Harvest voices concern


  • Business
  • Wednesday, 23 Nov 2011

PETALING JAYA: Harvest Court Industries Bhd continues to hog the limelight, with its share price tumbling 30% yesterday and its director, Datuk Raymond Chan, raising concern over Bursa Malaysia's move to designate the company's shares.

Speaking to StarBiz, Chan said he would clear the ambiguity over the letter of intent for RM1.2bil worth of contracts, saying that a letter of award for this would soon be issued.

“Bursa should have in place safety triggers or controlled pricing mechanisms. There has to be some measures to have a cooling-down effect rather than opting to designate a particular stock.

“I would not say Bursa was wrong in designating the stock but let us have better measures and let's explore to make it work, as designating a counter does not help. They could have waited a while more for people to digest the news flow and let the share price find its level before designating it,” Chan said.

His business associate, Nazifuddin Najib, who is also the Prime Minister's son, added: “We see other measures that could have been done prior to the designation. We have also fully collaborated with the exchange and gave them whatever they wanted.”

Both said they were puzzled over the spike in the share price and the subsequent designation of the stock.

However, it was excessive speculation that drove Bursa to act and designate the stock on Nov 16. It was also done after Bursa had issued two “unusual market activity'' (UMA) queries and an “investor alert.''

Harvest shares have gone up more than 10-fold in the past one month and its trading volume has ballooned at an equally fast pace.

The designation of the stock meant that investors have to pay upfront when buying the shares of the company, which is a move that helps weed out speculation. In yesterday's trading, the stock fell 43 sen to 96 sen.

Bursa, in reply to queries from StarBiz, said the exchange employed a range of measures to address regulatory concerns which were based on an escalated approach depending on the severity of the trading concerns such as UMA queries, market alert and designation.

“In the matter of Harvest, prior to the designation of the securities, the exchange had issued two UMA queries to procure more information for investors to make informed decisions, as well as a market alert to warn investors to trade with caution.

“The decision to designate was taken in the interest of ensuring a fair and orderly market, as well as ensuring investor protection,” Bursa said.

Chan added: “We are ourselves concerned over the spike in share price. There is no promise, we are just shareholders and driven by shareholder value. I cannot say why they designated the counter but what I can say is that we have substance. We want to give the contracts out because we have a stake in Harvest. Why give it elsewhere when our own company can do it?”

Harvest managing director Ng Swee Kiat said: “We cannot control what is happening outside but we have done our part and exercised caution. We have replied to the queries from Bursa and what we said is for people to look at the fundamentals of the company. All the speculation is not helping the situation. For us, we just want to move on and concentrate on the core business.”

There is also doubt in the market place over the seriousness of the award of RM1.2bil construction jobs to Harvest as Sagajuta (Sabah) Sdn Bhd only issued a letter of intent instead of an award. Chan and Nazifuddin have a 30% and 10% stake respectively in Sagajuta and they hold a 15.7% and 2.2% stake in Harvest respectively.

“Sagajuta will issue a letter of award for the construction jobs. We want to clear any ambiguity over the letter of intent and formalise it. We will do it this week. All the development projects will stay put with Sagajuta and Harvest will only get the construction jobs,” Chan said. “We are rectifying the situation on our side and I hope that clears the situation.”

He said details on the RM1.2bil contracts would be announced soon.

Harvest does not have any construction expertise and to address that Chan said: “We will assign our (Sagajuta) project team to them so that the construction can go on. We have to also call for an EGM to add a new core business for Harvest and the process will begin soon.”

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