(Petaling Jaya, Friday): The statement issued by the Sabah Chief Minister, Datuk Yong Teck Lee allegedly to "clear the haze" over the Warisan Harta-NBT issue has only intensified the "API" over the matter to an emergency level, for what Yong had given was a non-explanatory statement significant for what he did not say rather than what he had said.
While welcoming the state government’s confirmation of my statement two days ago that one of the terms in the complex Warisan Harta-Suniwang swap over Warisan Harta’s purchase of three million North Norneo Timber (NBT) shares was a RM50 million cash payment by Suniwang to Warisan Harta, Yong’s statement yesterday was pathetic "Public Relations" exercise rather than a full and frank disclosure of the Warisan Harta-Suniwang deal over the three million NBT shares to enable the people of Sabah and Malaysia to make an informed judgement as to whether the whole deal was in the best interests of the state and people of Sabah or the opposite.
Yong was at great pains to highlight two points about the Warisan Harta-NBT deal, namely that Warisan Harta did not have to pay a single sen for the three million NBT shares and that Warisan would get RM50 million as part of the deal.
However, Yong Teck Lee was vague as to whether this RM50 million cash had been paid and credited into the accounts of Warisan Harta.
Furthermore, what is the use of the State Government trumpeting that it did not have to pay a single sen for the three million NBT shares if it had incurred a RM73 million loss for acquiring them without having to pay a single sen?
On 22nd December last year, Warisan Harta bought the three million NBT shares for 31.50 per share. NBT was traded at RM7.15 per share at the end of KLSE trading yesterday, which means that Warisan Harta had lost over RM73 million from the deal.
Yong said that the complex Warisan Harta-Suniwang swap over the three million NBT shares involves a cash payment of RM50 million to Warisan. Even if this RM50 million cash payment is taken into account, Warisan would still be the loser by over RM23 million! And the biggest question is whether this RM50 million cash had been made by Suniwang to the credit of Warisan Harta, and if so, why both Yong and the Chief Executive Officer of Warisan Harta, Datuk Matiasin Surai, had been so shy to admit it.
If Yong and Matiasin continues to shy away from stating whether Warisan Harta had received the RM50 million from Suniwang and when the payment was made, then the people of Sabah and Malaysia would be quite correct to assume that this RM50 million payment had not been made and that the losses of Warisan arising from the "Don’t have to pay a single sen" three million NBT deal is over RM73 million!
Yong’s statement is also shocking for other reasons, e.g. his explanation as to why there had not been earlier disclosure of the Warisan Harta-NBT deal.
Yong said: "If the State Government had disclosed details of the transaction earlier, Warisan would have been placed in a vulnerable position. There are good reasons for this policy and practice of not disclosing details of such a business transaction. One of which is that by making premature public disclosures could jeopardise the successful conclusion of the transaction".
This is an extraordinary proposition, which is a justification against openness, accountability and transparency in state government and corporate governance. I am sure Sabahans and Malaysians would want to know how disclosure of the complex Warisan Harta-Suniwang swaps over the three million NBT shares could "jeopardise the successful conclusion of the transaction".
At the time Warisan Harta was concluding its agreement with Suniwang on the three million NBT shares, Suniwang was publicly announcing another RM850 million deal, where NBT would acquire the entire paid-up capital of Suniwang Holdings Sdn. Bhd. (SHSB) and acquire 85 per cent of Bentaniaga Sdn. Bhd. (BSB) for a total of RM850 million, to be paid for by issuing new NBT shares!
Why was the Sabah State Government and Warisan Harta so shy about disclosing details about its three million NBT shares deal, when NBT was brazenly announcing to the whole world its proposed RM850 million acquisition of SHSB and BSB, which had subsequently to be aborted. On 28th December last year, the North Borneo Corp Bhd. (TNBC), formerly The North Borneo Timbers Bhd., announced that the significant drop in its share price – which formed the basis of the share-exchange in the RM850 million acquisition of SHSB and BSB – "will materially affect the outcome of the agreements and the spirit in which they were entered into could now not be met".
However, the omission in Yong’s statement which cries out for an answer is why the full details of the complex Warisan Harta-NBT deal had not been publicly disclosed, now that there had been a successful conclusion of the transaction!
Apart from being compelled to admit that there is a term on a RM50 million cash payment – though all are waiting for the explanation whether this payment had been made by Suniwang to Warisan Harta – what are the other terms of this complex swap between Warisan and Suniwang?
In his statement yesterday, Matiasin purported to give a summary of the Warisan Harta-NBT transaction, namely:
Sabahans and Malaysians are entitled to ask Yong and Matiasin what is it they are hiding when even now, they are not prepared to give the full details of the Warisan Harta-NBT deal.
It had earlier been reported that the Warisan Harta-NBT deal had been carried out in tranches with the first tranch completed on December 22 last year involving the purchase of 15.5 million MISC shares at RM5.70 per share by Suniwang from Warisan Harta and the purchase by Warisan Harta of three million NBT shares from Suniwang at RM31.50 per share.
What are the details of the other tranches of the deal?
Yong should confirm whether Warisan Harta-NBT deal involved a total sale of Warisan’s 32 million MISC shares to Suniwang at RM5.70 per share. At the close of trading yesterday, MISC was quoted at RM4.92 per share, which means that Warisan Harta would have made RM24.9 million from the sale of 32 million MISC shares to Suniwang.
Was it a wise investment decision for Warisan Harta to sell 32 million MISC shares at RM5.70 per share? It would be a wise decision if the Sabah state government has privileged information that MISC stock is not going to rise above RM5.70 per share or for some other reason, the Sabah state government has reason not to have any confidence in the MISC as compared to NBT.
In an article in the Borneo Post yesterday which clearly emanated from an official Sabah State government source, it was reported that as part of the deal, "Warisan was allowed to acquire a substantial stake in a listed Suniwang subsidiary franchised foodchain at a discounted price".
Yong should confirm whether one term of the complex Warisan Harta-NBT deal is the sale of 4.79 million shares of SugarBun Corporation Services Sdn. Bhd. (SugarBun) at RM7.60 per share. At the close of trading yesterday, SugarBun was quoted at RM4.90 per share, which would means an additional loss of RM12.9 million from this particular transaction!
Matiasin said that Warisan would get from the NBT deal "other quoted stocks". What are these other quoted stocks? I ask Yong to confirm whether there are other quoted stocks involved in the complex Warisan Harta-NTB deal apart from MISC and Sugar Bun stocks, and if there are no other stocks, disciplinary action should be taken immediately by the Sabah State Government against Matiasin for trying to mislead the people of Sabah and Malaysia.
In summary, the profit and loss for Warisan Harta in the complex NBT deal with Suniwang is as follows:
(a) Purchase of 3 million NBT shares - RM
(b) Sale of 33 million MISC shares - RM 24.9 million
(c) Acquire 4.79 million SugarBun shares - RM 12.9 million
Taking the RM50 million cash item into account, Warisan Harta would have still lost to the tune of RM11 million from the entire complext deal – provided the RM50 million had be paid!
Matiasin said that the entire NBT deal is "sufficiently and legally protected throughout and covered by more than adequate collateral". What are these legal protections?
Yong should explain whether it is true that one of the terms of the Warisan-Suniwang deal was a RM96 million personal guarantee. Why was this important item left out in the state government’s explanation yesterday, raising the question as to whether there had been an execution of the RM96 million performance bond!
Matiasin said that "legal buy-back arrangements are in place". This is another example of a statement which is meant to state nothing!
Just as NBT’s RM850 million acquisition of Suniwang Holdings Sdn. Bhd. and Bentaniaga Sdn. Bhd. could be aborted as "the spirit in which they were entered into could now not be met", the Warisan Harta-Suniwang deal over the three million NBT shares and other share swaps should be aborted on the same ground.
Yong Teck Lee should issue a frank tell-all press statement about the Warisan Harta-Suniwang deal over the three million NBT shares if he is not to lose the confidence of the people of Sabah and Malaysia!