KUALA LUMPUR (Aug 20): Omesti Bhd has disposed of a 7.38% stake in Diversified Gateway Solutions Bhd (DGSB) to Insas Bhd for RM6.93 million or 6.3 sen per share via direct business transactions, to pare down its share margin loans and for working capital.

Omesti said the disposal was carried out after reviewing the group's investment portfolio and the overall market conditions.

This brings Omesti's stake in DGSB to 5.65% from 13.03% previously, and therefore DGSB ceases to become an associate of the group.

Omesti said the group is expected to incur a loss of RM3.5 million from the disposal.

In a filing with Bursa Malaysia today, Omesti said its wholly-owned subsidiary Omesti Holdings Bhd had disposed of 110 million shares, or 7.38% stake, in DGSB to Insas' wholly-owned unit Insas Technology Bhd last Friday (Aug 17).

The disposal consideration was about 30% below its cost of investment of RM9.9 million back in April 2010. According to the filing, the disposal was done last Friday, when the share price of DGSB was trading at between 7 sen and 7.5 sen on the open market.

The disposal is deemed a related party transaction by virtue of Datuk Seri Thong Kok Khee's common directorship and substantial shareholdings in Omesti and Insas.

Datuk Mah Siew Kwok, who is Omesti's non-executive chairman and a substantial shareholder with an 18.97% direct stake in the group, is also DGSB's chairman and shareholder with a 0.29% direct stake.

Insas executive director Datuk Dr Tan Seng Chuan Thong is also a shareholder in DGSB with a 1.06% stake and a director of Insas Technology.

At noon break, Omesti's share price closed 1.25% or 0.5 sen higher at 40.5 sen, with 11,000 shares traded. DGSB's share price was unchanged at 7.5 sen, with 455,000 shares transacted, while Insas's share price climbed higher by 0.56% or 0.5 sen to 89.5 sen with about 154,700 shares changing hands.