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Please keep your promise, Nalfin
| 21 Apr 2017 00:00
SIX years is a long time for minorities of Premier Nalfin Bhd to wait for a regularisation plan. But in the end, the plan didn’t materialise and the company’s shares were suspended on April 11.
Nalfin was repeatedly warned by Bursa Malaysia since 2011 to find a replacement after selling its core palm oil business for RM111 mil cash. With the suspension, the shares could eventually be delisted.
But to be fair, Nalfin did try to acquire Emrail Sdn Bhd in February 2015 in a RM670 mil reverse takeover. The deal fell through when the Selangor government rejected Emrail’s RM2.42 bil Kinrara-Damansara Expressway (Kidex) project.
In recent years, Nalfin has been unsuccessfully trying to secure business deals. It has also not declared any dividend since 2014, much to the chagrin of minorities. It reported a net profit of RM446,563 for FY16 compared to RM1.38 mil in the previous year.
Despite the threat of suspension, Nalfin’s shares have hovering around 30 sen in the past month. The reason – Nalfin is cash-rich. It has RM105 mil in fixed deposits and another RM10.6 mil in a trust account. Excluding the trust account, this works out to 31 sen per share.
Its fixed deposits earn interest of around RM5 mil per annum. With no viable business, this is probably its main source of income. But this interest is used for operating expenses, including directors’ fees.
The company’s chairman is Tan Sri KR Somasundram, 87, while its CEO is his son Kili Anandaraj, 57. Thus, it earned a paltry net profit of less than half a million ringgit.
So there is no point for the company to hold on to the cash. Just distribute it to shareholders.
The company must remember the promise it made to shareholders in April 2011. It assured them that in the event it failed to find a viable business within 12 months, it would immediately return the cash from the disposal to shareholders.
It will be interesting to see what the minorities have to say at the company’s AGM in Kuala Lumpur on April 28. Hopefully, on that day, Somasundram will not have to face the wrath of minorities. Ironically, the meeting will be held at a hall named after him – Dewan KR Somasundram in Wisma Tun Sambanthan.
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