THE 'THIRD FORCE' - THE HO HUP SAGA CONTINUES

Ho Hup has been queried by the authorities as to whether there is a party or parties acting in concert with Low Chee & Sons Sdn Bhd and Choo Soo Har with regards to a purported acquisition of 51 per cent shares in the tussle-ridden Construction and Development giant.

Ho Hup today confirmed that it had indeed received a query from the Securities Commission dated Jan 13 seeking information by engaging section 33A(4) of the Securities Commission Act 1993 and further asking for the current shareholding of Low Chee & Sons, Soo Har and their parties-acting-in-concert.

While Ho Hup does not dismiss the possibility of a “third force” acting in concert on the sidelines in the run-up to the Feb 4 EGM called by the former managing director Dato Low Tuck Choy, it becomes more apparent especially with the market surge that has created a lot of hype in the market.

Fuelled by the tussle between the two opposing shareholders the deputy chairman of Ho Hup Datuk Vincent Lye and Dato Low, the ‘third force’ appears to be preparing a coup come Feb 4 where a 51 per cent vote on the part of shareholders would be sought to determine the direction in which the company is going to take.

However things do not seem to add up in the Low Chee & Sons’ stable where one of the three siblings Low Teik Kien, the current executive director of Ho Hup and younger brother of the ousted former boss Tuck Choy and another sibling Ms Low Lai Yoong, do not seem to be seeing eye-to-eye on matters of Ho Hup and Low Chee & Sons.

This reality is heightened by Low Teik Kien’s function in the present board having endorsed the course of actions and measures taken by the current management in the interest of Ho Hup while Dato Low appears to be using Low Chee & Sons to oppose Ho Hup’s actions.

It is reliably learnt the siblings prefer to part ways as the Ho Hup tussle deepens what with police reports and a RM250 million legal action against Tuck Choy becoming a blemish on the family’s good name in the business.

The surge in the share price on the other hand had prompted the present management led by its managing director Lim Ching Choy to seek a postponement of their restructuring plan having proposed a new revised downward the capital reduction from 95 per cent to 60 per cent as a bail-out solution for Ho Hup. The bail-out is needed given the current PN17 status of Ho Hup.

While market observers are wondering whether the company’s share is really worth its current trading price of RM1.19. The share price had tumbled to an all time low of RM24
sen previously. Over the past one month, the share priced had peaked to RM2.08 with trading volumes increasing in unusual market action (UMA).

This prompted Bursa to query Ho Hup on Jan 5 this year requesting for an immediate confirmation on whether there was any corporate development relating to Ho Hup Group’s business affairs and that had not been previously announced. This was to explain the causes of the unusual market activity for a PN17 status company.

The question remains whether a ‘third force’ can stay intact with what appears to be rivalry among the siblings in Low Chee & Sons to topple the present management seeking a mandate to revive the company, said a market insider.

The market insider went on to question whether the EGM being called on Feb 4 was an action that was being taken after the intervention of the ‘third force’ in what has been estimated as RM70 million worth of shares changing hands in the UMA. “There is great value to be harnessed in Ho Hup especially with its 60-acre land bank in a prime location in Bukit Jalil which the present management has earmarked to develop into Jalil Green City,” said the insider.

This has raised eyebrows among old faithful loyalist minority shareholders and potential shareholders who may prefer to place their odds on Lim’s management team to get Ho Hup out of this debacle and head towards not only revival and sustainability but also profitability.

Market analysts who speculated when the share price peaked when investors started buying up to take sides in the tussle only add credence to the existence of the ‘third force’ now in the form of an unseen hand to try and garner support by buying huge volumes of shares to tilt the odds in favour of Tuck Choy.

Either by sheer coincidence or by choice, market analysts had already spotted an irony in the line-up of six directors proposed by Dato Low in the form Tan Sri Kamaruzzaman Sharif who happens to be the former chairman of Magna Bhd. The other directors proposed are Hew Thin Chay, Yusob Md Tasir, Felix Dorairaj, Slamat Manzah and Chow Seck Wai. They have also raised questions whether there is a concert of sorts between Low Chee & Sons and Magna Prima in what Dato Low is attempting to shape up.

The present directors of Ho Hup including Lim are Datuk Liew Lee Leong, Lai Moo Chan, Long Md Nor Amran Long Ibrahim, Mohd Shahril Tan Sri Hamzah and Foo Ton Hin.

Tuck Choy’s 3 per cent share together with Low Chee & Sons’ 22.66 per cent with Choo Soo Har’s 2 per cent give this grouping an almost 26 per cent shareholding against Datuk Vincent’s 27.95 held via his company Extreme Systems Sdn Bhd.

Undoubtedly there are worries that the share, which has earned the recognition of being one of the best performing stocks on Bursa during these periods, was being overbought, said a market analyst.

But the analyst went on to forecast that shareholders would align themselves with a group which can deliver and given the chain of events surrounding Ho Hup in the last 15 months since Datuk Vincent came into the picture and Lim making his repairs for a makeover, they would prefer the company to settle down with the ones who can deliver.

When this is placed against the scenario in which this 50-year old company collapsed over a period of the last seven years from 2001 to 2008 when the company suffered accumulated losses amounting to RM270 million, it will be quite obvious on which side the minority shareholders will bank their support regardless of whether a third force is in play.