Dear SC and Bursa,

Please investigate under CHAPTER 6 - NEW ISSUES OF SECURITIES:

6.02: Admission

1. The Exchange will exercise discretion over the listing of new issues of securities on its Official List and may approve or reject applications for the listing of such new issues of securities, as it deems fit

Please reject JAKS application renounceable rights issue of new JRB Shares together with Warrants as per Exchange considers amongst others, whether-

1. The listed issuer has satisfactory/unsatisfactory corporate governance practices;
2. The listed issuer has/has not addressed all situations of conflict of interests satisfactorily; or
3. The application by the listed issuer undermines public interest.

Refer Bursa announcement:

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3068126

On 22 May 2020, Kenanga IB had, on behalf of the Board, announced that the Company proposed to undertake a renounceable rights issue of new JRB Shares together with Warrants to raise proceeds of up to RM160.92 million (“Original Proposed Rights Issue with Warrants”).

Kenanga IB, on behalf of the Board, wishes to announce that after further deliberation, the Board has resolved to revise the following key terms of the Original Proposed Rights Issue with Warrants:-

 i. maximum gross proceeds to be raised to RM289.64 million from RM160.92 million; and

 ii. Minimum Subscription Levels to be raised to RM200.00 million from RM130.00 million.

(Collectively referred to as the “Revisions”)

This announcement is dated 13 July 2020.

The revise proposal: For illustrative purposes only, the Proposed Rights Issue with Warrants may now entail an issuance of up to 1,287,286,584 Rights Shares together with 643,643,292 Warrants based on the above mentioned enlarged number of 804,554,115 Shares in issue, a revised illustrative entitlement basis of 8 Rights Shares together with 4 Warrants for every 5JRB Shares held and a revised illustrative issue price of RM0.225 per Rights Share, the issue price of the Rights Shares is now assumed at RM0.225 per Rights Share throughout this announcement, which represents a discount of RM0.275 or approximately 55.0% to the TERP of JRB Shares of RM0.50, calculated based on the 5-day VWAMP of JRB Shares up to and including 7 July 2020, being the latest practicable date prior to this announcement (“LPD”) of RM0.9443.

The exercise price of the Warrants is now assumed at RM0.50 per JRB Share throughout this announcement, which represents the TERP of JRB Shares of RM0.50 calculated based on the 5-day VWAMP of JRB Shares up to and including the LPD of RM0.9443.

The original proposal: For illustrative purposes only, the Proposed Rights Issue with Warrants may entail an issuance of up to 402,277,057 Rights Shares together with 201,138,528 Warrants based on the abovementioned enlarged number of 804,554,115 Shares in issue, an illustrative entitlement basis of 2 Rights Shares together with 1 Warrant for every 4 JRB Shares held and an illustrative issue price of RM0.40 per Rights Share, the issue price of the Rights Shares is assumed at RM0.40 per Rights Share throughout this announcement, which represents a discount of RM0.40 or approximately 52.94% to the TERP of JRB Shares of RM0.85, calculated based on the 5-day VWAMP of JRB Shares up to and including 19 May 2020, being the latest practicable date prior to the date of this announcement (“LPD”) of RM1.0706.

The exercise price of the Warrants is assumed at RM0.85 per JRB Share throughout this announcement, which represents the TERP of JRB Shares of RM0.85, calculated based on the 5-day VWAMP of JRB Shares up to and including the LPD of RM1.0706.

Below summary of recent placement shares, award of shares under LTIP and Warrants issued

1. On behalf of the Board, UOBKH wishes to announce that 58,465,313 Placement Shares were issued  (RM 0.70) pursuant to the Private Placement and were listed and quoted on the Main Market of Bursa Securities on Tuesday, 28 May 2019 marking the completion of the Private Placement.
2. Award of Shares under the Restricted Share Plan of JAKS Resources Berhads (JRB or the Company) Long-Term Incentive Plan 38,709,760LTIPShares. Date of Offer of LTIP Shares: 30January 2019

• Executive Director/Chief Executive Officer: 27,625,760
• Senior Management: 10,645,800Other
• Selected Employees/Executives: 438,200
• Closing market Price of the Company’s shares on the Date of Offer: RM0.510per share

3. On behalf of the Board, UOBKH wishes to announce that 102,428,430 Warrants issued (RM 0.25) pursuant to the Rights Issue of Warrants were listed and quoted on the Main Market of Bursa Securities with effect from 9.00 a.m. on Thursday, 20 December 2018, marking the completion of the Rights Issue of Warrants.

4. On behalf of the Board, Kenanga IB is pleased to announce that the Placement has been completed on 30 March 2018 following the listing of and quotation for 49,631,200 Placement Shares (RM 1.38) on the Main Market of Bursa Securities.

5. On behalf of JRB, Kenanga IB is pleased to announce that the Private Placement has been completed on 24 March 2017 following the listing of and quotation for 43,836,100 Placement Shares (RM 1.36) on the Main Market of Bursa Securities today.

A.  The listed issuer has unsatisfactory corporate governance practices:

Offence 1: For the past placement shares JAKS did not complied to: Section 6.15: Announcement of Placees' details

As soon as practicable after the placement of securities and before the listing of such new issue of securities, the Principal Adviser must submit to the Exchange the following:

1. The final list (broken down by each placement agent) setting out the names, home or business addresses, identity card/passport/company registration numbers, occupations/principal activities and securities account numbers of all the placees and the ultimate beneficial owners of the securities placed (in the case where the placees are nominee corporations or funds), and the amount and price of securities placed to each placee; and
2. A confirmation from the Principal Adviser that to the best of its knowledge and belief, after having taken all reasonable steps and made all reasonable inquiries, the details set out in the final list of placees in subparagraph (a) above are accurate and the issue or placement exercise complies with the requirements as stated in this Chapter.

Refer AGM held on 26 June 2018

Authority to allot shares pursuant to Sections 75 and 76 of the Companies Act 2016 “THAT pursuant to Sections 75 and 76 of the Companies Act 2016 and subject always to the approval of the relevant authorities, the Directors be and are hereby empowered to issue shares in the capital of the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total number of issued shares of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.

Offence 2: The issues of 38,709,760 LTIP Shares on 30January 2019 and 58,465,313 Placement Shares on 28 May 2019 clearly did not comply with corporate governance practices “the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total number of issued shares of the Company and shall continue in force until the conclusion of the next Annual General Meeting of the Company

Offence 3: Case: SC2020-10946 & Bursa Ref: CC/38/20: Official complaint on JAKS AGM minutes reporting did not comply with SC Corporate Governance 

 B. The application by the listed issuer undermines public interest & the listed issuer has not addressed all situations of conflict of interests satisfactorily

22 May 2020: Announcement of RI: JAKS market share price: RM1.03:  23 May 2020: RM 0.875

13 July 2020: Announcement of revised RI: JAKS market share price: RM 0.945: 14 May 2020: RM 0.875

Technically the rights issue is offered to all shareholders equitably & all shareholders have the rights & entitlement to subscribe to 1,287,286,584 Rights Shares together with 643,643,292 Warrants allocated to them based on no. of shares held in the company. As such, all shareholders are treated equally & enjoy full benefits & entitlements under the rights issue

But if you look deeper the discount of more than 50% to the TERP of JRB Shares with free warrants immediately cause the market share price to drop and those do not have saving to take up the RI will see their investment immediately drop/dilution in value.

The whole RI is actually robbing the poor to enrich the rich and underwriter. Many minority shareholders me included are in dilemma to cut loss now or borrow more money to invest and get sucked into and play out by the Jaks management with never ending fund raising with issue of billion of shares like toilet paper and consigned Jaks into penny stock.

I really cannot understand why the rule: shares are not priced at more than 10% discount to the weighted average market price of the shares for the 5 market days immediately before the price-fixing date only apply to Private Placement but not Rights Issue?

The RI is designed to safeguard CEO undertaking up to an aggregate amount of RM50.00 million and to procure underwriting arrangement for the remaining portion of RM150.00 million at the very expensive expense of minority shareholders who cannot afford or unwilling to subscribe for RI.

Offence 4: Clearly the RI undermined public interest/confident (Market share price drop the next day immediately after announcement of RI) and also clearly the conflict of interest between minority shareholders unable or unwilling to subscribe for the RI and CEO and underwriters that are fully protected by discount of more than 50% to the TERP of JRB Shares with free warrants are not addressed at all.

For illustrative purposes, shareholders who do not subscribe RI will see their share value dilute from 5-day VWAMP of JRB Shares up to and including 7 July 2020, being the latest practicable date prior to this announcement (“LPD”) of RM0.9443 to TERP of JRB Shares of RM0.50 whereas underwriters only pay RM0.225 for 1 rights shares together with 0.5 free warrant. Isn’t that a very clear day light robbing the poor shareholders to enrich the rich underwriters?

Refer Jaks website Media news:

 http://jaks.irplc.com/medianews.htm?filepath=JAKS/JAKS-Nanyang-12072020.pdf

Highlights: （吉隆坡11日讯）捷硕资源（JAKS，4723，主板建筑股）放眼越南海阳省的煤炭发电厂今年11月投运，料可带动能源业务在2021财年贡献逾半盈利。

Jaks resources expects the coal power plant in Hai Duong province, Vietnam, to achieve commercial operation in November this year, and it is expected that the energy business will contribute more than half of its profit in FY2021

洪楠堡指，公司截至2019财年末季的净负债，仍处于约0.28倍的低水平。“这让公司有能力融资，供未来收购业务。”

Andy Ang pointed out that the company's net gearing ratio as of the end of the fiscal year 2019 is still at a low level of about 0.28. "This gives the company the ability to raise funds through borrowings for future business acquisitions."

Offence 5: On 12 July 2020 CEO told Nanyang Siang Pau, “Andy Ang pointed out that the company's net gearing ratio as of the end of the fiscal year 2019 is still at a low level of about 0.28. "This gives the company the ability to raise funds through borrowings for future business acquisitions" But on 13 July 2020 Kenanga IB, on behalf of the Board, wishes to announce that after further deliberation, the Board has resolved to revise the following key terms of the Original Proposed Rights Issue with Warrants:-

 i. maximum gross proceeds to be raised to RM289.64 million from RM160.92 million; and

 ii. Minimum Subscription Levels to be raised to RM200.00 million from RM130.00 million.

Since CEO Andy Ang is confident coal power plant in Hai Duong province, Vietnam, to achieve commercial operation in November this year, and it is expected that the energy business will contribute more than half of its profit in FY2021 and since JAKS gearing ratio as of at end of the fiscal year 2019 is still at a low level of about 0.28. This gives the company the ability to raise funds through borrowings hence my suggestion to JAKS management please replace this RI with Bank borrowing, period.

In view of the above 5 offences is it my hope SC and Bursa will reject JAKS revise proposed RI. It is also my hope SC and Bursa will also enforce shares are not priced at more than 10% discount to the weighted average market price of the shares for the 5 market days immediately before the price-fixing date for RI too to prevent insiders and underwriter RI billion of share at penny price causing market price disruption and at the expensive expense of minority shareholders who decide to cut loss, unable to subscribe or unwilling to subscribe to the RI.

Please allow me to suggest for a more fairer and equitable RI, discount should be capped at 10% and free warrants distribute to the current shareholders and subscribe Rights shares:

For illustration purpose: My suggest propose Rights Issue with Warrants may now entail an issuance of up to 321,821,645 Rights Shares together with 321,821,645 free Warrants based on the above mentioned enlarged number of 804,554,115 Shares in issue, a revised illustrative entitlement basis of 2 Rights Shares for every 5JRB Shares held with 1 warrant for every 5 JRB shares currently held and 1 warrant for every 2 Rights shares subscribe and a revised illustrative issue price of RM0.815 per Rights Share, the issue price of the Rights Shares is now assumed at RM0.815 per Rights Share throughout this announcement, which represents a discount of RM0.090 or approximately 10% to the TERP of JRB Shares of RM 0.907, calculated based on the 5-day VWAMP of JRB Shares up to and including 7 July 2020, being the latest practicable date prior to this announcement (“LPD”) of RM0.9443.

The exercise price of the Warrants is now assumed at RM0.905 per JRB Share throughout this announcement, which represents the TERP of JRB Shares of RM0.905 calculated based on the 5-day VWAMP of JRB Shares up to and including the LPD of RM0.9443. 

If SC and Bursa enforce above fairer and equitable RI, I believe those do not wish to subscribe will still get the free warrant and those RI subscribers and underwriters will get the 10% discount and also sweetener free warrants. Moreover the market price will not be disrupted due to huge discount and dilution effect.

Thank you

Best Regards

Lee Soon Sheng

PS: For illustrate purpose the RI is so bad that even JAKS Executive Director DATO' RAZALI MERICAN BIN NAINA MERICAN had to sell his shares at current market depressed price.

DATO' RAZALI MERICAN BIN NAINA MERICAN: 20-Jul-2020: Disposed Warrant: 35,500: RM 0.518

DATO' RAZALI MERICAN BIN NAINA MERICAN: 20-Jul-2020: Disposed: 4,000,000: RM 0.843

DATO' RAZALI MERICAN BIN NAINA MERICAN: 20-Jul-2020: Disposed: 1,000,000: RM 0.843

DATO' RAZALI MERICAN BIN NAINA MERICAN: 13-Jul-2020: Disposed: 5,000,000: RM 0.948

DATO' RAZALI MERICAN BIN NAINA MERICAN: 03-Jul-2020: Disposed: 1,500,000: RM 0.958

DATO' RAZALI MERICAN BIN NAINA MERICAN: 29-May-2020: Disposed: 2,000,000: RM 0.883

DATO' RAZALI MERICAN BIN NAINA MERICAN: 27-May-2020: Disposed: 1,500,000: RM 0.888

DATO' RAZALI MERICAN BIN NAINA MERICAN: 28-Jan-2020: Disposed: 1,000,000: RM 1.367

It is very clear the RI is value dilutive/destroying even to JAKS directors who might not be as rich as CEO Andy Ang and was forced to cut win/cut loss as he might not have enough money to take up the RI.

Just imagine how about me and many who loaded up early in the year in anticipation promised by JAKS that Jaks’ Hai Duong Vietnam power plant will be operational in year 2020 and will generate net profit/ cash flow of RM 120 - 250 millions to JAKS for the next 25 years. Everyone is hopeful PublicInvest will then upgrade JAKS like MFCB but instead PublicInvest ceasing coverage after repeat warning, “All told, we are still wary over the various dilutive equity fund raisings done so far to meet its liquidity demands and the poor execution especially on its property business”

The current RI is the last straw that broke the camel’s back, it show how poorly CEO Andy Ang on execution that instead of turning “Cash Cow JHD Vietnam Power Plant” into rewarding the shareholders but alas a poorly thought out RI had turned shareholders into Cash Cow for the JAKS/CEO/Underwriters to milk its dry. 

Will SC and Bursa also investigate the Award of Free Shares under the Restricted Share Plan of JAKS Resources Berhads (JRB or the Company) Long-Term Incentive Plan 38,709,760 LTIP Shares is against certain performance merit yardstick, might constitute abuse of power or conflict of interest to unjustifiable award or any SC/Bursa rule and regulation or on corporate governance practices and transparency?

Date of Offer of LTIP Shares: 30 January 2019

• Executive Director/Chief Executive Officer: 27,625,760
• Senior Management: 10,645,800
• Other Selected Employees/Executives: 438,200