Wednesday, June 27th, 2018


SSM wants KPMG to clarify status of 1MDB audit reports

PETALING JAYA: The Companies Commission Malaysia (SSM) will be seeking further clarification from KPMG on the status of audit reports of 1Malaysia Development Bhd's (1MDB) financial statements, following news reports that said the statements between 2010 and 2012 were inaccurate.

SSM said in a statement issued an hour before midnight that it would seek an explanation from KPMG on the issue of reliability of the financial statements filed with them.

SSM said as the corporate regulator tasked with the enforcement of the Companies Act 2016, it views the media reports with concern. It went on to say that it will ensure that necessary and immediate action is taken to comply with the Companies Act 2016. This action may include having the relevant parties rectify the financial information filed with the companies registrar.

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Citaglobal Airports’ proposal for new LCCT was supported by AirAsia

PETALING JAYA: A proposal for a new low-cost carrier terminal (LCCT) to be developed at Kuala Lumpur International Airport (KLIA) was made last year by a company called Citaglobal Airports Sdn Bhd, a move which looks to have had the backing of the AirAsia group, the largest user of klia2, the current LCCT.

Documents sighted by SunBiz revealed that the company's director, Datuk Seri Mohamad Norza Zakaria, had proposed to then prime minister Datuk Seri Najib Abdul Razak, via a letter dated Nov 24, 2017, the building of a new LCCT that will be able to accommodate higher passenger numbers, especially with the establishment of the Digital Free Trade Zone.

Citaglobal Airports said it will be able to generate the required funds for the project from the private sector which will benefit the government in terms of savings on infrastructure and operation costs.

In addition to that, it said UK-based airport operator Manchester Airports Group Plc indicated interest to manage and operate the new LCCT.

The project was said to require 450 acres, for which Citaglobal Airports suggested the government transfer land rights from the Director General of Land and Mines to the Transport Ministry, which will then be leased out for the project for a period of 99 years.

“The necessity for a new LCCT in KLIA will make Malaysia a leading hub in Asia with a 'dual hub', whereby the main KLIA terminal will house the OneWorld Alliance, klia2 will house other premium airlines and the new LCCT will accommodate the low-cost carriers,” the proposal read.

Companies Commission of Malaysia records show that Citaglobal Airports was incorporated on Nov 2, 2017 and is involved in wholesale of goods without particular specialisation and management and business consultancy activities.

AirAsia Bhd issued a letter of support for the plan via a letter dated Nov 2, 2017 which coincides with Citaglobal Airport's incorporation date. The letter carried AirAsia's letterhead and bore the signature of its executive chairman Datuk Kamarudin Meranun and copies were sent to AirAsia group CEO Tan Sri Tony Fernandes and AirAsia Bhd CEO Aireen Omar.

The low-cost airline expressed its interest in shifting its operations to the new LCCT.

“We understand that Citaglobal Airports Sdn Bhd plans to develop a LCCT at KLIA. We are in full support of this proposal as the aviation sector is a major contributor to the country's economic growth and accords significant contributions to other sectors of the economy,” it said, citing a study by Bain & Co.

Kamarudin said it would support Citaglobal by making the new LCCT the base for AirAsia Bhd and AirAsia X Bhd operations, have all flights operated by AirAsia group operate at the new LCCT and participate with Citaglobal to generate non-aeronautical revenue.

Citing the recent increase in Passenger Service Charge (PSC) introduced by the Malaysian Aviation Commission (Mavcom) and the proposed equalisation of PSC at both airports, on top of other cost increases proposed by the commission and the Department of Civil Aviation, the airline said an LCCT with a much reduced PSC and cost for travellers is required to accommodate the low-fare travel segment while KLIA and klia2 could be used to accommodate premium airlines.

AirAsia declined to comment in response to SunBiz's queries on the matter.

According to Malaysia Airports Holdings Bhd, AirAsia accounts for 95% of traffic at klia2 and they are the largest occupant.

“Any new airport terminal construction will be under the purview of the Ministry of Transport and will need to get the government's approval. We are currently guided by the existing National Airport Master Plan,” its spokesperson said, who added that it has not received anything official on the matter.

The Transport Ministry was yet to respond to request for comments as at press time.

Country Heights to raise RM1b to finance four projects

PETALING JAYA: Country Heights Holdings Bhd (CHHB) plans to raise RM1 billion either through direct borrowings, bond issuance or strategic partnerships to finance four project launches.

The property developer said in a statement that it has a very low financial gearing in comparison with its assets, with current loans standing at RM200 million against RM778 million in net tangible assets.

“Based on revalued net asset value together with a revaluation of our assets, the company would be worth over RM2.8 billion.”

In a filing with the stock exchange today, CHHB announced its plan to undertake a bonus issue of warrants involving an issuance of up to 137.85 million warrants on the basis of one warrant for every two existing CHHB shares held.

It noted that the exact quantum of the proceeds that may be raised will depend on the exercise price of the warrants and the actual number of warrants exercised during its five-year tenure. The proceeds will be used for working capital.

The bonus issue of warrants will provide the shareholders with the opportunity to increase their participation and to benefit from any potential capital appreciation of the warrants.

Barring any unforeseen circumstances, it is expected to be completed by the fourth quarter this year.

Speaking on the change in government, CHHB opined that the new government should aim to protect and propel new businesses in the next five years.

“New ideas from private sector should be protected but not hijacked. Similarly, the government should liberalise and not be overprotective of the banking and financial industries. Banks and financial companies should ideally operate as business entities with rules and regulations, thriving on their own merits. New banking licences should be considered,” it said.

CHHB held its AGM today. Its executive chairman, Tan Sri Lee Kim Yew, was in the news last year after the Inland Revenue Board seized his personal accounts in relation to RM22.7 million of tax liabilities incurred by CHHB's wholly owned subsidiary Country Heights Sdn Bhd for the 1997 and 1998 assessment years. Lee later settled the tax liabilities with his personal funds.

CHHB gained 14 sen or 11% to RM1.41 on volume of 114,500 shares today.

T7 Global unfazed by departure of Vincent Tan

PETALING JAYA: T7 Global Bhd said local tycoon Tan Sri Vincent Tan's plan to dispose of his substantial stake in the company will not have any impact on its business or financial performance. 

“The group would like to clarify that Tan's entry into T7 Global is on the basis of a passive investor due to the group's well-positioned business in the O&G services industry. The group's current and future core businesses and operations in the O&G, aerospace and construction as well as infrastructure are fully intact and is unaffected by the recent news,” it said in a filing with the stock exchange today. 

According to T7 Global's separate filing with Bursa Malaysia, Tan disposed of 3.68 million shares or 0.88% stake via direct business transaction on Monday. Tan has said he will divest his entire 5.04% stake in T7 Global. 

Meanwhile, T7 Global said it welcomes the price renegotiation for the East Coast Rail Line and aspires to participate in the project. 

“As of today, there has not been any contracts awarded to T7 Global and we are still awaiting for the government's review on the entire project.”

T7 is partnering with Terengganu state government-linked Eastern Pacific Industrial Corp Bhd and CMC Engineering Sdn Bhd to bid for the Terengganu portion of the ECRL. 

Currently, T7 Global's core business remains the oil and gas segment, accounting for 90% of the group's total revenue.

On Bursa Malaysia today, T7 Global ended down 7 sen or 14.1% at 42.5 sen with 12.2 million shares traded. 

Gamuda posts 17.4% rise in Q3 net profit

PETALING JAYA: Gamuda Bhd, whose managing director Datuk Lin Yun Ling’s contract has been renewed for another five years, reported a 17.4% increase in net profit to RM200.69 million for the third quarter ended April 30 against RM170.93 million in the previous corresponding period, buoyed by higher work progress from its various construction projects coupled with stronger overseas property sales and several new property projects in Malaysia.

Revenue surged 47.4% to RM1.24 billion from RM839.49 million.

The group proposed an interim dividend of 6 sen per share for the quarter.

Gamuda’s nine-month net profit rose 23.2% to RM614.96 million from RM499.34 million. Revenue came in at RM3.01 billion, 37% higher than the RM2.2 billion it made a year ago.

Commenting on prospects, the group said its performance is on track for this year due to the pick up in MRT2 progress, higher property sales driven by overseas projects especially Vietnam and the launch of new townships in Malaysia as well as steady earnings contribution from the expressway division.

Gamuda said Lin’s new contract starts on July 1, 2018 and runs until June 30, 2023.

Gamuda gained 3 sen or 0.9% to RM3.22 today on 6.7 million shares done.