Two corporate figures previously with property developer SP Setia Bhd could be behind the RM605 million acquisitions of 623.4 acres of land owned by DRB Hicom Bhd.
The two, Abdul Rashid Abdul Manaf, previously the chairman of SP Setia before his resignation in October last year, and Eddie Leong Kok Wah who retired as independent non-executive director of SP Setia end February this year, surface in all three private companies, that acquired the land.
However a source says that the duo is venturing out on their own, and is not doing anything with SP Setia.
“There is no involvement of SP Setia…the two of them are on their own, but it is a large acquisition and it’s going to get interesting,” the source familiar with the deal said.
A check with the Companies Commission of Malaysia revealed that the duo were directors in all the three companies that acquired the three plots of land namely—Summer Nights Sdn Bhd, Promosi Etika Sdn Bhd and Eco World Development Sdn Bhd.
In all three companies as well, the duo were appointed on June fourth last year.
In two of the companies, Summer Nights and Promosi Etika the shareholding is equally held by Asiah Osman and Salasiah Mohd Said. Eco World Development meanwhile is equally owned by Sinarmas Harta Sdn Bhd and Maple Quay Sdn Bhd.
Sinarmas Harta however is a little vague with the company equally owned by Halimi Sakijan and Norasyikin Miskiran. The company’s directors meanwhile are Fisool Musa and Zulfeka Zainal Abidin.
Both Rashid and Leong who are known corporate personalities could not be contacted.
Rashid was chairman of SP Setia from March 1997 to October last year, and was the senior partner in a legal firm and the Senior Federal Counsel for the Income Tax Department in the mid 1970’s.
Leong meanwhile is an executive director with water player Salcon Bhd, and is known to have a background in investment banking.
A positive move for DRB
Meanwhile, DRB divesting its non-core assets has been viewed positively by analysts, as the move would help DRB to get more resources for its core activities.
DRB yesterday announced that they would be selling certain parcels of land covering 613.79 acres in Johor for RM 534.7 million. Another piece being sold is a 9.6 acrea parcel in Kuala Lumpur for RM69.92 million.
DRB’s gearing levels had surged after buying over over Proton Holdings Bhd and its unit Lotus from Khazanah Nasional Bhd, and forking out about RM3 billion for the takeover at RM5.50 a share.
Prior to Proton, DRB forked out RM622.79 million for 32.2 percent of Pos Malaysia Bhd at RM3.60per share.
However the HLIB analyst said that DRB could still sustain, as the company’s debt commitments were largely long term.
For its nine months ended 31 March 2013, DRB posted a net profit of RM1.2 billion on the back of RM6.6 billion in revenue.
The disposal of land in Johor is expected to be completed by 31 March 2014, and DRB stands to make a net gain of RM89.12 million. The land in Kuala Lumpur, which was sold to Summer Nights Sdn Bhd in March 2013, would bring in a net gain of RM54.60 million.
Late last year DRB disposed off its power generation arm, HICOM Power Sdn Bhd to Sterling Asia Sdn Bhd for RM575 million. Sterling Asia is a unit of Malakoff Corp Bhd, a 51 percent subsidiary of MMC Corp Bhd, in a related party transaction.
Both DRB and MMC are controlled by tycoon Syed Mokhtar Albukhary.
HLIB is maintaining its ‘buy’ call on DRB’s stock with an unchanged target price of RM3.36. DRB closed unchanged at RM2.59.