SC rejects ECM's proposal to transfer dealer licence
ECM Libra Avenue Bhd's proposal to transfer to HLG Capital Bhd's subsidiary HLG Securities Sdn Bhd a dealer licence, originally issued to ECM Libra Securities Sdn Bhd, has failed as such a licence was not transferable.
The dealer licence, inherited from ECM Libra Berhad, became redundant when it merged with Avenue Capital Resources toform a new entity called ECM-Libra Avenue Bhd.
Both ECM-Libra Avenue and HLG Capital have made voluntary disclosure to Bursa Malaysia on the matter.
Chronology
Yesterday, August 15, the companies also said that an appropriate announcement will be made in due course.
Some other significant events had preceded before this latest development:
- August 3, ECM Libra Avenue announced that it had proposed to transfer the dealer licence to HLG Securities for RM5 million.
- The Securities Commission has informed both companies of the decision in a letter dated August 10, 2006
- On the same day, August 10, ECM-Libra Avenue chief operating officer and substantial shareholder David Chua sold his entire stake of 56.26 million shares to a foreign fund management company at 57 sen per share.
- One day later, August 11, ECM Libra Avenue chairman Kalimullah Masheerul Hassan disposed off 16.26 million shares at 65 sen a share to reduce his stake in the company to 40 million shares, or 4.8%.
- Similarly, August 11, Umno Youth deputy head Khairy Jamaluddin also sold his entire stake of 10.2 million shares representing 1.23% of ECM Libra Avenue Bhd at 65 sen a share yesterday. He had bought them at 71 sen a share in December last year.
Comments
Anyone knows where Kali-man got his riches from?
Dammit....how do these people make so much or have so much money!!!!
Here we are jumping from Carrefour to Giant if a bag of rice or cooking oil is RM$1 cheaper...
We are the suckers....ladies and gentleman...the average tax paying man are the suckers. We play by the game, live by the game and we lose.....
Posted by: jigsawpuzzle![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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August 16, 2006 07:49 AM
The significant events show possible insider trading when the shares were sold by the senior management. ECM share is continuing to slip as I type...
Posted by: tigerporc![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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August 16, 2006 09:22 AM
I believe with the merger between ECM and Avenue, the combined entity have two subsidiaries with a dealer's licence each, these being Avenue Securities Sdn Bhd and ECM Libra Securities Sdn Bhd. The SC required one to be surrendered which can be deduced from ECM Libra Avenue's (ECMLA) announcement on August 3:
"The Proposed Assignment represents an opportunity for ECMLS to realise cash for the surrender of its licence upon the completion of the stockbroking business merger with Avenue. The Proposed Assignment is subject to the approval of the Securities Commission."
I am indeed surprised that the lawyers did not know that the licence is not transferable. Maybe it was a grey area with no published guideline on the transferability or otherwise, but one would have thought they would have checked with the SC before the proposal was announced on August 3. If it is indeed a grey area, then the SC is simply saying "thou shalt not be so greedy" and so ECMLA lost the chance to make RM5 million. But it should not have an impact on the earnings of ECMLA since Avenue Securities still has a licence for the group. But with so much negative publicity lately and the lack of clarity on the impact for the ECMLA group in yesterday's announcement will give rise to more confusion and I think the share price might take a hit.
I think the sale of shares by the three people mentioned just one day after the SC notified the company of the rejection but 4-5 days before the company notified the public of same is clearly troubling and I dare say their share sales should be investigated for possible insider trading.
You think this will mean anything to the PAC??
Posted by: birdseye![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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August 16, 2006 10:13 AM
Err..correct me If I am wrong as I do not know how the stock market is in Malaysia....
If an officer wants to sell his/her share...is there a waiting period before the stock is finally sold? (ie. Planned Sale?)
Posted by: jigsawpuzzle![[TypeKey Profile Page]](http://www.jeffooi.com/nav-commenters.gif)
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August 16, 2006 12:37 PM