Minority shareholders concerned over Cahya Mata’s phosphates, CG issues
KUCHING (March 24): Minority shareholders of Cahya Mata Sarawak Berhad (Cahya Mata) are raising concerns over the ongoing struggles of its phosphate plant amidst unresolved corporate governance matters, a news report said.
According to a report by Free Malaysia Today, the phosphate business, under Cahya Mata Phosphates Industries Berhad (CMPI), has suffered heavy financial losses. In financial year 2024 (FY24), the division reported a loss of RM96.8 million, despite an overall 48 per cent rise in Cahya Mata’s profit before tax for the period.
In FY2023, it had registered a larger loss before tax of RM156.7 million.
“Cahya Mata is pleased with its achievements in 2024 which are in line with our expectations, with the exception of the phosphates division, where the commercialisation of the plant has been deferred,” Cahya Mata said in a February 18 filing to Bursa Malaysia.
Meanwhile, the minority shareholders also raised concerns over the viability of the phosphates plant project which has faced years of delays since its announcement in 2014 with a RM1.04 billion budget.
This follows a dispute with state utility provider Syarikat Sesco Bhd (Sesco) over power charges led to a legal battle and suspension of electricity to the plant since July 2023.
The dispute flared up when Sesco billed the group for cumulative electricity consumption shortfall and payment security shortfall amounting to RM266 million as at end-December 2022, despite Cahya Mata contending that the plant is not deemed to have commenced commercial operations.
Sesco cut off power supply to the phosphate plant in July 2023 after the Court of Appeal dismissed CMPI’s application for a preservation order.
The minority shareholders argued that it was not possible for the company to operate without electricity for almost 20 months, and might have to be liquidated.
“How can testing and commissioning be carried out without electricity supply? When will the plant be ready for commercial operation?,” they said in the FMT report.
In a recent filing, CMSB said the hearing dates for the arbitration proceedings between CMPI and Sesco have been changed from last August to May 2025.
Another matter broughty forward by the minority shareholders revolve around corporate governance, following a lawsuit by Deputy Chairman Datuk Seri Mahmud Abu Bekir Taib, demanding inspection of the group’s accounts.
Three days ago, Cahya Mata has taken legal action against Mahmud, over alleged breaches of trust and fiduciary duties linked to the failure of an enterprise resource planning (ERP) system under the company’s digital transformation initiative.
The Borneo Post has reached out to Cahya Mata for comments.
-Agency
