Changes in mTouche seems like hostile takeover

PETALING JAYA: The recent major changes in the ownership structure of mobile content provider mTouche Technology Bhd appears to have the makings of a hostile takeover, industry observers noted.

Last Friday, four out of seven mTouche directors, including its chairman and chief executive officer Eugene Goh, resigned from all their positions in the firm.

Goh said he was leaving to “pursue other career developments”. Goh could not be contacted at press time.

Meanwhile, the directors who quit have also disposed almost all of their respective stakes in the firm. In their place, several individuals have been appointed to the board, including Raja Hizad Raja Kamarulzaman who is now a substantial shareholder after purchasing 66.5 million shares, or a 28.83% stake, in mTouche via his substantial shareholding in Homegrown Media Sdn Bhd.

This makes Homegrown Media, said to be a Sabah-based firm, the largest shareholder in mTouche. Raja Hizad has also been appointed as non independent and non executive chairman of the company.

StarBiz reported in March that Goh and his business partners, including mTouche's co-founder and executive director Tan Wee Meng, could potentially lose their grip on the company after Goh was said to be facing pressure to settle a total of RM20mil that he owed OSK Capital Partners currently the second-largest shareholder in mTouche with close to a 21% stake.

StarBiz reported that initially, this loan, taken to fund a rights issue, was to be settled via an arrangement which would see Goh sell off some of his shares in the market.

Goh, however, was later made to understand that a takeover of mTouche was part of the plan, according to the report. While Goh consequently denied that a takeover was on the cards via an announcement to Bursa Malaysia, he and his partners had continued to pare down their stakes in mTouche following that.

With Goh, being largely the brains of mTouche all this while, out of mTouche's board, concerns are raised as to what direction will mTouche take next.

The group is one of the mobile technology platform service providers in the world to have direct server connections to all mobile network operators in Singapore, Malaysia, Indonesia and Thailand, according to its latest annual report.

In 2010, it held the No. 1 position locally in the mobile pure-play arena, with more than half a million subscribers subscribing to its mobile device-based social networking service called JuzFrens.

Singaporean Goh is the founder of mTouche Pte Ltd (MPL) and a major contributor to the setting-up of MPL's pioneering operations in Singapore.

mTouche made a net loss of RM4.7mil on revenue of RM43.7mil for its financial year ended Dec 31, 2011 and had cash and balances of RM21.1mil at Dec 31 last year. Its shares ended at 53 sen on Monday.