28 February 2023, Kuala Lumpur Malaysia, RAPID SYNERGY BHD KLSE: RAPID (7765) Executive Director YU KUAN CHON and his brother YU KUAN HUAT have been accused of fraudulent misrepresentation in the company’s 2021 Annual Report. They allegedly failed to report related parties to avoid reprimands from the Securities Commission Malaysia. The brothers are accused of deceiving shareholders with material fraudulent misrepresentation, which is a serious allegation. The Securities Commission Malaysia has regulations in place to protect minority shareholders from abuses by controlling shareholders.
YU KUAN HUAT and his inner circle known as the YU Syndicate were recently fined for failing to undertake a mandatory takeover offer on Rapid Synergy Berhad. According to regulations, the group of declared YU Syndicate members cannot collectively exceed 33% of the outstanding shares of Rapid Synergy Bhd without making an offer to buy from all shareholders. The lack of clarity surrounding how CHAN WENG FUI managed to purchase RM hundreds of millions in shares of Rapid Synergy and YNH Property raises questions about potential impropriety.
The 2021 Annual Report of Rapid Synergy reported that YU KUAN CHON and CHAN WENG FUI collectively own 39.1597% of the company, which is well above the 33% threshold. However, this does not include other Related Party Shareholders who were reprimanded. CHAN WENG FUI is listed as YNH Property’s main investor relations contact and is a direct employee and “a person connected” directly to the YU brothers. Media outlets have described CHAN WENG FUI as a “close associate” of YU KUAN CHON and his right-hand man, trusted proxy, and general problem solver.
According to the latest disclosures from Rapid Synergy, the 33% or more controlling ownership threshold was breached and remains breached for several years, even during the investigation by the Security Commission Malaysia. It is clear that Rapid Synergy Directors knew the CHAN WENG FUI was an employee of YNH and a person connected, but it is unclear how his ownership was and continues to be overlooked by Security Commission investigators.
The stock price of Rapid Synergy Berhad has a PE ratio of 578 and has been much higher in the past, an astronomical number that is unheard of for a company whose financials show no justification or hope of future value. It is believed that the stock price is being manipulated, and access to the public trading records of the company would likely be a story of its own.
Rapid Synergy Chairman YU KUAN CHON and YU KUAN HUAT’s alleged fraudulent misrepresentation is a serious matter that could result in significant penalties. Companies and their executives must comply with regulations set by regulatory bodies to ensure that all shareholders are treated fairly and equally. The Securities Commission Malaysia is responsible for protecting investors and ensuring fair trading practices in the Malaysian capital market.
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