Friday 29 Mar 2024
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KUALA LUMPUR: A group of 23 minority shareholders of Tanjung Offshore Bhd, who collectively hold more than 6% of its shares, has filed a police report citing irregularities in the company’s filings with Bursa Malaysia in March 2014 and January 2015, with regards to its Birmingham, United Kingdom (UK) deal.

The police report was filed on March 12, according to a statement yesterday by Michael Azizeu, representing the group.

“We are disappointed that Tanjung Offshore has breached listing rules, as company documents on the Birmingham deal filed to Bursa in March 2014 differed from those in January 2015,” read the statement.

To recap, Tanjung Offshore (fundamental:1.85; valuation: 0.6) had replied to a Bursa query on March 26 last year, on the £6.7 million (RM36.67 million at the current exchange rate) deal with Cross Space Securities Ltd to acquire full ownership of Wavenet Investments Ltd (UK).

Wavenet owned Sparkling Light Investments Ltd (UK), which in turn owned an 8-storey office building in the central business district of Birmingham.

The company, in its reply to the local bourse, had said that once acquired, it would refurbish the building into 91 one- and 2-bedroom residential units.

However, in the key findings of its independent committee filed with Bursa on Jan 28 this year, Tanjung Offshore said the acquisition of the property at a cost of £6.7 million and the refurbishment programme amounting to £4.8 million were two separate events at different times.

It also said that the (acquisition and refurbishment) costs have been properly treated as separate, with the refurbishment expenditure arising from the later decision to redevelop the building into a residential property.

“This clearly differs from the earlier filing to Bursa Malaysia in March 2014. This is a shock to us, as the company has deliberately misled Bursa Malaysia and in the process, shareholders who only have access to information filed to the regulatory body,” said Azizeu, adding that investors expect the company to have good corporate governance, and that false reports to Bursa contravene the Capital Markets and Securities Act and are considered criminal acts.

“If the transaction and the refurbishment costs were completed at the same time, then the full amount would have breached the threshold of 25% of the company’s net asset value, which would have required the convening of an extraordinary general meeting for minority shareholders like us to vote on the matter,” said Azizeu.

He said that the minority shareholders have been denied a vote on Tanjung Offshore, as an oil and gas services provider, spending more than 25% of the company’s net asset value on a non-related business of property development.

“As minority shareholders, we had trust in Tanjung Offshore’s management and this turn of events, is a great shock to us. We hope that the authorities can help us get to the bottom of these irregularities within Tanjung Offshore, so that the company does not fall into the Practice Note 17 list by default, as it has an excellent track record,” added Azizeu.


The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

 

This article first appeared in The Edge Financial Daily, on March 18, 2015.

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