Little-known S5 wants to acquire this listed company

CONNECTCOUNTY Holdings Bhd is up for a reverse takeover (RTO) exercise involving S5 Systems Sdn Bhd. The cable and wire maker confirmed that it was a target in a June 16 Bursa filing but said no agreement has been signed yet.

S5, a security solutions provider, has been dubbed a frontrunner for the RM1.5 bil National Integrated Immigration System (NIIS) contract. Listed e-government giant MyEG Services Bhd is looking to acquire a 10% stake in S5 Holdings Inc, the holding company of S5.

The clear connection between S5 and ConnectCounty comes through one of S5’s shareholders, Avocat Sdn Bhd. According to MyEG’s filing with Bursa over the 10% stake offer, S5 Holdings is owned by Avocat (3.6%), British Virgin Islands company Merrington (20%), and NSA Technology Sdn Bhd (76.4%).

The sole shareholder and director of Avocat is Lim Beng Guan, the co-founder of ZJ Advisory Sdn Bhd, according to company filings. Lim, along with his 95%-owned Concrete Parade Sdn Bhd, controls a 4.68% stake in Apex Equity Holdings Bhd.

He is also among the 11 defendants in a suit brought by Apex and its subsidiary JF Apex for allegedly acting in concert to obtain control of the company and breaching capital market rules in doing so.

Also among the defendants is ACE Credit (M) Sdn Bhd, whose holding company, ACE Group, counts Lee Su Lin among its directors. Lee is also a director of Nexus Creative (Mal) Sdn Bhd, the majority owner of ConnectCounty with a 31.21% stake.

Lee and her husband, Peter Wong Pooi Fatt, were directors of ConnectCounty until July 2019 when they resigned from the board to pursue personal interests.

ConnectCounty also counts a certain Flonic Sdn Bhd as a shareholder with a 2.86% stake. The company’s current shareholders are Low Chee Seng (99%) and Sim Jinq Feei (1%). They are also the company’s directors.

But Low and Sim have a business relationship with Tan Siew Ching, the granddaughter of the late Tan Sri Tan Yuet Foh, founder of Tan Chong Motors Holdings Bhd. She is also the chairman and executive director of JAG Bhd, which is listed on the ACE Market. In 2013, Siew Ching emerged as a significant shareholder in Flonic.

Another JAG director, Ng Meow Giak, owns a direct stake in ConnectCounty of 0.43% through a pledged securities account.

Why does S5 want to do an RTO of ConnectCounty? Despite the latter being an ACE Market-listed company, it is believed that this might help in its NIIS bidding process.

The punters have moved in as early as May 14. ConnectCounty’s share price rose to an intraday high of 11.5 sen from eight sen. On June 12, the volume traded surges to 214.97 million shares and its share price reached an intraday high of 37.5 sen, then the highest in over five years.  The stock closed at 30 sen yesterday.

Also, major shareholder and deputy chairman Ang Chuang Juay began disposing shares in ConnectCounty on June 11 with a total of 1.6 million shares transacted for RM535,992.

But it has to be said that the ultimate beneficial owner of S5’s major shareholder, NSA Technology, is an offshore or overseas entity NSA Technology (L) Inc.

That might be an air of mystery there. However, NSA Technology’s sole director is Syed Mohammad Hafiz. His father Syed Razlan Syed Putra Jamalullail is the younger brother of Raja Perlis Tuanku Syed Sirajuddin Putra Jamalullail. Syed Razlan was former Arau MP and he joined Bersatu from Umno on July 15, 2018.

Syed Mohammad Hafiz also owns a 0.42% stake in listed automobile leather seat designer Pecca Group Bhd. – June 23, 2020

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