Friday, August 6, 2010

SC still reviewing affairs of Mudajaya

KUALA LUMPUR: The Securities Commission said it would conclude its review on MUDAJAYA GROUP BHD [] as soon as possible, after the company announced it had engaged with SC to clarify matters.

In an email reply to The Edge Financial Daily on Friday, Aug 6 it said it was still reviewing the affairs of Mudajaya, whose share price had tumbled 20.5% on Thursday and saw RM156 million erased from its market capitalisation.

The selldown on Thursday was sparked by concerns about SC's informal probe into the company, that is believed to be related to its independent power producer (IPP) project in India.

"As part of our review, we have engaged all the relevant parties, including the management of Mudajaya. We aim to conclude our review as soon as possible," said the SC spokesperson.

Before market opened on Friday, Mudajaya announced that it met up with the SC and provided the clarifications needed.

Market fears appeared to have been allayed by Mudajaya's announcement that its board of directors affirmed that the company had conducted its business in a professional manner.

The counter managed to recoup part of the recent losses on Friday, ending the day eight sen higher to RM4 with 17.64 million shares done.

"The board wishes to advise shareholders of the company to exercise caution not to trade in the company's shares based on rumours.

"Currently, the company has no borrowings and has a net cash position of approximately RM223 million. The company's focus remains on delivering and completing all our projects on hand. The board will update the shareholders of the company if and when is necessary," it said.

On Thursday, Mudajaya bought back one million of its shares for RM4.39 million, at prices ranging between RM3.90 and RM4.55. After the purchase, Mudajaya had 2.62 milllion treasury shares. No reasons were provided about the buyback.

Since the informal probe was announced by SC in June 22, the stock has plunged 34.4% from a recent high of RM6.10 to Friday's closing price at RM4.

Prior to the probe, Mudajaya's price rallied following news of a potential change in its substantial shareholding, with speculations that Tanjong plc and MMC CORPORATION BHD []'s unit Malakoff Corp Bhd eyeing a significant stake.

However, both Tanjong plc and MMC Corp had denied the market talk.

Based on its 2009 annual report, Mudajaya's major shareholders include Dataran Sentral (M) Sdn Bhd with a 24.43% stake and Mulpha Infrastructure Holdings Sdn Bhd with 21.45%.

Dataran Sentral's shareholders include managing director Ng Ying Loong and executive director Wee Teck Nam.

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