Saturday, July 26, 2014

EAH: Just another fishy deal

Just when will Bursa put a stop to this - minority shareholders are going to have no say in this. Any acquisitions that are cash in nature does not need shareholders approval and management as well as the controlling shareholders continue to take advantage of this.

Another deal which took opportunity of this another smallish company. Fresh from its rights issue, raising RM42.5 million it took the opportunity to have a spending spree, buying a less than 1 year old company. See for yourself - a company that was incorporated on 11 Sep 2013. The rights issue was created it seems partly to acquire this company. Otherwise, how can the deal be done in such a short timeframe? - a month after the rights.



Why is it fishy?

1. The announcement claims that it makes RM2.01 million profit - it has a track record for less than 1 year. How are we suppose to evaluate a less than a year old company? The fact that it achieves such a high net margin especially in short period of time causes some concerns already;
2. Another part of the announcement mentioned that it still has unbilleable contract worth RM4.94 million. One of the contract started before the company was even formed. How is it so? Contracts are transferred i.e. assigned?
3. Beyond the mention of its PAT, comparison against currently traded PEs of similar companies not much was revealed. How about showing the audited report of the acquired company?

For those whom have come out with money to subscribe for the rights earlier, good luck!

4 comments:

ronnie said...

This is an excellent posting.

Wonder what SC will do about this? Nothing much I imagine.

felicity said...

Nothing much. It is not against the regulations as cash purchase does not need SC's approval.

Vincent Chia said...

Lawrance aka Dali http://malaysiafinance.blogspot.com, successful RTO cases Kzen Bhd to RA Telecommuncation Bhd -0110 and I-Power Bhd to Instacom Group Bhd
What is MTSB? and who are the MTSB sharesholders are: Chia Kok Chin and Low Tee Chau?
Answer: MTSB owns by Dali which is Murasaki portal http://www.murasaki.co/login.mx :
MTSB stands for MURASAKI TECHNOLOGY SDN BHD ("MTSB") which is purchased by EAH Bhd @RM$18mils cash.http://www.bursamalaysia.com/market/listed-companies/company-announcements/1695773
Who is Chia Kok Chin? The founder and CEO & CTOof previously known I-Power Bhd which loss 90+mils in 2010 http://www.bursamalaysia.com/market/listed-companies/company-announcements/332832 and RTO in Oct 2012 into Instacom Group Bhd-0069
Promoted a lots in blog to seduce investors to pump money into EAH Bhd http://malaysiafinance.blogspot.com/search?q=ea
All geared to siphon money out from EAH bhd so good luck to EAH investors and prepare for the down fall of EAH Bhd soon....

Vincent Chia said...

A punch of crooks:

Dali: RTO specialist, owner of malaysiafinance.blogspot.com and MURASAKI TECHNOLOGY SDN BHD ("MTSB")
Jason Chia Kok Chin: Ex CEO of IPower Bhd
Mohammad Sobri bin Saad: CEO of EAH Bhd

3 crooks are repeating their crime in EAH now.

In 2008, IPower CEO Jason Chia Kok Chin purchased Izzinet at RM27mils and then writeoff the investement. The following was the breakdown of the shareholding:
Shareholder Number of iZZinet Shares %
Mobif 1,000,000 9.00
Ahmadiss Kandar bin Muslim 500,000 4.50
Fan Ruey Yin 2,722,250 24.50
Mohammad Sobri bin Saad 3,000,000 27.00
Sarawak Information Systems 1,111,000 10.00
IPOWER BHD 2,777,750 25.00
Total 11,111,000 100.00

Do you spot what is in common? Mohammad Sobri bin Saad and Jason Chia were accomplice in 2008.
Dali is the corporate man behind to architect this whole day light robbery. Dali did the RTO for RA Comm and Instacom.
Repeating the same trend: instead of buying Izzinet in IPower, EAH bought a 1year old company Murasaki Technology which belongs to Dali and Jason Chia Kok Chin @RM18mils
Hence thanks Felicity for pointing out the huge accout receivable tricks in EAH http://www.intellecpoint.com/2012/07/eah-dont-fall-into-trap-of-bad-asset.html
which EAH will be writen-off soon (repeating what Jason Chia did to IPower in 2010(loss of RM94mils)