What’s Up? Key West (READ ONLY)

Key West (READ ONLY)

What’s Up? … dated Jan 2011

Key West Global Telecommunications Bhd has seen the emergence of a new substantial shareholder in Goh Mei Yuin, who acquired 12.32 million shares, or a 9.13% stake in the company.

It is likely that Goh had purchased the shares from Key West ’s former controlling shareholders, the Yong family, which sold their 12.21 million shares in late November 2010.

Not much is known of Goh, except that Goh had also emerged as the single largest shareholder in furniture-maker Baswell Resources Bhd in September 2010, with an interest of 7.15 million units representing a 14.9% equity stake in the company as at Dec 14 2010.

According to the 2009 annual report of another listed company, XiDeLang Holdings Ltd, Goh was also among one of the China-based sports shoe manufacturer’s top 30 shareholders as at May 10, 2010 with 1.56 million shares, or a 0.39% stake.

Goh’s emergence in Key West is bound to raise eyebrows, especially with regard to future plans for the company, which has come under the spotlight of late for several reasons.

The company saw some share price gyrations over the past three months (Oct 2010 – Dec 201), and was issued an unusual market activity (UMA) query by regulators in early December 2010.

The telephony services company announced another poor set of financial results for the third quarter ended Oct 31, 2010.

It reported a net loss for the period of RM789,000 on revenue of RM12.58 million, from net profit of RM88,000 and revenue of RM36.86 million a year earlier.

It attributed the lacklustre performance to a foreign exchange loss of RM340,000 as its sales are primarily in US dollars, a slowdown in its telco business volume and a decline in profit margins.

For the cumulative nine-month period, Key West ’s net loss shrank slightly year-on-year to RM2 million, from RM2.28 million. However, revenue for 9MFY2011 more than halved to RM61.22 million from RM129.34 million previously. Its net assets per share for the period stood at four sen.

In November 2010, the company, which had been in the red for the last two years, announced a proposed private placement to raise up to RM1.89 million for working capital. However, a few days later, three of its directors and substantial shareholders disposed of their stakes in the company.

Two of Key West ’s directors, non-independent non-executive director Yong Chon Yee and independent non-executive director Datuk Haji Mohamad Amin Satem ceased being substantial shareholders.

Former non-independent non-executive director Yong Chon Yew also disposed of 27.41 million shares on the open market, representing a 20.3% direct and indirect stake in the company.

Chon Yew’s family comprises his wife Liau Yueh Hwa @ Liaw Yueh Hwa and their sons Alfred Yong Kah Soon and Alan Yong Kah Kee. Alfred’s wife Doris Tan Lian Fah and uncle Chon Yee were also directors and shareholders.

Recently, the company saw the resignation of Chon Yew as well as his son Alfred, who was Key West ’s chairman and executive director. No reasons were given for their resignations.

Meanwhile, two new independent and non-executive directors were appointed to the board in November 2010, namely Datuk Dr Loga Bala Mohan Jaganathan and Dr Lai Chee Chuen. It is worth noting that Lai also sits on the board of Baswell Resources as its senior independent non-executive director.

Lai is a former CEO of Seloga Holdings Bhd, a company principally involved in property development as well as in the construction and engineering business.
Both Baswell and Seloga are among Bursa Malaysia ’s financially-distressed Practice Note 17 (PN17) companies.

Seloga is in the midst of a boardroom tussle. Two of its major shareholders are seeking the removal of four of its directors, including executive director Datuk Samsudin Abu Hassan. Samsudin and the other directors will meet with shareholders in an EGM to be held on Jan 31.

It is understood that former Renong chief Tan Sri Halim Saad indirectly owns 32.5% of Seloga via Usaha Citra Sdn Bhd and Lucky Lamp International Ltd.