The share price of Harvest Court Industries Bhd plunged 30 percent this morning, after Bursa Malaysia yesterday declared it as 'designated securities' where buyers are required to pay upfront.

This came despite the star shareholder - the prime minister’s second son Mohd Nazifuddin Najib - denying that the company was getting preferential treatment from the government.

The shares and warrants tumbled to RM1.50 and RM1.27 respectively when the market resumed at 9am, dropping nearly one-third from yesterday’s RM2.13 and RM1.81.

Both shares and warrants closed today at RM1.49 and RM1.27 respectively.

NONE In interviews published today by two Chinese dailies Sin Chew Daily and China Press , Nazifuddin ( right ) insisted that the government was not involved in the company’s projects, which have a total value of RM1.2 billion.

These were awarded to Harvest Court by Sagajuta (Sabah) Sdn Bhd, of which Nazifuddin is chairperson and which built the 1Borneo mall in Kota Kinabalu.

On speculation over Harvest's share price and rumours being spread about him, Nazifuddin said he was "deeply troubled", but that there was little he could do about the situation.

The company's share price had seen a surge of 2,563 percent from the 8sen registered on Oct 13.

Yesterday Harvest's stock and warrant were declared 'designated securities' and suspended for the day by Bursa Malaysia.

'Designated securities' means that the trading of the counter will require investors to pay cash upfront on purchase, and a free balance of securities before selling, a move aimed at curbing excessive speculative activity.

The timber company, which had struggled with weak financial performance over the last few years, rose to become the top performer in Bursa Malaysia soon after it appointed Nazifuddin and business partner Raymond Chan as its directors on Oct 28.

'Purchase my personal investment'

In the interviews together with Chan, Nazifuddin, 28, said he does not deserve the criticism because the purchase of Harvest's share was his personal investment, had no conflict of interest and was in accordance with regulations.

Children of the prime minister, he said, also have the right to make purchases and invest.

Chan, a major shareholder of Harvest, defended his business partner, arguing that it is not necessary for the prime minister's children to sell pisang goreng (fried bananas) to prove the father's integrity.

"He is not like other 'sleeping' chairpersons. He is indeed a talent. To say that he relies on relationships to climb up is unfair," said Chan.

Nazifuddin held nearly two percent of Harvest's share, which he claimed was bought in the open market in his personal capacity, with price ranging from 85 sen to RM1.50, contrary to talk accusing him of absorbing the stock at lower price.

NONE "I was once a wage earner too, and I started in small business. I did not hear such talk (that I enjoy privilege because I'm the prime minister's son) when the business was small," he said, adding that his company would continue to focus on private projects.

Asked whether Harvest would eye government projects or land, the Chan and Nazifuddin did not deny, but said "nobody knows what will happen in the future".

Chan pointed out that the heated market response to Harvest was not unusual as it is a company with good fundamentals.

He also ruled out the possibility that they would perform a reverse takeover to acquire the listed company.

The duo have no intention of interfering the daily management of Harvest, he added.

Asked whether it was appropriate for Sagajuta to give development projects worth more than a billion ringgit to Harvest, which has no track record in the industry, Chan admitted the shortcomings, but asserted that management experience was more important than operations experience, adding that Sagajuta would provide relevant personnel to Harvest.