Referring to the news, should be 6 listed company: AISB, HIAPTEK, WASEONG, ANNJOO, PRESTAR, SSTEEL

http://www.theedgemarkets.com/my/article/misif-lodges-complaint-mof
Misif lodges complaint with MoF
This article first appeared in The Edge Financial Daily, on February 29, 2016.

KUALA LUMPUR: The Malaysian Iron and Steel Industry Federation (Misif) has lodged a complaint with the ministry of finance (MoF) on concerns raised by its members regarding the industry-wide audit that was conducted in a high-handed manner of the steel industry last week.

In a letter addressed to Deputy Finance Minister Datuk Chua Tee Yong, Misif noted that the industry-wide audit, which had so far raided 12 of its members including six listed companies, had resulted in the freezing of bank accounts, and confiscation of mobile phones.

As long-standing manufacturers, Misif said its members' operations would not abscond. It asserted that the initial audit investigations should be conducted under the Customs Act 1967, which does not involve the need for heavy weapons, and not under the Anti-Money Laundering Act (AMLA).

“Our members are bona fide manufacturers that have continued to contribute significantly to the development and well-being of the national economy since several decades ago,” Misif said in the letter sighted by The Edge Financial Daily.

“In view of the above, we seek the urgent attention and assistance from Yang Berhormat to address the ongoing predicaments, especially the freezing of accounts, facing the steel companies,” it added.

Among the companies raided are Amalgamated Industrial Steel Bhd (AISB), Alpine Pipe Manufacturing Sdn Bhd (account frozen) and Hiap Teck Hardware Sdn Bhd (both subsidiaries of Hiap Teck Venture Bhd), PPI Industries Sdn Bhd (account frozen) (subsidiary of Wah Seong Corp Bhd), Ann Joo Metal Sdn Bhd and Anshin Steel Service Centre Sdn Bhd (both subsidiaries of Ann Joo Resources Bhd), Tashin Steel Sdn Bhd and Prestar Steel Pipe Sdn Bhd (both subsidiaries of Prestar Resources Bhd), and Southern Pipe Industry Sdn Bhd (subsidiary of Southern Steel Bhd).

The raids were conducted by the Royal Malaysian Customs Department together with other government departments such as the Royal Malaysian Police, the MoF and the Attorney-General's Chambers of Malaysia last week.

Misif said its members had raised concerns about the “high-handed” manner of the “audit”, which included heavy weapons, the confiscation of mobile phones and switching off of CCTVs within the premises during the visit.

“As responsible corporate citizens and manufacturers, our members will extend [the] full cooperation to the authorities for such visits, but not to the extent that their reputation and image are put at stake when no wrongdoing or offence has yet to be determined by the authorities. Staff morale and implications for joint-venture investments would also be adversely affected,” Misif said.

The association also noted that the freezing of accounts would affect its members' investor confidence and company reputation, especially public-listed companies.

In a filing with Bursa Malaysia last week, Hiap Teck confirmed that the customs had taken custody of certain documents of two of its subsidiaries, and frozen a bank account of one of the two subsidiaries “for purposes of audit and investigation”.

Hiap Teck revealed that it is currently seeking legal advice on the matter.

IF and ONLY IF lioncor successfully restructure, AND maintain profitable every year, 3.5 cents should be a good price to hold for long term.
Let's wait for the comment from misif on this issue (逃税).

Investor99, you are right. Any action taken on the irresponsible local steel importers will benefit Megasteel and indirectly help lioncor (megasteel) in restructuring (new investor may be). Perhaps it is a good reason to start the spv which proposed by megasteel? Just my guess. Again, let's see how the progress going.
As reported, around 100 companies practise the illlegal practice. It is a very serious issue now, I think gov will do something to curb the illegal import and take action on the involved parties. May be there is following news report on the 4 public listed companies.

http://biz.sinchew.com.my/node/132083?tid=6
進口鋼鐵公司逃稅‧政府失數十億稅收

（吉隆坡28日訊）一些進口鋼鐵的公司被發現操縱進口制度和條例，以逃避支付反傾銷稅，導致政府在近3年來損失數十億令吉的稅收。

《馬來西亞前鋒報》報道，這樣的趨勢也可能會導致本地一些鋼鐵公司因無法競爭，而面臨倒閉的窘境。

由總檢察署屬下的國家追稅執法工作隊（NRRET）協調的“鐵行動”（Ops Besi）揭發了有關公司用這種不法的手段。這項行動在大馬皇家關稅局、大馬公司委員會和大馬皇家警察的合作下進行。
令人驚訝的是，在巴生河流域和北馬同時展開的檢舉行動發現，有10間進口鋼鐵的公司在2013至2015年逃避支付反傾銷稅，導致政府損失的稅收高達1億5千萬令吉。
知情人士對該報章說：“當局進行稽查後得出了有關稅額，我們相信政府損失的稅收高出此金額，可能數十億令吉，因為在我國有上百間這樣的公司。”
知情人士指出，根據條例，進口鋼鐵的公司必須支付進口稅和反傾銷稅，稅率胥視類型而定，而且從去年4月開始也要支付消費稅。

以更便宜市價售鋼鐵
“這些進口公司用各種方式來逃避支付反傾銷稅，政府徵收反傾銷稅的目的是保護國內的鋼鐵行業。”
他說，但有關公司想方設法來逃避反傾銷稅，以便他們能以更便宜的價格或以市價出售鋼鐵，進而獲得厚利。

他也解釋，政府只是對特定的鋼鐵類型和類別徵收反傾銷稅。
詢及有關公司如何操縱進口制度和條例的問題，他說，這包括在認證書中謊報進口材料、偽造文件及用不同的貨物報關。
“此外，由馬來西亞投資發展局發出的豁免反傾銷稅便利也被濫用。”

鋼鐵進口公司逃避支付反傾銷稅的招數：
●利用不須付反傾銷稅鋼鐵的代碼或關稅，進而達到降低進口鐵的價格
●申報不是反傾銷稅類別的進口鐵
●偽造文件和生產證書
●偽造進口鐵含量的文件
●用“AB”貨柜報關的招數，即申報不同的進口貨物
●濫用馬來西亞投資發展局發出的豁免反傾銷稅的便利（星洲日報）

http://www.utusan.com.my/berita/jenayah/negara-rugi-bilion-8232-ringgit-industri-lari-duti-1.195027
Negara rugi bilion 
ringgit, industri lari duti

MUKADIMAH Ketirisan hasil negara terus berlaku. Ia bukannya melibatkan jumlah yang kecil tetapi melibatkan berbilion-bilion ringgit dalam tempoh sekitar tiga tahun.

Apa yang diperkatakan hanya melibatkan tindakan licik sesetengah syarikat pengimport besi memanipulasi syarat dan sistem pengimportan dengan tujuan mengelak membayar duti anti-lambakan komoditi berkenaan.

Kerugian berbilion ringgit itu dianggarkan hasil serbuan yang dikoordinasikan oleh Pasukan Penguatkuasa Pemulihan Hasil Negara (NRRET) Jabatan Peguam Negara dengan kerjasama Jabatan Kastam Diraja Malaysia (JKDM), Suruhanjaya Syarikat Malaysia (SSM) dan Polis Diraja Malaysia (PDRM) di beberapa syarikat besi, baru-baru ini.

Persoalannya, bagaimana dengan industri-industri pengimportan barangan lain? Apakah ada jaminan modus operandi yang sama tidak digunakan? Dalam laporan khas kali ini wartawan Mingguan Malaysia, ZULKIFLEE BAKAR dan MOHAMMAD YASIR JAAFAR mendedahkan mengenai penyelewengan yang dilakukan oleh sesetengah syarikat besi dan kesannya kepada hasil pendapatan negara.

KUALA LUMPUR 27 Feb. - Kerajaan mengalami kerugian yang dianggarkan mencecah berbilion-bilion ringgit dalam tempoh tiga tahun kebelakangan ini berikutan kegiatan beberapa syarikat pengimport besi yang dikesan memanipulasi syarat dan sistem pengimportan dengan tujuan mengelak membayar duti anti-lambakan komoditi berkenaan.

Taktik licik syarikat-syarikat ter­sebut terbongkar dalam Ops Besi yang dikoordinasikan oleh Pasukan Penguatkuasa Pemulihan Hasil Negara (NRRET) Jabatan Peguam Negara dengan kerjasama Jabatan Kastam Diraja Malaysia (JKDM), Suruhanjaya Syarikat Malaysia (SSM) dan Polis Diraja Malaysia (PDRM).

Apa yang mengejutkan, dalam operasi serentak yang dilancarkan di wilayah utara dan Lembah Klang itu, kerajaan menanggung kerugian lebih RM150 juta, apabila 10 syarikat pengimport besi didapati me­lakukan kegiatan mengelak pembayaran caj duti anti-lambakan dalam tempoh 2013 hingga 2015.

“Jumlah itu dikesan melalui pro­ses pengauditan yang dilakukan. Berdasarkan pengauditan itu, kita percaya jumlah kerugian dialami oleh kerajaan jauh lebih besar dan mungkin mencecah berbilion ringgit dalam tempoh tersebut memandangkan di negara ini terdapat 100 syarikat seumpama itu,” kata satu sumber dalaman kepada Mingguan Malaysia.

Menurut sumber itu, berdasarkan peraturan, syarikat pengimport bahan berkenaan wajib membayar cukai import serta duti anti-lambakan bergantung kepada jenis besi yang ditetapkan selain cukai barang dan perkhidmatan (GST) bermula April tahun lalu.

“Syarikat pengimport terbabit meng­gunakan pelbagai cara untuk mengelakkan daripada membayar duti anti-lambakan berkenaan yang ditetapkan oleh kerajaan demi melindungi industri pengeluar besi tempatan.

“Namun syarikat berkenaan cuba mengelak daripada membayar duti anti-lambakan itu bagi memboleh­kan mereka mengaut keuntungan dengan cara besi yang diimport mereka dijual pada harga lebih murah atau sama dengan harga pasaran produk besi tempatan,” katanya.
Sumber itu menjelaskan, duti anti-lambakan tersebut hanya dikenakan terhadap jenis dan kategori besi yang ditetapkan oleh kerajaan.

Mengulas kaedah syarikat terlibat memanipulasi sistem dan syarat pengimportan bahan ber­kenaan, sumber itu memberitahu, antaranya termasuk penggunaan surat akuan kandungan bahan berbeza daripada bahan diimport, pemalsuan dokumen jenis besi termasuk pengisytiharan barangan kontena berbeza.

“Di samping itu, ketirisan itu juga berlaku daripada penyalahgunaan pengecualian duti anti-lambakan yang dikeluarkan Lembaga Pemba­ngunan Pelaburan Malaysia (MIDA) kepada syarikat yang memohon,” katanya.

Tambah sumber berkenaan, se­nario itu bukan sahaja akan meng­akibatkan negara mengalami kehilangan hasil pendapatan negara malah membuatkan industri besi tempatan gagal bersaing sekali gus ditutup.

“Sekiranya perkara ini tidak di­bendung, tidak mustahil ramai te­naga tempatan juga akan kehilangan pekerjaan,” ujarnya.

Lebih menyedihkan, sumber itu berkata, kegiatan memanipulasi sistem dan syarat pengimportan itu turut berlaku dalam pelbagai industri import yang melibatkan bahan dan produk lain.

http://www.nanyang.com/node/749802?tid=643
廉价倾销 抢市场 中国五金建材强攻大马

（吉隆坡25日讯）马来西亚五金机械建材总商会总会长罗夫指中国五金建材正以低廉价格“走出去”，抢攻世界市场，单在去年我国厂商已经损失30%的订单。
他指中国五金建材产品比大马生产的价格低17至20%，导致无法竞争的大马厂商停产甚至倒闭。

60%产自中国冲击本地同业
“在这波低价攻势下，他们抢走不少本地厂商的订单，目前我国50至60%五金建材进口自中国。”
罗夫与该商会多位重要领导接受《南洋商报》专访时，透露这项剧烈的马中“商战”消息。
其他出席者包括署理会长及钢材组主任许圣杰、执行会务顾问拿督林权兴及财政曾年樑。
罗夫说，目前国际五金机械建材供求失衡，主要是中国供应量太大，同时期国内已无法消化，在这种压力下，中国货正全力“向外走”。
他说，中国五金建材的攻势已经严重打击大马市场，冲击本地同业。

中国铁矿成本较低
“本地的五金制造法是熔化废铁后再造，而中国是使用铁矿砂制造，因此其成本较低。”
罗夫表示，由于中国大量出口五金建材，许多本地贸易商开始选择中国货，导致国内不少厂商开始倒闭及停产。
他批评中国货重量不重质，为了大量生产而忽视品质，也常出现不合规格的五金建材；目前我国50至60%五金建材进口自中国。

不过，他说：“本地业者不能因为卖不出，就向政府寻求保护，这样对我们贸易商不利。就如美佳钢铁（Megasteel）对政府提出的反倾销申请那样。”
他解释，如果寻求政府“保护”，那有关的保护税将提高国内五金的价格，进而冲击本地贸易商。
“我们也出席相关的听证会。我们了解到，若特定企业受到过度保护，反而对其他工业造成伤害。”

Now the most important and urgent is Regularisation Plan to exit the PN17 status before the deadline. The extension to 31 Mar is still pending for approval.

Seems like yes. But don't speculate. Let's see how the thing goes.

http://www.theedgemarkets.com/my/article/more-10-steel-companies-raided
This article first appeared in The Edge Financial Daily, on February 25, 2016.

KUALA LUMPUR: Customs officers have raided more than 10 steel companies, including four public-listed entities, in the past two days, stepping up efforts on curbing illegal imports of steel products, particularly hot-rolled coils (HRC).

According to industry players, this is an “unprecedented scale”.

It is understood that Customs officers brought along policemen in a scale of more than 20 personnel and conducted audit of multiple steel sites across the country to check if the imports of steel have followed the proper procedures.

“We are not sure of the reason for the raid in such [a] scale, [and] who initiated it,” an industry source told The Edge Financial Daily, adding that the raid may continue over the next few days.

According to the source, there were about four listed steel players, who are mainly involved in imported steel pipes, being raided. Meanwhile, another source said, it seems that HRC is the main target.

“Customs has the right to audit companies, but it is seldom that the customs officers would conduct an industry-wide raid. It’s the first time in such a big scale,” the source said.

The source added that there is nothing wrong for Customs to carry audits and take away documents to conduct investigations as Malaysia imports a substantial amount of steel, and the officers may want to check things like whether industry players are paying the goods and services tax, and declaring imported goods.

“This is quite a shock to [industry] players; it is intimidating. Such raids are normally conducted because of complaints about certain undeclared shipments, but even for smuggling, officers will narrow down to one or two companies,” said another source.

According to him, companies that have different subsidiaries were raided simultaneously this time.

When contacted, Malaysian Iron & Steel Industry Federation president Datuk Soh Thian Lai declined to comment.

However, a source revealed that the association is trying to find out the rationale for the massive raid.

Just last month, the local downstream steel players were relieved that the government decided not to impose safeguard duties, which had been requested by Megasteel Sdn Bhd, the country’s biggest HRC producer owned by tycoon Tan Sri William Cheng.

The local steel industry has been in conundrum for a long while. The upstream players are trying to seek safeguard measures imposed by the government to defend home turf. However, downstream players want to have a more liberalised operating environment, which offers more leeway to import raw materials, such as HRC.

http://finance.sina.com.cn/roll/2016-02-11/doc-ifxpmpqr4285379.shtml
国家重拳治理钢铁产能过剩：5年压缩1.5亿吨

北京时间2月5日消息：作为供给侧改革的重要组成部分，国家正在不断加码重拳治理产能过剩问题，并利用市场化手段进一步化解产能过剩，钢铁行业首当其冲。国务院日前印发《关于钢铁行业化解过剩产能实现脱困发展的意见》(以下简称《意见》)，提出从2016年开始，在近年来淘汰落后钢铁产能的基础上，用5年时间再压减粗钢产能1亿-1.5亿吨。

　　《意见》指出，钢铁行业化解过剩产能实现脱困发展，要着眼于推动钢铁行业供给侧结构性改革。一方面，要严禁新增产能，对违法违规建设的，要严肃问责。严格执行环保、能耗、质量等法律法规和产业政策，达不到标准的钢铁产能要依法依规退出。另一方面，完善激励政策，鼓励企业通过主动压减、兼并重组、转型转产等途径，退出部分钢铁产能。再有，要严格执法监管，强化相关法律法规的约束作用。

　　值得注意的是，《意见》特别明确了加强奖补支持、完善税收政策、加大金融支持、做好职工安置、盘活土地资源等一系列支持钢铁行业化解过剩产能实现脱困发展的政策措施。


　　记者了解到，尽管近十年来国家对钢铁业产能过剩频频调控，但是收效甚微。《经济参考报》记者从多个协会取得的资料显示，2003年钢铁行业产能近3亿吨，2012年产能已经突破10亿吨，目前钢铁产能据不完全统计已经接近12亿吨。而与此相对的是，全球需求低迷。中国冶金工业规划院最新研究表明，预测2015年我国钢材实际消费量为6.68亿吨，同比下降4%，预测2016年我国钢材实际消费量为6.48亿吨，同比减少2000万吨，同比下降3%。

　　“集中审批、管控竞争的方式已难以抑制产能过剩。”一位业内专家表示，目前钢铁等产能过剩行业往往是地方政府财政支柱企业，涉及当地财政收入、就业、经济稳定等问题。同时，现在过剩的产能不仅仅是落后产能，还包括结构性无序发展产生的大量先进的产能。这些都是目前产能过剩政策调控无法根本解决的关键问题。“我的钢铁网”咨询总监徐向春表示，随着国家重拳治理产能过剩，行业的洗牌力度会进一步加大，同时也会给钢铁行业后期的兼并重组创造更多机会。

http://www.businessspectator.com.au/article/2016/2/9/china/beijing-steels-itself-battle-over-capacity

http://futures.hexun.com/2016-02-07/182218872.html

钢铁去产能是修复供需失衡关系的最有效手段
2016-02-07 08:39:00 来源：生意社

2016年2月3日，国务院新闻办举行发布会，国家发展和改革委员会主任徐绍史在回应产能过剩问题时表示，去产能准备先从钢铁和煤炭两个行业入手，因为钢铁和煤炭现在产能过剩的情况比较突出。

　　徐主任同时指出，供给侧改革，“三去一降一补”，去产能是从钢铁和煤炭这两个行业先做起，实事求是地讲，是会有失业问题，因为这部分职工，如果说这部分产能要去掉的话，就有个就业安置问题，特别是一些煤炭占比比较大的省份，山西省，黑龙江的四大煤城，他们的压力就会比较大。而像钢铁产能占比较大的河北省，去产能已经做了3年，它的钢铁产能、水泥产能已经压缩了相当数量。所以，一部分过剩产能比较集中的地方已经积累了很好的经验，他们也碰到职工就业安置的问题、企业债务的问题、银行贷款的问题等等，但是他们都比较平稳地处理了。现在力度可能会比前两年要大，政府还是有一定的政策储备，来支持化解过剩产能。更重要的，地方政府会比较稳妥地来处理职工安置、企业债务和银行贷款问题。

　　所以，在未来“去产能”改革过程中，中央政府将先从钢铁和煤炭两个问题突出的行业入手是完全正确的；而对过程中可能产生的失业等问题，中央政府会考虑支持政策，地方政府也完全有能力来应对。

　　生意社钢铁分社何杭生认为，近期中央提出化解过剩产能，相关部门正在加紧制定措施来积极处理。而以钢铁煤炭行业为例，当前去产能、淘汰僵尸企业的最大障碍就是去产能后，去产能企业是否能够有高效生产的空间和转型升级的机会以及淘汰僵尸企业后原有债务的清算和下岗员工的处理。而目前后者基本已经由政府明确兜底，那么前者的障碍就是企业是否愿意配合国家去产能的问题了。而对于钢企和煤企来说，除了产能过剩问题，还存在“亏损增加，价格新低，资金紧张，负债率高”等其他问题。所以，钢企和煤企的去产能的阻碍也会相对增加。

　　不过，从另一方面去看待去产能问题，其对钢铁，煤炭，有色金属等产能严重过剩产业来说，却是修复供需失衡关系的最有效手段。

　　据冶金工业规划研究院报告显示，2015年我国钢材实际消费量为6.68亿吨，同比下降4.8%。而据生意社不完全统计，2015年我国粗钢产能11.7亿吨，产量为8.05亿吨，表观消费量7.04亿吨。所以2015年我国粗钢产能利用率为68.8%，产量过剩1.01亿吨。而2014年我国共淘汰了炼铁2823万吨、炼钢3113万吨、铁合金262万吨，粗钢产能仍旧在12.5亿吨左右，有3亿多吨落后能力。2015年淘汰炼铁1300万吨、炼钢1700万吨，过剩依旧超过亿吨。

　　而2015年底中央经济工作会议指出十三五的去产能预计为未来三年要压缩8000万吨钢铁产能，平均每年2700万吨。且当前河北省已经提出“十三五”末(即2020年)，钢铁产能将控制在2亿吨左右，如果按照这个规模，未来4年内至少去产能1亿吨以上，占2015年粗钢产量12.5%，平均每年2500万吨。

　　但2016年我国钢铁仍旧有近2800万吨的高炉生铁新增能力，且未来几年也有8000万吨的轧材新增计划，平均每年2000万吨。另外，2016年2月3日据报道，《关于钢铁行业脱困指导意见》将于春节前后下发，该文件是钢铁行业“去产能”的指导性文件，明确未来5年去产能的目标为压减粗钢产能1至1.5亿吨。

　　所以综合来看，就2016年，新增和淘汰产能基本保持平衡，但由于国内经济增速的放缓和钢价的低迷，企业亏损持续，或会加剧企业产能淘汰和破产企业增加，预计这类量在2000-3000万吨左右，那么过剩仍旧有着近7000-8000万吨。且产能和企业是越淘汰，市场供需失衡情况就越减弱，也就越难淘汰。因此供需短期弱平衡的情况也要到十三五末才会刚刚开始修复。

　　那么，从大宗商品角度来看，目前大宗商品市场已经持续多年熊市，中国去产能如能“动真格”，对整体大宗商品市场来说，就意味着市场供需恢复，产业重新洗牌并翻新。

　　首先，供需失衡修复，价格回升，企业利润回升，经济逐渐好转，企业转型、创新就会增多，并有效发展，提升行业竞争力；减少恶性价格、市场等竞争。

　　其次，原本出口的产品会继续流向国内，那么国际反倾销就会减少，其他国家进口减弱，其本国的钢铁产品就会被消耗，那么供需修复，经济好转。

　　最后，国际市场经济好转之后，全球大宗商品的价格也会逐渐回升。

　　因此，可以说，中国去产能成功，全球钢铁行业就会迎来发展新轮回。

　　当然，短期时间来看，首先影响的是螺纹，热轧，铜等有色金属和钢材价格的回升，毕竟去产能的直接影响是铁矿石等原来采购需求减弱，利空矿价。钢价回升之后，会逐渐传导至原料端市场，带动上涨。但由于全球铁矿石企业增产不断，所以此等利好会被供应增加所抵消部分。因此矿价的回升反而不如钢价，会滞后并涨幅小于钢价。

http://www.straitstimes.com/business/economy/china-steels-plan-to-slash-production-capacity-risks-400000-jobs
http://thehimalayantimes.com/business/china-to-slash-steel-production-capacity/
http://seekingalpha.com/article/3854806-china-accelerate-steel-dumping-2016

Megasteel, an ailing company
Although it is the sole HRC producer in the country, Megasteel receives protection from the government, which requires the cold rolled coil (CRC) producers to acquire a chunk of their raw material from Megasteel or pay hefty duties on imported HRC, or seek exemptions which are hard to come by.

However, other than high prices for Megasteel’s HRC, many CRC players are said to be facing quality issues, as they require HRC made from iron ore and not pig iron or scrap metal as used by Megasteel.

Downstream players are understood to be able to import CRC at a lower price than buying from the local CRC players due to Megasteel’s high HRC pricing.

However, even with all the protection, Megasteel has been bleeding. For its financial year ended June 2014, the company suffered an after-tax loss of RM416.76 million from RM2.26 billion in revenue. As at end-June 2014, Megasteel had RM1.53 billion in negative reserves. It had non-current assets of RM2.64 billion, current assets of RM673.38 million, current liabilities of RM3.8 billion and non-current liabilities of RM439.39 million.

In September last year, Lion Corp announced that Megasteel was unable to meet its debt obligations, which resulted in a cross default of RM3.02 billion in debt. Some of Megasteel’s borrowings are pegged with interest rates of as high as 15.6%, in contrast to the average of 6%, which partly explains the company’s problems.

Megasteel seeks higher anti-dumping duties
By Jose Barrock / The Edge Malaysia | February 3, 2016 : 7:00 PM MYT
This article first appeared in The Edge Malaysia Weekly, on January 18 - 24, 2016

AILING flat steel producer Megasteel Sdn Bhd is looking to nudge the federal government into raising the anti-dumping duties on hot rolled coils (HRC) from China, according to industry sources.

In mid-February last year, the government imposed anti-dumping duties of 6.35% to 12.19% on HRC from China and a yearly review of these duties takes place in February, which is what Megasteel is banking on to get higher duties imposed.

The quantum of the increment Megasteel is seeking is not clear. The question is about whether the government is likely to pay heed to the steel maker’s urging.

“They (Megasteel) have tried many ways to seek protection and this is the latest. Other methods thus far have not been very successful,” a source says.

Megasteel is 69.79% controlled by Lion Diversified Holdings Bhd. The remaining 30.21% stake is held by Limpahjaya Sdn Bhd, a wholly-owned unit of Lion Corp Bhd. Both companies are controlled by businessman Tan Sri William Cheng Heng Jem.

The Lion group did not respond to The Edge’s attempts to speak to Cheng.

To recap, HRC is the raw material for flat steel, which is used to make household items such as fridges, washing machines and even cars, as opposed to long steel, which is used for construction. Megasteel has the monopoly on the supply of HRC in Malaysia.

In June 2014, the government initiated anti-dumping investigations after Megasteel filed a petition on behalf of the domestic HRC and flat steel producers. Megasteel had alleged that imports of HRC from China, Indonesia and South Korea were at a price much lower than local production costs.

Apart from HRC, the Ministry of International Trade and Industry (Miti) said anti-dumping duties would be imposed on imports of chequered coils from China and Indonesia at 15.62% and 25.4% respectively. Similarly, anti-dumping duties were imposed on imports of pickled and oiled coils from China and Indonesia at 15.62% and 20.56% respectively.

HRC from Indonesia was slapped with an 11.2% duty while South Korea was exempted from all forms of duty.

The measures were slated to be effective for five years with a review each year, in February.

While Megasteel has been looking to obtain protection, local steel players have been bleeding given the current tough operating environment. Downstream steel players are already grappling with the sharp depreciation of the ringgit against the US dollar, the 16.8% increase in electricity tariff — which translates into an increase of millions of ringgit in charges — plus other increments, for instance, a 31% hike in gas tariffs, the implementation of the Goods and Services Tax and the revision of the minimum wage, which significantly increases the labour costs.

One of many attempts at prolonged protection
Late last year, Megasteel sought to get a safeguard action and sought a public hearing for safeguard investigations into imports of HRC. A safeguard action restrains trade and protects a particular industry or company — in this case, Megasteel — from foreign competition via restrictions on imports.

The public hearing to discuss Megasteel’s grouses was held on Nov 4 last year at Miti, but it came to naught.

In fact, from 1999, when Megasteel commenced operations, the government has imposed a 25% import tariff on HRC and has continuously assisted Megasteel. In 2002, the import tariff was increased from 25% to 50%.

In February 2012, Miti hired the Boston Consulting Group (BCG) to undertake a comprehensive study of the steel industry after several complaints suggesting a lack of competitiveness of local steel products. BCG’s

recommendations were made in July 2012, and gave a timeline of 2013 for Megasteel to sort itself out and start registering positive cash flow. This, of course, did not happen.

Late last year, Megasteel, as part of another attempt to obtain protection, sought to meet senior government officials to propose the setting up of a special purpose vehicle (SPV) solely to import HRC and even downstream products into Malaysia, say industry sources. The SPV is set to work in the same vein as Padiberas Nasional Bhd, which until recently held the monopoly on rice imports.

However, the meeting with the government officials did not take place last year. Since then, it has been unclear if the meeting had taken place at all or if Megasteel had put forth its plans for an SPV.

It is worth noting that Megasteel’s chairman is Tan Sri Rafidah Aziz, the former minister of International Trade and Industry.

"for the Company to consider options for any Regularisation Plan"
Keyword: "options". Means more than 1 option to consider?

29 January 2016
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4990269
On behalf of the Board of Directors of the Company, SJ Securities Sdn Bhd (“SJ Securities”) wishes to announce that SJ Securities had on 29 January 2016 submitted an application to Bursa Malaysia Securities Berhad (“Bursa Securities”) for an extension of time from 31 January 2016 to 31 March 2016 for the Company to consider options for any Regularisation Plan.

Investor99, i personally think the answer for your question above is "Yes".

Again, only insider knows.

Getting closer to 31 January 2016.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4885469
The Bursa’s Letter also stated that Bursa Securities’ decision is without prejudice to its right to proceed to suspend the trading of the securities of the Company and to de-list the Company in the event:
(i) the Company fails to submit the Regularisation Plan to the regulatory authorities on or before 31 January 2016;
(ii) the Company fails to obtain the approval from any of the regulatory authorities necessary for the implementation of its Regularisation Plan; or
(iii) the Company fails to implement its Regularisation Plan within the time frame or extended time frames stipulated by Bursa Securities.
Upon occurrence of any of the events set out in (i) and (iii) above, Bursa Securities shall suspend the trading of the listed securities of the Company upon the expiry of five (5) market days from the date the Company is notified by Bursa Securities and de-list the Company, subject to the Company’s right to appeal against the delisting.

investor99, only insider knows.

http://www.theedgemarkets.com/my/article/megasteel-talks-lawyer-over-govts-move-terminate-safeguard-investigation

investor99, yes. It seems like. But still cant find any news online.
Anyone got news (not rumour) can share?

investor99, tomorrow is the expected date for decision on safeguard duty petition.
Share price will up if the decision in favorable to Megasteel.
And vice versa.
The other factor is related to SPV, but no timeline on that.

investor99, thanks for sharing the info.
The Lionmesh Prima's factory produce "wire rod", whereas Megasteel produce "HRC".

________________________________________________________________________________________________
4 January 2016
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4965609
The Board of Directors of the Company wishes to announce that the Company will submit an application to Bursa Securities for an extension of time for the Company to make the submission of the Regularisation Plan to the regulatory authorities in view that the Company will be continuing the engagement with potential investor(s) with a view to considering investment in Megasteel, and following up on the petition for the implementation of effective trade defense mechanism by the Government. The Company will make the necessary announcement on the Regularisation Plan in accordance with the requirements under PN17 in due course.
________________________________________________________________________________________________

________________________________________________________________________________________________
2 November 2015
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4909557
The Board of Directors of the Company wishes to announce that the Regularisation Plan would include the securing of potential investor(s) to strengthen the operational and financial position of Megasteel Sdn Bhd (“Megasteel”), a major subsidiary of the Company and the petition for the implementation of effective trade defense mechanism by the Government. The Company is continuing to engage with potential investor(s) with a view to considering the investment in Megasteel.
________________________________________________________________________________________________
1 December 2015
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4938793
The Board of Directors of the Company wishes to announce that the Company is continuing to engage with potential investor(s) with a view to considering investment in Megasteel to strengthen the operational and financial position of Megasteel. The Company is also following up closely on the petition for the implementation of effective trade defense mechanism by the Government. The Company will make the necessary announcement on the Regularisation Plan in accordance with the requirements under PN17 in due course.
________________________________________________________________________________________________

________________________________________________________________________________________________
1 September 2015
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4854293
The Board of Directors of the Company wishes to announce that the application to Bursa Securities for an extension of time of up to 31 March 2016 for the Company to make the submission of the Regularisation Plan to the relevant authorities is currently pending the decision from Bursa Securities.
________________________________________________________________________________________________
2 October 2015
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4884329
On behalf of the Board of Directors of LCB, SJ Securities Sdn Bhd wishes to announce the following :
(i) The Company plans to submit the Regularisation Plan to the relevant authorities which is envisaged to involve Megasteel Sdn Bhd (“Megasteel”), a subsidiary of the Company principally involved in the manufacturing and sales of Hot Rolled Coils (“HRC”) and Cold Rolled Coils;
(ii) The Regularisation Plan would include the securing of potential investor(s) to strengthen the operational and financial position of Megasteel and the petition for the implementation of effective trade defense mechanism by the Government;
(iii) The Company will continue to engage with potential investor(s) with a view to considering investment in Megasteel and in this respect, discussions have been initiated with a party from Northeast Asia and it is still on-going; and
(iv) The Ministry of International Trade and Industry (“MITI”) has released a press statement on 11 September 2015 that the Government has decided to initiate a safeguard investigation on imports of HRC. In accordance with the Safeguards Act 2006 and its Regulations, the preliminary determination will be made within ninety (90) days from the date of commencement of the investigation. Further investigation would be carried out if a preliminary affirmative determination is made by the Government and during this time, the Government may impose a provisional safeguard duty on the imports of HRC, for the purpose of reducing the effects of serious injury to the domestic industry caused by the imports.
The application to Bursa Securities for an extension of time of up to 31 March 2016 for the Company to make the submission of the Regularisation Plan to the relevant authorities is currently pending the decision from Bursa Securities.
________________________________________________________________________________________________
5 October 2015 (OTHERS: REGULARISATION PLAN)
http://www.bursamalaysia.com/market/listed-companies/company-announcements/4885469
On behalf of the Board of Directors of the Company, SJ Securities Sdn Bhd (“SJ Securities”) wishes to announce that Bursa Malaysia Securities Berhad (“Bursa Securities”) had vide its letter dated 5 October 2015 (“Bursa’s Letter”) granted the Company an extension of time up to 31 January 2016 to submit the Regularisation Plan to the regulatory authorities.
The Bursa’s Letter also stated that Bursa Securities’ decision is without prejudice to its right to proceed to suspend the trading of the securities of the Company and to de-list the Company in the event:
(i) the Company fails to submit the Regularisation Plan to the regulatory authorities on or before 31 January 2016;
(ii) the Company fails to obtain the approval from any of the regulatory authorities necessary for the implementation of its Regularisation Plan; or
(iii) the Company fails to implement its Regularisation Plan within the time frame or extended time frames stipulated by Bursa Securities.
Upon occurrence of any of the events set out in (i) and (iii) above, Bursa Securities shall suspend the trading of the listed securities of the Company upon the expiry of five (5) market days from the date the Company is notified by Bursa Securities and de-list the Company, subject to the Company’s right to appeal against the delisting.
________________________________________________________________________________________________

http://www.theedgemarkets.com/my/article/miti-confirms-receipt-megasteel%E2%80%99s-spv-proposal
Miti confirms receipt of Megasteel’s SPV proposal
This article first appeared in The Edge Financial Daily, on December 23, 2015.

KUALA LUMPUR: The government yesterday confirmed that it had received a proposal from Megasteel Sdn Bhd to set up a special purpose vehicle (SPV) solely to import hot rolled coils (HRCs) and downstream products into Malaysia.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said his ministry is still reviewing the proposal and gathering feedback from all stakeholders.

“We have received the proposal on this matter. It is still being discussed, and it is not a small thing. Whether any parties agree or disagree, it will have a huge impact on the industry,” he told reporters after launching the Young Entrepreneurs Congress 2015 here yesterday.

“But we welcome any suggestions to strengthen the steel industry,” he added.

Mustapa declined to provide any timeline on when the matter will be finalised.

“Once the ministry has finalised the discussions, then it will be brought to the next level,” he said, adding that the finalised decision at the ministry’s level will be presented to the cabinet for approval.

The Edge Financial Daily on Dec 11 reported on a scheduled meeting between Megasteel and senior government officials to propose the setting up of a SPV solely to import HRCs and downstream products into Malaysia.

Three models were expected to be proposed by Megasteel, one of which involved the government taking a 60% equity interest in the SPV and the rest by Megasteel.

On Dec 11, Malaysian Iron and Steel Industry Federation (Misif) president Datuk Soh Thian Lai came out strongly against the move, saying the proposal was “neither feasible nor implementable and will cause irreparable damage to the whole Malaysian iron and steel industry”.

He said the establishment of a SPV will infringe the Malaysian Competition Act 2010, and that the confidentiality of users’ information is at risk as the SPV will know who is the foreign producer and the pricing, creating an unfair advantage for Megasteel over the other product manufacturers.

In response, Megasteel on Dec 15 issued a statement against Misif, saying that the federation was “very short-sighted in objecting to well-meaning petitions to safeguard the Malaysian steel industry”.

It said Misif’s views were not an accurate reflection of the needs of the steel industry.

In the face of oversupply and the depressed steel market and prices, Megasteel had repeatedly pointed out that it had been suffering losses for several years due to rampant importation of steel products into the country at dumping prices.

Apart from Megasteel, Southern Steel Bhd ( Valuation: 0.90, Fundamental: 0.00) is the other company producing HRCs in Malaysia, albeit on a smaller scale.

If it is formed eventually, i think yes

http://www.theedgemarkets.com/en/node/248001
Megasteel's proposal to set up SPV is preposterous, says Misif

http://www.theedgemarkets.com/en/node/247866

Megasteel proposes SPV for HRC imports
By Gho Chee Yuan & Jose Barrock / The Edge Financial Daily | December 11, 2015 : 8:51 AM MYT

KUALA LUMPUR: Megasteel Sdn Bhd, the country’s sole producer of hot rolled coils (HRC), is scheduled to meet with senior government officials early next week to propose the setting up of a special purpose vehicle (SPV), solely to import HRC and even downstream products into Malaysia, said industry sources.

A source told The Edge Financial Daily that Megasteel, a member of Lion Group controlled by tycoon Tan Sri William Cheng, is set to propose the establishment of the SPV which works in the same vein as Padiberas Nasional Bhd (Bernas), at the meeting.

Bernas holds the monopoly on rice imports, controlling about 30% of the local padi market.

“Megasteel’s proposed HRC [import] model will help ensure that it maintains its position as the sole importer of HRC in the country,” the source claimed.

The source elaborated that there will be three models offered by Megasteel, one of which will involve the government having a 60% equity interest in the SPV and Megasteel the remaining 40% stake.

Another proposal involves imports for the entire steel industry — be it HRC, cold rolled coils (CRC), galvanised iron or other types of steel — by the SPV, while there is little clarity on the third option.

“Under the first model, it is understood that while the government may have a 60% shareholding (in the SPV), its management will still be with Megasteel,” the source said.

Megasteel is 69.79% controlled by Lion Diversified Holdings Bhd, while the rest of its shares are held by Limpahjaya Sdn Bhd, a wholly-owned unit of Lion Corp Bhd.

It is understood that the idea to set up the SPV surfaced after Megasteel’s call for the government to impose 40% safeguard duties on the import of HRC received lukewarm response. It was more or less shot down by members of the Malaysian Iron and Steel Industry Federation (Misif) and interested trade outfits from abroad.

Megasteel had sought the imposition of the 40% duty on HCR imports over and above the existing 15% import duties, with the rate to be gradually reduced over a four-year period.

Similarly in 2011, Megasteel submitted a petition to the government in the hope of initiating a safeguard investigation into the imports of HRC due to the surge in imports from 2007 to September 2010, which had adversely impacted the domestic industry, namely Megasteel, which sought an additional 35% import duty on HRC, which meant the total duty payable on HRC would be up to 60% for five years.

The petition was not approved by the Ministry of International Trade and Industry (Miti).

The Edge Financial Daily had reported that a public hearing held on Nov 4 in Miti’s premises had seen interested parties and stakeholders, including Misif, opposing any proposed safeguard measures requested by Megasteel. They have since filed their written submissions to the ministry.

On Dec 8, it reported that the government had deferred its decision on Megasteel’s petition to impose 40% safeguard duties on the import of HRC to next month.

HRC is an essential raw material for CRC, which is widely used by downstream players to make different steel products for a wide range of industries, such as automobiles and household electrical appliances.

Meanwhile, industry observers described the creation of the proposed SPV as a “disastrous move” and warned that it could adversely impact the supply chain of steel.

“I do not think the idea is implementable. I also have no idea how the proposed SPV can fulfil the whole industry’s needs,” an industry observer quipped.

“There are over 1,000 steel players in the country. Each of them needs different types of steel to manufacture different types of end products to be used in different industries. I don’t see how this SPV will help solve our issues,” he added.

As at press time, The Edge Financial Daily has yet to get a response from Megasteel.

investor99, yes. From what i understand frm the news. Government will announce the decision by next month (postpone).

http://www.theedgemarkets.com/my/article/decision-megasteel’s-petition-deferred
KUALA LUMPUR: The federal government has deferred its decision on the petition to impose 40% safeguard duties on the import of hot-rolled coils (HRC) to next month — an important policy decision for the local steel industry.

investor99, agree with u.
“Miti will balance the interests [of all parties] and [a decision will be] based on information submitted by all parties.”
Judging from precedents, Miti could give Megasteel the cold shoulder.

Miti will announce preliminary determination of the Safeguard Investigation On Imports Of HRC From Foreign Countries Into Malaysia by next week. Should the news positive to Megasteel, stock price may fly. And vice versa. Let's wait for it.

http://m.thesundaily.my/node/328383

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4927585
Anyone attended LIONCOR AGM today? Mind to share? Tq
http://www.thestar.com.my/Business/Business-News/2015/11/14/Measures-to-help-the-industry-in-the-pipeline/?style=biz