Tadmax Resources Berhad (Tadmax) wishes to clarify and correct certain misleading statements made by YB Tony Pua under the article ‘Will there be a double bailout of 1MDB and Tadmax’, which appeared in Malaysiakini on June 17, 2015. We owe this as a duty to our shareholders and stakeholders who may also be just as perplexed by the incorrect accusations made against the company.
In particular Tadmax wishes to address the following:
1. That the cabinet was willing to abuse its powers to conduct a ‘double bailout’ including Tadmax Resources Berhad.
2. That the land sold by Tadmax was valued at RM9.93 per sq.ft in August 2011 but was sold for a massive profit of RM21.80 per sq.ft.
3. That Wijaya Baru Global (Tadmax) is the parent company of Kuala Dimensi Sdn Bhd (KDSB), which was the turnkey developer for PKFZ.
4. That Abdul Azim Zabidi is the chairperson of Tadmax.
Tadmax, a public company listed on the Main Market of Bursa Malaysia went through a major shareholding change in December 2011 when then major shareholder Tiong King Sing divested his controlling block.
Since then, there were also changes in the directorships of the company and today, except for Faizal Abdullah, all the other directors are new, with four of the existing nine directors being independent and non-executive and comprise a mix of professionals and businessmen. We also wish to point out that Abdul Azim Zabidi had resigned as chairperson and board member with effect from March 24, 2014 - over a year ago!
As a public listed company, Tadmax has always acted in the best interests of its shareholders. In this regard as part of its restructuring the company decided to dispose off and monetise its non-core assets, including the subject Pulau Indah land. Ivory Merge Sdn Bhd was not the only company negotiating with Tadmax to buy the subject property at that time. There was also no compulsion for Ivory Merge Sdn Bhd to enter into the transaction.
Tadmax was at that time already in discussions with several parties which had indicated interest in the subject property.
We also wish to point out that the entire transaction was done in a transparent manner, in full compliance with the Rules of Bursa Malaysia. The transaction was subject to shareholders approval and a detailed circular was prepared and circulated to shareholders prior to the said shareholders meeting.
Full details of the terms of the transaction and valuation of the property are in the circular and can be viewed by anyone and everyone at the company’s website link to Bursa. We had hoped that YB Tony Pua would have availed himself of the information provided.
It was also quoted by YB Tony Pua that the land was sold to Ivory Merge (a subsidiary of 1MDB) at a massive profit of RM21.80psf. We wish to point out that the land was sold at the price of RM21.80psf and not at a profit of RM21.80psf. As to the price of RM21.80psf we wish to inform that it was supported by a Valuation carried out by an independent valuer, Azmi & Co. (Shah Alam) Sdn Bhd on 25 January 2014.
The valuation was also subjected to the approval of the Valuation Department of the Securities Commission (in compliance with the Compliance Rules of Bursa for sale of assets). The full Valuation Report is appendixed in the circular forwarded to Shareholders for Approval of the Sale in May 2014.
Cost of land was at RM9.93 psf
With regard to the price, the company also takes issue with the inaccurate statement by YB Tony Pua that the land sold by Tadmax was valued at RM9.93 psf in August 2011. The fact is that the cost of the land bought in 2005 was at RM9.93 psf and carried in the books of the company since then at that cost.
While YB Tony Pua had extracted that figure from the Annual Report he may have overlooked the explanation in the company’s audited accounts, appearing under ‘Significant Accounting Policies’. The said property is classified under Current Assets under the category of Inventory with sub-classification as ‘Land and Development Expenditure’ for financial year ended Dec 31, 2012.
Under such category and classification, as required by law under the approved accounting standards (paragraph 9 of the MFRS 102 Inventories), the said Land HAS to be stated AT THE LOWER OF HISTORICAL COST AND NET REALISABLE VALUE.
However, revaluation at regular interval needs to be undertaken in assessing the net realisable value of the Land and in the event the revaluation is below cost/ carrying value, an impairment will need to be made, otherwise NO ADJUSTMENT SHALL BE MADE SHOULD THE REVALUATION IS ABOVE THE CARRYING VALUE.
For this purpose the last valuation was undertaken in August 2011 to ascertain if any impairment in the carrying value of the Land is needed.
It would also be pertinent to note that recent price of land transactions in Pulau Indah have ranged from about RM25-RM66 psf. This is tabulated at Appendix A for your reference.
Finally YB Tony Pua has been quoted as saying that Wijaya Baru Global (since renamed Tadmax) is the parent company of Kuala Dimensi Sdn Bhd (KDSB) which was the turnkey developer of PKFZ.
Tadmax wishes to clarify that this is factually not correct. KDSB has never at any point in time been a subsidiary or associated company of Tadmax. A review of the past Annual Reports of Tadmax or Wijaya Baru Global (as it was then known) would confirm this fact.
YB Tony Pua had raised most of the above issues late last year in Malaysiakini and Tadmax had on Dec 31, 2014 replied accordingly. Tadmax’s reply was published in full by Malaysiakini then. We wonder why the same inaccurate and misleading issues are being raised again without reference to our earlier written reply.
As a public listed company, Tadmax has to be accountable to its shareholders and stakeholders for its actions. It would thus not be prudent for anyone to make accusations against the company without proper research and due care as it could also have an adverse effect on all shareholders and stakeholders.
If anyone requires information to substantiate or otherwise what they are proposing to say especially to the wider Malaysian audiences, the company’s investor relations personnel are more than willing to meet the concerned parties. Having to reply to such adverse comments which are in the most part inaccurate and misleading is not what every public listed company desire to do and also importantly serves no justice to all shareholders.
The Company reserves its legal position in relation to these statements.
We hope that Malaysiakini would avail its spaces for this reply by the Company’s Board.
Thank you.
TADMAX RESOURCES BERHAD
