Cliq Energy liquidation will deprive shareholders of Cliq's valuable research SC's envy has unintended legal consequences



by Ganesh Sahathevan

The Securities Commission Malaysia's decision to kill the SPAC market, or at least Cliq Energy and perhaps some other SPAC  companies has resulted in a situation where shareholders in Cliq will be deprived of the value of the intellectual property built up in these  companies.

This unhappy circumstance would not have occurred had the SC stuck to its role as regulator and allowed shareholders to decide if the assets Cliq put before them were worth buying.

Instead, the SC in a typical case of penis envy, desperately wanting 
to participate , not merely regulate , the monies raised by the SPACs  embarked on a mission to make life difficult for Cliq and the other SPACs, repeatedly  knocking back suitable assets on grounds that made the SC's intentions obvious.In the process the SC seemed not to mind that it made itself look idiotic, issuing official statements that have become fodder for  of endless rounds of jokes at gatherings of oil and gas professionals.

Meanwhile, SPAC managers not wanting to be seen as failures kept trying, going back to the SC with new proposals, all the while building up within their companies massive amounts of research, which could now be worth many millions of dollars. This type of research has been the basis of oil and gas IPOs in Australia, the US , the UK and even in Singapore, where the Catalist market s proving a more sensible means of raising money. 

Cliq has will soon appoint a liquidator to oversee the return of funds to shareholders (see below), but the liquidator cannot simply ignore the value of the accumulated research. Doing so will expose the liquidator to legal action from shareholders and others to whom  it owes a duty. 
That the SC in its wisdom did not foresee that assets can be created even if it did  not approve will not be a defence for a liquidator facing shareholders angry that they have been short-changed.

END 





Tuesday, 8 March 2016

CLIQ Energy to shortlist liquidator


PETALING JAYA: CLIQ Energy Bhd will be undertaking an evaluation process to shortlist a liquidator before it makes a further announcement on returning monies to its entitled shareholders.

The oil and gas-based special-purpose acquisition company (SPAC), which has decided to liquidate the business, said it had received “numerous proposals” from liquidators to undertake the liquidation process.

In a filing with Bursa Malaysia yesterday, the company said it would make another announcement once the selection of the liquidator was made.

The decision to liquidate the company was announced on Feb 24.

This was after the Securities Commission (SC) rejected the company’s request for a deadline extension to acquire its qualifying asset.

The SC had said it “would not consider an extension of time”.

This was in reply to the company’s letter to the regulator on Feb 15, seeking the extension.

CLIQ had to acquire the asset by April 9.

The SPAC said it would be resolving the process towards its liquidation and returning monies in the trust account to entitled shareholders according to the applicable laws and rules.

SPACs are cash shells that raise money to make acquisitions, with the end-goal of adding value to the newly-acquired asset and to eventually see significant returns for shareholders.

Earlier in February, Maybank Investment Bank Bhd (Maybank IB) withdrew from its advisory role to the company in relation to the proposed acquisition and proposed rights issue with warrants.

The resignation letter from Maybank IB came after the SC had returned CLIQ’s application for its maiden acquisition a week earlier.

The SC had said it was unable to proceed with its review on CLIQ’s acquisition proposal as it had yet to receive certain information and documents.

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