By DASHVEENJIT KAUR / Graphic By TMR
YFG Bhd and Lion Diversified Bhd shares plunged almost 100% ahead of its delisting from the Main Market of Bursa Malaysia on March 26, 2018.
Both companies had requested for more time to submit its regularisation plan, which was rejected by Bursa Securities Malaysia Bhd.
The announcement of the rejection propelled both stocks downwards, with YFG dipping almost 91% and Lion Diversified 80%.
Construction firm YFG currently trades at 0.5 sen, 91% below its trading price of six sen a year ago.
High-grade steel maker Lion Diversified, meanwhile, fell 80% from five sen, to close at one sen yesterday with 10 mil- lion shares exchanging hands valuing the company at only RM118,970.
So far this year, Lion Diversified has returned a negative 71%, while YFG a negative 83% Both are classified as Practice Note 17 (PN17) companies due to huge defaults in payments.
YFG fell into the category on Sept 22, 2015, while Lion Diversified in August 2016.
Under the directive from the Securities Commission Malaysia, YFG reissued its audited financial statements for the financial year ended June 30, 2014 (FY14), which revealed its shareholders’ equity was less than 50% of the issued and paid-up capital of the company.
A quick check on Bursa Malaysia showed that as at June 30, 2014, YFG’s issued and paid-up capital totalled to RM54.47 million, whereas its shareholders’ equity was only RM24.9 million, falling short of the 50% threshold.
This was prompted by YFG’s accumulated losses of RM38.7 million, which led the reserves to fall into a deficit of RM29.57 million.
The reserves was at a deficit of RM16.01 million for the FY13.
Lion Diversified has also been suffering losses for several years given the rampant importation of steel products into Malaysia at dumping prices. Lion Diversified was given multiple extension of due date to submit a regularisation plan following its PN17 status.
On March 1, 2018, YFG and Lion Diversified appealed to extend the regularisation plan submission to Oct 31 and
Aug 31, 2018, respectively. Both firms admitted that they have “failed to regularise their condition” in accordance with the Main Market listing requirements.
In two separate exchange filings, the companies noted that trading in Lion Diversified and YFG securities will be suspended from March 22, unless an appeal against the delisting is submitted to Bursa Securities by March 21, following which the securities will be delisted on March 26.
The companies will continue to exist as unlisted entities following the delisting.