Pursue the right culprit on the Protasco fiasco

A posting from a blog in our bloglist, Corporate Governance in Malaysia recently [read here] caught this blog's attention to the Protasco boardroom tussle.

The blog raised the issue on the transparency of the dispute. The Edge, KiniBiz and The Star are actively writing on the mud-slinging between the parties linked to CEO Dato Chong Ket Pen and parties of Tey Por Yee and Ooi Kock Aun.

Details are being revealed and some information have yet to confirmed. By the look of things, the Tey and Ooi side of the story is not heard much.

Anyway why the revelation by Dato Chong now and not then? The blog had raised the issue way back in 2013 to question on the company's ability to pursue the oil rights to develop and produce the  field in Indonesia [read here].

Dato Chong alleged that the parties of Tey and Ooi have cheated and swindled some money. In turn, Tey and Ooi claimed to have done money trail that lead to Dato Chong taking money too. However, this usual dispute in Malaysian corporate scene has taken a new precedent never happened before.

There will be two EGMs within the span of two days on November 26 and 28th to sack each other off as Directors. It is fodder for speculative play on the company's shares for those privy to the outcome.

Bigdog has taken a keen interest from the angle of the impartiality of the Chairman, Tan Sri Hadenan Abdul Jalil. In his posting late last night, he highlighted that Hadenan sits on the Board of Directors of the prestigious Maybank and is a Chairman on the Advisory Committee of MACC [read here].

One party, believed to be Ooi have made a MACC report against Dato Chong. Hadenan is seen as siding with management. Isn't it interesting?

More interesting is someone left a link on Bigdog's blog to a newly established blog, Right To Be Heard. It could be anybody since it hardly made much comment.

According to Dato Chong's version, sources said Tey and Oi came to him to invest in Protasco. They introduced him to an oil deal in which he do not know much details. Now two years later, he said they had cheated him and the oil project is a scam. 

Naturally, there are lawsuits and throwing the two out is an immediate step.

The link in Bigdog's blog was linked to copies of Sales and Purchase Agreements of the oil and gas deal and Shareholders Agreement dated November 2012. In all the agreements, Dato Chong's signatures can be presumably seen. 

Unless it was forged and police reports have been made, how could he claim he do not know much? Don't tell us that a public listed company did not do a due dilligence and hire experts to verify? That is a dodgy claim, isn't it? 

From calls made to several stockbroker friends, Tey and Ooi could likely be approached to buy Protasco shares from a major shareholders whose getting out in total from the company and giving the stewardship to Dato Chong. 

It was known then that the offer to Dato Chong to arrange a buyer and take control of the company was not forever. It may have ended somewhere near the end of 2012.  

One aspect of the story that does not make sense is for Tey and Ooi to spend more than RM90 million to buy a minority stake in a company when they have strike black gold in Indonesia and should have used the money to undertake the production. 

The Shareholders Agreement seemed possible. It is logical to have Protasco buy over the rights from the Indonesian to pursue the business and the two buys the shares to come on board. 

Presumably the Sales and Purchase Agreement of the oil right comes with a Board of Directors' approval and an EGM to undertake such a major investment. Many PLCs as far back as the 80s have terlungkup because of oil and gas exploration. 

Dato Chong would not have made the decision on his own. If there is none, Dato Chong deserve to terlungkup. All the razzmatazz from his side on Tey and Ooi could be to cover-up his tracks by removing them from the Board and cancel the whole deal. 

It could even be a ploy to have the offered shares parked to some group till he could find another friendly group or he raised some money to buy it. Tey and Ooi's shares can be dealt later. Wonder whether Bursa or SC can see the suspicious going ons? 

Although we are not quite sure yet, we are suspicious. It will be something interesting to pursue than pre-PWTC commentaries on UMNO.

The issue of who cheat and swindle money will be for the police to pursue but with a complex corporate deal like this, will the police be able to understand the sophisticated financial transaction and fine legal intricacies?

They could just take the easy low hanging fruits to charge one party with a misdeamenour but left out the bigger trunk of an offense. Easy to make a case or close it up.

It will be sad should the real big culprit get way free. This is about honesty and integrity. The public bought shares on expectations of return on an oil strike. It will not be fair if it turns out to be a mere ploy or con job.