It is difficult to comprehend how a listed company, which is supposedly subject to a string of regulations and regulators, have gone through an experience like Kenmark.
Never mind that a huge number of shareholders of Kenmark – whose shares had traded within a stable band of 80 sen to RM1 since 2005 – have lost their shirts, and more, in this episode.
What is more appalling is that one well-known corporate raider has been able to make a tonne of money from Kenmark’s misfortunes, all within less than two weeks!
To Datuk Ishak Ismail’s admirers, he remains an opportunistic investor who had capitalised on the situation.
Ishak is also said to have not intended to make such a quick exit from Kenmark. His plans were to “get the business operations re-started ... It is not about grabbing an opportunity but doing social service,” Ishak has been quoted as saying.
Ishak did add though that some of the shares in Kenmark that were linked to him were actually purchased by BHLB Trustee Bhd, a trust for his family. Ishak holds that the trust has its own trustees who make independent decisions about the buying and selling of shares.
But Ishak had also bought into Kenmark using another vehicle, Unioncity Enterprise Ltd. Both BHLB Trustee and Unioncity sold their shares in Kenmark late last week, pocketing a cool RM5mil in profit, based on StarBiz estimates.
No surprise then that there are many seething Kenmark shareholders.
But Ishak’s involvement is not the main issue here. There are many more parties involved such as the disappeared Taiwanese directors of Kenmark. They are James Hwang, the managing director and major shareholder; Chen Wen-Ling (who had held a 18.7% stake in Kenmark); and Chang Chin-Chuan, the executive director in charge of plant operations in Malaysia and Vietnam.
These directors have resurfaced though, but only via emails and phone calls. It is still unclear if they will be around to face any charges, if and when such action is taken.
That these directors are Taiwanese enforce the perception that it could be harder to bring a foreigner to task in Malaysia. Hence the Kenmark case may be another reason why investor confidence in China IPOs in Malaysia may not improve.
The Kenmark case sends out a worrisome message to investors. The series of events that transpired at Kenmark do seem suspicious, to say the least. Or orchestrated, as some reports have speculated.
The good news is that the relevant regulators – Bursa Malaysia, the Securities Commission and the Companies Commission – are investigating Kenmark. The quicker the matter is resolved, the better it is for the image and integrity of our capital market.
Raison D'etre - By Risen Jayaseelan
Deputy news editor Risen Jayaseelan reckons that in cases like Kenmark, the relevant regulators should work closer – perhaps by creating a special task force – to bring to book those responsible, in the interest of protecting the credibility of our capital market.
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