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Hevea Under Attack - Bursa Dummy

Tan KW
Publish date: Wed, 13 Jan 2016, 10:37 AM
Tan KW
0 509,841
Good.

Wednesday, 13 January 2016 

 
Recently Hevea has been under relentless attacks by a few people in i3investor.
 
I'm alert to this as I'm also a small shareholder of Hevea.
 
Last week I wanted to write about my opinion on this issue but finally I did not do so. I thought that I should not let my decision affecting other readers since the reliability of those information are in doubt.
 
A few people made the allegation, and some people tried to counter it by posting feedback from Hevea's management. All these information might not be true.
 
Yesterday, the first reliable source of information finally came out. CIMB organised a conference call with Hevea management and its institutional investors, and published the note today.
 
 
 
 
Last week, the first allegation was that Hevea's directors & major shareholders had some physical conflict and are involved in a few civil suits.
 
The major issue the author wished to bring out was that Hevea tried to hide these law suits from the shareholders/investors by not disclosing them to Bursa when they are obliged to do so.
 
Both parties consist of HeveaWood controlled by HeveaBoard's MD Yoong's family, and Dato Loo who is a non-executive director & founding member of HeveaBoard.
 
Those who know Hevea well should know that HeveaWood is not a subsidiary of HeveaBoard but is a major shareholder of HeveaBoard.
 
This is just some personal conflict among HeveaWood shareholders who also happen to be HeveaBoard shareholders.
 
So I think Hevea has no obligation to reveal these law suits under material litigation in their financial report as they do not involve Hevea directly. 
 
After CIMB's report, we know that the law suits are because of non-payment of dividends at HeveaWood and the court has actually decided in favour of Yoong's family.
 
Of course these conflict among directors is not good for Hevea. However, it should not affect Hevea's operation as Dato Loo is not an executive director and this case were already closed even though an appeal seems to be on-going.
 
 
 
       Yoong Hau Choon & Dato Loo Swee Chew
 
 
The second allegation was about 700 containers stuck in Korea port and Hevea could potentially face hefty fines and was alleged to sell hazardous products!
 
I opined that this could not be true. The number of 700 is too huge and how can Hevea passes Japan test but fails in Korea?
 
Finally it turned out that it was 700m3 containers and the Korean custom actually used the wrong testing method. This issue has also been resolved.
 
From the 2 allegation above, we can know that the attacker has close relationship with Hevea as he can gain access to those information. 
 
However, why did he only tell half of the story? Didn't he know that the Korea issue is just a misunderstanding and has been resolved without "hefty fines"? 
 
He either knows only a bit and inevitably gave inaccurate information, or knows the issues well but chose to mislead the public deliberately by posting and exaggerating only on the negatives.
 
If he is really a neutral person who is trying to help the investing public as he claimed to be, he should quickly write another article to support his earlier claims or apologize for his mistakes, especially the 700 containers story.
 
However, he didn't.
 
So to me, there is a well-organised plot to attack Hevea & its current executive directors for whatever reason I'm not sure but it seems to me that it is related to earlier law suits.
 
 
 
 
As for the accounting fraud part, though I'm not good at accounting, I wonder why the "amount due to/by related parties of HeveaWood & HeveaBoard must be the same. Can't there be other parties involve other than these two?
 
Now CIMB has reported that there are other parties involved so this allegation is a joke.
 
Similarly, the attackers should counter CIMB report or Hevea MD's clarification by giving concrete evidence. If they fail to do so, this just exposes their desperate plot to down Hevea with purpose.
 
There might be more allegation coming out but the credibility of those attacking authors are surely waning.
 
I just write my view on one of my company I'm investing in and I might also be wrong. 
 
Hevea's MD might cheat those institutional investors and gave empty promise if he is really that bad & "no big no small" as described by the attackers.
 
The attackers will surely continue to find faults in Hevea and we can't rule out that they might find something real in the future, as I don't think a big organisation can do things 100% right.
 
We as outsiders can only use our own brain to think and make a decision on who is right or wrong.
 
Please be reminded that this is not a buy or sell recommendation on Hevea. 
 
 

http://bursadummy.blogspot.my/2016/01/hevea-under-attack.html

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3 people like this. Showing 26 of 26 comments

Ahbeng11

Well said !!

2016-01-13 10:44

Unfair

is my answer. Why counters like Xinquan, China stocks and other counters under attack nobody create so many blogs to highlight it like Hevea?

2016-01-13 10:55

gwansoo

China stocks are well known as scam stocks. Just too much of them.

2016-01-13 10:59

Unfair

Like China stocks Hevea also has high EPS. Problems is why dividend so little only 2.5 sen? Yet people chase it so high.

2016-01-13 11:04

Kevin Wong

we have heard from both side now...its up to investors, traders,market to react/decide...

2016-01-13 11:22

gwansoo

Hevea used most of the cash to repay its debt first. Once debt is cleared, they will increase dividend slowly. I think they mentioned before.

2016-01-13 11:24

Unfair

Who care your high debts? Dividend is what shareholders should care. You ask China counters investors or other high debts counters.

2016-01-13 11:29

gwansoo

Because their debt is US denominated. Hence, it will be wiser to repay the debt first before USD further strengthen.

2016-01-13 11:31

soojinhou

As an investor, I actually hoped that management don't give dividend at all but use all their free cash to settle their debt first.

2016-01-13 11:35

gwansoo

Especially US denominated debt before ringgit plunge more.

2016-01-13 11:36

gwansoo

Actually strong USD is neutral to Hevea due to their debt. However, they manage to increase their profit. Imaging once their debt is cleared, how would their next QR will be. Eps and dividend!!

2016-01-13 11:38

Samtuckfatt

as there are another 3 interest hike in 2016 this year, the USD will expect to strengthen further, settle debt earlier is the more effective use of Cash, imagine Bank going to increase 3 time the interest soon, will you not wish to settle your housing ( or pay more than the regular installment)so as the outstanding loan will be reduced and hence reduce the bearing interest also .

2016-01-13 13:52

obiwan88

It is a good stock to invest in as local economy is very weak due to the GST and the weak Ringgit. So concentrate in company that export. Ringgit will continue to weaken or stay where it is.

2016-01-13 16:46

fayeTan

To begin with... Hevea should make a public announcement... And not selectively talking to cimb only... The selective disclosure doesnt seem right to me.

2016-01-13 17:21

obiwan88

I do not see anything wrong with that as basically there is no hidden information from the public. Firstly, the court case has been set aside in favour of the defendant. Moreover, it is a court case involving the shareholder and not the company so there is no material impact on the company. Company does not need to disclose court cases against another shareholder.
And, the person who alleged the 700 containers claim has since went into hiding. It is a misinformation and laughable story. The intention is obvious i. e to bring down the price and buy up.
Any public company can use their bankers to iron out this issue and make the announcement. They have not infringed the Bursa rulings in anyway. Well, caveat emptor, so make the decision if one would like to invest in the stock.

2016-01-13 17:51

tehsk

Well done Mr Tan

2016-01-13 18:58

voonyoke

Official Statement by HeveaBoard Berhad

This announcement is made in relation to the article published in TheEdge Financial Daily on 13 January
2016) titled “HeveaBoard rebounds as allegations against it dismissed” in relation to certain articles
posted by certain parties on an online stock investor portal known as I3investor recently:
(a) “HEVEA, Internal Cracks Emerging” dated 6 January 2016;
(b) “HEVEA: 700 Containers Stranded in Korean Port” dated 7 January 2016; and
(c) “HEVEA” Ingenuity Accounting (Bomb No.1) dated 10 January 2016.
The contents made in those articles are untrue, defamatory and malicious in nature.
The Company states the following:

1. It is business as usual at the Company and its subsidiaries (collectively, the “Group”).

2. Business operations of the Group have not been interrupted as a result of the allegations
contained in the abovementioned articles.

3. The civil suit (“Suit”) filed in the High Court of Malaya in Seremban (“Seremban High Court”)
in September 2014 is a suit brought under Section 181 of the Companies Act 1965 by the
minority shareholders of HeveaWood Industries Sdn Bhd (“HeveaWood”) against the majority
shareholders of HeveaWood (i.e. Yong Kian Seng @ Yoong Tein Seng, Yoong Hau Chun, Tenson
Holdings Sdn Bhd, Firama Holdings Sdn Bhd and HeveaWood Industries Sdn Bhd). The minority
shareholders alleged that they have been oppressed by the majority shareholders, and non
payment of dividends by HeveaWood was one of the allegations made. On a separate note, the
Company had not paid any dividends during the financial years ended 2009 to 2012 due to its
financial position during that period of time.
HeveaWood should not be confused with the Company. HeveaWood is a substantial
shareholder of the Company and is a private limited company.
This Suit had been decided by the Seremban High Court in favour of the majority shareholders.
The minority shareholders have subsequently filed an appeal against the decision of the
Seremban High Court.
As the Suit does not involve the Company and is at the shareholders’ level, it is a private matter
and there is no legal requirement for the Company to make any announcements to Bursa
Malaysia Securities Berhad on the same. The Suit has no bearing on the governance of the Company.

4. As for the allegation of 700 containers of the Company being stranded in a port in South Korea
in October 2015 due to non-conformance of quality standards, the Company reiterates that this
is untrue. The South Korean authority had changed its standard of panel products from E2
boards to E1. As South Korean E1 testing standards differed slightly, the Company had decided
to delay its shipment to South Korea pending clarification on new testing standards applicable
to its products. As of to-date, this matter has been resolved.
5. In respect of the allegation of ingenuity accounting in that there were discrepancies between
the amounts owed by related parties to HeveaWood and the amounts owed by the Company
to related parties, the Company understands that in addition to the amount owing by the
Company to HeveaWood, there are other amounts due from other related parties to
HeveaWood. Hence, the alleged discrepancies. The amount owing to HeveaWood by the
Company is intended to be repaid in 2016.
The Company reserves all rights to take legal steps

2016-01-13 18:58

hamster1

Mr Tan....your article is very objective.

2016-01-13 19:45

Pakcik Saham

Nice, optimist & simple article Mr Tan, well done

2016-01-13 22:58

JT Yeo

Erm Bursa Dummy wrote that not Tan

2016-01-14 08:06

Tan KW

Yes. it is from bursa dummy (http://bursadummy.blogspot.my/2016/01/hevea-under-attack.html)

2016-01-14 09:39

Harold Huong

Mr Cold Eye still hold Hevea?

2016-01-15 06:59

StingRay

Sometimes, I really don't understand the level of mentality of Malaysian investors. The accussation was posted in the internet, without revealing the real author... whoever this robert chai is... no real and full name... no IC or whatever identification... and you people believe it. No wonder so many scam can be successful in Malaysia.

If you believe what he wrote, then don't buy the counter. Simple as that. But when the counter start to move up, don't kau beh kau bu loh. Nobody pointing a gun at your head to buy. And please, don't try to act so noble as if you don't know the game of the share market. Most of the counters are being goreng before. So what? That is the game of the market.

2016-01-15 07:15

Pakcik Saham

JT Yeo & Tan KW thank amend & remind me.

2016-01-15 07:53

StingRay

Pakcik... I am not saying anything negative about TanKW. Please re-read what I have posted again. All I am saying is those people who are too damn emotional and like to over re-act, as mentioned by you. Reading through all the respond here and other topic related to Hevea, I find it amusing that people will seriously take that robert fella said. If what he said is true, he can always make a police report or report to the proper authority or even go to the press. Heck, he don't even have the balls to use his full name and identification. Now... if there is something to hide, it will be him hiding. Hahaha!!!

2016-01-15 08:01

MuttonCurry

Yes ... today the stock will be moving to upside ... i believe you will not be able to see the stock at yesterday price as it held quite nicely despite the global/local market meltdown.

2016-01-15 08:07

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