CCM investigating CNLT

The Companies Commission of Malaysia (CCM) is understood to have commenced investigations into yarn manufacturer CNLT (Far East) Bhd and companies related to it, sources say.

It is believed that some of the related companies such as Golden Privilege Sdn Bhd and CNLT International Sdn Bhd are under investigation. The reasons for the probes are not clear.

Checks with the CCM reveal that Golden Privilege is equally controlled by Datuk Prem Krishna Sahgal and Neo Chin Sang. Sahgal, an Indian national, was also the managing director of CNLT since 1996.

According to CNLT’s annual report for 2006, Golden Privilege was paid rental for premises amounting to some RM144,000 a year in 2006 and a few years before.

Sources say Golden Privilege had filed to be struck off from the CCM records in January 2007 and was officially removed from the register in March 2008.

Before it was struck off, a statutory declaration pertaining to the application, signed by a director of Golden Privilege dated January 2007, stated that the company had no assets, was cash strapped and could not pay its winding-up fees.

However, documents obtained by The Edge Financial Daily show that Golden Privilege owned residential land in Seremban in 2008.

It is not clear what the issues with CNLT International are.

CNLT was listed on the local bourse in mid-December 1997, and started faltering in 2003 when the company posted losses.

The company’s shares were delisted from Bursa Malaysia on March 4, 2009 after it failed to submit its annual report for the financial year ended Dec 31, 2007 within the timeframe stipulated.

CNLT was wound up on Jan 16, 2009 with the judgment stating, among others, financial irregularities in the company.

For the first three months of 2008, CNLT posted a net loss of RM6.48 million on the back of a RM4.01 million revenue.

In the notes accompanying its financial statement, CNLT said the poor showing was due to low production capacity and low plant utilisation caused by the lack of working capital for the purchase of raw materials.

CNLT posted net losses of RM13.27 million in 2007 and RM28.39 million in 2006. Except for 2002, when it was marginally profitable, the company had been in the red since 2001.

A liquidator was appointed for the company on Feb 4 this year.


This article appeared in The Edge Financial Daily, July 28, 2010.