'Deal smells of political manoeuvrings'

In all likelihood, the reverse takeover (RTO) of Scope Industries Sdn Bhd by Matang will be bulldozed through at the latter’s extraordinary general meeting (EGM) on Friday.

The reason being all that is needed is for 15 percent of the shareholders to vote in favour of the RTO.

And with most of the top 20 shareholders in favour of the takeover, it is all but given that the profitable plantation firm built with the money of ordinary MCA members will be bought by Scope, an electronics firm in one of the most lopsided deals ever witnessed.

MCA-owned Huaren Holdings owns 10.72 percent shares in Matang while Rohua Sdn Bhd, chaired by party president Dr Chua Soi Lek (left) holds 1.18 percent.

“Of the 19,984 shareholders, about 3,500 are untraceable,” said Wong Pang Nam, Matang’s former chief financial officer (CFO) who is campaigning against the deal.

He said Matang has RM4.5 million in unclaimed dividends as many shareholders have passed on or moved.

“Many are not highly educated. They cannot read English, so they do not know what is going on,” added Wong, who is trying to trace as many shareholders as possible to oppose the deal at the EGM.

Wong, who was CFO between 2011 and this year, said he was kept out of talks when he started questioning the deal. His contract, which expired in January, was not renewed.

‘Matang pays out more dividends than earnings’

He said Matang is a profitable zero-debt company that has been paying dividends every year since 1982.

Its key assets are a plantation in Segamat, open land in Tangkak and a five-storey commercial building in Larkin.

“Shareholders have benefitted a lot. Matang even pays out more dividends than earnings,” he said.

In 2008, dividends of eight sen a share were paid out, although earnings per share were only 6.5 sen. “But for the first time in the company’s history, it did not pay dividends last year.”

Wong questioned how Scope could obtain Matang in return for shares valued at 25 sen per share. Matang shares are traded at a par value of 45 sen.

“It will take the shareholder 119 years just to recover the original investment based on current earnings,” he said.

He said the four year moratorium on disposing Scope shares was unfair as new shareholders other than Matang are able to sell their shares freely.

Wong’s contention is:

• Why dispose of Matang at RM145 million, when Henry Buthcer valued it at RM168 million?

• Why is Matang handing over its RM25 million cash reserves to Scope when the money should be given to the former's shareholders?

• Why dispose to Scope which posted profits of just RM500,000 last year when Matang made RM5 million?

• How did Scope value its shares at just 25 sen?

• Why issue a four-year moratorium on shareholders for the disposal of the Scope shares? Scope has an unprecedented deal. They take the shares plus cash.

"Loyal MCA members bought shares in Matang, providing an interest free loan to the party to raise RM50 million and this is how they are repaid," he said.

Matang background

Matang Holdings Berhad was incorporated on April 3, 1978 as a public limited investment holding company.

According to its mission statement, its principal objective is "fostering inter-communal economic cooperation in conjunction with the economic policy of the country".

Its initial authorised share capital was RM50,000,000 divided into 100,000,000 ordinary shares of RM0.50 each.

This was later increased to RM 60,000,002 after the allotment of 120,000,000 shares of RM0.50 each to members of Johor MCA on November 2, 1981.

Matang's first business venture was disposing a timber concession obtained from the Johor Government at Hutan Simpan Maokil, Labis.

In 1984, Matang acquired Nagapal Estate (now known as Ladang Matang) at Jementah, Tangkak.

It has also acquired industrial properties in Larkin, Johor Bahru and commercial land in Tangkak.

On Nov 20, 2012, Matang launched a RTO of electronics firm Scope Industries Bhd in a deal worth RM145 million.

The RM145 million deal incorporates Scope’s buy out of another plantation company, Benua Mutiara Sdn Bhd, for RM31.7 million.

- The Malay Mail