LCL Corp Bhd's (7177) chairman Datuk Low Chin Meng progressively sold some 28 milion shares a month before major subsidiary, LCL Furniture Sdn Bhd, defaulted in its payment of credit facilities.
"I had instructed for the shares to be sold to help the company pay its loan facilities," Low told Business Times when contacted yesterday.
The move however, did not help steer the group away from defaulting on its loans. The group is now in PN17 status.
LCL Furniture is currently under receivership.
Low raised some RM16 million in the open market through the disposals.
While he has no plans of leaving the group, he would be compelled to adhere to the wishes of shareholders and board members, if they want him to leave. There have been no calls for him to do so yet.
With his own disposals and CIMB Islamic Bank Bhd force-selling 16 million shares belonging to him last Monday, Low no longer owns shares in the interior fit-out company he co-founded 24 years ago.
"Our company still has cash flow, its a little stream that helps us to go about with our job, it's not a cascading waterfall, which is what the banks want," LCL Corp chief executive officer Paul Lim Pang Kiam said after the group's extraordinary general meeting (EGM) in Selangor yesterday.
The EGM was convened to approve a change in auditors for the group to Messrs UHY Diong, with the resignation of Messrs Ernst & Young. The resolution was approved in the meeting, which lasted about 20 minutes.
The company is currently engaging all its lenders and creditors proactively to seek an amicable solution and a way out to resolve the critical issues, which includes a global debt- restructuring scheme.
Lim said despite the board's best efforts of proactively coming up with a debt-restructuring scheme and explaining the situation to their creditors, they could not stop LCL Furniture from going under receivership.
"By pulling the plug, first and foremost, our reputation has been affected. This has set us back and we may have to start from (ground) zero," he said.
The board of directors of LCL group is currently working with the receivers and managers to resuscitate the company.
"We are currently also actively engaging our Dubai clients (on getting payments back on track)," Lim said.
Jobs in Dubai make up about 80 to 90 per cent of LCL Corp's revenue.
I'm working so hard every single day to safeguard the company's interest and recover monies from slow paying clients with the hope that things will get better. If Dato' Low were to leave LCL, I will feel compelled to leave too.
ReplyDeleteI wonder how come our company cud fall when we have achieved spectacular projects like JT metro, Atlantis, Dubai Mall Hotel, Dubai Marina Mall & Apartments and other projects and that to, in just 4 years of span.... We put all our efforts to built up this firm in these years
ReplyDeleteSince our reputation left us because of this finaicial crisis, we will not be diminished.. We'as a team' will still strive hard to recover the remaining amount to overwhelm our current situation....We believe that this can be achieved only through stong leadership by Dato' Low.
As a LCL Dubai’s staff, I believe Dato’ Low Chin Meng is the only right leader that can guide LCL Dubai to cruise through the crisis in UAE. During this time, no construction companies in UAE are spare from negative spillover effect from this current market situation. Every companies are consolidating their position and conservative on the business strategy now. It's totally unfair to condemn only LCL’s weak performance at this unfavourable market condition.
ReplyDeleteIn the past few years, LCL has secured multi million mega projects and become a reputable, formidable and prominent interiors fit out company in Gulf region. This is not other person other than Dato’ Low and his team’s superb business and executive skill. This few years LCL has created history & record of the amount of mega projects it acquired and made Malaysian proud as it has proven Malaysian “BOLEH” spirit by execute overseas and Far East mega projects.
Our major projects like Dubai metro line, Atlantis hotel, Dubai mall hotel and apartment, Dubai marina hotel & apartment, Palm Jumeirah Apartment are completed or very near to completion. It is very bitter at this stage if LCL lose Dato’ Low services as LCL Dubai is so close to complete and handover few major projects. It is very pitiful if LCL give up at this moment.
Instead now should be the time to look at the measures and ideas to alleviate the problem. I believe Dato’ Low is the right person who has tremendous knowledge and experience in Dubai market to lead LCL again to recover from current crisis. I support he should deserve a chance to prove himself again that he could lead the team to salvage from this crisis and bring back the Malaysian “BOLEH” spirit again.