My Dearest Bursa Malaysia And My Dearest Securities Commission

Dear Bursa Malaysia and Securities Commission Boys And Gals,

You invited and you have actively promoted corporate governance recently. You have invited minority shareholders to file their complains against unscrupulous corporates. Yes, if you have a complain, send all your details in and your case will be heard. Yes, I would say kudos to you boys and gals for taking such an initiative. It gives us, the minority shareholders, hope.

However, sadly this morning, I have to ask 'what's the point of hearing without even listening'?

Why am I so disappointed?

I was well aware of my good friend's recent complaint and I was rather impressed that you boys and gals granted a hearing (Mind you, this was a case that happened some three FULL years ago!). But again, what's the point of hearing without even listening?

Rather sad, in my flawed opinion. So a hearing is granted but on the hearing itself, you boys and gals came prepared in a team but instead of trying to understand and listen to the major issues pointed out in the complaint, you boys and gals were rather eagerly prepared not to listen and instead were more focus on dismissing the case. So sad. Did you really understand what the complaint is all about and why the complaint is such importance? Ironically, the complaint focused on the very topic you boys and gals were actively promoting; ie CORPORATE GOVERNANCE!

I wondered the past couple of days thinking how Bursa Malaysia can attract more investors (esp foreign investors)? You invite foreign investors to invest and when they have a legitimate complain, you boys and gals were not really interested to listen.

And the sad outcome of this lopsided hearing?

You boys and gals won!

Congratulations!

The complaint is now officially withdrawn!

Here's the letter written by M.A Wind (who is a foreign investor!!!! ): Withdrawal of complaints with SC & BM

• "Dear Sir/Madam,
  
  In light of the extremely disappointing performance of the authorities (most notably Bursa Malaysia) on my complaints regarding Bumi Armada and Maybulk/POSH, not seeing even a sliver of justice being done after stonewalling me in both cases for a full three years, with Bursa Malaysia being an interested party having approved all the documents in the first place and now having to check their own work (and thus not surprisingly approving it), I herewith withdraw all my complaints with SC/BM.
  
  It is better to have no justice at all and it being painfully obvious, than to get a half-baked effort after 3 full years that would not even count as an slap on the wrist and some people boasting of actually having done their job.
  
  I also don’t have the energy or the time to be involved in a process that leads to absolute nowhere.
  
  Regards, M.A. Wind"

By the way do read this other posting too: Unsatisfactory handling of complaints by SC/BM

• After the damage has been done (the RPT deal went through), SC/BM will look into possible complaints. My experience is that these investigations will go nowhere, I haven’t heard of a single complaint by a Minority Investor ever being approved. Normally SC/BM will drag their feet for a long time (often a few years), stonewalling the Minority Investor, changing the manager in charge many times and then answer with a one line reply that no rule has been breached. No reason will be given, no transparency at all. Investigations have to be conducted confidentially, this is of course correct, but SC/BM is abusing this rule very much. For instance there is no reason whatsoever not to reveal publicly available information why a complaint or argument is not valid. If somebody provides detailed information which rules are broken, then the SC/BM should be able to counter these arguments without breaking the confidentiality of the research. It is extremely disappointing (to say the least) to spend a huge amount of time writing a complaint with all the information gathered, doing all the work for the SC/BM, coming up with large amounts of supporting documents and then to be treated like this. Unfortunately, I have never heard of a different experience. SC/BM has a (very) bad image and most retail investors don’t even bother anymore to file a complaint with them, is my experience.
  
  I can see the following reasons for the highly unethical and unacceptable behaviour of SC/BM:
  
  (a) SC and BM might be pressured not to take action. For a long time there was suspicion regarding legal matters. Since the publication of the Lingam tape I think no person will have doubts anymore about what might be going on.
  
  (b) SC and BM are not actually pressured in certain cases but think they are and act accordingly. This is an argument that is often brought forward to explain curious verdicts of judges that make no sense at all. The previous Chairman of the SC was (when he retired) asked by a journalist if he had instructions from above not to take action in certain corporate cases. The Chairmen said he wasn’t. Unfortunately, during his tenure the SC didn’t solve any major case (except of course for the usual illegal future trader and ticking off some small corporate players) although he inherited a huge amount of very large cheating cases of the 1997/98 crisis. Nobody dared to say that the Emperor was wearing no Clothes.
  
  (c) SC and BM have already approved certain parts in the process, to agree with a complaint means admitting that they made mistakes in the past. Organisations that “police” their own actions will hardly ever take any action against their own people and the SC/BM seems to be no exception. There is really a need for an organisation totally independent from SC/BM to look into these cases.
  
  (d) It is the "lazy" alternative, it means the manager doesn’t have to make investigations, interviews, research etc. Since the SC/BM doesn’t give any insight in on-going investigations (in itself understandable, but it is easily abused) and the SC/BM never gives any reason for its rejection, it can never be accused of making a mistake in the reason given. No transparency at all of course, but nobody seems to care.
  
  (e) It has become the norm, for 20 years SC/BM have toed the line, why change?
  
  (f) The personnel of SC/BM is simply not (always) up to the task and are not able to counter the army of fancy, well-paid advisors the Majority Investor has hired to defend his case. If this is the case, SC/BM should be allowed to use external advisors, but that would mean admitting that SC/BM is not up to the task and that will not be easy.
  
  In my posting about recommendations I came with the following suggestions:
  
  A small, fast moving, high-powered, totally independent commission to be formed, which will look at complaints (besides other issues).
  
  The top management of SC and BM should make it very clear to all their employees that in the cases of GO’s and RPT’s Minority Investors have clearly the benefit of the doubt, not Majority Investors.
  
  All complaints (except very rare, difficult cases) should be handled well within one year, with quarterly updates. A final answer will be provided containing information publicly available.
  
  In general, SC and BM really should genuinely start to reach out to retail investors, bloggers etc, they can provide useful insights in corporate affairs, since they are putting their money where their mouth is. There are about 1,000 listed companies, much too much for SC and BM to keep tabs on.

I do have one small wish for this holiday season.

I hope you boys and gals really make an effort to listen. Please.

Thanks,

Merry Christmas and A Happy New Year
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Footnote:

For those interested in M.A Wind's complain against Maybulk , do read the following posting:

• SC & BM: (perceived) Conflict of Interest?
• Maybulk/POSH: What happened to the Cash? * Fully recommended reading!*
• Clarkson, the valuer who didn’t believe his own valuation * Fully recommended reading!*
• Maybulk/POSH: KPMG's "independent" advice
• Maybulk: before and after POSH