By Jose Barrock
Chin Seak Huat ceased to be a substantial shareholder in beleaguered ornamental fish breeder Xian Leng Holdings Bhd, after selling 1.45 million shares or two percent equity interest in the company.
It noteworthy that Chin was instrumental in the special audit on Xian Leng by PricewaterhouseCoopers Advisory Services (PwC) last year, which implicated Chua Bah Bee @ Chua Chong Seng— the brother of MCA president Chua Soi Lek— in the siphoning out of RM85.7 million, set aside to build ponds at Xian Leng.
When contacted Chin merely said, “It is difficult; I don’t have much time… I still have a little more shareholding,” he said, clearly reluctant to divulge more than necessary.
Xian Leng after all has turned out to be a political minefield with many parties uneasy with the findings of PwC.
To recap PwC was engaged in October 2011 by Xian Leng to investigate alleged irregularities in capital expenditure incurred by its wholly owned units Xian Leng Trading Sdn Bhd, and Xian Leng Acquatic (Kluang) Sdn Bhd, from February 1, 2001 to January 31, 2008.
As part of the plan to build ponds, cash cheques from Xian Leng were made out to Inco Licensed Money Changer, while corresponding payment vouchers were made out by Xian Leng to four contractors.
Chua, the report by PwC says, could not account for RM37.7 million of the cash paid to Inco Licensed Money Changer and withdrawn by him.
Transactions with Inco Licensed Money Changer were a related party transaction and should have been disclosed, but were not.
PwC said that the invoices by the four contractors stated the work was done in broad terms, without any specifics, and that three of the four contractors were also not registered businesses when they issued invoices to Xian Leng. All the four contractors were also sole proprietors.
The award of the work to the four contractors as well was without tender or a competitive bidding process.
The alleged financial irregularities took place when Ng Huan Tong served as the managing director of Xian Leng. Ng was also the controlling shareholder of Xian Leng with about 47% interest, stepped down on April 3, shortly before PwC’s report was made public. In October last year he sold down his shareholdeing and ceased to be a substantial shareholder.
Inco Licenced Money Changer is 80% controlled by Chua a former executive director of Xian Leng, and the brother of the MCA head honcho. Chua resigned from Xian Leng in August 2008.
For the past six years, Xian Leng has bleed losses. For the financial year ended January 2013, Xian Leng posted a net loss of RM12.46 million on the back of RM12.99 million in revenue.
While many investigations have commenced, no action has yet to be taken.
Last month KiniBiz had reported that the police commercial crime department had recommended that charges be made in the graft probe at Xian Leng involving Chua.
According to police Federal Commercial Crime Investigation Department (CCID) chief Syed Ismail Syed Azizan, the investigation papers were handed over to the Attorney General’s Chambers.
When contacted Syed Ismail had said, “On our part, we have taken all actions and our investigations are completed.
“Of course we recommended charging but it is up to the Attorney General’s Chambers to see if our probe is sufficient or not,” he had said.
Without Chin, the only other substantial shareholder at Xian Leng is Idris Abdullah @ Das Murthy who has about 8.07 percent equity interest in Xian Leng. However Idris surfaced as a substantial shareholder in April last year, after much of the problems at Xian Leng had surfaced.
Whether the authorities take any action is taken at Xian Leng remains to be seen, with most of them evasive when questioned.
Xian Leng closed at 28 sen, slipping two sen.
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