Keuro under close watch after granted highway concession

PETALINGJAYA: Kumpulan Europlus Bhd (Keuro) has become a closelywatched company since the issuance of the letter of approval for the 60-year West Coast Expressway concession to its subsidiary, West Coast Expressway Sdn Bhd (WCESB), last month.

Even its recently-announced plan to acquire additional shares in Wcesbfromlittle-knownprominent Xtreme Sdn Bhd has come under scrutiny.

Keuro had on last Friday announced to Bursa Malaysia its intent to acquire a 15.8% stake, or about 4.59 million shares, in WCESB from Prominent Xtreme. The proposed acquisition would cost Rm5.34mil, or RM1.16 per share, which Keuro said it would finance by internal funds.

Upon completion of the proposed acquisition, Keuro’s stake in WCESB would increase from the present 64.2% to80%, whilethat of Prominent Xtreme would be reduced from 35.8% to 20%.

In the same statement, Keuro had explained that Prominent Xtreme was principally involved in investment holding and property development businesses.

As it turned out, filings with the Companies Commission of Malaysia showed that the nature of Prominent Xtreme’s business was listed as “dormant.” Shares in the privately held company were owned equally by two individuals, namely Liau Yoke Leang and Mohd Ruah Abdul Manan.

A further check revealed that Liau was formerly the senior general manager of Agrocon Sdn Bhd, a smallish property development company, whose director and major shareholder was Chan Keat Wan. (Chan is the sibling of Tan Sri Chan Ah Chye, who is the major shareholder of Keuro.)

Ruah, on the other hand, was a director of a smallish construction company called Ekspedisi Jasa Sdn Bhd. The information was based on records with the Construction Industry Development Board of Malaysia.

Prominent Xtreme had in October 2010 entered a deal to acquire Perak Corp Bhd’s entire equity interest in WCESB, comprising 3.3 million shares, or a 12.19% stake, for Rm4mil. Since completion of the deal, Prominent Xtreme and Keuro were the remaining two shareholders of WCESB.

Analysts reckoned that Keuro would undertake further corporate exercises once the concession for the West Coast Expressway, which would be built at an estimated cost of Rm7.07bil over a five-year period, is officially signed in the coming days.