Scanwolf Corp Bhd, which was embroiled in a boardroom tussle between April and June, is about to embark on a new chapter, as major shareholders from the two camps seem to work together peacefully, at least for now.
“Everything is back to normal. There is no more boardroom tussle. With the new shareholders coming in, we now have plans to drive the company forward and we will continue to source for more property-related projects to strengthen our property division,” Scanwolf’s management told The Edge Financial Daily in an email.
Scanwolf also plans to launch the second phase of the Taman Harmoni project worth RM13 million in the first quarter of 2016. The project is located in Bidor, which is also easily accessible via the North-South Highway.
“The lower GDV [of the second phase] as compared to the previous phase is mainly due to some low-cost developments to be carried out. Similarly, for the second phase, we are also waiting for the necessary approvals from the relevant authorities,” he said.
The first phase of Taman Harmoni was launched in 2011. With a GDV of RM16 million, the first phase offers a mix of residential and commercial properties. It saw a take-up rate of 70%, and all units are slated to be completed soon.
In the 15-month financial period ended June 30, 2015 (FY15), Scanwolf’s property division achieved sales of RM22.6 million, compared with RM14.9 million in the 12 months ended March 31, 2014 (FY14), said the company’s official.
Scanwolf changed its financial year end from March 31 to June 30 and therefore its financial period for FY15 has 15 months.
In FY15, Scanwolf recorded revenue of RM64.3 million, while loss after taxation widened to RM4.1 million from RM1 million in FY14. The weaker performance was mainly due to the impairment of receivables, which was done on the grounds of a more stringent credit control policy.
“The year 2015 was indeed a challenging year and we expect the same in FY16 (financial year ending June 30, 2016). However, we are still targeting revenue growth and we hope to return to full-year profitability, hoping that our manufacturing division and property division can perform better,” said the company’s official.
According to its annual report 2015, Scanwolf’s manufacturing business and property segment faced stiff competition and various challenges.
“In the property sector, signs of [a] slowdown in this sector emerge when the financial institutions impose more stringent requirements for loan applications for both buyers and developers,” it said.
The company went on to say that its fittings products continued to face competition from manufacturers from China, which had a severe impact on its financial performance.
To recap, Scanwolf was embroiled in a three-way boardroom tussle in the middle of this year, involving the founding board members led by Datuk Loo Bin Keong, the previous board members led by Datuk Ch’ng Kong San, and new board members led by Cedric Wong King Ti.
The founding board members began losing control of the company in August last year after Loo and executive director Datuk Tan Sin Keat sold a 26.54% stake to David Chang Nyen Wee, an associate of Ch’ng.
The Wong camp came into the picture in January this year, after emerging as a substantial shareholder of Scanwolf. But the real tussle supposedly began in the April to June period, when Wong’s camp made two attempts to oust the directors of Scanwolf.
As a result, all directors from Ch’ng’s camp left the company, with Tan remaining as the sole founding member of the board. In July, Teoh Teik Kean, another founding member from Loo’s camp, was reappointed to the board, signaling the end of the three-month boardroom tussle.
It is also worth noting that in April, PKF Covenant Sdn Bhd was hired to conduct an investigative review of Scanwolf’s property development operations. In its preliminary report, eight possible irregularities have been identified in the company as well as its property development subsidiaries.
On Nov 16, PKF Covenant released the full report. In a nutshell, the firm claimed that it did not discover any misfeasance of funds or leakages of profits. However, a few areas of corporate governance, including some undisclosed potential conflicts of interest, should be improved by the management.
Credits: Edge Markets