Den of Thieves

Snow White took a bite of the poisoned apple and fell to her death. We all know how she was brought back to life by Prince Charming in that story. The antidote was a loving kiss. Well, that was fairy tales.

After dusting off all the cobwebs and painstakingly mapping out the ulterior motives behind those announcements, we believe we found ours now in the form of an October 25, 2004 announcement by Lii Hen. It said that Lii Hen had been informed by Assets Muar Sdn Bhd, its substantial shareholder, that they have received an offer to purchase a 32% stake in Lii Hen from a bank-based stockbroker on October 14, 2004. After due deliberation, Assets Muar Sdn Bhd had formally accepted the offer on October 20, 2004. It went on to said that the parties are now finalising the documents of transaction.

We are aware that there are several common denominators in both Lii Hen and Assets Muar Sdn Bhd. Chief among them is Mr. Chua Lee Seng, who is at all material time the chairman and director of Lii Hen as well as the director and substantial shareholder in Assets Muar Sdn Bhd. Mr. Tan Bee Eng is a director in Lii Hen but only became a director in Assets Muar Sdn Bhd on October 21, 2005. His substantial shareholding in Assets Muar Sdn Bhd is held through his son, Tan Uei Jye.

The announcement on the offer to purchase on October 25, 2004, raised many eyebrows. This is indeed a material information which can influence the directions of Lii Hen stock price immensely. Assets Muar Sdn Bhd claimed in the said announcement that they received the offer on October 14, 2004 and subsequently accepted the offer on October 20, 2004. But why did Lii Hen only announce this material information on October 25, 2004, considering that there are common denominators in both Assets Muar Sdn Bhd and Lii Hen? Not only did Lii Hen breach Paragraph 9.03 (1) Chapter 9 of Continuing Disclosure of the Main Market of Bursa Malaysia which states that a listed issuer must make immediate public disclosure of any material information but they have also infringed Paragraph 9.03 (3)(d) of the same which relates to any event that will materially affects the size of the public shareholdings of Lii Hen shares.

We have no qualm on what Lii Hen had breached. Our contention is why would the regulators allow these corporate shenanigans to slip passed their claws, especially on the concealment of the critical 10% public shareholdings? Effectively this tantamount to allowing a private company to be trading on the Bursa Malaysia exchange.

It will be reasonable to assume that there were at least, a series of meetings or discussions between Assets Muar Sdn Bhd and the prospective purchaser of the 32% controlling stake which ultimately gave rise to the offer to purchase on October 14, 2004. This would mean that both Chua Lee Seng and Tan Bee Eng are fully involved in this takeover bid well before October 14, 2004, as they were the ultimate sellers. Interestingly, the identity of the purchaser was not mentioned in the announcement of October 25, 2004. But never mind.

We have said we are unsure about the relationship between the Siow brothers and Asset Muar Sdn Bhd or Chua Lee Seng or Tan Bee Eng. But we have concluded that the board is able to draw a line between a public shareholder and vested party by virtue of how the two public shareholdings spread announcements were made. They may or may not know each other personally but they did work profusely toward a same goal. That mean they are from the same den. The Siow brothers would not have bought a total of 12,220,150 shares as at October 19, 2004, if they are not in the loop of the impending takeover bid. In another word, Asset Muar Sdn Bhd and or Chua Lee Seng and or Tan Bee Eng have had their finger prints all over Siows' 12,220,150 shares!

It all make sense now as we have established that the Muar carpenters are as the matter of facts, been working hand in glove with the Siow brothers. It answered why the disappearance of 656 shareholders in 39 days. It answered why the Siows bought up all the available shares long before his first announcement of substantial shareholdings on July 10, 2004. It answered why the stock price of Lii Hen had been rising rapidly since May 2004. It answered why the board of Lii Hen is risking themselves to create multiple false and misleading announcements, relentlessly. It also answered why the board had kept very closely to their chests that the 10% public shareholding threshold had long been breached. All of them worked toward one ultimate goal : a big bounty awaits when they unload the 32% stake or 19,200,000 block of shares to the new purchaser at a higher price. They are doing this because they are all from the same den. The den of thieves.

A thief takes the property of another by stealth without the latter's knowledge. We can make a simple analogy to Lii Hen in this case. The carpenters take the property in the form of a privileged information of an impending takeover from the public shareholders. They are doing by stealth by way of false and misleading announcements. The public shareholders have no knowledge of it because the announcements were camouflaged meticulously. In order for the carpenters not to be caught under the insider's trading trapdoor, they will need an outsider to pull off this Italian job. The outsiders were the Siow brothers. Period.