Intrigue at Eastland Equity

Intrigue at Eastland Equity
Business & Markets 2013
Written by Afiq Isa of theedgemalaysia.com
Wednesday, 10 July 2013 09:43

KUALA LUMPUR: The sharp gains and increased volatility seen in the trading of Eastland Equity Bhd shares coupled with newsflow speculating over corporate developments at the company have made it among the top 10 most active counters in the last two trading days.

The counter has gained 114% since last Friday due to intense speculation over the entry of a new substantial shareholder, with prominent figures being mentioned as possible candidates.

The investment holding company is reportedly in the midst of a corporate tussle between the existing board of directors and disgruntled minority shareholders due to differing opinions regarding the company's future plans and a proposed private placement exercise.

Observers said uncertainty within the company leaves it open to a takeover by outside parties linked to the minority shareholders.

Mohd Nazifuddin Najib (pic) is the latest name mentioned as a possible entrant into the company, according to a Bernama report.

The report said Nazifuddin, who is Prime Minister Datuk Seri Najib Razak's second son, is bidding for control over Eastland against a group led by Sabah business magnate Teh Soon Seng.

Nazifuddin's involvement in Eastland may have been due to his link to the Kelantan royal family through his mother Tengku Puteri Zainah Tengku Iskandar.

Eastland, formerly known as Furqan Organisation Bhd, is primarily involved in property development in Kelantan. Its flagship project is the Bandar Tasek Raja township development in Pasir Mas, Kelantan with a gross development value (GDV) of RM151 million.

Through its wholly owned subsidiary Eastern Biscuit Factory Sdn Bhd (EBF), Eastland also owns the Kota Sri Mutiara shopping complex, a 23-storey condominium and the Renaissance Kota Baru, the only five-star hotel in the east coast state.

Eastland was hit with an unusual market activity query by Bursa Malaysia on July 5 after its shares hit limit-up of 84 sen in intraday trading.

In its reply to Bursa last Friday, the company said it is holding “preliminary talks" with several parties to develop a piece of land in Kota Baru which might have contributed to the share price increase.

Eastland disclosed to Bursa yesterday that EBF will be entering into a joint venture agreement (JVA) with Zalam Corp Sdn Bhd to develop a piece of vacant land in the state capital.

A check on Eastland's annual report showed that it owns two parcels of vacant property development land in Kota Baru, with the bigger one measuring 5,767 sq m and having a net book value of RM5 million.

The details of the project and the value of the JVA between Eastland and Zalam have yet to be disclosed.

It also announced yesterday that it has appointed M&S Securities Sdn Bhd its main adviser for a proposed private placement exercise, details of which will be disclosed in due course.

Its largest shareholder as at April 25 was Prestige Pavilion Sdn Bhd with 11.32% equity interest. This is followed by Equal Accord Sdn Bhd and Maylex Ventures Sdn Bhd with 7.84% and 5.76% respectively.

Notably, the company said in filing with Bursa on Monday that its substantial shareholders Equal Accord, Tan Kok Aun and Sydney Lim Tau Chin plan to deal in Eastland shares during the closed period pending the announcement of its second quarter results.

Tan is Eastland's company secretary while Lim is managing director. Both are shareholders via interests in Maylex Ventures.

Eastland shares saw some highly volatile price movements yesterday, peaking at RM1.30 before declining by more than 9% in the closing minutes of trading.?The counter closed at RM1.18.



This article first appeared in The Edge Financial Daily, on July 10, 2013.