Wednesday, August 17, 2011

About Gatekeepers And Authorities

Posted on Corporate Governance in Malaysia ( have you bookmark this brand new exciting blog? ) : Step up, gatekeepers and authorities

  • I have myself contacted the Bursa Malaysia (BM) & Securities Commission (SC) several times, and each time was stonewalled. It took literally three years (!) for complaints to get settled, nobody can convince me that that is an efficient way of dealing with these matter. There was no communication at all from the side of the authorities, although the SC promises to give an update every 3 months, they simply don't do that. And lastly, the SC & BM are "hiding" behind the confidentiality rule, a rule that in itself is good, but can not be used as an excuse in each instance not to give out any information. When I submitted a detailed report of many pages with appendices to the SC I received a letter back with one line stating that no rule had been broken, no explanation whatsoever.
That's absolutely disappointing to read to say the least.

I, for one, asks Where's The Enforcement Dude?


Take the latest trading debacle where DRB Went Into A Meltdown During Trading At Close.. Guess Who Came For Dinner. That mighty strange close caused the call warrant, DRBHicom-CE, issued by OSK to go from 'in-the-money' into 'junk'. Of course OSK tried to explain that it has nothing to do with the fat fingers that caused the trading error which crushed the call warrant to bits.

So what's going to be done?

And what about the future? Abolish all these call warrants which does nothing but help seduce the investing public to gamble and not invest in the market? Well if the Gatekeepers and Authorities are not going to do anything about it, how about preventing bankers from issuing call warrants whose settlement price is based on CLOSING DAY prices?

Think about it!

Isn't it insanely ludicrous that a settlement price of a call warrant could be severely impacted by ONE trading error?

And when such a trading error occurs, who does it benefit?

And if the call warrant has such a MASSIVE loophole in it, where does this leads us? More fat fingers trading errors?

Or how about the recent issue on Ranhill, where Ranhill's director bought shares of the company a week BEFORE Ranhill announced that there is a takeover bid of the company???

Is this allowed?

If I complain to the Gatekeepers, would I get the no rule is broken reply?

And what about company doing share buybacks the same period the company major shareholder is selling?

Won't it make a mockery to the stock exchange if such an incident did happen?

Well... sadly... it did happen.

16 Oct 2008: Changes in Director's Interest (S135) - Lee Swee Eng. Two transactions mentioned in that announcement.
  • Acquired 23/10/2008 11,376,000
    Disposed 16/10/2008 72,271,600
Now look at this: Notice of Shares Buy Back by a Company pursuant to Form 28A

Date of buy back from : 16/10/2008

Date of buy back to : 22/10/2008
Total number of shares purchased (units) : 22,190,200
Minimum price paid for each share purchased (RM) : 0.415
Maximum price paid for each share purchased (RM) : 0.690
Total amount paid for shares purchased (RM) : 13,544,216.1


Share buyback took place on the very same day, the boss sold some 72,271,600 shares.

What's your conclusion?

Is this allowed?

Think about it.




M.A. Wind said...


By the way, SC gives a lot of statistics on their website (how many IPO's, rights issues, whatever), but never how many complaints received, how many of them were succesful and how long it took to handle them.

Information that is not given, always suspicious.

Moolah said...

I really think they should publish all the complaints for everyone to see.

And they should publish out whatever actions they have taken on these complaints. And needless to say, they need to explain and justify whatever actions they have and have not taken.

William Wang said...

Your last paragraph is most appropriate. It will not cost them more manpower to please the disgruntled investors and should the company's image be important, they will responnd, no need for those standard questions from BM which only trigger standard reponse from them. But then, BM is so arrogant, any ideas not from them is not welcomed.

solomon said...

If the mentality of gatekeeper is to keep the gate nice and shiny, then they could get an A for that.

Well, many rats have sneaked thru the gates when the gatekeeper have tea time. Arguments go on.

Maybe moola u can set a voting for hall of shames at mid year or year end for everyone to vote on those bugger who are sleeping on their jobs with fat pay.

kine said...

Why need to waste your time complaining when they r like the
fox guarding the henhouse ?

limko said...

Can Moolah start a voting system of the 10 most untouchable companies on KLSE, one each for main board and ace markets?

It would be a good guidance for newbies entering the market, I hink.