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The report fails to explain the significant surge in administrative expenses; it merely emphasizes revenue. What's the use of running a successful business if it can't turn a profit? When it mentions 'Others,' what does that refer to? Why has expenditure increased so much? Where has the money been spent? These are the things the company should be explaining. Having over 20 million in annual profit does not necessarily signify operational profit; the company boss's claim of 'exceptional performance' is quite strained.
Whether or not this is a fraudulent act under Malaysian law depends on the specific facts and circumstances. However, if it can be shown that the MD cum largest shareholder knowingly and intentionally sold the gold produce to Southeast Gold Sdn. Bhd. at lower than market prices with longer than average credit term in order to benefit himself personally, then it could be considered fraud.
Bahvest has not honestly disclosed its subleasing status, neither on its official website nor in its annual reports. Minority shareholders would not have known part of the actual master deed of lease belongs to Southeast Gold, which is 75% owned by Lo, which in turn is a major conflict of interest when Bahvest sell its gold produce to Southeast at discounted price via its subsidiaries or related companies.
An approved mining land can be subleased under Malaysian mining laws. However, there are some restrictions on subleasing. For example, the sublease must be approved by the Director-General of Mines. The sublease must also be for a period of not more than 10 years.
