The palace of Caesar collapsed on the evening of October 27, 2004, when Bursa Malaysia slapped Lii Hen stock with a harsh Designated Securities trading rule. And it took effect the very next morning. Suddenly, massive selling orders were gushing out the gate the moment the morning trading bell rang. Bursa has become the abattoir of Lii Hen as the little hen were slaughtered mercilessly. At the stroke of a pen, Lii Hen stock registered a whopping three limit down. The aftermath of such a drastic measure by Bursa Malaysia and the Securities Commission wiped out almost RM 370 million of market capitalisation of Lii Hen within two days.

Many investors and stock analysts have cried foul on the need of both Bursa Malaysia and the Securities Commission having to imposed such a draconian rule on a stock which had thus far shown no sign of rigging or otherwise. Several notable stock market commentators lashes out on the rationale. Among them is the long term columnist of "Taking Stock" of the New Straits Times, S. N. Lock. He lamented that not only the investors are not given an explanation by the regulators, they are also deprived of their rights of a fair and informed decision or opportunity to either further acquire, hold, reduce or dispose entirely their shareholdings in Lii Hen. 

One of the Bursa Malaysia and Securities Commission mandates is to maintain an orderly exchange and capital market but the violent consequences of their own doing is a clear testament of their failure as a regulator. Further, it may be that they have even failed to detect or negligent enough in the early stages to foresee what may be brewing in Lii Hen's pot. Kill the evilly foetus whilst it is still in the embryo, if there is any. Both Bursa Malaysia and Securities Commission owed an explanation to the capital market for this. Perhaps at the very least, they should come forward and redeem themselves why did they resorted to the violent route.

Toeing back to the pivotal point of the complaint. The misleading announcement was made on August 10, 2004, right in the period of hiatus mentioned above. Evidently, Lii Hen stock staged a powerful breakout of its 100-Day Moving Average of RM 3.50 on an upward momentum without looking back. A million dollar question needs to be asked now on why would a seemingly general reply to a query by Bursa Malaysia of Unusual Market Action ("UMA") by Lii Hen's board provided such a powerful propellent for the stock to almost doubled its price within 2 months?

Stay tuned.

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