MyCC penalty casts shadow over Leong Hup

TA Research said LHI’s financial standing was expected to see no significant impact until its appeal result with the CAT is disclosed.

PETALING JAYA: Leong Hup International Bhd’s (LHI) pro forma net gearing ratio is expected to deteriorate to 0.96 times from 0.7 times, assuming the group fully utilises its cash reserves for the penalty settlement imposed on it by the Malaysia Competition Commission (MyCC).

Last week, MyCC issued cumulative fines of RM415.5mil on five feed millers, namely, LHI’s wholly-owned subsidiary, Leong Hup Feedmill Malaysia Sdn Bhd (LFM), Malayan Flour Mills Bhd’s partially-owned Dindings Poultry Development Centre Sdn Bhd, PPB Group Bhd’s 80%-owned FFM Bhd, Gold Coin Feedmills (M) Sdn Bhd, and PK Agro-Industrial Products (M) Sdn Bhd for fixing the price of chicken feed.