SC throwing the books at Jani’s partners?

In the game of white collar crime, corporate and market players are no island and the interlink, intriguely layered and through complex web of dealings and sophisticated commercial papers.

Then again, ‘insider trading’ is often the best excuse to go after active market players, especially to those who could have access to strategic and delicate information. When the going gets tough, the market players get tougher or shall falter.

Dato’ Yeow Kheng Chew

Word from the grapevine is circulating that Securities Commission (SC) is charging Dato’ Yeow Kheng Chew, former Executive Director of Kencana Petroleum Berhad, Paulene Chee Yuet Fang, her remisier Tan Yee Chee for insider trading in relation to the proposed merger of Kencana Petroleum Berhad and SapuraCrest Petroleum Berhad in 2011.

Is an official press release from SC is expected soon?

‘Insider trading’ is SC’s so called flavour-of-the-year crussade.

This is very interesting because K C Yeow has been former Sapura Kencana Bhd Chairman Tan Sri Mokhzani Mahathir’s long time business partner.

Both of them quit Sapura Kencana board almost 16 months ago.

The Star story:

Friday, 6 March 2015

Mokhzani and Yeow to keep stakes in SapuraKencana

BY YVONNE TAN

“We have no plans to sell,” Mokhzani told StarBiz. Asked on the duo’s next move, he said they “don’t know just yet”.

“We have no plans to sell,” Mokhzani told StarBiz. Asked on the duo’s next move, he said they “don’t know just yet”.

PETALING JAYA: Tan Sri Mokhzani Mahathir and close associate Yeow Kheng Chew, better known as KC, have no plans to sell their combined stake of 9.12% in oil and gas (O&G) giant SapuraKencana Petroleum Bhd (SapKen) following their resignations from the board of the company.

“We have no plans to sell,” Mokhzani told StarBiz.

Asked on the duo’s next move, he said they “don’t know just yet”.

Mokhzani and Yeow collectively hold a 9.12% stake in SapKen through Khasera Baru Sdn Bhd, which is the company’s fourth largest shareholder.

Based on yesterday’s closing price of RM2.45, the stake is worth some RM1.3bil.

Shares in SapKen yesterday fell close to a two-month low, as investors sold ahead of a perceived stock overhang in the company, following the exit of the two directors from its board.

Mokhzani, who was the vice-chairman of SapKen, and Yeow, one of the company’s non-executive directors, told Bursa Malaysia on Wednesday that they had resigned due to “personal reasons”.

Their exit raised concerns if the duo would follow up on their resignations and reduce their interests in the oil and gas giant.

“In a knee-jerk reaction, some investors sold their interests for fear of an overhang,” said a broker.

Usually an overhang occurs when there are concerns that a sizeable amount of shares in a company are to be sold, hence limiting the upside movement of the stock.

But an investment banker described as unfounded the concerns of Mokhzani and KC disposing of their stake in SapKen.

“If they want to divest their stake, they would not resign because it would be value destructive,” said the banker.

To a question, Mokhzani dispelled speculation that the resignations were due to disagreements with regard to the operations of the group under the current environment where oil prices have slumped.

“No, the resignations were not caused by a disagreement,” Mokhzani said.

The president and group chief executive officer of SapKen is Tan Sri Shahril Shamsuddin, who has a 16.71% stake.

Since more than 18 months ago, speculation has been rife that both Shahril and Mokhzani did not see eye to eye and there was talk that there was a disagreement between the two on the operations and expansion plans of the group.

The banker speculated that the more likely reason for the resignations was a possible corporate exercise that Khasera Baru was undertaking that could put Mokhzani and Yeow in a conflict of interest situation should they remain on the board of SapKen.

Apart from SapKen, both Mokhzani and Yeow have a major investment in the form of O&G service provider Yinson Holdings Bhd.

They hold an 18.55% stake in Yinson via Kencana Capital Sdn Bhd, which is the second largest shareholder after company chairman Lim Han Weng, who has 22%.

In 2012, childhood friends Mokhzani and Shahril merged their businesses, Kencana Petroleum Bhd and SapuraCrest Petroleum Bhd, to form SapKen. It became the biggest privately owned integrated oil and gas company in the country.

Following that, Khasera Baru had a stake of about 15% in the O&G outfit, while Shahril held 16.71% via Sapura Holdings Sdn Bhd.

Last February, Khasera Baru sold a block of 190.3 million shares for RM4.30 apiece, netting about RM820mil in total.

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How and why something happened so long ago only being actively sought after now is as good as the next person’s guess.

Probably the Long Arm of Corporate Law took tad long to figure the tit.

Coincidentally, Fourth Prime Minister Tun Dr. Mahathir Mohamad started his open attacks against Prime Minister Dato’ Sri Mohd. Najib Tun Razak moments after the duo exited as active personalities in Sapura Kencana.

Probably some would view that as ‘conveniently’. Needless to say, many has been expecting this ‘Open season’, especially the intensity and voracity of the former’s attack on once the anointed successor after Tun Abdullah Ahmad Badawi being ousted.

Regardless, this is an interesting development to watch.

*Updated 1545hrs

The Edge Market story on K C Yeow being charged by SC.

SC charges Kencana’s former ED KC Yeow with insider trading

By Chen Shaua Fui / theedgemarkets.com | July 29, 2016 : 2:09 PM MYT

KUALA LUMPUR (July 29): Kencana Petroleum Bhd’s former executive director Datuk Yeow Kheng Chew, better known as KC Yeow, along with two individuals were charged with insider trading at the Sessions Court here today.

The other two individuals, Paulene Chee Yuet Fang and her remisier Tan Yee Chee were charged for abetment.

The trio were alleged to have committed the offence in relation to the proposed merger of Kencana Petroleum Bhd and SapuraCrest Petroleum Bhd in 2011.

 

In the local corporate scene, Yeow is known as the partner of Datuk Mokhzani Mahathir in the oil & gas business.

Yeow was the former non-executive director of SapuraKencana Petroleum Bhd. He relinquished his position on March 4, 2015 for personal reasons.

The three claimed trial to the charge. Yeow was out on bail for RM1 million with two sureties, while Chee and Tan were bailed at RM800,000 and two sureties. The court did not request them to surrender their passport.

The presiding Judge Zulqarnian Hassan has fixed the case management on Aug 11.

According to the charge sheet, Yeow, 64, was charged for buying 1.16 million shares in Kencana Petroleum Bhd through Chee’s Central Depository System account, while in possession of information on the proposed merger of Kencana Petroleum and SapuraCrest on July 8, 2011, three days before the offer letter for the merger being issued.

The charge further stated Yeow would have expected such information to have had a material effect on the price of the shares, and ought reasonably to have known that such information was not generally available.

Therefore, he was accused of committing an offence under section 188(2)(a) of the Capital Markets and Services Act 2007 (CMSA).

Meanwhile, Chee and Tan were charged for abetting Yeow in commission of the insider trading offence, and that they have committed an offence under Section 370 (c) of the CMSA, read together with section 188(2)(a) of the CMSA.

Upon conviction, the trio shall be punished to imprisonment for a term not exceeding 10 years, and to a fine of not less than RM1 million.

Recall that the boards of SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd have agreed to their merge on Aug 5, 2011.

The merger, worth a total of RM11.85 billion, was carried out under Integral Key Sdn Bhd (IKSB), a special purpose vehicle. The letter of offer from IKSB was dated July 11, 2011.

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