By Ros Sothea, VOA Khmer
Original report from Phnom Penh
12 August 2009
A Malaysian seaweed company in Kampot province has begun selling public shares to local citizens as a way to raise investment capital, a move the government claims is illegal.
Since early 2009, FMC Services, Bhd., has invested nearly $3 million in growing seaweed on the coast, which sells as foodstuff in Japan, China, Korea, the US and Europe and can be used in cosmetics.
The company had been using about 60 hectares of sea area, but plans to increase that to 10,000 hectares, offering in September unlimited shares at $300 per share, said Mei Ratha, FMC’s Cambodia representative.
Shares could yield an increase in value of 30 percent the first year, 50 percent the second and 75 percent the third, with value doubling in the fourth year, he said, adding that around 400 people are waiting to buy in.
“Don’t wait and see,” Mei Ratha said. “Time is limited. Come and buy shares. It is beneficial. More beneficial than keeping your money with other people.”
However, on learning of the scheme, Minh Ban Kosal, director-general of the Securities Commission of Cambodia, said the public offering was not yet legal in Cambodia.
“If my company wants to sell shares, I can sell them to people I know, but not publicly announce it and ask the public to buy them,” he said.
Cambodia plans to establish a stock exchange at the end of the year, listing between four and 10 companies, but FMC is not among them, he said, adding the commission would immediately look into the offering.
Mei Ratha said he had not asked for permission to sell the shares, denying the company had done anything wrong in seeking to raise capital. The company was not only selling shares in Cambodia, but other countries as well.
Risk of bankruptcy will be insured for shareholders, he said.
Sam Ganty, a stocks expert who sits on the Securities Commission, said the shares were illegal and risky.
“If we buy shares when we know nothing about the company, and the company doesn’t have permission to sell such kind of shares, I think the shares are very risky,” he said.
Since early 2009, FMC Services, Bhd., has invested nearly $3 million in growing seaweed on the coast, which sells as foodstuff in Japan, China, Korea, the US and Europe and can be used in cosmetics.
The company had been using about 60 hectares of sea area, but plans to increase that to 10,000 hectares, offering in September unlimited shares at $300 per share, said Mei Ratha, FMC’s Cambodia representative.
Shares could yield an increase in value of 30 percent the first year, 50 percent the second and 75 percent the third, with value doubling in the fourth year, he said, adding that around 400 people are waiting to buy in.
“Don’t wait and see,” Mei Ratha said. “Time is limited. Come and buy shares. It is beneficial. More beneficial than keeping your money with other people.”
However, on learning of the scheme, Minh Ban Kosal, director-general of the Securities Commission of Cambodia, said the public offering was not yet legal in Cambodia.
“If my company wants to sell shares, I can sell them to people I know, but not publicly announce it and ask the public to buy them,” he said.
Cambodia plans to establish a stock exchange at the end of the year, listing between four and 10 companies, but FMC is not among them, he said, adding the commission would immediately look into the offering.
Mei Ratha said he had not asked for permission to sell the shares, denying the company had done anything wrong in seeking to raise capital. The company was not only selling shares in Cambodia, but other countries as well.
Risk of bankruptcy will be insured for shareholders, he said.
Sam Ganty, a stocks expert who sits on the Securities Commission, said the shares were illegal and risky.
“If we buy shares when we know nothing about the company, and the company doesn’t have permission to sell such kind of shares, I think the shares are very risky,” he said.
9 comments:
Canbodia Town
Long Beach, Ca
Mei Ratha tried to trick people
to buy his company shares, there were no guarantee for such gain in stock. The Police must investigate the claim properly before people get victimize by that schemes.
New Phally
What so hot about this company? Is it the only seaweed company on the planet? How much do they bring profit in a year? Is it going to be a billion dollars business. Why $300 per share? It is not something like Google or Microsoft. It is just a small seaweed co. Look at GE stock, it is only $14 per share. The company have more than sixty billios dollars in the company. I do not trust to buy these stock shares at all. I would never get my money back. It will go to a bubble.
To sell any share to public, we must follow certain rules in the country. The company must reveal all necessary data, such as prospectus of the company, financial statements ...etc, to the public so that they have some base for making decision. There must be certain number of IPO, unlike unlimted as this company has claimed. Of course, the price per share of USD 300 is really a skyrocketing one, what company is doing? how big the market is? what is the profit margin? there are many more questions need to be answered. What is the basis for saying this year you will earn this much, and next year that much? It is a really a risky investment. Though this company is listed in other coutry stock exchange, Cambodian might be eligible to invest in those countries, if we comply with their local requirements as a foreign investor. In Cambodia, it is not different scenario. It is legal to seek for additional capital, however, it must be transparent and realistic, I meant the company should state the required additional capital to be raised using equity shares.
There are always some excitement in cambodia.
Once land sale stalled while land grabbing is still bubbling, here is another selling share of nowhere.
This is where police can do the real job.
joker
Shares could yield an increase in value of 30 percent the first year, 50 percent the second and 75 percent the third, with value doubling in the fourth year, he said, adding that around 400 people are waiting to buy in.
wtf! how the hell he knows the shares will increase in value in that proportion? he can do private placement but not an offer to public in this manner without, of course, the approval from the soon-to-come Cambodian exchange.
and USD300 per share? unlimited issue? is another wtf%&$*#$)%... invest your money in it and you'll see your money burned like ghost money hohoho the investor needs to know at least some basis for making investment investment.. such as info abt the company and its future prospect, its financial position and results for the past years, price earning ratio, price to book ratio, dividend policy, etc. etc.
this is a real joke from a bunch of jokers!
and this forward looking statement by the company is perfectly illegal in any established equity market..
$300 per share! it is still cheap.
$5000 per share and sell to govt officials and oknhas, they will buy it. When discovered the share does not exist, then your head be hung upside down.
unless okhnas and those officials are your friends.
What a crock!!!
Joker
Posted by Heng Xoy
what is wrong with malaysian investors? they never last long in cambodia! i read that malaysian company invest this or that in cambodia, but they always back out at the end. is something wrong with the malaysian company or something? they are not helping cambodia, really!
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