Idris fortune takes turn for worse


  • Business
  • Wednesday, 12 Feb 2003

BY IZWAN IDRIS

IT seems like Idris Hydraulic Bhd is no stranger to problems. It has a colourful history – as seasoned punters would politely put it. 

Listed in 1984, the company was an ailing operating concern by the end of 1990. At the time Idris’s total losses was more than RM110mil, a massive amount then. 

An investor who had bought Idris shares at 70 sen apiece on Jan 2, 1990, would have come in just before the company experienced a twist in fortune. 

In early 1991, a company called Tanjung Layang Sdn Bhd, led by now former executive deputy chairman Datuk Ishak Ismail, took control of Idris. 

Ishak was no stranger to Idris. He used to be a board member from 1987 to 1989. 

The assessment was that fresh capital was needed to revitalise Idris, and the investor was called to participate in a four-for-five rights issue in 1991.  

News reports at the time applauded the move. 

The rights issue raised RM140mil for Idris, and with its war chest full, the company went on a buying spree. 

Already engaged in finance, insurance, manufacturing, property development and retailing, the new management added timber, transport and hotel operations to Idris's list of businesses over the ensuing next few years. 

The move paid off but did not translate to dividend payment to shareholders although the company, over the years, mentioned plans to pay the shareholders part of Idris's profit. 

The expansion and diversification plus a healthy dose of rumour fuelled optimism that saw Idris’s share price rocketing from 80 sen to RM8 within a year during the super bull-run of 1993–94. 

The shareholders were richly rewarded already. Never mind the dividend or any other form of fundamental valuations. 

Trading at an historic price-earnings ratio of more than 300 times, the Idris share price was definitely defying gravity. Even by the sizzling standards of the KLSE at the time, the stock was awesome, commented one article that examined the stock. 

For the investor, his initial investment was worth many times over. The market was hot for Idris. 

During those freewheeling years, Idris was linked to all sorts of business and ventures. From timber concessions in far-flung places like Gabon in Africa, to hotel operations in Myanmar and multi-billion ringgit sewerage concessions at home. 

There was also a steady stream of talks and deals that never came through, but which added to the allure of Idris. 

For the investor, the windfall year was 1994. After that it has been downhill all the way. Even the stock market rally of 1996–97 failed to lift Idris's share price close to its former glory. 

And talk about that dividend payout? It never materialised. 

By 1998, Idris was again in trouble, mired in debt. Another twist in fortune, only this time it was worse. 

In March 1999 the stock was suspended for a year, and the company unveiled a painful restructuring exercise in August 2001. 

The investor, needless to say, has not fared too well either. The stock was traded at five sen apiece on Dec 31, 2002. 

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