Political overtones in Matang-Scope deal
Sathish Govind, FMT
The controversial deal to inject cash and assets of Matang Holdings Bhd into listed Scope Industries Bhd, which shareholders rejected last Friday, had political overtones and vested interest, political commentators and company insiders said.
They told The Malaysian Reserve that the takeover at the very outset was not in the interest of all the shareholders of Matang and not just the minority shareholders as there is no “commercial sense” in the transaction.
“We were just hoping that there will be a white knight that will come around to be our saviour, as the takeover was not in the interest of all the shareholders of Matang and not just the minority shareholders and this did happen,” said a shareholder.
Many of the MCA’s old guard came forward to object to the deal saying that it will impact the Chinese community.
There was keen interest to see how the MCA would deal with the matter.
Former deputy president Tan Sri Lim Ah Lek said the reverse takeover deal was “lopsided” and that it was ridiculous for MCA president Dr Chua Soi Lek to defend it. At last Friday’s EGM to vote on the deal, MCA members rejected the Matang–Scope deal by show of hands after intense debate.
While Dr Chua was keen to inject Matang into Scope, his deputy Datuk Seri Liow Teong Lai and seven other central committee members were against it.
MCA-owned Huaren Holdings Sdn Bhd owns 10.72% share in Matang while Rohua Sdn Bhd, chaired by Dr Chua, holds 1.18%.
Among the issues that stood in the way for the proposed reverse takeover is the valuation of the company (Matang), which is valued far below that of the independent valuers’, said Matang’s former CFO Wong Pang Nam.
He said another issue was Matang’s handing over its RM25 million cash reserves to Scope when that money could have been returned to Matang’s shareholders.
He added that it makes no sense to dispose Matang to Scope when the latter made RM500,000 last year compared to Matang’s RM5 million for the same period.
