The Blame Game

As we have mentioned earlier, Siow Chung Peng first emerged as a substantial shareholder of Lii Hen on July 10, 2004 through a Bursa Malaysia announcement. You might not have heard about his name prior to this. But if you are involved in the heyday of the then Second Board in the year 1996/1997, you will surely recall many familiar darling stocks like Emico or EMC, which have seen their stock prices in the high twenties. You will probably heard of names like Repco Low or John Soh or Taikar Lim as well. The punters used to refer them with an infamous moniker 'the syndicate'. Undeniably, these stock market movers took us through one of the most luminous years in the history of our stock market.

It remains an untold story, but not until now, that Siow Chung Peng was once associated with one of them in a low profile stock by the name of Advanced Packaging Technologies (Malaysia) Bhd (ADVPKG Stock Code 9148). According to the register of shareholders of Advanced Packaging on April 30, 2004, he held a direct interest of 2,018,250 shares or a 4.92% which placed him the fourth largest shareholder in this very tightly held stock. His wife was also ranked 14th on the list with another 2.1% stake. We were told that these were the pared down positions after the Asia Financial Crisis of 1997. The stock was once trading at more than fifteen ringgit in 1997. It was reputed that he was the supplier of Advanced Packaging shares to the syndicate for the market play then. The collaboration went on several occasions thereafter.

So no novice was him. Although the public may know a thing or two about Bursa Malaysia's Securities Borrowing and Lending (SBL) or Regulated Short Selling (RSS) today, Siow Chung Peng was already trading briskly put and call options with the syndicate in 1997. He had has his gun trained long before Lii Hen's Italian job in 2004.

Not long after the music of jingle bells went off in late October 2004, margin calls and force selling took place on the various stock accounts held by the Siow brothers. The immediate aftermath of the crash of Lii Hen stock price was a series of legal suits on contra losses. To surmount the onslaught of civil suits stemmed from the stockbrokers and bankers at a moment when the Siow brothers needed time the most to huff-and-puff and to reorganise their finances, the best strategy to delays the arrival of judgement day now is the blame game, they reckoned. They were hoping that by pointing fingers, it will not only buy them the time they need but it will also assert some sort of pressure on the carpenters to help bail them out. And at the worst case scenario, they were determined to take the carpenters down together.

But the carpenters are not intimidated by the game the brothers are playing. They have always maintained that they have no hand in the Italian job. They thought they are Charlie Croker or Handsome Rob that they can walk away stealthily from the rumble. They thought their finger prints would have been buried or hideaway by the passing of time by now. Sadly, the damage in the form of contra losses was just too large for the rabid brothers to shoulder them on alone.

Sensing that their blame game strategy may be hitting a snag in mid 2006, the brothers decided to up the ante to a kamikaze level. They desparately needed someone who are closed to the carpenters to send over their ultimatum. To them, the best person would be the remisiers who had acted on either side.

The attempt proved futile which resulted in their last bid of tell-all by Siow Chug Peng lodging a report with the Securities Commission on May 29, 2006 against a long list of remisiers, the board of directors of Lii Hen, banks and stockbroking companies, alleging a conspiracy to defraud them.

Upon perusing the SC report made available to us, it is obvious that one of the key personalities mentioned was a remisier with SJ Securities Sdn Bhd, Dato' Goh Hock Choy. He is also known as David within the stockbroking fraternity. Our sources told us that he had a long and illustrious background having been involved in the  stockbroking industry since the late 1980s. Mind you, a few of our yesteryears market movers first made their names through SJ Securities. Repco Low and John Soh are two names that come to mind. Little wonder why the market once nicknamed SJ Securities as the shaolin temple of Second Board. We are not certain about his clienteles but we do know that he contributed a significant shares in SJ Securities' business.

Siow Chung Peng claimed in the SC report that he had known of the Dato' since the year 2000, when he was seeking his advice on restructuring his Advanced Packaging shareholdings after the Asian Financial Crisis. By the way, the relationship with the syndicate did not end well as we understand that Siow took a legal action against the syndicate for the recovery of ADVPKG shares as well as some monies. He got the judgment on the syndicate and eventually made the syndicate a bankrupt. But the deal on Advanced Packaging did not materialise with Dato' and the two become friends thereafter.

The carpenters from Muar have been a client of Dato' since the company was listed a long time ago. He has been their broker of choice when it comes to deal with larger block of shares in the millions. They knew the Dato's capability. In the late 1990s to early 2000s, Lii Hen was only an uninspiring furniture manufacturer among its many peers. Thus the need of the carpenters to see the Dato' regularly. With the continued lacklustre state of Lii Hen as a company, the carpenters decided to throw in their towels and henceforth sought to dispose off their controlling stakes entirely. So they may retire.

A preliminary deal was struck with the Dato' in early March 2004 for a two parts exercise in the presence of a common friend by the name of Lau Teck Poh from Muar. To kick start the first part, the carpenters agreed to place out a block of 5 million Lii Hen shares through the Dato' at a discounted price to the prevailing market price of Lii Hen. As with any such exercise, the carpenters who are also the board members had agreed to co-ordinate the exercise with timely stock positive announcements in order to consummate the second part of the exercise successfully. Obviously part two will be the disposal of their controlling stake in Lii Hen.

Prior to the deal with the carpenters, sometime in early February 2004 the Dato' and Siow Chung Peng were having lunch ushering the Chinese New Year. He told the Dato' that since his last attempt to wrestle control of Advanced Packaging ended in the bin, he enquired with the Dato' if he has anything on hand that he can lay his hand to. The Dato' said he will looks around.

This is the beginning of Lii Hen's 2004 debacle.

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