Ishak no longer substantial shareholder of Kenmark

Tuesday June 15, 2010

Ishak no longer substantial shareholder of Kenmark

He pares down Kenmark stake

PETALING JAYA: Datuk Ishak Ismail has netted an estimated RM5mil from selling shares in Kenmark Industrial Co (M) Bhd, a company that he had started buying into slightly over a week ago.

Then, Kenmark’s shares had collapsed following the absence of its top officials and what seemed like a cessation of its business.

It is estimated that Ishak paid around 8 sen per Kenmark share and had emerged with around 57 million shares in Kenmark through his vehicles Unioncity Enterprises Ltd and BHLB Trustee Bhd.

In a filing with Bursa Malaysia yesterday, Kenmark said Ishak had ceased to be substantial shareholder of the company as of June 9.

The shares were disposed into the open market on June 9 and June 11. The average share price of Kenmark on those days was 17 sen per share, giving Ishak an estimated gain of 9 sen per share for his 57 million shares.

A senior analyst from a local brokerage said investors were unable to see clear leadership in the running of Kenmark to improve its financial performance. “When the single largest shareholder of a company starts to sell down nearly all of his shares, it does not promote confidence in the company’s future. This turn of events has left many questions unanswered,” he said.

It was earlier reported that Ishak wanted to take the financially distressed furniture maker out of its PN17 classification and restart its operations as soon as possible.

Kenmark’s share price hit a high of 16.5 sen in early morning trade yesterday before dipping gradually to close at 13 sen with 36.5 million shares traded.

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Ishak makes exit from Kenmark
By Francis Fernandez
Published: 2010/06/15

Datuk Ishak Ismail appears to have sold out of Kenmark Industrial Co (M) Bhd, (7030) a financially troubled furniture maker, in about 10 days, which was also when the stock surged by more than 600 per cent.

As early as June 1, Kenmark was trading as low as 3.5 sen a share, after it emerged that its chief was missing and it was late with its financial results.

But by June 4, Kenmark was trading at 26 sen a share, powered by news that Ishak had bought a 32 per cent stake.

Kenmark told the stock exchange yesterday that it received verbal confirmation from Ishak and BHLB Trustee Bhd, a trust for his family, that nearly 60 million shares linked to him were sold on June 9 and 11.

Unioncity Enterprises Ltd, in which Ishak has an indirect stake, informed Bursa Malaysia that it sold some 27.69 million Kenmark shares on the open market.
With the sale, Unioncity ceases to be a substantial shareholder.

BHLB Trustee owned 30 million shares, or 16.83 per cent, in Kenmark as at June 2, filings to the stock exchange show.

"A representative of BHLB for a discretionary trust for the family of Ishak has verbally confirmed to the company that the trust on June 10 acquired one million Kenmark shares and on June 11 disposed of a total of 31 million Kenmark shares," Kenmark said in a statement yesterday.

Ishak, when asked about the share sale by Business Times, merely answered with a question himself: "Are you sure?"

As at press time, there was no filing to the stock exchange on BHLB selling Kenmark shares.

It is not clear who bought the shares from Ishak. Kenmark also did not mention it in its short statement to Bursa Malaysia yesterday.

Meanwhile, Kenmark executive chairman Datuk Abd Gani Yusof told Business Times that he was still the chairman of the company.

"I was appointed by the company," Abd Gani said when asked if he was representing Ishak or Taiwanese shareholder James Hwang Ding Kuo, who owns 8.41 per cent of Kenmark.

Abd Gani, who is the major shareholder and executive vice-chairman of Metronic Global Bhd, said he did not know who bought the shares from Ishak.

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Comment:
It's another way of expressing the "Greater Fool Theory." "I may be a fool to buy this stock at this price; but I'll find another fool to buy it from me at a higher price."