Hong Leong Asset Management Bhd (“HLAM” or the “Purchaser”), a wholly-owned subsidiary of HLCB, has on 28 June 2019 entered into a sale and purchase agreement (“SPA”) with HL Management Co Sdn Bhd (“HLMC” or the “Vendor”) for the acquisition of the entire equity interest in Hong Leong Fund Management Sdn Bhd (“HLFM”) comprising 2,600,000 ordinary shares in HLFM (“Sale Shares”) for a cash consideration of RM2,554,815.82 (the “Acquisition”).
HLFM was incorporated in Malaysia under the Companies Act, 1965 on 29 May 1985 as a private limited company. As at the date hereof, the issued share capital of HLFM comprises the Sale Shares. HLFM is in possession of a Capital Markets Services Licence to undertake fund management business issued by the Securities Commission under the Capital Markets and Services Act 2007. As at the date hereof, HLFM has ceased its fund management activities. Based on the audited financial statements of HLFM for the financial year ended (“FYE”) 30 June 2018, the net assets of HLFM amounted to RM2.49 million and a net loss of RM0.27 million was incurred.
Pursuant to the Acquisition, HLFM is now a wholly-owned subsidiary of HLAM. It is intended for HLFM’s conventional fund management licence to be converted to an Islamic fund management licence, following which HLFM will be principally involved in Islamic fund management. The liberalisation of the Islamic capital market industry in Malaysia has encouraged the Islamic fund management industry to continue to grow rapidly. There is a high growth potential of Shariah business as the number of affluent Muslims in Malaysia and other Muslim countries continue to grow. This is resulting in a growing demand for Shariah-compliant wealth management services, even among non-Muslims who seek investments in ethical and/or socially responsible investments.
In view of the growing demand for Islamic products and services, HLAM endeavours to expand into the Islamic fund management business to meet the demand and capture growth opportunities by offering its products and services. The Acquisition enables HLAM to acquire a licensed fund management company. In keeping with its primary objective of expanding into the Islamic fund management business, HLFM’s conventional fund management license will be converted to an Islamic fund management licence.
*Source: Extracted from Bursa Malaysia announcement dated 28 June 2019.