A portion of Atta Global’s premises located at Prai Industrial Estate, which is tenanted by a third party, had been raided by the police on Jan 16 for investigation of an offence under the Dangerous Drugs Act 1952
GETTING reliable information about Ooi Chieng Sim, the former executive chairman of ATTA Global Group Bhd and Heng Huat Resources Group Bhd, is proving to be difficult.
All those who spoke about him did so on condition of anonymity, which is understandable as they do not want to be associated with him, especially since he has been remanded by the police to assist in investigations relating to drug trafficking.
To recap, on Jan 30, Ooi and seven others were charged, under Section 39 (B)(1) of the Dangerous Drugs Act 1952, with trafficking in just under 5kg of methamphetamine at a warehouse on ATTA Global’s premises in Prai Industrial Estate.
Their arrest was part of what the police called “Ops Eagle Diamond” and was linked to another drug bust that involved more than 12 tonnes of cocaine worth RM2.4 billion — the largest drug haul in the country’s history — in September last year.
A corporate player says as far as he knew, Ooi was a big moneylender, including to corporate clients. Some merchant bankers knew Ooi and had met him but they declined to elaborate, saying that they had no part in his business.
As to who might be Ooi’s boss, many names were bandied about but most mentioned MBI International Sdn Bhd founder Teddy Teow Wooi Huat. At the end of May in 2018, Teow was charged with financial fraud — issuing unrecognised payment instruments by Bank Negara Malaysia in 2012 — and fined RM3 million.
The scam raked in billions for Teow and those involved with him. There were even allegations that some of the funds had flowed into many listed companies, although this was hard to prove.
While many say Ooi is linked to Teow, there is no real evidence of it. Nevertheless, a lot about steel player ATTA Global and the other companies Ooi was involved in was odd. For instance, G Reka Management Sdn Bhd (formerly G Reka Perunding Sdn Bhd) is the largest shareholder of Prai-based ATTA Global with 23.45% equity interest but it has no board representation. Checks on CTOS reveal that the company is wholly owned by a Goh Chin Heng and its address is George Town, Pulau Pinang.
Ooi is ATTA Global’s third largest shareholder with a 10.15% stake while Tan Kim Hee is a substantial shareholder with 19.92% equity interest.
According to publicly available records, Ooi often used private vehicles, such as Skylitech Resources Sdn Bhd, Hock Lok Siew Realty Sdn Bhd and A1 Capital Sdn Bhd. At times, his mother Tang Ah Moi surfaced as a substantial shareholder in the companies he was involved in.
Ooi, Tang and Skylitech Resources surfaced as substantial shareholders in Prai-headquartered Heng Huat Resources in November last year with 17.38% equity interest. Ooi was then appointed its executive chairman.
Neither ATTA Global nor Heng Huat Resources, which deals in eco-friendly biomass material products, performed well on the local bourse. The same goes for all the companies Ooi and his crew were involved in.
It is worth noting that Ooi was a substantial shareholder of Metronic Global Bhd, a building management and engineering solutions outfit, from April to June last year. He and 11 other shareholders were alleged to have blackmailed the company for RM20 million a month before he sold out.
In January 2010, A1 Capital emerged as a substantial shareholder in publicly traded Hock Lok Siew Corp Bhd (formerly Foremost Holdings Bhd). At the time, A1 Capital’s shareholders were Ng Chin Nam (now an executive director of ATTA Global and independent director of Heng Huat Resources) and one Kwan Seong Kee, who owned equal equity in the company.
Ooi was the executive chairman of Kedah-based Hock Lok Siew Corp from September 2006 to 2012. The company, which made loudspeakers, entered into sale and purchase agreements with Duro Metal Industrial Sdn Bhd — a company connected to Ng — to acquire two pieces of freehold land in Ulu Langat, Selangor, for RM375,000 each.
ATTA Global now has 60% equity interest in one Duro Metal Industrial (M) Sdn Bhd, whose bank account is one of nine under ATTA Global that were frozen recently.
Hock Lok Siew Corp grabbed the headlines after it claimed that it had no records of a corporate guarantee allegedly provided to Malayan Banking Bhd, which sued the company for failure to repay a total of RM31.2 million with interest.
In the company’s last annual report for its financial year ended Dec 31, 2011, Ooi was listed as the largest shareholder with just below 33% equity interest. Hock Lok Siew Corp, which was a cash-strapped Practice Note 17 outfit, was delisted in May 2013.
In George Town-based See Hup Consolidated Bhd, Ooi’s Skylitech Resources surfaced as a substantial shareholder in December 2012 after a private placement and controlled 5.05% equity interest. Ooi ceased to be a substantial shareholder in December 2017.
Ooi surfaced in See Hup Consolidated with a direct equity interest of 6.87% and still holds the stake. The provision of transport services, maintenance for heavy vehicles and warehousing, among others, is the company’s mainstay.
Ooi was also a substantial shareholder of Astral Supreme Bhd (now Vizione Holdings Bhd) for about two weeks in August 2011 with a 5.08% stake and was an executive director from Oct 1, 2010, to August 2011.
Interestingly, one of the earliest reports about Ooi came out in November 2007, when the High Court set aside a five-year jail term and RM10,000 fine by a lower court for allegedly using his late father Ooi Kok Chor’s forged will as the genuine item.
For now, there are a lot of unanswered questions. Will any more charges be brought against Ooi, who has been on the corporate scene for many years now? And will more listed companies come under the spotlight in the drug bust?
How have ATTA Global and Heng Huat performed financially?
Penang-based ATTA Global Group Bhd and Heng Huat Resources Group Bhd found themselves in the news for the wrong reasons recently when executive chairman and major shareholder, Ooi Chieng Sim, was charged with drug trafficking at the Magistrate’s Court in Bukit Mertajam on Jan 30.
Looking at their financial performance in recent years, one cannot help but wonder why Ooi was interested in buying into ATTA Global and Heng Huat Resources in the first place, especially the latter, which has been performing poorly of late.
What value did he see in the two companies? Did he like their core business or was he interested in their properties, factories and warehouses?
ATTA Global, a steel company that has ventured into property development, has been delivering inconsistent financial results over the past decade. After reporting net losses from its financial year ended March 31, 2009 (FY2009), to FY2011, it recorded a net profit of RM17.9 million in FY2012, before slipping into the red again in FY2013.
It returned to profitability in FY2014 and FY2015 but suffered a loss in FY2016. It turned around with a net profit of RM18 million in FY2017 and RM28.4 million in FY2018.
However, the group saw its net profit tumble 77% year on year to RM6.4 million in FY2019, due to a drop in revenue at its metal processing and metal roofing divisions as well as lower operating income and profit margin.
It is worth noting that as at March 31, 2019, investment properties on ATTA Global’s books increased 67% year on year to RM82.43 million, thanks to the group’s acquisition of subsidiaries.
According to the company’s 2019 annual report, it plans to expand its property development business, which it had ventured into in 2018. It acquired a few subsidiaries, namely Sunrise Manner Sdn Bhd, Sungguh Gemilang Sdn Bhd, Eminent Potential Sdn Bhd and Scanrite Sdn Bhd, all of which are involved in property development.
As for Heng Huat Resources, a biomass materials manufacturer, its financial results have been lacklustre over the past three years. To be fair, the company reported strong earnings after its listing in 2014, recording a net profit of RM12.57 million in its financial year ended Dec 31, 2014 (FY2014) and RM10.66 million in FY2015.
But things went downhill from there as Heng Huat Resources reported minimal profits in FY2016 and FY2017, before suffering a net loss of RM3.47 million in FY2018. This widened to RM6.57 million in the nine months ended Sept 30, 2019.
The company blamed its poor financial performance on softer market demand and the provision for impairment of receivables in its oil palm empty fruit bunch fibre division.
Meanwhile, a former top narcotics division police officer tells The Edge that drug syndicates need to find ways to launder illegal proceeds because they cannot keep their money in banks.
“Modern drugs such as cocaine and ice are widely consumed by addicts, so you can imagine the amount of cash that pours in. That is why drug syndicates have to keep buying companies, land and property.
“The syndicates don’t mind paying double what these assets are actually worth. I wouldn’t be surprised if more companies and executives are involved in such activities,” he remarks.
Ooi was among eight men charged with trafficking in 4,980g of methamphetamine, reportedly at a warehouse on ATTA Global’s premises in Prai Industrial Estate. However, Heng Huat Resources has stressed that Ooi’s remand has nothing to do with the company.