PETALING JAYA: Country Heights Holdings Bhd (CHHB) seems to be holding up well despite the flood of negative publicity following the revelation yesterday its founder Lee Kim Yew had been declared a bankrupt.
While many investors were expecting CHHB’s share price to tank, it actually rose half-a-sen to 36 sen at 2.30pm.
The shares earlier fell as much as 5.63% or two sen to 33.5 sen during the morning trade, before recovering all of its losses just after the lunch break.
The property development and investment group also moved to allay investors’ concerns over the matter. In a statement today, CHHB assured that the recent “personal incident of one of their shareholders” would not impact the company’s financial performance or operations. The company did not name Lee in its statement.
“We appreciate the contributions of all our shareholders, but we want to emphasise that their personal incident is a confidential matter and will not affect CHHB’s operations,” said managing director Mircle Yap.
“We have a competent management team, and a strong corporate governance structure in place to ensure that our business operations continue without interruption,” he added.
He said the company remains committed to its growth strategy and believes it will create long term value for its investors.
“Investors can be confident that CHHB’s financial performance and outlook are based on their strong business fundamentals, including a diversified real estate portfolio, strategic investments, and a proven track record of creating value for shareholders,” he said.
The release of the company’s statement appears to have been well received as its share price jumped 12.68% or 4.5 sen to close at 40 sen, valuing the company at RM119.2 million.
Checks by FMT on the e-Insolvensi website yesterday found that Lee was declared bankrupt on Jan 26.
On Feb 3, CHHB announced the 68-year-old’s resignation as the group’s executive chairman, saying it was “to cater for change management for the transformation of the group.”
Lee, who controls 57.64% in Country Heights, said he had stepped down from all company directorships since Jan 26.
A captain going down with his ship?
Once a high-flying corporate bigwig, Lee is best known for developing the Mines Resort City in Seri Kembangan, Selangor.
Other projects include MSC Cyberjaya, Palace of the Golden Horses, and Mines International Exhibition & Convention Centre, all built during the tenure of then prime minister Dr Mahathir Mohamad.
Lee campaigned for Mahathir in the Johor state elections last year and urged the Chinese community to vote for the latter’s party.
In 2017, the Inland Revenue Board (IRB) seized RM120 million of his fixed deposits after Country Height’s subsidiary was slapped with additional tax assessments amounting to RM22.5 million. The IRB also initiated a winding up petition against the subsidiary, Country Heights Sdn Bhd.
The company subsequently announced in August that year that the tax liabilities were settled by Lee as the group’s major shareholder, and that the IRB petition had been withdrawn.
A quick look under the hood reveals that CHHB’s finances had been deteriorating for some time. The company has posted three consecutive quarters of net losses. The latest being a RM68.29 million net loss in its fourth quarter for the financial year ended Dec 31, 2022.
For the whole year, it racked up an RM81.63 million net loss from RM2.64 million net profit a year ago. The company has been in the red three times in the last four years.
CHHB has also announced an array of plans to revive the group in recent years, ranging from blockchain to healthcare and even Islamic finance – but most have not materialised.
Far from insolvency
In a press conference today, Lee reiterated that he is not bankrupt, saying he is “far away from insolvency”.
“I have accumulated a lot of tangible and intangible assets. I am solidly solvent,” he stressed.
Lee said one of his former officers in a now wound-up US-based company, Club Excellence Inc, had previously obtained a RM3 million judgment in his favour in the US and used it in Malaysia to declare him bankrupt.
He claimed that the individual, a US citizen named Patrick Healy, later “felt it was a mistake” and agreed to negotiate with him for a settlement and to set aside the court order.
Lee added that negotiations were “ongoing”.