So much vibes have resonated lately on Heveaboard.
Let's start by putting before us the 3 issues in my previous articles : Containers, Civil Suits and €890,000. Whilst Heveaboard may use all its might like CIMB Research and an Official Statement through Bursalink to clarify the isssues raised, there is no denying that these 3 issues only came to light and public awareness with my revelation which it now sought to rebuff.
In a way, it is a positive development for Heveaboard, now that it has awaken about its corporate contract to be transparent and forthcoming on any or all matters that will affect the company in one way or another.
As more articles will be written on Heveaboard, please don't stop releasing further official statements to clarify issues that will be raised in due course. Keep it up Heveaboard, it will only make the company more transparent. And this is what the investing public wants to see.
I have asked openly for Mr. Marcus Chan of CIMB Research and Heveaboard to shed us some lights as to how many containers were stranded in Korea and at its Gemas plant for the said Korean customers. I am waiting for your official response, humbly.
Now let us move on to the second subject matter, the civil suit. True, under the present Listing Requirement, Heveaboard need not make the announcement to Bursa Malaysia about its substantial shareholders cum the ultimate shareholdings company Heveawood Industries Sdn. Bhd's internal squabble.
Paragraph 3 of the Offical Statement of Heveaboard last evening, beside repeating what was said in the conference call and CIMB Research's article on the same, went on to add that "the minority shareholders alleged that they have been oppressed by the majority shareholders and non-payment of dividends by Heveawood.....", whereas CIMB Research only said that the suit involved the non-payment of dividends at Heveawood Industries.
Yes, the keyword here is oppression of minority shareholders. And I will write extensively in another article on why and how Heveawood Industries minority shareholders have been oppressed by the Yoong family, so much so that a courtroom tussle is the only option left in their partnership spanning more than 25 years.
The Official Statement also said that this civil suit was brought about under Section 181 of the Companies Act 1965, which deals with a situation of alleged minority shareholders oppression. The end-of-the-road of this Section 181, if all remedies failed, will be the ultimate dissolution or death of Heveawood Industries Sdn. Bhd. as a corporate entity.
This dissolution of Heveawood Industries, if it ever materialised, will in no doubt cause a strong concussion to the stability of Heveaboard Berhad. This will be a situation no investors want to see. Perhaps this may well be the very reason why this civil suit was kept underwrapped by the Yoong family from public eyes since it erupted. But not until now.
As the above SSM search clearly shows, the major shareholders of Heveawood Industries are the Yoong family (Yoong Hau Chun, Tenson Holdings Sdn. Bhd. and Firama Holdings Sdn. Bhd.) with a combined 52.51% stakes. On the other hand, the parties that made up the minority shareholders with a combined stakes of 47.49% are Sung Lee Timber Trading Sdn. Bhd (10.00%), Mr. Liang Chong Wai (25.83%) and Dato' Loo Swee Cheong (21.66%).
It is noteworthy to point out that Sung Lee Timber Trading Sdn. Bhd. is the investment vehicle of Dato' Seri Yong Tu Sang, who is also the majority shareholder of another public listed company BTM Resources Berhad.
Seasoned market players with a preying instinct should now be able to draw an inkling about the delicate relationships among some of Heveawood Industries shareholders. And why certain shareholders wanted to break-up Heveawood Industries and part ways. I will stop this point here and let your own imagination run wild....
Next, about the outstanding "debt" of €890,000 owed by Heveaboard to Heveawood Industries.
In the Official Statement, Heveaboard said in Paragraph 5 Line 3 that "......in addition to the amount owing by the Company to Heveawood, there are other amounts due from other related parties to Heveawood. Hence the alleged discrepancies...." . Correct me if I am wrong Heveaboard, but you just said that the discrepancies (between RM 2,296,000 in Heveaboard's book and RM 4,204,733 in Hevaewood Industries' book) arise because there are more people (other related parties) owing Heveawood Industries.
Well, you have clarified that the higher amount in Heveawood Industries was due to some other related parties owing, but why not clarify the amount of RM 2,296,000 in your own book?
Even quoting a cheap forex rate of about RM 4.20 Euro to one RM (today's official median rate 4.755 by Standard Chartered Bank), this €890,000 alone is already RM 3,738,000 !
Didn't you owe this €890,000 or RM 3,738,000 to Heveawood Industries that have helped pay on Heveaboard Berhad's behalf to Dieffenbacher GmbH, the supplier of machineries that supplied you your money-making machineries?
So why the entry in Heveaboard's book the debt to Heveawood Industries as only RM 2,296,000 and not RM 3,738,000? Please note Heveaboard did not clarify nor confirm the actual amount due to Heveawood Industries but only said "......The amount owing to Heveawood by the Company is intended to be repaid in 2016."
As a matter of fact, Heveaboard Berhad owed Heveawood Industries the exact amount of RM 3,501,260 as illustrated in the following internal document of Heveawood Industries.
As I have written in HEVEA : Ingenuity Accounting that ".....it was agreed among both Heveaboard Berhad and Heveawood Industries Sdn. Bhd. that once the financial situations of Heveaboard Berhad returns to normalcy, Heveaboard Berhad will not only repay this € 890,000 to Heveawood Industries Sdn. Bhd., but it will also pay an additional equivalent amount of € 890,000 to Heveawood Industries Sdn. Bhd. as a "reward or compensation" for throwing the much needed money-buoy to Heveaboard Berhad......"
This is now confirmed by the internal document of Heveawood Industries recognising an amount of RM 3,501,260 as "Gain on take over of Dieffenbacher GmbH debts of €890,000" !
To put figure in its simplest form, according to the internal sources, Heveaboard actually owed this second €890,000 or RM 3,501,260 (as agreed among the shareholders when the same was documented in the loan covenant of 2009) which is NOT in the annual reports and another RM 2,296,000 which is already appearing as a Non-current Liabilities item in Annual Report 2014.
Is it RM 3,501,260 + RM 2,296,000 = RM 5,797,260 ?
I stand corrected, Heveaboard Berhad.
Robertl
January 14, 2016
P. S. : some of you maybe eagerly awaiting for my Possible False Statement In Annual Report 2014. Howecer, in light of the Official Statement by Heveaboard Berhad released last evening, I find it necessary to repond in a timely manner, in order for Heveaboard to shed more lights on the issues raised. Henceforth the delay of the intended article as promised.
At the same time, some behind the scene manoeuvres are presently underway. It is only fair that I let things pan it out the way it should rightfully be, before intensifying more revelations.
HEVEA (5095) : Answering Your Official Statement
http://klse.i3investor.com/blogs/heveatimetoalight/89764.jsp
HEVEA, HEVEA (5095), 5095, EN5095, KLSE:HEVEA, Investing, robertl,
