CEO Morning Brief

MACC Raids Bahvest' Tawau Office, Detains Key Management Personnel

Publish date: Thu, 18 May 2023, 08:37 AM
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TheEdge CEO Morning Brief
MACC raids and detains key management personnel of Bahvest

KUALA LUMPUR (May 17): Bahvest Resources Bhd has announced that the Malaysian Anti-Corruption Commission (MACC) raided the goldmine and business premises of its wholly-owned unit Wullersdorf Resources Sdn Bhd in Tawau, Sabah.

In a bourse filing on Wednesday (May 17), Bahvest said the raid was conducted on Tuesday (May 16) with key management personnel of the company, including its managing director-cum-CEO Datuk Lo Fui Ming, detained until May 19, 2023.

This came after a series of events, including a boardroom tussle and a demand from Southsea Gold Sdn Bhd — a company owned by Fui Ming — for a sum of money from Wullersdorf for allegedly occupying and trespassing into its land for gold mining operations.

Wullersdorf is principally involved in gold mining activities in Tawau, which it subleased within a larger piece of mining lease land belonging to Southsea Gold Sdn Bhd.

“In light of the events above and the detention of the key management staff, the company is concerned and wishes to highlight that the gold production and the mining operation of Wullersdorf might be severely affected and/or halted.

“This may also cause severe impact on the financial position of Wullersdorf/Bahvest,” Bahvest warned.

According to Bahvest, during the MACC’S raid conducted on Tuesday, the key management personnel, namely Fui Ming, executive director Lo Teck Yong, Chong Khing Chung (Chief Financial Officer of Bahvest), Shahrol Azuan (chief operating officer & chief metallurgist in Bahvest), and Brando Pang Tze Ching (assistant general manager of Bahvest) were detained and remanded.

Bahvest added that all of them were brought before the magistrate's court in Tawau at approximately 11am where MACC sought to extend the remand against them for another seven days.

“During the course of hearing, MACC also informed the court that its action was precipitated by a complaint lodged with MACC and they are investigating a case of cheating relating to inaccurate gold production figures.

“Counsels for the detainees complained that the officers of the company were denied their right to legal representation pursuant to Section 28A (2), (3) and (4) of the Criminal Procedure Code,” it added.

The magistrate's court allowed the detention of the detainees to be extended until May 19 (Friday).

Notwithstanding the complaints relating to the denial of legal representation, Bahvest said the legal counsels, to date, are unable to communicate with the detainees.

With key management personnel of the company being detained and remanded until May 19, Bahvest said it would have difficulty in providing instructions and preparing affidavits for the OS Suit No.: WA-24NCC-255-05/2023.

Accordingly, the remaining board of directors had convened an emergency board of directors meeting, at 4pm on May 17.

Bahvest said the board of directors taking cognisance of the events above has instructed the company secretary and remaining management to reach out to the auditors of the company to propose conducting a forensic audit and investigation over the issues arising above.

The board of directors will notify the shareholders of any further development, it added.

To recap, on April 26, Bahvest received a special notice of intention from a group of shareholders holding more than 10% of its shares, to convene an extraordinary general meeting (EGM), to discuss the proposed resolutions which sought to remove its non-executive chairman Datuk Seri Dr Md Kamal Bilal, Fui Ming and Tek Yong from its board.

The shareholders sought to replace them with Chong Tzu Khen, Law Ngia Meng and Chong Mee Fah @ Frederick Chong.

Following the shareholders’ disagreement, Bahvest on May 3 received a letter of demand seeking RM20.4 million from Southsea Gold for alleged wrongful occupation and trespass into Southsea Gold’s lease land.

Wullersdorf is required to remove its operations from Southsea Gold’s mining land.

Southsea Gold is 75%-owned by Fui Ming, who had a 16.09% stake in Bahvest but has since trimmed his stake to 3.304% after the series of events. His son, Teck Yong also disposed of shares and reduced his stake from 0.31% to 0.139%, while Md Kamal retained his shareholdings at 0.19%.

Meanwhile, a temporary resolution had been agreed between Southsea Gold and Wullersdorf, pertaining to the shareholders and boardroom tussles that the group is facing.

The first part of the temporary resolution is for Wullersdorf to pay a non-refundable deposit of RM13 million in two tranches to commence negotiations relating to a final sum for compensation over the wrongful occupation of Southsea Gold’s land from September 2017 till April 2023.

The negotiation will also include a possible tenancy to continue Wullersdorf’s operations on Southsea Gold’s land, without prejudice to Southsea Gold claiming the full RM20.4 million. This came after Bahvest on May 3 received a letter of demand seeking RM20.4 million from Southsea Gold for the abovementioned alleged actions.

Pending the good faith negotiations, Southsea Gold has extended the 30 days’ deadline for Wullersdorf to vacate Southsea Gold’s land to 90 days from the date of the letter of demand.

Shares in Bahvest closed unchanged at 11.5 sen, giving the group a market capitalisation of RM143 million.

Read Also:

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Bahvest CEO’s son trims shares; partner Amir dumps entire stake

Bahvest boardroom battle surfaces as gold glitters

Shareholders seeking to replace three directors sue Bahvest for record of depository

Bahvest to pay RM13 mil over mining land dispute

Source: TheEdge - 18 May 2023

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