PETALING JAYA: MOL Global Inc’s single largest shareholder Tan Sri Vincent Tan Chee Yioun gives his backing to the company’s management, helping to shore up the embattled stock. Shares of MOL Global Inc rebounded sharply, closing 116% higher to US$3.65 (RM12.41) on Tuesday.
“I have the utmost confidence in the management and MOL and none of these unfortunate events alters my very positive view of the underlying business of MOL,” Tan said in a statement which was issued after midnight on Tuesday.
On Monday, shares of MOL tumbled by 59% to US$1.69 (RM5.82), which is about 80% below its initial public offering price of US$12.50 (RM42). Prior to that, trading in the shares had been halted since Nov 24 due to the delay of its third quarter results and resignation of its chief financial officer (CFO).
Tan added that MOL had encountered some difficulties over the last several days relating to an accounting error at its Vietnam subsidiary, a delayed earnings release and trading halt, and the departure of its CFO Allan Wong.
“The timing of Allan’s departure for personal reasons which unfortunately coincided with the delay in the earnings release has resulted in some unhealthy speculation on the company’s financial numbers, and the stock price has been, in my view, unfairly punished,” he said in a statement.
He added that while he knew the management was currently working very hard on addressing the issues that had arisen, he had encouraged them to remain focused on executing their business plans.
“I have communicated my support to the management team at MOL, and while I know they are currently working very hard on addressing the issues that have arisen, I have encouraged them to continue to remain focused on executing their business plans,” he said.
Tan also said that he was very supportive of the board’s decision to implement a share buyback plan, as he believed that at the last closing price, the stock was significantly undervalued. The closing price on Monday was US$1.69.
Tan has about 45% stake in the company, while the Sultan of Johor has a 15% stake.
On Monday, MOL had announced a share buyback programme, along with the financial results for its third quarter ended Sept 30.
The company’s board of directors had approved a share repurchase programme, authorising the company to repurchase at any time during the next 12 months an aggregate of up to US$15mil of Amercian Depositary Shares (ADS), from time to time.
In an accompanying release, MOL said that any ADS purchased by the company will be cancelled with the underlying common stock held in treasury.
MOL’s CEO, Ganesh Kumar Bangah also said he planned to purchase at any time during the next 12 months an aggregate of up to US$500,000 of ADS,
Its third quarter net profit was 65.3% lower to RM3mil from RM8.5mil in the corresponding quarter of 2013. This was due to lower contributions from its gaming business MMOG.asia and higher employee expenses.
In a release, Ganesh said that MOL was expanding its interaction with mobile app stores, game developers as well as other mobile partners.”
Its strategy is to expand into new markets, execute its mobile strategy, grow its online merchant network and accelerate real world payments in all of its key geographic markets.
MOL achieved several milestones for its core e-payment segment in the third quarter.
These included growth for MOLPoints, MOLReloads and MOLPay, the completion of its PayByMe carrier billing acquisition, the signing of a new licensing agreement to launch a game in the Middle East and Brazil as well as the signing of MoUs with several major retail chains to execute its gift cards strategy.
“We believe these initiatives are the key building blocks that will help us to meet our vision of becoming the leading e-payment platform for digital services in emerging markets,” said Ganesh.
