January 4, 2023; Kuala Lumpur Malaysia (UPDATED), YU Syndicate Directors used Shady Scheme to Siphon RM1 Billion from YHN Property Bhd. The YU Syndicate is controlled by YU KUAN CHON and his brother YU KUAN HUAT. Both are Controlling Shareholders and Directors of YNH Property BHD (YNH) (KLSE: YNHPROP (3158)) along with its sister company RAPID SYNERGY BHD (RSB), KLSE: RAPID (7765). Both are puppet Malaysian Public companies of the YU Syndicate group consisting of more than 30 known YU Syndicate companies.
The historical Annual Reports of YNH show in its asset list a number of properties year after year. These lists tell a story when you collect them together. Often auditor’s notes can be complicated and difficult to interpret, but with the new FRS regulations, YNH is forced to clarify the status, disposition, and investments made in land. In the case of YNH, Property Assets are now listed in 3 categories.
The third category Auditor note 8 item (v) of the 2021 Annual Report states: Included in properties held for development and properties under development of the Group are amounts of RM1,007,510,470 (2020: RM952,227,470) paid in respect of joint venture and turnkey contracts entered into with landowners for development work which has yet to commence. The land cost is subject to the agreed entitlement provided in the contract with the joint venture partners or landowners.
This means YNH states that it has put deposits in cash of more than 1 Billion into 18 dead or frozen projects. This money is unregulated, unreported, and not controlled by the YNH shareholders. Instead, it is controlled by the YU Syndicate (YNH controlling shareholders and Directors) who use this money unchecked.
The majority of the 18 dead land deals are all Joint Ventured with companies set up by the YU Syndicate and located in Perak at the same address located inside the YNH Construction Sdn Bhd complex and using known YU Syndicate Directors, YNH’s in-house Company Secretary (CHENG GHEE CHENG) and audited by LEE,YIP & ASSOCIATES PLT, a company owned by Lee Chun Weng, a long-time Director of RAPID SYNERGY BHD
How much more related party does it need to get? Just because you avoid the key elements of a related party transaction, does not mean it is not a related party transaction. It still is a related party as clearly defined in Malaysian law.
This has not been a new development, it has been ongoing and growing in size going back at least 20 years. It has become a habit of the YU Brothers to raise money from the capital markets under the protective umbrella of Rapid Synergy and YNH, then siphon the money out in these Shady Joint Ventures.
What is the money used for? Well, that is a good question for the YU Brothers and Auditors.
From the public records, this money is not just sitting around. Much of it is used to manipulate the stock price of YHN and Rapid Synergy. Almost, if not all of the shares traded can be linked to one or another of the YU Syndicate posers. Meaning they keep trading in shares covertly using proxies and posers to increase the share price. They lose money in doing so.
Why do they need to do this? Well, that comes down to pledging shares to lenders for personal borrowings. Greed.
For clarity purposes, at the time of this audit, YU Syndicate Directors have created Joint Ventures with various parties where they deposit YNH cash totaling RM952 million in 2021 and this number increased to more than RM1 Billion in 2021. This money is “for development work which has yet to commence”.
If you and a friend are building a house together, but you have not started the project, would you give your friend all the funds needed to build the house in advance? I think not. In business, we pay things out based on milestones and cash flow needs. We protect our cash assets. it is the duty of a Director of a Public Company to always protect its assets.
So other than dubious intent, what purpose would YNH Controlling Shareholders and Directors risk pumping out RM1 Billion into 18 different friendly companies with zero development activities or cost and just leave the money for years and years?
What is the benefit to the shareholders? I mean the ones who are not controlling the funds outside of YNH. In our humble opinion, this looks like a criminal breach of trust and duties by a director. But this is something that needs to be determined by the authorities.
A complete forensic audit of the money trail must be called to examine both YNH dealings and those of the Shady Joint Ventures. Where is the RM1 Billion and what was is was it used for? Who benefited at the end of the money trail?
We hope an official independent investigation will review and disclose this information in the near future.
This is part 4 of a 5 part exposé our team is working on in relation to the YU Syndicate and its business dealings. Information used in this story has been obtained primarily from public and corporate records along with inside confidential sources close to the matter. This investigation is ongoing, and the facts and data will lead us to the truth. Stay tuned for more to come in the following weeks.
If you have information about the YU Syndicate, YHN, RAPID, or other related parties mentioned in this article, feel free to send us an email. If you are concerned about privacy, please use a new email account dedicated solely to this purpose. Contact us via the contact us links or by email. We welcome public assistance and will go to great lengths to protect our sources.
