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MSWG probes Sapura’s constant massive write-off of machinery/tools

Publish date: Sun, 19 Jun 2022, 09:27 PM

THE Minority Shareholders Watch Group (MSWG) is querying cash-strapped Sapura Energy Bhd at its forthcoming annual general meeting (AGM) with regard to consistent large amounts of write-offs of its plant, machinery, electrical installation, factory equipment and application tools (PMEIFEAT).

The global integrated oil & gas (O&G) service provider is scheduled to stage its 11th AGM on June 22 (Wednesday) at 11am.

Over the past two financial years, Sapura has written off RM32.2 mil in its FY1/2022 and RM27.3 mil FY1/2021.

“What were the reasons for the group to write-off large amounts of PMEIFEAT in the past two years?” enquired the shareholder activism group. “What categories of assets from the PMEIFEAT have been written-off in FY1/2022 and FY2/2021?”

MSWG further seeks clarification from Sapura if the group needs to change the depreciation rates on PMEIFEAT that have frequent write-offs.

“If yes, what are the new depreciation rates?” asked MSWG. “Will there be similar large write-offs in PMEIFEAT in FY1/2023?”

Sapura incurred an audited net loss RM9.06 bil for its FY1/2022 which is deemed as the largest in the history of corporate Malaysia.

In a related development, MSWG is also querying FGV Holdings Bhd over reasons behind the significant increase in its inventory write-off which rose to RM9.2 mil in its FY2021 (2020: RM3.6 mil).

“What are the reasons for the huge increase in write-off of inventories?” asked the shareholder activism group. FGV is scheduled to stage its 14th AGM virtually on June 23 (Thursday) at 11am.

Elsewhere, MSWG is also querying Muhibbah Engineering (M) Bhd at the company’s forthcoming extraordinary general meeting (EGM) as to why the company is granting a share issuance scheme (SIS) and share grant plan (SGP) award to one non-executive director (NED) Mazlan Abdul Hamid who does not perform an executive role.

“Shouldn’t the directors’ fee and other benefits he receives be adequate to compensate for the services rendered by him?” asked the shareholder activism group. “Considering his non-executive role of the director in Muhibbah, what is his view on the SIS? Is he keen to accept the shares if the SIS Options and SGP Awards are offered to him?”

In line with better corporate governance, MSWG does not encourage the practice of giving employees share option scheme (ESOS) to any NED as they play the independent check and balance role (as opposed to an executive role) and are responsible for monitoring the allocation to employees and executive directors.

Muhibbah is staging its fully virtual EGM on June 22 (Wednesday) at 3.30pm. – June 19, 2022

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