KSH director transfers $5.2 m of shares to ...Who got the windfall? Why?

THIS IS A one-of-a-kind story -- but unfortunately we don't know the full story.

Let's start with an announcement which was submitted to the SGX website on Aug 28 by KSH Holdings, a construction-cum-property developer.

KSH said Lim Kee Seng, who is its executive director, project director and procurement director -- as well as one of its founders -- had disposed of 9,467,574 shares of KSH.

No, the 62-year-old didn't sell the shares since the announcement said he received nothing.

LKS_transfer10.14

The change of equity interest took place on 22 Aug 2014 and the 9,467,574 shares then had a market value of S$5.2 million (based on the closing stock price of 55 cents which is similar to the current trading level).

In KSH's routine-looking announcement, the reason for the transfer was briefly given as "pursuant to court order" -- which is a most non-routine reason.

So, there was a court case and the judge directed Lim Kee Seng to transfer the shares to certain people. However, the recipient(s) was/were not named in KSH's announcement.

The company is not required to do so anyway, and this looks to be a case involving Lim Kee Seng in his personal capacity.

Despite the setback, he still owns 49,627,171 shares, a 11.98% stake worth about S$27.2 million.

(KSH, by the way, reported record net profit of $44.5 million in FY2014. It has done very well since its IPO in 2007. Prior to that, in FY2006, its net profit was just S$5.7 million. See FY2014 business performance presentation slides here.)

So what was the court case about?

Anyone who Googles "Lim Kee Seng, court" will find two pdf documents which have the court schedule details of a case of Lim Kee Seng vs Chua Siak Neng and another person.

a. On 25 August 2014, the case was heard before Justice Vinodh Coomaraswamy.
b. On 13 March 2014, the parties made oral submissions before Justice Coomaraswamy.

confused_150 Those are the facts.

Now, we enter the realm of conjecture. Could the transfer of shares be to repay a debt? That's unlikely since a debt is more commonly settled in cash.

Especially in the case of someone with ample financial means like Lim Kee Seng, he could have sold some shares to raise cash to settle a debt.

Muddling the picture, however, is the fact that the judge also directed Lim Kee Seng to fork out cash amounting to about S$250,000 each to Chua Siak Neng and the other person (Goh Kia Hua) on top of the share transfer in equal portions of 4,733,787 shares to the two men.

The cash payout is, when viewed in perspective, a relatively insignificant 10% of the value of the shares.

Thus we should view the transfer of shares as the main action. The transfer of shares could have to do with a right of ownership of the company by the recipients. Here, we come to a huge mental challenge: What could this have to do with the case?

Or maybe the share transfer is a form of a gift. But Lim Kee Seng could not have gifted the shares since the share transfer and cash payout were directed by the court and there was a contested case involving lawyers from both sides.

Let's move on to the question of: Who are Chua Siak Neng and Goh Kia Hua?

A Google search gave no clue.

If they are not cited in any publication, are they common folks then? If so, have the shares worth S$2.6 million and cash payout of about S$250,000 to each of them dramatically improved their lot in life?

We knocked on a few doors for some answers but .... didn't get the story. If you know, feel free to tell us.

Recent story: KSH: Professor Emerges As Substantial Shareholder With $11.3 M Stake

Counter Name	Last	Change
AEM Holdings	2.340	-0.020
Best World	2.460	-0.010
Boustead Singapore	0.960	-0.005
Broadway Ind	0.133	0.004
China Aviation Oil (S)	0.925	0.005
China Sunsine	0.415	-
ComfortDelGro	1.480	-0.020
Delfi Limited	0.895	-0.010
Food Empire	1.260	-0.010
Fortress Minerals	0.305	-0.005
Geo Energy Res	0.310	-
Hong Leong Finance	2.500	0.010
Hongkong Land (USD)	3.120	0.050
InnoTek	0.520	-0.005
ISDN Holdings	0.310	-
ISOTeam	0.043	0.002
IX Biopharma	0.041	-0.002
KSH Holdings	0.250	-
Leader Env	0.051	-
Ley Choon	0.045	-0.001
Marco Polo Marine	0.067	0.001
Mermaid Maritime	0.140	-0.001
Nordic Group	0.310	-0.030
Oxley Holdings	0.089	-
REX International	0.136	-0.001
Riverstone	0.815	-0.005
Southern Alliance Mining	0.430	-0.015
Straco Corp.	0.510	0.010
Sunpower Group	0.205	-0.005
The Trendlines	0.067	-0.002
Totm Technologies	0.022	-
Uni-Asia Group	0.825	-
Wilmar Intl	3.500	0.020
Yangzijiang Shipbldg	1.750	-0.030

Counter Name

Last

Change

AEM Holdings

2.340

-0.020

Best World

2.460

-0.010

Boustead Singapore

0.960

-0.005

Broadway Ind

0.133

0.004

China Aviation Oil (S)

0.925

0.005

China Sunsine

0.415

ComfortDelGro

1.480

-0.020

Delfi Limited

0.895

-0.010

Food Empire

1.260

-0.010

Fortress Minerals

0.305

-0.005

Geo Energy Res

0.310

Hong Leong Finance

2.500

0.010

Hongkong Land (USD)

3.120

0.050

InnoTek

0.520

-0.005

ISDN Holdings

0.310

ISOTeam

0.043

0.002

IX Biopharma

0.041

-0.002

KSH Holdings

0.250

Leader Env

0.051

Ley Choon

0.045

-0.001

Marco Polo Marine

0.067

0.001

Mermaid Maritime

0.140

-0.001

Nordic Group

0.310

-0.030

Oxley Holdings

0.089

REX International

0.136

-0.001

Riverstone

0.815

-0.005

Southern Alliance Mining

0.430

-0.015

Straco Corp.

0.510

0.010

Sunpower Group

0.205

-0.005

The Trendlines

0.067

-0.002

Totm Technologies

0.022

Uni-Asia Group

0.825

Wilmar Intl

3.500

0.020

Yangzijiang Shipbldg

1.750

-0.030

Comments

+1 #3 busybody 2014-10-18 16:23

according to google search for chua siak neng, 2 clues,
1) an old ST obituary listing the name as the son of a dead man.
2) a institute of engineers pdf file listing the name as accredited site supervisor(resi dent technical officer)

+1 #2 Hershel 2014-10-14 05:59

Lim Kee Seng should not have a problem in recouping his 'loss' as KSH Holdings shares can easily climb 10.5 cents (ie, from 55 cents to 65.5 cents).

+1 #1 Shiao Chung Chian 2014-10-12 17:55

Good work!

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KSH director transfers $5.2 m of shares to ...Who got the windfall? Why?

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