.
Prior to the release of the joint venture news, Jiankun said it had appointed former attorney-general Tan Sri Mohamed Apandi Ali as its chairman, redesignated Lim as its deputy chairman, and named Datuk Tan Choon Hwa and Das as its new executive directors.
At the same time, executive directors Foong Kah Heng, 57, and Lee Leong Kui, 43, together with independent and non-executive director Fathi Ridzuan Ahmad Fauzi, 55, all resigned from their positions due to “personal commitment”.