ZKP under receivership. What about other outstanding debts?
As of now, we know that ZKP going under receivership is the result of action taken by CIMB Bank Bhd to recall its loans to the Meda group.Meda Inc Bhd had in 1999 & 2000 borrowed heavily from CIMB Bank. The loan was not secured against any assets but based on the credit standing of the company. (Unbelievable! I wonder who approved the loan to this group?).
However, it is well-known in business circles that many credit lines had been withdrawn by various banks in the last few years. Now Meda Inc Bhd has been unable to even pay the interest on the loan taken from CIMB Bank. I think it could be due to one or all of the following factors:
1. CIMB has lost its patience with Meda Inc Bhd because of frequent missed payments.
2. The reputation of the group has also been in the tong sampah for so long. CIMB can no longer trust Meda Inc Bhd to honour its repayment obligations.
3. Meda Inc Bhd is already struggling under a very huge pile of debts due to its suppliers and creditors who are sueing them relentlessly. Looking at Meda under so much debts, CIMB decided to take action first before others lock up Meda's assets through winding up action.
4. Its Cova projects in Kota Damansara are not selling as well as they claim. There are not enough money coming in to pay for the debt repayments to CIMB. (Remember "A Friend" who wrote to tell us that Meda property sales were mostly scams?)
5. Its other projects are also not doing as well as they claim. For example, the Semantan Avenue Suites project which was completed last year is doing badly.
ZKP Development Sdn Bhd, being wholly owned by Meda Inc Bhd, owns and runs the Summit Shopping & Hotel complex in Bukit Mertajam. According to Meda Inc Bhd accounting, the Bukit Mertajam property is worth RM107million.But whether they can actually get someone to pay RM107million for that property is big question. The complex has been badly maintained and car thefts and robberies there are frequent. This lowers the value of the property. If nobody wants to buy the property, it is worth...RM zero.
The amount outstanding owing by Meda Inc Bhd to CIMB Bank is RM55million. So ZKP is placed under receivership so that its asset, the Summit Shopping & Hotel Complex Bukit Mertajam, can be sold and the money from the sale be used to pay the amount owing to the bank.
Meda Inc Bhd's financial problems are well-known. But the owners have no financial problems. They still live in luxury houses, go for expensive holidays and drive the biggest and latest BMW cars. In fact, they own numerous companies, many houses and many cars. Perhaps, it is more accurate to say that their PLCs are in financial trouble but they personally are rich beyond imagination. Have the owners been manipulating a complex scheme that enrich their overflowing personal bank accounts, while their companies which are publicly subscribed, become financially strapped? Are the owners deliberately enriching themselves by not paying their suppliers, contractors and lenders? Just think about how much money has been going through their companies over the years - Meda Inc Bhd, SEGi, EcoFirst Consolidated (formerly Kumpulan Emas). Easily, several RM BILLION!!
It is embarrassing to be put under receivership, especially if you are supposed to be a big businessman who owns several PLCs, and especially if you a Datuk. It is a loss of face for Chinese businessmen. Maybe the Teoh brothers are either really in very deep financial trouble, or they have very thick skin. Probably both.They should know that CIMB Bank would take this next step.
They should also know that their property will not get a good price if it's sold in a receivership. They could have mortgaged it for a loan to pay off CIMB to avoid this bad and embarrassing publicity. Probably no other bank wanted to get involved with Meda Inc Bhd. Afterall, their bad payment reputation is already well known in the market.
And probably because no one wants to pay RM107million for it. Also, the book value is probably "cooked" to a higher value to make it easier for the group to get credit facilities from other unsuspecting finance companies.
Meda Inc Bhd most likely will not get close to the "book value" for the property. In a receivership sale, buyers will only be interested if the price is really really cheap. So, Meda Inc Bhd's property is now in the market, like pasar malam sale.
It will be interesting to see how much CIMB Bank can get for the ZKP asset. I think the bank should just offer to sell it for RM60million. This is more than enough to cover the loan. If Meda Inc Bhd disagrees, then the Teoh brothers should jolly well go out there and try selling it for more themselves, which I seriously doubt.
And what's going to happen to the money owed to suppliers and contractors? Maybe it is time to group together and sue Meda Inc Bhd for payment before the company runs out of cash and assets.
Action against Teoh brothers
Legal action should also be brought against the major shareholders personally -Dato Patrick Teoh,Teoh Seng Aun and Kenneth Teoh - who as group chairman, managing & executive directors drawing huge salaries and bonuses, should be personally held accountable for their business decisions and the way the PLC is run. Where they have caused the group to go under a mountain of debt and become insolvent through negligence or incompetence or especially fraudulent practices, they should be made to personally pay for the losses of the company. Shareholders who buy Meda Inc Bhd shares should not be made to suffer for the troubles of the company caused by these corporate crooks.
Suppliers are already so tired and fed up with all the rubbish from Meda Inc Bhd, they don't really care one way or another as long as the Teoh brothers get their just desserts. Punish them severely, yeah!
SYABAS!
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