Multi-Chem

[BlueKelah]

recently directo buy in at 4.13 after financials and div announcement. 

this has been one of my best counter so far, hoever i think now fully valued and entire EPS and more paid as Div

will be cont. holding as business still good and expanding oveseas slowly.

[weijian]

Back in 2024, the auditors had flagged out that the Company had deposited cash into the bank accounts of 2 employees which were subsequently transferred into a vendor's employee account for the purchase of Capitaland shopping vouchers. These "numbers" seem to match the current CPIB investigation and so I wonder if this is related?

For the record, Multi-Chem had subsequently engaged an outside law firm to review the entire issue and was given the "all clear".

ATTENDANCE BY TWO EXECUTIVE DIRECTORS AND TWO EMPLOYEES WITH THE CORRUPT PRACTICES INVESTIGATION BUREAU FOR INTERVIEWS

Mr Foo Suan Sai, the Chief Executive Officer of the Group and Madam Han Juat Hoon, have been interviewed by the Corrupt Practices Investigation Bureau ("CPIB"), and have been asked by the CPIB to provide bail, as well as surrender their passports and mobile phones to the CPIB;

Two senior employees of the Group involved in sales have been interviewed by the CPIB. The ARMC does not at present know if the employees have been requested to surrender their passport and/or mobile phones.

In addition, the ARMC understands that the CPIB attended the premises of the Group and while there, required the production of certain documents relating to the Group, comprising certain accounts of the Group from an earlier year to date, claims documents relating to employees of the Group and an individual from a vendor of the Group, and an agreement relating to the same vendor.

The ARMC is currently seeking further information from the Executive Directors relating to the interviews, substance of the investigations and other actions taken by the CPIB.

https://links.sgx.com/FileOpen/Multichem...eID=904489

[BlueKelah]

Back in 2024, the auditors had flagged out that the Company had deposited cash into the bank accounts of 2 employees which were subsequently transferred into a vendor's employee account for the purchase of Capitaland shopping vouchers. These "numbers" seem to match the current CPIB investigation and so I wonder if this is related?

For the record, Multi-Chem had subsequently engaged an outside law firm to review the entire issue and was given the "all clear".

ATTENDANCE BY TWO EXECUTIVE DIRECTORS AND TWO EMPLOYEES WITH THE CORRUPT PRACTICES INVESTIGATION BUREAU FOR INTERVIEWS

Mr Foo Suan Sai, the Chief Executive Officer of the Group and Madam Han Juat Hoon, have been interviewed by the Corrupt Practices Investigation Bureau ("CPIB"), and have been asked by the CPIB to provide bail, as well as surrender their passports and mobile phones to the CPIB;

Two senior employees of the Group involved in sales have been interviewed by the CPIB. The ARMC does not at present know if the employees have been requested to surrender their passport and/or mobile phones.

In addition, the ARMC understands that the CPIB attended the premises of the Group and while there, required the production of certain documents relating to the Group, comprising certain accounts of the Group from an earlier year to date, claims documents relating to employees of the Group and an individual from a vendor of the Group, and an agreement relating to the same vendor.

The ARMC is currently seeking further information from the Executive Directors relating to the interviews, substance of the investigations and other actions taken by the CPIB.

https://links.sgx.com/FileOpen/Multichem...eID=904489

I think you are SPOT ON. If this is the case, the LIM KOPI session would be SOP in order to show they are doing some work and took them long enough(2 years)

Worse case maybe slapped with a small fine or given warning. 

Best case just lim kopi and cleared as per the lawyers( I will put my money and start nibbling on this one, going to grab some later today and over next few days, its come down to ~2.50 today) 

other than a big market crash, i dont think we will have another chance to grab such a cash cow company now at 12% plus yield again. 
**vested**

[opmi]

Back in 2024, the auditors had flagged out that the Company had deposited cash into the bank accounts of 2 employees which were subsequently transferred into a vendor's employee account for the purchase of Capitaland shopping vouchers. These "numbers" seem to match the current CPIB investigation and so I wonder if this is related?

For the record, Multi-Chem had subsequently engaged an outside law firm to review the entire issue and was given the "all clear".

ATTENDANCE BY TWO EXECUTIVE DIRECTORS AND TWO EMPLOYEES WITH THE CORRUPT PRACTICES INVESTIGATION BUREAU FOR INTERVIEWS

Mr Foo Suan Sai, the Chief Executive Officer of the Group and Madam Han Juat Hoon, have been interviewed by the Corrupt Practices Investigation Bureau ("CPIB"), and have been asked by the CPIB to provide bail, as well as surrender their passports and mobile phones to the CPIB;

Two senior employees of the Group involved in sales have been interviewed by the CPIB. The ARMC does not at present know if the employees have been requested to surrender their passport and/or mobile phones.

In addition, the ARMC understands that the CPIB attended the premises of the Group and while there, required the production of certain documents relating to the Group, comprising certain accounts of the Group from an earlier year to date, claims documents relating to employees of the Group and an individual from a vendor of the Group, and an agreement relating to the same vendor.

The ARMC is currently seeking further information from the Executive Directors relating to the interviews, substance of the investigations and other actions taken by the CPIB.

https://links.sgx.com/FileOpen/Multichem...eID=904489

went to this year AGM for first time. some personal 
observations.

the CEO (son) dont speak much. More talking by Director Han (mother).  I feel CEO dont seem to be like those that can pitch/sell in tech software corp sales or that can get distribution agreements.

[BlueKelah]

Back in 2024, the auditors had flagged out that the Company had deposited cash into the bank accounts of 2 employees which were subsequently transferred into a vendor's employee account for the purchase of Capitaland shopping vouchers. These "numbers" seem to match the current CPIB investigation and so I wonder if this is related?

For the record, Multi-Chem had subsequently engaged an outside law firm to review the entire issue and was given the "all clear".

ATTENDANCE BY TWO EXECUTIVE DIRECTORS AND TWO EMPLOYEES WITH THE CORRUPT PRACTICES INVESTIGATION BUREAU FOR INTERVIEWS

Mr Foo Suan Sai, the Chief Executive Officer of the Group and Madam Han Juat Hoon, have been interviewed by the Corrupt Practices Investigation Bureau ("CPIB"), and have been asked by the CPIB to provide bail, as well as surrender their passports and mobile phones to the CPIB;

Two senior employees of the Group involved in sales have been interviewed by the CPIB. The ARMC does not at present know if the employees have been requested to surrender their passport and/or mobile phones.

In addition, the ARMC understands that the CPIB attended the premises of the Group and while there, required the production of certain documents relating to the Group, comprising certain accounts of the Group from an earlier year to date, claims documents relating to employees of the Group and an individual from a vendor of the Group, and an agreement relating to the same vendor.

The ARMC is currently seeking further information from the Executive Directors relating to the interviews, substance of the investigations and other actions taken by the CPIB.

https://links.sgx.com/FileOpen/Multichem...eID=904489

went to this year AGM for first time. some personal 
observations.

the CEO (son) dont speak much. More talking by Director Han (mother).  I feel CEO dont seem to be like those that can pitch/sell in tech software corp sales or that can get distribution agreements.

 thanks for feedback: I dug up the info from last year audit result
The ARC wishes to update that Shook Lin & Bok LLP has completed its independent inquiry. A summary
of its findings are as follows:
(a) On the balance of probabilities, the Transactions were bona fide transactions vis-à-vis the
Group and its employees.
(b) Based on the documents reviewed and the interviews conducted, there is no finding that the
Group and its employees acted with a lack of probity, for personal gain, or to wrongfully
benefit from the Transactions. The evidence provided by the Group and its employees were
assessed to be sufficiently credible, with no specific indicators of deliberate concealment or
inconsistency being detected.
© The evidence reviewed included bank statements from the Group’s employees showing the
flow of funds and a confirmation letter from the vendor’s employee on the vendor’s letterhead
and bearing the vendor’s company stamp that the vendor employee had received the
corresponding amount of funds on behalf of the vendor from those Group employees.
(d) In addition, there is no finding that the Group suffered any financial losses or financial
disadvantages as a result of the Transactions.
(e) Notwithstanding, remedial measures should be implemented to guard against risks of
unauthorised fund leakage or misapplication of funds. These remain as hypothetical risks in
this case as no evidence of the same was found for the Transactions.
(f) Such measures can include a general anti-fraud policy, as well as revisions to the marketing
development fund policy pursuant to which the Transactions had been made, and the
implementation of associated standard operating procedures for verification of claims and
the remittance of funds.

since already 2 years, it is likely CIPB is doing followup as a report was probably lodged by the accounting firm as standard and CIPB need to review everything. 

Ok i checked :
During the financial year, a subsidiary of the Company, M.Tech Products Pte Ltd, made payments
totalling S$2,137,000 via two employees of the subsidiary, who purportedly paid this amount to an
employee of a vendor for marketing and promotional expenses on behalf of the subsidiary.

so quite a substantial amount but as above was independently verified by lawyer firm and matter concluded as all legal.

didnt manage to buy anything today as market depth says not much in the queue.

but now at 1.98 wow excellent value

[Big Toe]

Here's what I think.

on c) "The evidence reviewed included bank statements from the Group’s employees showing the
flow of funds and a confirmation letter from the vendor’s employee on the vendor’s letterhead
and bearing the vendor’s company stamp that the vendor employee had received the
corresponding amount of funds on behalf of the vendor from those Group employees."

A confirmation letter from the employee of the vendor???
Since the matter is serious, shouldn't it be from the finance department head or CFO?
And why use personal accounts for quite a significant sum?

In any case, my best guess is that there is more than meets the eye for this Audit Result.
Not in depth enough, not independent enough. (reminds me of independent directors)

From evidence so far, on Mtech's side, there isnt evidence that employees siphoned money or
acted against the interest of the company. However the methods they go about advancing their business interest
is questionable, but not uncommon.

I will probably dip my toe in for this one. Have been keeping tabs but never had a great entry opportunity.

[weijian]

went to this year AGM for first time. some personal 
observations.

the CEO (son) dont speak much. More talking by Director Han (mother).  I feel CEO dont seem to be like those that can pitch/sell in tech software corp sales or that can get distribution agreements.

hi opmi,

There are some corrections I have to make for you: The CEO, Foo Suan Sai is the husband of Director Han, or 1 of the remaining founders with his wife (Director Han). As for the son Foo Fang Yong, he is the GM of the company but also serves as an executive director on the BOD together with his parents.

[weijian]

Here are some of my thoughts on this issue:

Law firm's independent audit vs CPIB investigation The first thing I tried to look for was the terms of reference (ToR) for the independent audit done by Shook Lin & Bok LLP. The ToR would define the scope and methodology of the independent audit. Unfortunately the ToR was not publicly published and only a summary of the independent audit's outcome was published in 2024. Nonetheless, I would imagine that a CPIB probe would be more comprehensive and look into a whole array of documents/issues that are "complimentary" to this transaction. Examples of complimentary documents/issues would be all bank accounts of the personnel involved (rather than only the accounts involved in the transaction) or interviewing more company personnel from the vendor/customer (rather than only the personnel involved). Finally, rather than "no financial loss" to Multi-Chem which the independent audit concluded, CPIB would probably also look into the entire vendor-distributor-customer network to look for any white collar criminal intent.

What do CPIB current actions imply? CPIB have asked the couple to post bail and surrender their passports/handphones and it means that both of them have been formally arrested during the investigation and is been released conditionally while the investigation continues.

Base rates of CPIB investigation life cycle from reports to successful prosecution (based on CPIB annual stats):

(1) Reports converted to investigation: 30-40% (For every 10 reports received by CPIB, ~4 of them are pursuable based on the quality of the information received + follow-up probes/enquiries done by the CPIB.

(2) From investigation to arrested: It is the norm for CPIB to do an arrest because the arrest would also grant CPIB the rights to search premises and confiscate items for more forensic studies. So it is 100%.

(3) From investigation to charge: Only the no. of individuals been charged (90 and 133 individuals charged in court in 2025 and 2024 respectively) is available but we can assume that at least 2 individuals will be charged in every case (68cases and 75 cases for 2025 and 2024 respectively and use this assumption to estimate the upper bound. Using 2 years to smoothen out the time delays and taking note that clearance rate (completed investigations over investigated) --> ((90+133)/2)/(68+75) = 78%

(4) From charge to successful conviction:~90% and above

CPIB 2025 annual stats: https://www.cpib.gov.sg/press-room/effec...tion-free/

[BlueKelah]

Good calculation!!

IMHO its already been 2 years and the amount was 2million plus.

Given that the 2 employee is not "under arrest" (passport not taken), they are probably not in any serious trouble. However directors lim kopi and arrested probably as suggested due to SOP to investigate fully.

I am betting that company has so far been quite transparent in announcing the 2million case in 2024 and even lawyers is cleared. if any issue likely will make accounting and lawyers look bad. (i have not seen the report for capita land voucher but if just to buy voucher then is probably for the vendor entire company staff)

The deciding issue here is whether or not there was any tender project/contract given to Multichem back in 2024. If the vendor is just a long time partner and this 2mil did not affect any tender which resulted in favourtism for multichem vs other bidder company then there should be no issue as this is accepted industry wide practice for gift giving.( though i am a little shocked as I did not expect one company can gift another company so much! yes i have to admit once I decide to hold a counter i usually just set and forget and collect dividend lol)

there was a director share buyback this year at $4+ level just recently.
So I do not think the boss had any idea this was about to happen either...

the stock fall has taken a pause now and I am now nibbling at $2 level. Seems like not much buying queue above 2.01-2.10 . will see what happens later today.

[opmi]

I am curious on the gifting to an employee of a vendor. I cannot imagine big cybesecurity firms eg Palo Alto to allow that. It has to be big enough vendor coz it is $2m in gifts.

Is this vendor a middleman company? meaning direct reseller of license. Multichem is the customer of this reseller?

Capitaland vouchers......remind me of the former TW president wife also receive a lot of SOGO vouchers.

Not vested. got follow a bit on company due to high div yield.