Hall of Shame

Information Technology

Silverlake Axis Ltd (SILV SP)

Year: 2015

Silverlake Axis Limited (SAL) is a Malaysian investment holding company. The Company is a provider of digital economy solutions and services to the banking, insurance, payment, retail and logistics industries. The Company operates through six segments: software licensing; rendering of software project services; maintenance and enhancement services; sale of software and hardware products; credit and cards processing services, and insurance processing services. The Company offers maintenance and enhancement services, software licensing, software project services, insurance processing services, credit and cards processing services, and software and hardware products. The maintenance and enhancement services business focuses on providing round-the-clock software support services and software enhancement services to customers. The Company has operations in South East Asia, North East Asia, South Asia, the Middle East, North America, Africa and Europe.

SAL listed on the Singapore Stock Exchange (SGX) in March 2003 raising SG$13.30M in its IPO. Additional share offerings between 2006 and 2013 raised another SG$150.26M; (Jun.2006: SG$13.46M, Mar.2013: SG$24.30M, Jun.2013: SG$112.50M).

August 20, 2015, Razor99 published a report on SAL; "The Unbelievable Financial Alchemy of Silverlake Axis". The report brought up a number of issues it had with SAL. Those were: 

   1) Complex and deceiving corporate structure
   2) Alarming reliance on related party transactions
   3) Self-dealing and related party acquisitions
   4) Large undisclosed loss-making related parties
   5) Undisclosed off-balance sheet debt
   6) Chairman's history of fleecing minority shareholders
   7) Unrealistic profit margins compared to peers
   8) Declining product competitiveness and bribery allegations
   9) High valuations

Razor99 concluded in light of the numerous red flags uncovered,  it wouldn’t rule out the possibility that the stock was ultimately worthless, if the total contingent liabilities were even more significant than the cases it identified. Razor99 did not recommend owning SAL at any price. It had shown how Goh had systematically deceived and defrauded minority shareholders numerous times. With Goh in control of SAL, it doubted that minority shareholders would generate any net returns over time, apart from lucky timing or short-term trading in the stock. Razor99 also doubted that SAL would have much value to an acquirer because of the ongoing related party transactions and key man risk. 

August 25, 2015 SAL, in response to queries raised by SGC on trading activity, noted the report. Sal also stated that, based on a preliminary review of the Report, the Board and management of the Company were of the view that the adverse allegations contained in the Report were clearly baseless and without merit. SAL added that to provide additional comfort to the Shareholders, the Company would engage Deloitte Singapore to undertake an independent review of the allegations.

January 6, 2016, SAL released the Investigation report prepared by Deloittes. The Deloitte Singapore report while suggesting some better clarity and transparency could be improved with regards to its IPTs, nonetheless gave it a clear bill of health and suggested that the numbers were good.

August 10, 2016 GMT Research issued a report "RELATED PARTY TRANSACTIONS Family Games in ASEAN",   The report reviewed every company in ASEAN with a market capitalisation in excess of US$1bn (ex-banks and insurance), all 289 of them, and catalogued every related party transaction.  With regard to related party sales and expenses, Silverlake ranked second on the list. GMT noted Razor99's previous year's report and commented that it had no opinion as to whether or not Silverlake was a fraud but such a high level of related party transactions was clearly very odd and made a company vulnerable to reputation-destroying short-sellers’ reports. GMT said that this was a reason in itself to avoid them.

Razor99: The Unbelievable Financial Alchemy of Silverlake Axis, 20 Aug 2015
The Edge Markets: Silverlake Axis down 24.4% on short-seller attack, 21 Aug 2015
Silverlake Axis: Announcement on Response to SGX regarding Trading Activity, 25 Aug 2015
Deloittes: Silverlake Axis Ltd Executive Report, 6 Jan 2016
Singapore Business Review: Deloitte report refutes short-seller’s allegations against Silverlake Axis, 7Jan 2016
GMT Research: RELATED PARTY TRANSACTIONS: Family Games in ASEAN, 10 Aug 2016
Silverlake Axis: Annual Report YE-Jun.2015
Silverlake Axis: Annual Report YE-Jun.2014
SGX: Silverlake Axis Filing 



Company From To
Ernst & Young - -


(IPO - Initial Public Offering, ASO - Additional Share offerings)

Type Date Role Party
ASO-1 21-Jun-06 Placement Agent(s) Hong Leong Financial Group
ASO-3 6-Mar-13 Lead Manager(s) Religare Capital Markets Singapore Pte Ltd
ASO-4 13-Jun-13 Placement Agent(s) RHB Securities Singapore Pte Ltd
IPO 12-Mar-03 Auditor(s) PwC
IPO 12-Mar-03 Lead Manager Hong Leong Financial Group
IPO 12-Mar-03 Lead Manager(s) Hong Leong Financial Group
IPO 12-Mar-03 Legal Adviser to the Issuer(s) Khattar Wong & Partners
IPO 12-Mar-03 Registrar(s) Lim Associates Pte Ltd
IPO 12-Mar-03 Underwriter(s) Hong Leong Financial Group


(CAC/MAC Chairman / Member Audit Committee - NC Nomination /Governance Comm. - CC Compensation/Remuneration Committee)

Type Name Role From To
Executive Goh Peng Ooi Chairman 23-Aug-02 -
Independent Ong Kian Min CAC, CNC, MCC 9-Jan-03 -
Independent Tan Sri Dato' Lin See-Yan CCC, MAC, MNC 9-Jan-03 -
Independent Lim Kok Min MAC, MCC, MNC 15-Jun-06 -
Independent Tan Sri Dato' Mohd Munir Bin Abdul Majid MAC, MNC 1-Jun-15 -
Independent Datuk Yvonne Chia MCC, MNC 1-Jun-15 -
Non-Executive Datuk Sulaiman Bin Daud MNC 9-Jan-03 -
Non-Executive Goh Shiou Ling MNC 1-Jun-15 -
Senior Management Kwong Yong Sin CEO 20-Aug-04 -
Senior Management Tan Min-Li Company Secretary - -
Senior Management Hoong Lai Ling Company Secretary - -