Hwang’s stake in Kenmark reduced further

Kenmark Industrial Co (M) Bhd managing director James Hwang Ding Kuo, who has yet to reappear at the scene since his statement early this month claiming he had been sick and recuperating in China, continues to have his stake in the beleaguered furniture maker reduced.

In a statement yesterday, Kenmark said Hwang, who is a Taiwanese, had had his stake further reduced to 3.96% comprising 7.06 million shares as of Wednesday.

It said his stake had stood at 8.41% comprising 14.99 million shares as at June 7. Kenmark also said another substantial shareholder Chen Wen-Ling’s stake remained at 7.76% comprising 13.83 million shares as of Wednesday, the same as last disclosed on June 9. Chen had on April 23 notified that she held a 16.51% stake comprising 29.44 million shares.

In April this year, Hwang controlled some 53.36 million shares, representing 29.9% of Kenmark, but his pledged shares were force-sold by financial institutions. It is not known if the latest reduction was also the result of force-selling by financial institutions.

Kenmark, which is involved in furniture and wood-based products such as workstations and audio/visual furniture as well as electronics products, has been in the corporate limelight since late last month when its top officials, including Hwang, had gone missing.

The company raised the alarm on May 31that Hwang and its executive director Chang Chin-Chuan had not been contactable by its independent directors since May 27.

It said the group was in default of banking loans amounting to over RM70 million. It later announced a net loss totalling RM146.52 million in the fourth quarter ended March 31, 2010, following provisions for doubtful debts and impairments.

A few days later, Hwang broke his silence, saying that he was unwell and that a friendly party had acquired a substantial stake in the company.

That friendly party is now believed to have been former KFC Holdings Bhd (KFCH) managing director Datuk Ishak Ismail. It was reported that Ishak and Hwang were friends and the latter had called him on May 31 to “help out”.

Ishak had acquired a substantial stake on June 1 and over a few days, raised it 32.9%, but only to dispose of his entire interest not long after. Ishak had reportedly said Kenmark was a “good company”. He also reportedly said he had tried to persuade Hwang to return but failed, and thus, was not keen to “hang around”.

Kenmark had announced on June 14 that Ishak had disposed of his entire shareholding of 32.29% or 58.69 million shares.

On Wednesday, the Securities Commission (SC) announced it had obtained an ex-parte injunction to prevent Ishak from dealing with the proceeds of RM10.2 million from the disposal of his shares in Kenmark, following its investigations on him for suspected breaches of securities laws.

The SC said the High Court here had also ordered Ishak to furnish full and complete details of his assets, both domestic and foreign, within four days.

In 2001, as a Idris Hydraulic (M) Bhd director, he was fined RM400,000 by the court for submitting false information to the SC that he did not own shares in KFCH. In 2002, he was fined RM500,000 for abetting Idris Hydraulic to redirect RM50 million of public proceeds.


This article appeared in The Edge Financial Daily, June 18, 2010.