Bursa Malaysia Main Market listed company Industronics Berhad (“Industronics” or “Company” or “Group”) has entered into a non-binding Letter of Intent (“LOI”) with Bluemount Financial Group Limited (“BLUEMOUNT”) on the Company’s intention to purchase 10% of shares in Bluemont for RM12.5 million.

Bluemount is a renowned stockbroking, asset management and credit firm based in Hong Kong that is valued at HKD250 million. Bluemount is well funded with abundant capital, familiar with the operation of markets and has rigorous internal control systems, which have led to a profit of HKD10 million and HKD20 million in 2020 and 2021, respectively, despite the COVID-19 pandemic disruption.

Industronics Berhad Executive Director Datuk Chu Boon Tiong, said, “We are excited with this corporate exercise. Bluemont has a proven track record in Hong Kong in the financial services business. It is an exciting journey ahead for us as this acquisition would help us tap on the lucrative financial services business in Hong Kong.”

Bluemount’s wholly-owned securities brokerage arm, Bluemount Securities Ltd (“BSL”) is an exchange participant of the Stock Exchange of Hong Kong Ltd and licensed by the Securities and Futures Commission of Hong Kong (“SFC”) to carry out Type 1 (Dealing in Securities) and Type 4 (Advising on Securities) regulated activities.

Meanwhile, Bluemount’s wholly-owned asset management subsidiary, Bluemount Asset Management Ltd (“BAML”) is licensed by SFC to carry out Type 9 (Asset Management) regulated activity. BAML provides portfolio and investment management services to professional investors.

As for the credit services, it was undertaken by Bluemount Credit Ltd (“BCL”), a wholly-owned services arm of Bluemount.

“Bluemount has a team of professionals and experts who have vast experience in the financial services segment. Whether a business is looking for a listing on the Hong Kong Stock Exchange or if there is a need for credit services, Bluemount has a viable solution for them.

On top of that, there is a strong team that can help with the management of funds in Hong Kong. You can see from the impressive 1,900% growth in one of the funds under its management (Cyber Investment Fund Sp) in Hong Kong,” Datuk Chu said.

Recently, the US Securities and Exchange Commission (“SEC”) adopted amendments to finalise the rules to implement the Holding Foreign Companies Accountable Act (“HFCAA”). The law was passed in 2020 after the Chinese regulators repeatedly denied requests from the Public Company Accounting Oversight Board (“PCAOB”), which was created in 2002, to oversee the audits of public companies, to inspect the audits of Chinese firms that list and trade in the United States.

There are currently around 250 Chinese companies that were listed in the United States, and the push towards delisting for Chinese companies means investors who relied on US-listed China stocks would have to look at an alternative such as the Hong Kong Stock Exchange.

China’s ride-hailing giant, Didi Global, is one such example. Didi announced that it plans to delist from the New York Stock Exchange and seek a new home in Hong Kong as China tightens data control. The steps taken by both US and China to decouple has benefitted Hong Kong as companies and investors both look for alternatives.

“With the acquisition of Bluemounts, this put us in a good position to tap on the Hong Kong market, which is poised to benefit from the potential delisting action of China stocks in US Stock Exchange for failure to meet audit requirements,” Datuk Chu added.

This content is provided by Aegis Communication Sdn Bhd.

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