SARAWAK Cable Bhd (SCB), once Malaysia’s largest cable manufacturer with annual revenues of RM1.2 billion, is now at the centre of a heated legal and corporate tug-of-war as it attempts to stave off winding-up proceedings through a potential white knight deal.
SCB has received a bona fide offer from a White Knight which is a listed main board company to acquire its wholly-owned subsidiary, Leader Cable Industry Bhd (LCIB), for RM112 million. The proposal also includes assuming LCIB’s liabilities, according to Messrs Krish Maniam & Co led by Datuk Seri Krishna Kumar.
Speaking to The Vibes, Krishna said, “What is crucial to remember is that the main duty of a director or board member is to safeguard the rights and interests of minority shareholders not only any creditors as per the Companies Act 2016.
“In this case, there is now an offer for RM112 million for LCIB from the willing white knight which also takes on LCIB’s creditors, but the matter has been delayed, for what I suspect are certain stakeholders having ulterior motives.”
The offer comes after a previous RM72 million bid by MIE Industrial Sdn Bhd was opposed by SCB’s board, which claimed a higher backdoor offer was in play. Legal proceedings are underway to determine if the MIE Industrial Sdn Bhd’s offer serves the best interests of all creditors.
SCB fell into Practice Note 17 (PN17) status on 30 September 2022 after its external auditors, Ernst & Young PLT, issued a disclaimer of opinion on the company’s audited financial statements for the 17-month period ending 31 May 2022. The company has since struggled to restructure its finances.
“There may have been many incidents of misappropriation of funds and/or bad investments that allegedly went unaccounted for, causing massive losses despite there being known demand for the company’s products,” Krishna added.
He cited SCB’s investment in a loss-making hydroelectric project and in helicopter acquisitions as examples of the company’s “ostentatious spending” that drained profitable subsidiaries like LCIB and Universal Cable (M) Bhd (UCMB), both now under liquidation. Both these investments were sold at a major loss.
The affidavit filed in court also states that LCIB and UCMB had resorted to bank loans for operational costs which eventually defaulted, triggering their winding-up. The High Court granted OCBC Bank’s petition for liquidation on 15 May, last year after SCB failed to secure creditor approval for a proposed scheme of arrangement by the 26 September 2023 deadline.
Joint liquidators then - Khoo Siew Kiat and Goh Hua Yang Eddie of Deloitte Restructuring Services were appointed to oversee the winding-up of both subsidiaries who seem to be in support of a lower offer from MIE Industrial Sdn Bhd.
Meanwhile, SCB was placed under interim judicial management (IJM) following an application by legal firm Messrs Krish Maniam & Co, which was also seeking unpaid legal fees. The firm had introduced UK-based Serendib Capital Ltd as a potential white knight last year, though that relationship was later severed by SCB.
The restructuring process has faced resistance from within. Datuk Seri Mahmud Abu Bekir Taib, SCB’s largest shareholder with an 18.63% stake and the son of the late Sarawak Governor Tun Pehin Sri Abdul Taib Mahmud, has filed an affidavit to challenge the judicial management order.
Calling the Serendib Capital strategy “a futile exercise”, Abu Bekir, through law firm Messrs Dinesh Ratnaraj Partnership, criticised Messrs Krish Maniam & Co’s approach as relying on “unrealistic aspirations” and voiced support for a liquidation path backed by AmBank Bhd and Hong Leong Islamic Bank.
SCB has yet to submit a regularisation plan to Bursa Malaysia despite the appointment of Malacca Securities Sdn Bhd as its principal adviser but are seeking an extension from Bursa to do so. The outcome of the ongoing court applications could determine whether a revival via the white knight’s proposal proceeds — or whether liquidation becomes inevitable.
Sources confirmed that one of the largest minority shareholders supports the restructuring offered by Krishna and has further offered alternatives to save the company.
Sources also stated that they will be working with Krishna to take legal action against the responsible management and members of the board who allegedly committed fraud and criminal breach of trust. - May 29, 2025
