As retail investors, we find ourselves in a state of confusion regarding the ongoing Mandatory General Offer (MGO) of South Malaysia Industries Berhad (SMI). The recent flurry of announcements and legal disputes surrounding the MGO has left us questioning whether this offer is still proceeding and why the communication from SMI’s management and Board of Directors appears to be unclear and contradictory.

A Confusing Situation for Investors?

On 20 August 2024, the Unconditional Mandatory Takeover Offer was issued by Target 1 Sdn Bhd (T1) through TA Securities Holdings Berhad, offering to acquire all the remaining ordinary shares of SMI at RM0.45 per share. For many of us, this initially presented a clear opportunity to evaluate our position in SMI and decide whether to tender our shares. However, things became much more complicated soon after.

In late August, it was announced that Mr. Mah Sau Cheong, a minority shareholder, had filed an interim injunction to halt the MGO process, seeking clarity and protection for shareholders while the court deliberates on the offer. The situation was further complicated when, on 5 September 2024, the court dismissed the ad interim injunction. Despite this, SMI’s Board of Directors agreed to “prayer (b)” of the Plaintiff’s application, which restrains the company from taking further steps under the MGO until the matter is resolved.

Adding to the confusion, on 13 September 2024, SMI made an announcement stating that, despite the dismissal of the injunction, they would not proceed with the MGO until further court directions are provided following the next hearing, scheduled for 27 October 2024.

Is the MGO Still Ongoing?

From a retail investor’s perspective, this conflicting information is deeply concerning. On the one hand, we were told that the MGO was moving forward after the dismissal of the ad interim injunction. Yet, on the other hand, SMI has agreed to halt the process until further court orders are issued. This mixed messaging has left investors wondering: Is the MGO still on, or has it been effectively paused?

Furthermore, the legal back-and-forth raises a critical question: Why is the management and Board of Directors of SMI, who are responsible for ensuring transparency and protecting shareholder interests, seemingly contributing to the confusion? Instead of providing clear guidance on the MGO’s status, they appear to be adding layers of complexity, making it difficult for retail investors to make informed decisions about our holdings.

A Call for Clarity

As minority shareholders, we expect transparency and timely communication from SMI’s management, especially when it comes to such a significant event as a Mandatory General Offer. Unfortunately, this has not been the case, and we find ourselves in a state of uncertainty. We are left in limbo, unsure whether to act on the RM0.45 offer or wait for the court’s decision at the end of October.

We urge the Board of Directors and management of SMI to clarify the situation. Is the MGO still ongoing? If so, what should we, as shareholders, expect? If not, why has there been such a lack of clear communication to date? We seek answers, not further complications.

With legal actions pending and conflicting announcements being made, it is imperative for Bursa Malaysia, the Securities Commission Malaysia (SC), and the Minority Shareholders Watch Group (MSWG) to step in and ensure that SMI acts in the best interests of all shareholders. The current uncertainty and lack of transparency are unacceptable, and retail investors like ourselves deserve better.

We hope that the upcoming court hearing on 27 October 2024 will provide much-needed clarity. Until then, we continue to monitor the situation closely, but our confidence in the company’s leadership is waning.

https://klse.i3investor.com/web/blog/detail/LETTER/2024-09-18-story-h469212536-A_Concerned_Investor_s_Perspective_Uncertainty_Surrounding_SMI_s_Mandato

Bursa Malaysia certainly needs to explain the mandatory general offer (MGO) announced by SMI a month ago, otherwise similar situations will happen to other companies in the future ...

What're you talking about, coconut ? Time to go in and then prepare for smack down? 😵

The involvement of new major shareholders is necessary

I don't dare to go all in, but I have bought some at 1.73

PN 17 in making. The company should do some restructuring ..

not bad, net loss reduced to RM126 k

Old owners should give up their shares... they are hoarding assets without bringing any value to shareholders

TDM got chance to turn green in q2 ?

Alright, this company is doomed. They play the shareholders like a fiddle. Get ready for a class action lawsuit

Ctos is breaking Rm1.30 again. Shortiest got burned again?

act polite before fighting and hentam the old management thoroughly

I have prepared a series of 'polite' questions (as shown below) for the AGM tomorrow because Malaysians are quite polite one:

1) Financial Management:
a. Can you provide a breakdown of the company's financial performance over the past year?
b. What measures are being taken to address any financial challenges or losses?
c. How does the current financial performance compare to previous years and industry standards?

2) Strategy and Planning:
a. What is the company's strategic plan for growth and sustainability?
b. How are strategic decisions made within the company?
c. Are there any changes to the strategic direction of the company due to recent performance?

3) Governance and Accountability:
a. Can you provide transparency on executive compensation and bonuses, especially in light of performance?
b. How does the board ensure accountability and transparency in decision-making processes?
c. Are there any recent changes to the board composition or governance structure?

4) Operational Efficiency:
a. How is the company addressing any operational inefficiencies or bottlenecks?
b. Are there any plans to streamline operations or cut costs where necessary?
c. What steps are being taken to ensure operational excellence and productivity?

5) Risk Management:
a. How does the company identify and mitigate risks, both internal and external?
b. Are there any emerging risks that shareholders should be aware of?
c. How often are risk management strategies reviewed and updated?

6) Communication and Stakeholder Relations:
a. How does the company communicate with shareholders and other stakeholders?
b. Are there opportunities for shareholders to provide feedback or express concerns?
c. What efforts are being made to improve stakeholder relations and rebuild trust, if necessary?

7) Future Outlook:
a. What is the company's outlook for the coming year and beyond?
b. Are there any anticipated challenges or opportunities on the horizon?
c. How does the management team plan to steer the company through uncertain times?

Big funds like KWAP, ABRDN, CREADOR were tapping in. How are shortiets (IDSS, RSS) going to fight against them? ha

make it limit down before AGM and let the olddie kena hentam more fierce and brutal during AGM

foreign fund (ABRDN) comes and chips in also 😀

After AGM, it surely will limit down. Unless those management are voted out, it's going to drop like a waterfall

So CTOS will either drag or win the recent case

lousy management and yet still could enjoy the substantial increase in director fees for the financial year ending June 30, 2023

Avoid at all cost ! SMI has been filing consistent financial losses since 2019 !

Let's ask this lawyer 😆 https://cilisos.my/ctos-credit-report-agency/

https://klse.i3investor.com/web/blog/detail/LETTER/2024-03-16-story-h-186393387-My_Letter_to_the_Management_in_South_Malaysia_Industries

Hope the old management see this and respond to it

It's pass through RM1.30 resistance alrdy, ain't a dead cat

btw, they also deliberately postponed the annual general meeting, which normally takes place once every 12 months

@Yusof896. That shows that those old management are treating the company more like a private entity rather than a publicly listed company !! Poor shareholders of SMI

People who did IDSS & RSS on CTOS, are crying until no tears now 😄

Exactly. People will hentam the old management first and hit vote for to replace them during the AGM

From all these IBs that present their TP on CTOS today, we can tell that Kenanga is one of the shorties. ha

its AGM is on 27th this month. The old management sure kena hentam one

current price movement is beautiful. Let's see it can close above 0.80 today or not 🤗

That's weird, SMI's annual report does not include form ... old management's problem?

Implementation of e-invoice does create a good sentiment for accounting software business