Amid drug probe, Atta Global names new steward and warns of 40% revenue drop

KUALA LUMPUR (Feb 18): Atta Global Bhd, which has suspended its executive chairman Ooi Chieng Sim last month after he was charged with drug trafficking, announced that its second largest shareholder Tan Kim Hee will take stewardship of the group's direction and spearhead the running of its operations.

Tan, who has a 21.80% stake in Atta Global, has been redesignated to executive director from non-independent director, following changes made to the company’s board of directors today, which also saw its independent non-executive director Chiok Kian Chau being redesignated as executive chairman.

Ooi, whose chairmanship was suspended by Atta Global on Jan 31, has in turn been redesignated as executive director. Ooi is the third largest shareholder in Atta Global, with a 10.3% stake. G Reka Management Sdn Bhd is the largest with 23.45%.

Ooi, with seven others, were charged on Jan 30 with trafficking just under 5kg of methamphetamine at a warehouse on Atta Global’s premises in Prai Industrial Estate. Their arrest was part of what the police called “Ops Eagle Diamond” and was linked to another drug bust that involved more than 12 tonnes of cocaine worth RM2.4 billion — the largest drug haul in the country’s history — in September last year.

Following the redesignations, Atta Global's board now comprises eight members, of which five are executive directors and three are independent non-executive directors.

Meanwhile, the steel maker guided today that its revenue for the 12 months ending March 31, 2020 will see a 40% drop, as business operation at its subsidiary Syarikat Perkilangan Besi Gaya (SPBG) had completely ceased, in order to facilitate police investigations into the drug trafficking case. Other operations, however, have continued to run as usual. 

According to Atta Global, SPBG contributed 36% to the group’s total revenue for the nine months ended Dec 31, 2019. 

“SPBG is expected to be at a loss position of approximately RM500,000 in the financial year ending March 31, 2020. As of Dec 31, 2019, SPBG has recorded a loss of RM136,000. Therefore, the group’s revenues are expected to drop by 40% for the financial year ending March 31, 2020, based on adverse contribution of SPBG and also other subsidiaries' performance,” it added.

At the same time, business conditions of its other subsidiaries have become more difficult, as more suppliers and customers have adopted a more cautious stance in their dealings with the company, Atta Global said. “Every effort is being made by the executive directors and management staff to explain to them, in order to secure the business deals.”

Atta Global has also extended its financial year end from March 31 to June 30, 2020 — which will also apply for every subsequent financial year — as it foresees a tight schedule in finalising its accounts for the current financial year.

"The directors and senior management had been giving their time and effort to give full cooperation to the investigation police officer with regards to the offence investigation and therefore, priority has been given to the relevant authorities promptly, to fulfil their requested documents and requirements. On the other hand, the board and senior management team have been placing their focus on plans and strategy to rescue and remedy the current position of the Group," Atta Global said.

The group has also appointed an independent expert to conduct a full review of risk management and corporate liability on its subsidiaries SPBG and others including Progerex Sdn Bhd and SMPC Industries Sdn Bhd.

A legal firm has also been appointed to advise the board on all civil and criminal matters to protect the company and its shareholders, it added.

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