[SINGAPORE] Property company Capital World said the Malaysian Anti-Corruption Commission (MACC) is investigating certain transactions made between January and December 2018, which are linked to its former unit, MCM Studio Entertainment Group.
Capital World said on Thursday (Mar 20) that it disposed of its 80 per cent stake in the company in 2020. MCM Studio Entertainment Group’s core business is in the running of an indoor theme park, MCM Studio, in the company’s Capital City project in Johor.
Jensen Siow, executive director of the company’s Capital City Property subsidiary, along with the unit’s human resource manager and accounts manager, were interviewed by MACC on Wednesday and Thursday.
The company said it learnt from Siow that MACC on Wednesday obtained an order for the remand of former Capital World executive director Siow Chien Fu for four days, in connection with the same investigation.
Jensen Siow is the nephew of Siow Chien Fu, the company said in a filing on the Singapore Exchange. Siow Chien Fu, who was chief executive of Capital World from May 2017 to January 2023, stepped down from his role as Capital World’s executive director on Jan 31.
Capital World said that its operations are unaffected by the probe, and that it would continue to monitor the progress of the investigation, cooperate fully with all regulatory authorities, and update shareholders when there are material updates.
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It added: “The board is of the view that Jensen’s performance of his duties as the executive director of Capital City Property will not be compromised by the aforesaid investigation.”
The group also urged shareholders to refrain from taking action with respect to its shares “which may be prejudicial to their interests”. “Shareholders should consult their stockbrokers, bank managers, solicitors or other professional advisers if they have any doubt about the actions they should take,” it said.
Shares of Capital World ended Thursday flat at S$0.002 before the announcement.
Recent financial troubles
The company faced financial troubles in recent years because it was unable to repay its debts. During its second quarter ended December 2019, it sank into the red and was in a net liability position.
It then said that it was unable to sell any units in its newly completed Capital City shopping mall in Johor – located in its larger Capital City project – due to an oversupply in Malaysia’s property market. This, along with Covid-19, led it to suspend trading in its shares and propose a restructuring plan in February 2020.
In January 2023, it entered a sales-and-purchase agreement with Singapore retailer Mustafa to sell the bulk of the units at Capital City mall for RM368 million (S$105.5 million). The company said that part of the monies from the sale would be used to strengthen its working capital.
Its shares resumed trading in October 2023.
