Uncles Tans and Aunties Maggies that Never Learn

- related to F8, P1 and P7 ACCA students

























From Left to Right:
Pic 1: Uncle, got burned?
Pic 2: Perhaps I should listen to my ACCA son studying F8 on avoiding poor Corporate Governance firm?
Pic 3: Do you board a plane after knowing the pilots are negligent? What about Executives on Board?


In 2008, I highlighted in F8 classes the working tools of corporate governance involving External Auditors. (Please visit earlier blogs below). OilCorp executive directors were adamant on their accounting treatment for valuation of asset upgrades involvingi RM20 million in which auditor Baker Tilly disputed.

As shareholders, one will be wise to heed the 'check and balance' call from External Auditors. Surprisingly, Oilcorp berhad's shareholders were 'upset' with External Auditors for causing the fracas and resulting in shares sell down. You know what- shareholders in AGM voted to replace the External Auditors!! Whose duty it is to prepare Financial Statements? Why are auditors punished for highligting to shareholders on Executive Directors' negligence pertaining to accounts preparation?

Well, its proven that the highlight Corporate Governance in at work that the Executives have too much opportunisim and self interest resulting in poor execution of strategy.

Today its dying financially. Declared as PN17 meaning insolvent. Do you know what is the surprising shareholders reaction? Punters, investors mainly uncles and aunties are 'speculating' the stock. The company is at risk of defaulting payments to creditors. How much do you think a shareholder will get if it winds up? Zilch! Zero! Thus if its now at 3sen per share, its way too expensive to buy. Sighh... guess our investors never learn. Uncle Tans and Auntie Maggies that Never Learn the risks of investing in poorly governed company.

Read the article for your F8, P1 and P7 enlightenment.

Regards


News : Oilcorp suspended from Oct 12, faces delisting

PETALING JAYA: Trading in Oilcorp Bhd shares will be suspended with effect from Oct 12 and the securities of the company risk being delisted from the local bourse on Oct 14 unless an appeal is submitted to Bursa Malaysia within the stipulated timeframe.

The move comes after the PN17 (Practice Note 17) company failed to submit its regularisation plan to the Securities Commission or Bursa within the prescribed deadline.

According to a Bursa statement, financially-troubled Oilcorp will be given up to Oct 11 to file its appeal pertaining to the delisting of its shares. Any appeal submitted after that date will not be considered.

In the event Oilcorp submits its appeal within the timeframe, the removal of the its securities from the official list of Bursa on Oct 14 shall be deferred pending the exchange’s decision.

On the other hand, should Oilcorp be delisted, it would continue to exist as an unlisted entity.

The company would still able to continue its operations and business, proceed with its corporate restructuring and its shareholders can still be rewarded by its performance.

Oilcorp was supposed to submit regularisation plans to the regulators by Sept 22, but it had early last month requested for an extension of time until March 22, 2011, claiming that it was still in the midst of discussing and negotiating with its creditors.

Oilcorp was classified as a PN17 company last September because it failed to make an overdue interest payment amounting to RM1.6mil.

In addition, the company also could not provide the exchange with a solvency declaration.

Source:
The Star, 2010, http://biz.thestar.com.my/news/story.asp?file=/2010/10/5/business/7160219&sec=business, October 12.

Blog references:
http://marcusong88.blogspot.com/2008/08/auditors-appointment-professional.html
http://marcusong88.blogspot.com/2010/02/oilcorp-corporate-governance-works.html