Unusual reply to UMA query
ON May 15, 2026, at exactly 4.48pm, MKH Bhd was issued an unusual market activity (UMA) query by Bursa Malaysia, as at that point in time, the company’s share price had surged 54.5 sen or 60% from its closing price of 91.5 sen on May 13. Trading volume on the company’s shares also skyrocketed, with almost 9.4 million shares changing hands on May 14, before rising to 26.7 million shares the following day.
The timing of the filing of the UMA query was at an interesting time, as it was made during the auction period, and at a time when MKH’s share price had already hit the maximum limit-up price for the day.
Under the UMA, a listed entity must ensure that it undertakes necessary enquiries with its directors and major shareholders as to whether there is any corporate development relating to the company’s business and affairs that has not been previously announced that may account for the trading activity, including at the stage of negotiation or discussion.
Paragraphs 9.03, 9.09 and 9.10 are related to disclosure of material information; clarification, confirmation or denial of a rumour or report; and response to a rumour or report, respectively. Bursa Malaysia’s listing requirements or LR is clear in terms of a listed entity’s obligations when it comes to material announcements.
Under Paragraph 9.03 (2), information is considered material if it is reasonably expected to have a material effect on the price, value or market activity of any of the listed company’s shares; or if the decision of a holder of securities of the listed entity or an investor in determining their choice of action.
Nevertheless, there are exceptions to Paragraph 9.03, which is defined under Paragraph 9.05, whereby a listed entity is allowed to withhold material information provided complete confidentiality is maintained.
Temporary withholding of information is allowed if it would prejudice the ability of the listed entity to pursue a corporate objective, or when the facts are in a state of flux and a more appropriate moment for disclosure is imminent.
MKH’s reply
Post-Bursa Malaysia UMA query, there was an insight in a local weekly business newspaper into a potential deal involving MKH and its 65.3%-owned listed subsidiary, MKH Oil Palm (East Kalimantan) Bhd (MKHOP). According to the article, there was a corporate exercise brewing involving MKH and MKHOP.
MKH, in its reply to Bursa Malaysia’s UMA query, responded on Monday, May 18, at approximately 10.11am.
According to MKH, “its major shareholder is periodically in discussions with external parties, but as at the date of this announcement, there is no assurance that the discussions will result in any definitive agreement or transaction or as
to the final terms on which such transaction might be made”.
In addition, MKH also denied that a corporate exercise involving the company and MKHOP was in the works, as reported by the local weekly business newspaper. MKH reiterated its commitment to ensure it was in compliance with Bursa Malaysia’s LR on immediate disclosure obligations.
Meanwhile, MKH’s share price rallied further on May 18, and despite easing to a low of RM1.41, rose to a high of RM1.76 and closed the day at RM1.73, with nearly 36.4 million shares changing hands.
The next day, MKH’s share price opened at RM1.64, rose to a high of RM1.77, but closed the day at RM1.66 with a much lower trading volume of 13.5 million shares changing hands.
Interestingly, just after the auction period on that day (May 19), at 4.51pm, MKH requested a suspension in trading of its shares for one day (May 20), and the rest, as they say, is history as Batu Kawan Bhd announced a major corporate exercise.
The company announced the acquisition of a 47.7% stake in MKH for nearly RM550mil or RM2 per share, and launched a mandatory general offer to acquire the remaining shares it does not own for RM2 per share and to take the company private.
Batu Kawan also extended an offer to acquire the remaining shares not already owned in MKHOP at 64.78 sen. However, in the case of MKHOP, Batu Kawan intends to maintain the listing status of the company.
86 million questions
With 86 million shares changing hands prior to the suspension of trading in MKH for the sale of the company at RM2 per share, surely the news of an impending corporate exercise was evidently clear and leaked to many insiders.
Of course, there could also be cases of punters or speculators taking a one-way bet on a potential corporate exercise, as MKH’s major shareholders had the means to even carry out a selective capital repayment exercise at approximately RM2 per share.
This is based on the cash in hand at MKH and for the remaining 52.3% stake not already owned by the family and related parties, which would cost about RM604mil (MKH had a cash and cash equivalent balance of RM680mil as at the end of December 2025).
For all intents and purposes, the right time for MKH to request a trading suspension was on Friday, May 15, after the market had closed and pursuant to the issuance of the UMA by Bursa Malaysia, or even on Monday, May 18, before the market opened.
This would have been appropriate as the share price had hit the limit-up price on that day, and on top of the 21.5 sen or 23.5% increase on the previous day. The traded market volume on these two days alone was approximately 830 times and 294 times the average traded volume of less than 32,000 shares a day over the past month before the surge in volume and price.
Surely, by requesting a trading suspension on Tuesday, May 19, for the release of the material public information was rather late, as both MKH’s share price and trading volume had surged significantly. This leads the man on the street to conclude that there has been a rather obvious leak of information that allowed the share price to rise more than 80% before the actual announcement was made by MKH on May 20.
What’s next?
There is a great tendency for listed entities to take UMA queries for granted, and a mere denial is the default reply for most, if not all. Very rarely do we see an UMA query taken with greater accountability and responsibility, as well as transparent disclosures.
Corporate exercises do not take one or two days to materialise as they are planned well ahead with deep discussion on valuation, structure and funding. Hence, to merely deny a looming corporate exercise just one or even two days before a material announcement is simply taking the LR for granted.
Bursa Malaysia or the Securities Commission should and must investigate the nature of insider trading that had taken place in the run-up to the takeover of MKH by Batu Kawan and bring to book the culprits who had acted on insider news. After all, insider trading is an offence under the Capital Market Services Act, 2007, as defined under Section 188.