BUT it is a whole different ball game, to say from the very beginning READ : Hong Seng's RM60.3 million purchase of a 32.61 per cent stake in Classita Bhd was done to benefit Victor Chin Boon Long's older wife, and then to have the following happen now.
WHAT has happened now? Well apparently, based on Classita's intraday closing price of 0.045 sen, 100 per cent of Classita is now valued at RM55 million.
BASICALLY, what this means is for RM60.3 million , one could have 100 per cent ownership of Classita with RM5.3 million to spare.
SO is Classita, a bad buy? Well at this point it is not, but I suspect down the road it's going to end up like Revenue Group Bhd, which had more than RM100 million in the bank but today when you strip off its debts , receivables plus the RM20 odd million still in the bank, is in a net debt position.
YES, folks eventhough the once profitable Classita, now under management of Hong Seng has forgotten how to make a profit VIEW : thanks to a recently concluded rights issue, is now sitting on RM95 million in cash.
IT'S best for Bursa Malaysia to demand for Classita to appoint a monitoring accountant to oversee the cash pile at Classita before the cash is taken out from the company.
BURSA Malaysia as we know had recently demanded that VIEW : Revenue Group must appoint a monitoring accountant if it wants the exchange to approve Revenue Group's proposed private placement exercise.
LET'S hope the exchange is not SUCKERED into the possibility of appointing GovernanceAdvisory.Com Sdn Bhd , the so called monitoring accountant candidate from Revenue Group as the potential monitoring accountant for Classita too.
I have nothing against GovernanceAdvisory.com except that it's registered office according to the Companies Commission of Malaysia is just one floor below that of the principal address of UHY, the former auditors of Revenue Group, which may have a lot to answer FOR, on what really happened at the last shareholders meeting.