Malaysian US-listed MOL shares tumble on Vietnam accounting glitch

  • Business
  • Wednesday, 03 Dec 2014

(From left) MOL Global Pte Ltd Ganesh Kumar Bangah. MOL AccessPortal Sdn Bhd, a subsidiary of MOL Global, signed a joint venture agreement with Soft Space to set up a JV company MOLCube Sdn Bhd, a mobile payment acquiring company focused on enabling small and medium-sized businesses to accept credit and debit car payments through a mobile device the former designed.

SINGAPORE: Shares in MOL Global Inc, the first Malaysian company to list in the United States, fell more than 60% on Monday after the online payments company reported accounting errors at its Vietnam unit and a 61.5% fall in net profit.

The company, majority owned by billionaire Tan Sri Vincent Tan and the Sultan of Johor, is now trading 80% below the price it listed at on Oct 10. It is also facing two class action lawsuits from investors who said they had been misled by its listing prospectus.

MOL said the Vietnam unit initially overstated revenue and direct costs slightly. The error, though, would add to investors’ worries about the company after the departure of chief financial officer Allan Wong last week and a delay to its results announcement.

“It’s a perfect storm that resulted in a delay in our earnings result,” chief executive Ganesh Kumar Bangah (pic) said on an analyst conference call.

“We hope we get up and are able to basically continue to deliver on the promises we have set forth in our prospectus and to our investors.” MOL’s shares were halted on Nov 24 after falling more than 50% when the company said Wong was leaving, a departure the company stressed was for personal reasons.

The eventual release of its results on Monday offered little respite to investors, showing that the profit attributable to shareholders fell 61.5% to RM3mil in the three months ended Sept 30.

The company blamed the fall on the “rapid” shift in gaming habits of consumers who were now playing more games on their smartphones rather than online.

“This decrease was further compounded by technical delays in introducing and monetising new mobile games on the company’s platform,” MOL said.

The company, also known as Money Online, is one of the largest e-payment enablers for online goods and gaming in South-East Asia by payment volume.

Deutsche Bank AG, which helped MOL to go public, suspended its research coverage on the company last week, citing the delay in reporting third-quarter results and the departure of the CFO. Its analysts have not said anything further since the results release. – Reuters

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