Corporate Governance Of Things

Author: tanhakka   |   Latest post: Sat, 8 Feb 2020, 9:04 AM


Protasco Bhd joint development RM371.5m property in Tampin for a cash of RM48.6 million paying to related party Chong Ket Pen? - The Edge News

Author:   |    Publish date:

Earlier Report: Sun, 3 Mar 2019, 06:15 PM

Protasco Bhd's RM48.6m Land-JV cash to Director Chong Ket Pen, 2 days after -RM44m Q4 loss report shock the market. Real reasons exposed.



Protasco RM48.6 million cash-buy land JV announcement:


Protasco -RM44 million Q42018 loss announcement:


The announcement of RM48.6 million cash-buy land-JV paying to Dato Sri' Chong Ket Pen news just 2 days after Protasco Bhd announced -RM44 million 4th Quarter loss, the worst operating loss in Protasco's history also led by Dato Sri' Chong Ket Pen. Read more...



KUALA LUMPUR (March 1): According to The Edge newspaper, Protasco Bhd announced on 1st March 2019 it is undertaking a joint mixed residential development project in Tampin, Negeri Sembilan, which has an estimated gross development value of RM371.59 million, with Penmaland Sdn Bhd.
The collaboration is considered a related party transaction as Penmaland’s major shareholder is Datuk Seri Chong Ket Pen, the single largest shareholder in Protasco, with control of a 29.53% stake. Chong is the executive vice chairman-cum-managing director of Protasco.
In an exchange filing today, Protasco said the conditional joint development agreement was signed between its wholly-owned unit De Centrum Retail Sdn Bhd and Penmaland, which is the registered owner of the land measuring some 55.48 ha.
Penmaland had in August 2018, procured the existing planning approval from Majlis Daerah Tampin.
The land is approved to be developed as a mixed residential development known as “Denai Hills”, comprising 703 units of terraced houses, 32 units of semi-detached houses, 71 units of bungalows, three homestay units and a commercial lot.
“Subject to property market conditions, the development period is expected to be approximately seven years.
“As at the latest practicable date, the development has yet to commence and the construction works for the development is expected to commence in the third quarter of 2019 provided that the agreement has become unconditional,” read the filing.
Pursuant to the agreement, Penmaland will grant De Centrum full and unfettered rights to carry out the development on the land, in exchange for a cash consideration of RM48.6 million.
The group intends to fund the development through a combination of internal funds (including cash flows generated from the project) and bank borrowings, the quantum of which cannot be determined at this juncture.
Under the agreement, De Centrum is entitled to receive approximately 87% of the estimated aggregate GDV of the project, or some RM323.28 million based on its current estimation.
Shares in Protasco closed two sen or 6.52% higher today at 25 sen, for a market capitalisation of RM120.35 million. The stock has lost about 69% of its value over the past year.
The Edge however, forgot to quote on 27 February 2019, Protasco Bhd announced RM44.6 million losses in 4th quarter, and annual losses of RM48.5 million. In the quarterly report, Protasco under current management in the property sector had performed badly and continue to book losses for last few years. Adding more portfolio to a loss making cost center at current market condition? The madness just got worsen.
As an investigative financial newspaper, The Edge might want to ask why current board worsen Protasco with another RM48.6 million cash burden when debt and bank borrowing is already alarming high, moreover paying to the company executive director Chong Ket Pen which the losses is caused under his current management supervision and exactly knowing Protasco disastrous financial condition being disastrous? Is this the best The Edge can do, to deliver message of the villian?
Where is "The Edge" of The Edge for not reporting the obvious?
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