Penang tunnel developer Zenith eyes obscure firm: Report

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Penang tunnel consortium member Zenith Construction Sdn Bhd could be exploring a joint-venture opportunity with an obscure firm, ETI Tech Corp Bhd, reports a business weekly.

“We have not ascertained the form the venture will take, but it is highly unlikely to be a reverse takeover,” The Edge quotes Zenith director Zarul Ahmad Zulkifli as saying.

ETI Tech Corp is a loss-making company under PN1/2001 status (Practice Note 1 of 2001, Guidance Note 5) that is mainly involved in investment holdings and the provision of management services and intends. Following restructuring, the group said it intends to focus on the “design and development of green and renewable energy”.

Practice Note 1/2001 is issued to highlight the obligation of a listed issuer to make immediate announcements if there is a default of interest and/or principal payments in respect of certain loans, including a credit facility which is 5 per cent or more of the net assets of the firm.

Bursa Malaysia Securities Berhad had publicly reprimanded the firm for breaching paragraph 9.03(1) & 9.04(1) of the Bursa Securities Main Market Listing Requirements read together with paragraph 2.1(d) of Practice Note
(PN1) for failing to make an immediate announcement in respect of the default in payment of credit facilities by its major subsidiary, ETI Tech (M) Sdn. Bhd.

ETI Tech Corp’s 2013 Annual Report noted the group had “defaulted on the repayment on bank borrowings and hire purchase payables amounting to RM27.0 million as at the reporting date. The default in repayment of borrowings indicated the existence of a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern. Furthermore, the bank borrowings were pledged by the leasehold land, building and the fixed deposits of the Group coupled with the corporate guarantee provided by the Company in which the Group and the Company may be unable to realise these assets and discharge the liabilities in the normal course of business. The ability of the Group and the Company to continue as going concern is dependent on the bankers and creditors for appropriate financial support to enable it to meet its obligations as and when they fall due”.

For the year ended 28 February 2014, the company recorded a loss of RM9.7m on the back of turnover of RM5.0m.

Now, why would a tunnel developer be interested in such a company?

On 16 May, Zarul’s son Zarul Ikhwan Zarul Ahmad, 30, was appointed as executive director of ETI Corp. The stock price jumped.

ETI Tech Corp Berhad share price and trading volume

ETI Tech Corp describes Zarul Ikhwan’s background as follows:

Zarul Ikhwan studied at Multimedia University with a Foundation of Mechanical Engineering and music courses at International College of Music and University Technology Mara.

Currently, he is a director of Virgo Inspirasi Sdn Bhd (VISB) and a non-executive director of Beringin Waja Sdn Bhd (BWSB).

Prior joining to VISB, he worked as a Front Office/Fleet Assistant with NAZA Ventures Sdn Bhd. He was assigned to oversee NAZA Venture’s limousine at Sheraton Imperial Hotel, Kuala Lumpur. Today in VISB, his roles include conducting interviews and selecting appropriate chauffeurs/drivers, managing time and formulating manpower, organizing annual budgets and assist process required and reports of each operation and overall cost.

Currently under BWSB, he handles few projects such as the construction of the new Malaysian Embassy in Moscow, Russia under the Consortium Bina Puri Beringin Waja Sdn Bhd, and some upcoming projects in the State of Penang.

On 23 May, the firm announced its intention to diversify its business activities to include “property development, construction and property investment”.

Just like the tunnel developer, ETI Tech now has its own China connections. On 31 May, ETI Tech entered into a MOU with Castel Engineering Ltd. Castel, founded in 1997, is a member of China Aerospace Science and Technology Corporation, which has seven R & D centres, six listed firms and 135,000 employees in China and Hong Kong.

Castel is involved in “renewable energy, smart city infrastructures, mobility and transportation tracking and industrial and systems engineering. Its products include wind turbines, photovoltaic, LED, solar, energy efficiency, satellite communications, intelligent transportation systems, government and enterprise application solutions”.

The MOU is aimed at forming “a collaboration company in Malaysia to provide top-class renewable and smart city solutions to governmental and commercial organisations”.

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cwf

Obscure firm = obscure report= obscure comments.

Stylo Logan

There are now five developers from China actively in property development in Johor Iskandar zone. More Chinese nationals to make Johor their second home? Surely the locals … will be unhappy when they could not afford those expensive condominiums!

Don Anamalai

The China’s Guangzhou R&F Development (paid Johor Sultan RM4.5 billion for six plots in south Johor.at RM890 psf for the Tanjung Puteri project) will build two towers on the JB’s side of causeway, and mixed development of condominiums along reclaimed land facing Singapore’s CIQ.
Check up the pictures here to see for yourself:
http://rfmalaysia.com/en/gallery/tanjung-puteri/

GuangZhou R&F set up Johor subsidiary R&F Development Sdn Bhd with sharholders like Zatizam Zahari and Zalifah Kadis (they are also shareholders of VC Mahawangsa Sdn Bhd, which is keen to take over the controversial cattle-farming firm NFCorp).
http://realestatesmalaysia.blogspot.com/2013/12/land-sale-by-johor-sultan-sets-record.html

Priyanka

so tunglang if go south will be pissed off by such mega developments.

the way things move, best for tunglang to “chope” an accomodation at Belum Forest before it becomes expensive due to rapid transformation of rural to semi-urban landscape.

Adnan

The Johor Housing and Real Property Board Bill 2014 involving the jurisdiction of the sultan, has put Johor Pakatan Rakyat in a dilemma on how to raise (the issue) at the state assembly sitting.

Aidil

Having sold land to developers, (certain parties) will surely want to have a say in property matters in Johor to safeguard investment?

Joseph phang

Impressive!

Don Anamalai

Umno conservative ring-wing is not comfortable with the proposed Johor Housing and Real Property Board Bill 2014 as the amendment will mean less opportunity for them to tap into the goldmine of Iskandar? They are now showing their displeasure via mouthpiece Utusan.

Given the past mismanagement of Johor Corp, that ‘key stakeholder’ will definitely want to protect his investment with foreign developers (notably China & Singapore), and no leakage via ‘Alibaba’ practices? The foreign investors from China and Singapore are very influential now that the middle-east investors have pulled out of Iskandar development.

Stephen

If you read the column by Roy on a The Sun today, you will notice that Iskandar development is all about building properties but the real wages of its people hardly improved in the last six years. Johoreans are still earning good dollars working in Singapore, so nobody is complaining like your average Penangite readers, at least for now. ….I wonder what would the poor Malays would think when tanah melayu are sold to Chinese who built condominiums that they could not afford? Perhaps Johor is emulating Dubai in property development? With big money now Johor … is spending big… Read more »

Adnan

Malays in Johor are too busy supporting JDT football team that they do not realise their homeland is being gadai to foreigners?

bowen

Investors please be careful, Johor property law can change and not in line with federal laws.

Danny Kua

China also has an offshore natural island close to Taiwan – and are now planning tunnel linking this island to Taiwan while in short term turns this island into a commercial hub pulling in the brains of Taiwanese with better salary and incentives package. i don’t fabricate news. watch this program shown over Astro channel 316 recently. Sorry it’s in mandarin but do watch towards the end of this clip …… http://www.youtube.com/watch?v=P5WB7dW1JEQ&index=24&list=PL18B11A3C78394765 BTW, Penang may set such vision with Business Process Outsourcing (BPO) in collaboration with Spore’s Temasek ? May be Gerakan K got inside info as present PDC Chairman… Read more »

Don Anamalai

Business Process Outsourcing activities at Bayan Lepas and Batu Kawan will surely create high-value jobs for Penangites. I hope to see more collaboration with Singapore to enable more investment and job creation.

Adnan

True. DAP should collaborate more with PAP.
Can attract more investment from Temasik.

charleskiwi

The Umno schmucks must constantly come up with ideas or should I say gigantic idea, in the name of development, to enable them the chances to make money. Do you honestly think these Umno schmucks are concerned the prosperity and the survival of Penang ? Especially when it is administered by the opposition, you will be lucky and blessed if these Umno schmucks are not out to sabotage your every move. Why do you think the Umno samsengs are storming the legislative ? Aside from revealing the truth of who they are, why else can these samsengs come up with… Read more »

OM Saigal

Figure it out yourself…..Like most projects, this Ali Baba collusion of the rich has no transparency. Ali Baba has his (people) to support him! Penang security guards will stand aside to let (some people) harass and bully the brave ones seeking answers…..

Danny Kua

YTL allegedly a crony business but ironically tychoo Francis Yeoh now wants Malaysia to free itself from the constraints of “crony capitalism” and stop racial and religious rhetoric in order to compete on the global stage ???? Alibaba consciousness or conscience ?????

http://hornbillunleashed.wordpress.com/2014/06/04/60056/#more-60056

Aisay man

It’s kinda strange that Zenith is “entangling” with all those ailing PLCs !
First, it was Astral Supreme as feasibility study contractor and now, this ETI !?

Now, Penang people should demandingly ask that Zarul : – “Where is your projects’ feasibility study you promised to release in April 2014 ? “

tunglang

Tunnel vision can see nothing but a bing chui portfolio project to boast about from Komtar Tower of Cosmopolitan Frenzies. I don’t see a strategic point in having one tunnel to sort of defeat BeeEnd punishing antics should the 2 Bridges raise the toll fees. Btw, Line Clear Nasi Kandar is threatened with license issuing by MPPP just b’cos it operates against its back lane by-laws suit for clean alley CATs. Not a sincere way to use the family feud to clean up back lanes of food stalls, some of which are famous drawing tourists 24/7/365. This is a bad… Read more »

Don Anamalai

Line Clear issue is a family dispute over stall ownership. They should have sold the brand name as a franchise and retire for good in India?

Adnan

I prefer the Nasi Royal originated from Alor Setar.

charleskiwi

What is the point of having, if ever, a tunnel built for Penang ? If you don’t have the most essential thing in life and that is water ! You are now threatened by the son of the egregious Mahathir, the MB of Kedah where you are getting your water from and when the weather change becomes so serve that Kedah itself is in need of that. Do you honestly think Kedah will continue to supply you with the water you need when they themselves are sort of it ? As it is typical of Umno schmucks they are demanding… Read more »