MSWG Wants SC To Mandate Property Revaluation Prior To Privatisations

Just posted this morning: Glenealy: Sad Day For Investing

• Ok, one of the questions raised was Glenealy did not carry a property valuation of their plantations during this privatisation.
  
  If that was true, then this privatistion offer was simply absurd.
  
  How could SC allow an offer to be made without any proper valuation?

On the Edge:

• Watchdog wants authorities to mandate property revaluation prior to privatisations Written by Cindy Yeap of theedgemalaysia.com 
  Friday, 14 September 2012 18:27
  
  KUALA LUMPUR (Sept 14): Authorities should make it compulsory for public listed companies to revalue their assets prior to any privatisation exercise so that minority shareholders can better evaluate buyout offers, a shareholder watchdog group said Friday.
  
  "We reiterate our call to authorities to mandate the revaluation of PROPERTIES [] prior to any privatisation exercise," Rita Benoy Bushon, the CEO of the Minority Shareholder Watchdog Group (MSWG) wrote in a weekly newsletter dated Friday.
  
  Her comment was in reference to the privatisation of Glenealy PLANTATION []s Bhd, which was passed by shareholders at a court-convened meeting earlier this week, where Bushon said some queries by minorities weren't sufficiently addressed.
  
  "The most apparent was on the issue of the group's landed properties, comprising mainly plantation land which have not been re-valued since 1998," she wrote in the newsletter.
  
  On Wednesday, Bushon told The Edge Financial Daily that an updated valuation report on assets like plantations land would make it easier for minority shareholders to make educated decisions with regards to takeover offers. The valuation reports should be within a six month period prior to the privatisation exercise to ensure validity of the numbers, she added in an emailed reply.
  
  "Though the law is silent on the revaluation of land in cases of privatisation, we urge companies to embrace transparency by undertaking such revaluations especially when most assets are land-based," Bushon said.
  
  In Friday's newsletter, Bushon also asked that independent advisors "play their role in advising minority shareholders with greater sense of responsibility". When advising minority shareholders, Bushon said advisors should, for instance, "be transparent" about material parameters such as how the absence of an up-to-date asset revaluation exercise could impede decision-making.

I am shock to read that SC doesn't have such a mandate.

How can?

Without such a mandate, minority shareholders are going to be screwed if another company follows what Glenealy did to its shareholders.

Bernas Claims Its Donations To The University Was Noble

Posted the other day: MSWG Asking Why So Much Money Donated By Syed Mokhtar Firms To Albukhary International University

Yesterday was Padibera( Bernas) turn to answer the issue.

Star Business carried the following: Padiberas board discussed but did not hesitate to support private initiative (Strange, the print media version was named 'Bernas: Donation is 'noble')

• Tuesday June 22, 2010
  Padiberas board discussed but did not hesitate to support private initiative
  
  KUALA LUMPUR: Padiberas Nasional Bhd’s (Bernas) RM20mil contribution to the Albukhary International University is for a community project and seen as a noble cause, said chairman Datuk Wira Syed Abdul Jabbar Syed Hassan.
  
  “We were requested by the university to contribute and help in the building cost. It is a private initiative and the Government recognises it as a community project,” he told a post-AGM press conference yesterday.
  
  He said this in response to a news report that shareholders were questioning Bernas’ substantial donation to the Tan Sri Syed Mokhtar Albukhary-owned university. The RM20mil contribution is about 11.1% of Bernas’ net profit for the financial year ended Dec 31, 2009 (FY09).
  
  Two other Syed Mokhtar-related companies, Tradewinds (M) Bhd and Tradewinds Plantation Bhd, contributed RM10mil and RM20mil respectively. Bernas is 72.3% owned by Tradewinds (M).
  
  The construction cost of the university is about RM380mil.
  
  On whether there was any hesitation on the board’s part in approving the contribution, Syed Abdul Jabbar said: “There was a lot of discussion but no hesitation. We had two representatives from the Government but they also supported the private initiative.”
  
  He said Bernas hoped in FY10 to maintain the profit it achieved in FY09 and also wanted to see more growth in dividends.
  
  Bernas recorded a net profit of RM179.5mil for FY09 - the highest since it was privatised in 1996 - versus a loss of RM57.5mil in FY08. The distribution of a 24% dividend per share was also the highest.
  
  This was mainly due to the relative stability of the local and international markets and effective pricing strategies.
  
  Syed Abdul Jabbar said Bernas would also benefit from operational synergies with its parent, thus helping to improve bottom line.
  
  “We can look at savings by sharing distribution networks, expertise, infrastructure and resources. This will improve efficiency as well. We also need to read the market well and be more business-minded,” he said.
  
  According to managing director Bakry Hamzah, the group is also targeting to open another 18 Safe More retail outlets in the Klang Valley, Pahang, Selangor and Johor, which would incur a capital expenditure of some RM5.4mil. Bernas currently has 30 outlets.
  
  In addition, Bernas may reduce the production of lower grade Super Tempatan 15 rice to pre-crisis levels of 10% of monthly consumption versus the current 30% if the Government reduces subsidy.
  
  The country’s monthly rice consumption is about 180,000 tonnes.

I believe the issue is not whether Bernas or Tradewinds (M) or Tradewinds Plantations could afford such charity or not.

The issue is very tacky because all these companies donated to the same university.

And this university belongs to Yayasan Albukhary.

And Yayasan Albukhary belongs to Syed Mokhtar.

And Syed Mokhtar controls these companies making the donation.

Which makes it tacky.

How could it not be tacky?

Conflict of interest certainly comes to mind.

Since it is mentioned that the donation is 'noble' and we are indeed talking about charity, why are these PUBLIC (note I stress the word public because a huge portion of these companies belongs to the PUBLIC too!) making these donations? Why can't the owner of the university contribute fully for this noble cause himself? Why get the public? We are talking about noble donation yes?

And mind you, the sum of rm 380 million to construct that university is massive!

MSWG Asking Why So Much Money Donated By Syed Mokhtar Firms To Albukhary International University

I do want to highlight the following article posted on the Edge Financial.

• Syed Mokhtar-linked firms’ donations questioned
  Written by Jose Barrock
  Thursday, 17 June 2010 11:07
  
  KUALA LUMPUR: Tradewinds Plantation Bhd’s (TPB) AGM today could be an interesting affair as the Minority Shareholder Watchdog Group (MSWG) has sent to the company a set of questions ranging from crude oil pricing to a donation of RM10 million made to the Albukhary International University, sources said.
  
  Of particular interest to minority shareholders will be the RM10 million donation, which is deemed as excessive, representing about 20% of the company’s net profit. MSWG’s list of questions also include seeking clarity on its plans to build palm oil mills.
  
  TPB’s 69.76% parent Tradewinds (M) Bhd is also understood to have received a letter from MSWG over its own contribution of RM10 million as well, to the same university. Tradewinds’ AGM is slated for June 22.
  
  The RM10 million contribution by Tradewinds works out to about 12% of its net profit for FY09. Issues have cropped up as Tan Sri Syed Mokhtar Albukhary controls almost 43% of Tradewinds and has an interest in the university as well.
  
  The RM350 million Albukhary International University in Alor Setar, Kedah comes under the control of the Yayasan Albukhary, which in turn is controlled by Syed Mokhtar.
  
  This will not be the first fiery AGM in the businessman’s stable of companies.
  
  The Edge Financial Daily learnt that Syed Mokhtar’s flagship MMC Corporation Bhd’s AGM at end-April was also a fiery one, with shareholders questioning a RM75 million contribution to the university.
  
  For FY09, MMC posted a net profit of RM236.71 million on RM8.44 billion in revenue, which means the contribution to the Albukhary International University amounted to over 30% of the net profit. Syed Mokhtar, via his vehicle Seaport Terminal (Johore) Sdn Bhd, controls about 42.47% of MMC.
  
  Even more interesting was a contribution by water player Aliran Ihsan Resources Bhd, which gave away some RM20 million to the university. Aliran Ihsan’s net profit for FY09 amounted to RM30.23 million, meaning that the company forked out almost two-thirds of its net profits to the university.
  
  Syed Mokhtar’s MMC has more than 70% equity interest in Aliran Ihsan.
  
  Another company the tycoon controls, Padiberas Nasional Bhd (Bernas), has forked out RM20 million to the Albukhary International University. Bernas is 72.57% owned by Tradewinds.
  
  In total companies linked to the tycoon is understood to have donated anywhere between RM135 million and RM150 million to the university. Another Syed Mokhtar-controlled company, DRB Hicom Bhd, has not done so.
  
  According to MSWG’s letter to TPB, such donations are normally in the 2% or 3% range of net profits and that “the (TPB) board should provide more clarification on the substantial contribution”.
  
  “Giving out to charity or such causes is fine; just ensure the company pays out dividends and then pay it from your own pocket,” an industry observer said.
  
  
  This article appeared in The Edge Financial Daily, June 17, 2010.

Link: http://www.theedgemalaysia.com/in-the-financial-daily/168106-syed-mokhtar-linked-firms-donations-questioned.html

How?

So much money... going to just one university.

Here is Albukhary International University website: http://www2.aiu.edu.my/

Here is one blog posting on AIU last year:

http://syedcardiac.blogspot.com/2009/07/albukhary-international-university.html

• The proposed University Campus, located near Alor Setar city center will be built on approximately 70 acres of land. It is envisage that this university will be a modern and progressive Islamic Institution, focusing on Islamic knowledge in Science, Technology and Arts.

Do check it out as it as pictures of the University loaded.

Hwang-DBS Advises MMC Shareholders To Vote For SATS Purchase???

Blogged previously: MMC And Its Senai Airport Terminal Purchase! and http://whereiszemoola.blogspot.com/2008/12/more-on-mmc-and-its-senai-airport.html

On today's Star Business: Hwang-DBS advises shareholders to vote for SATS purchase

• Wednesday March 11, 2009
  Hwang-DBS advises shareholders to vote for SATS purchase
  By YEOW POOI LING
  
  PETALING JAYA: Hwang-DBS Investment Bank has advised shareholders of MMC Corp Bhd to vote in favour of the company’s controversial proposal to buy Senai Airport Terminal Services Sdn Bhd (SATS).
  
  Last August, MMC proposed to buy SATS for RM1.95bil via issuance of shares but the offer was revised downwards in December to RM1.7bil, to be paid with internally-generated funds, disposal of assets and external loans.
  
  The exercise, however, has fallen under scrutiny due to the present economic climate and the nature of the transaction, which involved a common major shareholder and parties related to Tan Sri Syed Mokhtar Al-Bukhary.
  
  In a circular to shareholders last Friday, MMC attached a recommendation letter from independent adviser Hwang-DBS, which deemed the overall terms of the SATS acquisition as “fair and reasonable,” and not detrimental to the non-interested shareholders of MMC. “There are sufficient merits to the rationale of the proposed SATS acquisition and it is in the long-term interests of the company,” Hwang-DBS said.
  
  SATS operates the Senai International Airport in Johor and holds 100% of Enigma Harmoni Sdn Bhd (EHSB), which owns 1,098.1ha designated for development into Senai Airport City.
  
  The investment bank said SATS was envisaged to play a key role in the transport and logistics segment of MMC given the strategic location to become the country’s southern logistic hub.
  
  It added that the discount rate of 10% to 12% used by Ernst & Young to value the Senai International Airport operations was within range of the cost of equity of companies involved in airport business.
  
  The implied price per passenger of the Senai International Airport of RM395 was significantly lower than other airports’ average price of RM700 from 1986 to 2006, Hwang-DBS said.
  
  Based on the price consideration of RM1.12bil for EHSB and its adjusted net asset of between RM1.18bil and RM1.35bil as at June 30, 2008, it translates into price over net asset of 0.83 times to 0.95 times, which were within the range of its peers of 0.26 times to 1.67 times.
  
  Hwang-DBS also said the valuations of EHSB’s land by IPC Island Property Consultants Sdn Bhd and Knight Frank Ooi & Zaharin Sdn Bhd were within Ernst & Young’s adjusted valuation range.
  
  IPC estimated the land at RM2.2bil while Knight Frank valued it at close to RM2bil. Knight Frank’s appointment as the second valuer complied with the Minority Shareholders Watchdog Group’s request for an alternative opinion on the valuation.
  
  The proposed acquisition of SATS would lead to MMC’s earnings in the current fianancial year being negatively impacted by RM44.06mil, or earnings dilution of 1 sen per share, assuming that the acquisition was funded entirely by bank borrowings.
  
  However, it would contribute positively to the future prospects of the enlarged MMC group.
  
  “As the Senai International Airport is already operational, there is no financial commitment required from MMC to put the existing airport business on stream,” Hwang-DBS said.
  
  SATS has stayed in the red in the past five years due to additional capital expenditure, high operating costs and financing payments.
  
  For the six months ended Dec 31, its revenue fell 3% to RM12.8mil from the previous corresponding period while losses almost doubled to RM7.9mil year-on-year. This was due to lower revenues generated and higher depreciation charges arising from the revaluation of the lease of the airport land in 2008.
  
  The MMC board, however, has forecast SATS to report a profit after tax of RM93.3mil for the 14 months ending June 30, 2010 on the back of property and sublease contracts sales as well as the success of SATS’ application for a 100% investment tax allowance.

Implied price per passenger?????

Holy cow great yardstick!!

Let me loook back at the following list of issues highlighted on the local papers.

• Based on the announcement, MMC has undertaken to advance RM417.2 million which is owed by SATS to the vendors. The vendors in the deal are Semarak Sestu Sdn Bhd and Suria Kemboja Sdn Bhd which own SATS. Both companies are believed to be linked to MMC’s major shareholder Tan Sri Syed Mokhtar Albukhary....
• In the first place, does MMC need more land? Even if it does, why must the deal be done now, especially in cash? Is it necessary for MMC to undertake the deal at this juncture when asset prices are fast coming down?
• When will Senai Airport and the land around it contribute to the bottom line of MMC positively? Also, what is the true valuation of Senai Airport and land that comes together with it?
• The unaudited net tangible asset (NTA) of the SATS Group and loss after tax as of June 30, 2008 are RM295.5 million and RM24.8 million.
• The proposed purchase of the 2,718 acres for RM9.45 per square foot (sq ft) is also questionable.Based on previous reports, the land was acquired from Lee Rubber at less than RM3 per sq ft. Now it is sold for three times the amount transacted less than two years ago.
• Why does it need more long term assets?
• Without strong cash flow, MMC will be sitting with a lot of assets but no cash to develop them.

Let me try to understand hor.

On the back of global financial crisis that is bringing companies down to their knees, MMC wants to buy SATS, a company that is losing tons of money, in a CASH deal??? Cash??? Only rm1.7 Billion!!!! And yeah, SATS so happened to be owned by MMC boss also!!!!

And this is good for MMC shareholders???

And what's Hwang-DBS advice again?

In the Star Business article there is a chart.

Can you see all the years of loss making?

And 2010.. the incredible forecast is a profit of 93.3 million.

LOL!

Life is good.

MSWG Gains Vital First Victory In Its Battle Against MMC's Senai Airport Terminal Purchase

Last December I pointed out that MMC was rightly sold down due to its incredible unjustifiable RPT transaction for Senai airpot. MMC And Its Senai Airport Terminal Purchase!

It made zero sense in my flawed opinion.

More On MMC And Its Senai Airport Terminal Purchase

Some of the points highlighted in the local papers which I agreed so much.

• Based on the announcement, MMC has undertaken to advance RM417.2 million which is owed by SATS to the vendors. The vendors in the deal are Semarak Sestu Sdn Bhd and Suria Kemboja Sdn Bhd which own SATS. Both companies are believed to be linked to MMC’s major shareholder Tan Sri Syed Mokhtar Albukhary....
• In the first place, does MMC need more land? Even if it does, why must the deal be done now, especially in cash? Is it necessary for MMC to undertake the deal at this juncture when asset prices are fast coming down?
• When will Senai Airport and the land around it contribute to the bottom line of MMC positively? Also, what is the true valuation of Senai Airport and land that comes together with it?
• The unaudited net tangible asset (NTA) of the SATS Group and loss after tax as of June 30, 2008 are RM295.5 million and RM24.8 million.
• The proposed purchase of the 2,718 acres for RM9.45 per square foot (sq ft) is also questionable.Based on previous reports, the land was acquired from Lee Rubber at less than RM3 per sq ft. Now it is sold for three times the amount transacted less than two years ago.
• Why does it need more long term assets?
• Without strong cash flow, MMC will be sitting with a lot of assets but no cash to develop them.

Yesterday on Star Business.

• Wednesday March 4, 2009
  MMC investors want second opinion on SATS deal
  By DANNY YAP
  
  KUALA LUMPUR: Minority institutional and retail investors of MMC Corp Bhd want a second independent valuation on the proposed acquisition by MMC of the entire stake in Senai Airport Terminal Services Sdn Bhd (SATS).
  
  They reached the decision after two separate meetings held yesterday with the Minority Shareholders Watchdog Group (MSWG).
  
  A number of the minority shareholders, both institutional and retail, present at the meetings had expressed their concerns to MSWG over the valuation process.
  
  The first valuation on SATS, valued by IPC Island Property Consultants Sdn Bhd, was tagged at RM2.229bil.
  
  However on Aug 4, 2008, MMC announced to the stock exchange that the SATS valuation would be RM1.95bil to be satisfied by the issuance of 696.4 million new MMC shares at RM2.80 per share.
  
  But on Dec 5, 2008, MMC told Bursa the company was prepared to acquire SATS for RM1.7bil and that payment would be made by cash in full, via internally generated funds and disposal of some assets as well as external borrowings.
  
  This prompted the stock exchange to query MMC on Dec 10 on the reason for the revised mode in acquiring SATs (from shares to cash) and also the fall in price.
  
  Minority shareholders at yesterday’s meetings said since the acquisition involved a hefty sum of money, they felt a second independent valuation of SATS was warranted to ensure an objective and fair market price.
  
  Moreover, SATS was still a loss-making entity, they said.
  
  The minority stakeholders also wanted to know in greater detail how the acquisition of SATs would benefit and enhance their interest, especially in terms of future dividends and the impact on MMC’s performance, going forward.
  
  “We are not against MMC’s acquisition of SATS so long as the purchase price is fair and is potentially yield-accretive but we need to be given sufficient knowlegde by the company to make an informed decision,” one shareholder said.
  MSWG chief excutive officer Rita Benoy Bushon said the meetings were held to enable institutional and retail investors to voice their concerns so that MSWG could relate their views to MMC’s management on Wednesday.
  
  “We will be seeing them (MMC management) tomorrow,” she said, adding that MSWG would be having more of such meetings in future with minority shareholders to benefit all stakeholders.
  
  Bushon said the meetings were also to educate minority shareholders on their rights as shareholders so that they could make an informed vote.
  
  MMC’s AGM could be in this month and an EGM for minority shareholders to vote on the SATS acquisition was expected before the AGM.
  
  It is believed that the proposed SATS acquisition would further increase MMC’s intangible assets and goodwill upon consolidation.
  
  Bushon said that since the SATS acquisition by MMC involved a related-party transaction, the minority shareholders’ votes were critical in the decision-making process.
  
  She said this was MSWG’s first meeting on such issues and that while the turnout was encouraging, it could have been better.
  
  “MSWG would like to see greater participation from retail and institutional investors in future meetings since they are financial custodians to many smaller investors.”

Great job Rita!

Great job MSWG!

And yes, I agree with what Rita is saying about participation.

In this MMC deal, the RPT nature of the Senai purchase made utter no sense in my flawed opinion. And if the minority shareholders wishes NOT to get the short end of the stick, they should participate in such events. It's their money, their rights and it makes only logical sense that the minority shareholders fight for what is just!

And on today's Business Times, there were some 'form' of positive development!

• MMC agrees in principle
  
  By Adeline Paul RajPublished: 2009/03/05
  
  MMC Corp Bhd (2194) has agreed in principle to get a second opinion on the value of its proposed acquisition of Senai Airport Terminal Services Sdn Bhd (SATS), says Minority Shareholder Watchdog Group (MSWG).
  
  "MMC has agreed in principle, subject to their board's approval, to obtain a second valuation by a reputable independent valuer to give comfort to the minority shareholders," MSWG chief executive officer Rita Benoy Bushon said after meeting with MMC's management yesterday.
  
  She said the board's approval was needed as it would be a costly exercise for MMC to appoint another valuer.
  
  If approved, the new valuation would take into consideration the current market situation.
  
  MMC's plan to buy the loss-making SATS for RM1.7 billion is controversial as it is a related-party transaction.
  
  Institutional and minority shareholders are worried as to whether MMC, a conglomerate owned by Tan Sri Syed Mokhtar Al-Bukhary, is paying a fair price for SATS, which is also owned by Syed Mokhtar.
  
  The first valuation, by IPC Island Property Consultants Sdn Bhd, tagged SATS at RM2.23 billion, but minorities argued that the sum did not reflect the current market situation and have been insisting on another independent valuation.
  
  MMC, meanwhile, said yesterday that it would address all concerns over the SATS deal in a circular to shareholders sometime this month.
  
  It is targeting to hold an extraordinary general meeting, at which shareholders can vote on the deal, by the end of the month.
  
  "All their concerns will be addressed in the circular, which has been submitted to Bursa Malaysia for approval," senior general manager of corporate services Azlan Shahrim told Business Times yesterday.
  
  The circular will provide sufficient information for shareholders to make an informed decision and determine whether the deal is earnings-accretive to MMC, Azlan said.
  
  MMC's management had an hour-long meeting with MSWG yesterday afternoon to discuss the SATS deal.
  
  MMC took note of MSWG's views, including concern, over the valuation process, Azlan added.
  
  According to Bushon, MMC had said that borrowings for the deal would be minimal and that the credit line was available.
  
  Minorities had been concerned that MMC's cash funds of RM3.8 billion would be reduced after the proposed acquisition. It already has large long-term borrowings of almost RM20 billion.

My fingers are crossed for a positive ending in this annoying RPT transaction in MMC.

MSWG Also Questions The Need For New LCCT!!

Posted the other day: Does Two LCT Makes Sense? and More On Sime Darby's Labu LCT Project.

Today on Business Times, MSWG also addresses this very same issue! MSWG questions need for new LCCT

• The Minority Shareholder Watchdog Group (MSWG) has questioned the benefits of the new low-cost carrier terminal (LCCT) in Labu, Negri Sembilan, proposed by Sime Darby Bhd and AirAsia Bhd.
  
  "Under the current depressed market conditions and likely difficult times ahead, initiatives led by the private sectors are most welcomed. Nonetheless, all key stakeholders must look at the broader picture to benefit the nation as a whole and the companies specifically," its new chief executive officer Rita Benoy Bushon said in a statement yesterday.
  
  She said while there may be persuasive arguments for Sime Darby and AirAsia to build a new LCCT, the watchdog group believes that an "orderly development and construction of airports and aviation infrastructure in the country must be given the utmost consideration to ensure optimisation of resources in line with the country's National Airport Masterplan".
  
  "(While) it is good to have competition, whether there is room for two LCCTs to be developed is debatable," she added.
  
  Bushon also questioned the funding arrangements and ownership of the proposed LCCT. These are important for shareholders to assess the impact on the companies' gearing and cash flow.
  
  "At MSWG, we believe in the board of directors' duty of making decisions to the best interest of their companies, shareholders and stakeholders.
  
  "We also believe that commercial viability, merits of competition and value-creation should be at the heart of any corporate decision," she added.
  
  MSWG believes that the proposed LCCT will hurt airport operator Malaysia Airports Holdings Bhd as it will cannibalise the existing capacity of KLIA given that AirAsia commands 16 per cent and 49 per cent of the international passenger and domestic passenger movements respectively at the airport.
  
  Last month, the Cabinet gave its consent for Sime Darby and AirAsia to proceed with the proposed LCCT on Sime Darby's 2,800ha in Labu. The two companies are now in preliminary discussions with the state and federal authorities.

Well done Rita!

Take AirAsia involvement posted in the other blog posting: More Capital Borrowing For AirAsia????

Bottom line is AirAsia is already buried way deep in debts but yet it wants to borrow more to involve in the building of the LCCT terminal.

Does it even make sense?

Is this how a business is run?

Is money really that cheap that one can borrow and borrow and borrow??????

Shareholder Group Reckons that Malayan Banking Directors Should Quit!

Interesting article published on Business Times, 'Maybank directors have to go if deal falls through'

• 'Maybank directors have to go if deal falls through'
  
  Published: 2008/08/07
  
  The Minority Shareholder Watchdog Group says it is against the BII deal for three reasons: the bank was late in entering the market, the pricing and the timing
  
  THE directors of Malayan Banking Bhd (Maybank) should be held responsible if the PT Bank Internasional Indonesia (BII) deal falls through and RM480 million deposit is forfeited, the Minority Shareholder Watchdog Group (MSWG) said yesterday.
  
  "They (the directors) should resign. No question. If it happens (Maybank loses the deposit), the whole board has to go. It's my money, it's the rakyat's money.
  
  "We were against the deal (for three reasons). Number one, they were late (to enter the market), others have already gone in. Number two is the pricing. Number three, timing ... you could have gotten (it) cheaper (when market goes down). What's the hurry?
  
  "Before you go into any venture, you have to assess the risk," MSWG chief executive officer Abdul Wahab Jaafar Sidek said in Kuala Lumpur.
  
  He believes Maybank should not get compensation from Bank Negara Malaysia, if the deal fails to go through.
  
  Abdul Wahab, however, agreed that Maybank chief executive officer Datuk Seri Abdul Wahid Omar should be excluded from blame as he came on board after the acquisition was announced.
  
  Meanwhile, in an apparent response to MSWG's comments, Maybank said in a statement later yesterday that its board of directors "had conducted itself professionally in the best interest of the bank and its shareholders, adhering at all times to standards of good governance and integrity.
  
  "The proposed acquisition has been evaluated and considered by the board as a strategic initiative to strengthen Maybank as a regional bank," it added.
  
  Maybank said the proposal was presented to shareholders in an extraordinary general meeting on May 15, where they voted overwhelmingly in favour of the proposed acquisition.
  
  "As explained in an earlier announcement to Bursa Malaysia on July 29, the move by Bank Negara Malaysia to revoke its earlier approval for the proposed acquisition of BII followed the recent changes of the new regulation on Take-Over Rule IX by Badan Pengawas Pasar Modal dan Lembaga Keuangan, which was enacted on June 30 2008" it said.

I fully agree and I will go one step beyond and recommend that the directors should be sacked immediately!

Hey if you do agree, do post a simple comment on this blog posting, ok?

The whole deal was so shambolic!

Well I am not going to say more since many had been written on this utterly appalling and shambolic deal.

Here's one good posting: Just The Facts, Ma'am - Maybank's Purchase

Know Our Rights!

Published on today's Bizweek: Capital market needs worthy directors. The article is written by Abdul Wahab, who is CEO of Minority Shareholder Watchdog Group.

• INVESTORS do not like seeing their money vanish into thin air. But this is likely to happen if and when they are inactive or fail to watch over their investments in listed companies. Through their activism, investors and shareholders are allowed to have dialogues with management over some aspects of the companies' operations.
  
  Under the law, shareholders are not trustees for one another. They hold no fiduciary position, and have no fiduciary duties like directors. They are responsible for their rights as owners of the company. Their focus should be on the protection of their own money.

Fully agree! Minority shareholders should be fully responsible for their own money.

Our money! So for heaven sake, learn to protect our own money!

• In essence, investor activism centres on the companies' performance and shareholder value. As more and more shareholders attend general meetings, the boards of directors face mounting pressure, not only from shareholders and investors, but also other stakeholders.
  
  For most boards, general meetings can be a chore under the best of circumstances. Nevertheless, today’s directors must take great care in all of their areas of responsibility and in all aspects of their stewardship.

Ever been into a meeting where the director is falling asleep? And just what about them empty seats? Buta Gaji is it?

• They are not only accountable to investors and regulators but also to stakeholder groups. If they do not know well the nature and consequences of their decisions taken in their names, the results and the bad publicity can be painful.

I strongly believe that some don't deserve to be a director!

• Regulators can act only when there has been a transgression of a rule, regulations or statute. At the heart of accountability are the board’s integrity, compliance and performance.
  
  When a company finds itself in trouble, it is often clear that the board did not fully discharge its responsibilities. What is obviously done wrong in hindsight, can be avoided through foresight. After all, the board knows the strengths and weaknesses of the business, and thus should be among the first to spot the red flags.
  
  Directors only have to recognise the interests of shareholders as their touchstone. Rising investor sophistication and activism would have elevated the boards' conscience.

• The following cases illustrate what minority shareholders can do:
  
  1. The minority shareholders refused to stay quiet at a listed issuer’s EGM. In particular, they questioned the wisdom of the board over the proposed acquisition of a piece of property. The vendors are the company's major shareholders. Even though they were outvoted at the EGM, the minority shareholders were not reasonably satisfied. Their concerns raised numerous questions about the rationale for the property purchase.
  
  2. A listed issuer called an EGM to seek the shareholders’ ratification of acquisitions and disposal of shares in another listed company. Even though a company can ratify a particular action of the board, the minority shareholders’ rights to seek clarification and inquire into any possible breach of directors’ duty under the regulatory rules must be respected.
  
  3. Minority shareholders were grossly unhappy with the board of a listed company over the absence of the chairman and his spouse (an executive director) in two consecutive AGMs. The shareholders also queried the directors' excessive remuneration and succeeded in adjourning the meeting.
  
  4. Minority shareholders were disappointed with a company’s performance. The accounts carried an auditors’ qualification with regards to fixed deposits placed in a foreign fund by the managing director. The MD did not attend the AGM and as a result, was not elected to the board. A police report was also lodged against him.
  
  5. The incumbent board of directors proposed to de-list a company. However, they faced strong objections from the minority shareholders, who called an EGM and brought an action against them, rejecting the proposed delisting.
  
  It is often assumed that wise and experienced directors will quickly reach consensus on what is best for all concerned. However, this is not always so. Although the Code on Corporate Governance emphasises the role and responsibility of non-executive directors, there are often conflicts in the boardroom when directors are reluctant to conform to the code's principles and best practices.
  
  Factors such as ambition, greed, egotism and plain obstinacy are assumed to play a major part in shareholders’ grievances. Of course, to naïve investors, some directors are highly impressive because of their sheer elegance and suavity.
  
  As directors pursue their private agenda, the companies could start to drift, with important decisions being shelved. In dramatic cases, directors or companies are not even bothered about being placed under public scrutiny and on the regulators’ watchlists.
  
  On irregularities in accounts, an investigator in Britain once commented that “the most statutory restrictions on directors’ conduct were more evident on their breaches of laws and regulations than their observance”. He added that “the amount of profit in question did not affect the principle; a small profit did not render permissible what would otherwise be improper; a large profit did not make improper what was basically proper”.
  
  Faced with tougher regulations and onerous duties, today’s directors know the trickiest decision between the right and the wrong compromises, and they have learned to tell one from the other.
  
  To restore investor confidence, the capital market needs to have principled directors, market players and participants who are fully aware of what is right and wrong, and not surrender to moral confusion and relativism.
  
  Of greater importance is the need for vigilant and professional boards of directors, and competent and efficient management. These two factors should ensure both the major and minority shareholders get fair and equitable deals from the companies' proposals.
  
  Lastly, underpinning nearly all shareholder activism is the drive to increase shareholder value. Directors must not pay lip service to acting in the best interests of shareholders.
  
  They must understand and recognise their true sentiments, and gain the trust and confidence of investors and stakeholders in seeking their support for the companies' decisions.
  
  The directors have to believe that the shareholders could at times be their customers and staff, who happen to partly own the company.
  
  If the would-be directors do not subscribe to the right priorities or if they think they cannot offer adequate commitment to the shareholders, they should seriously rethink their decision to join the board of a listed company. If they are already on the board, they should help to change it or resign.

Just want to add this. Sometimes, it makes no sense to be a shareholder when the company attempts all kinds of methods possible to screw us and our money. And sometimes, the company simply isn't the wonderful business that we want to own. Perhaps it's much better for our money if we just walk away. Vote with our feet!

Where's My Munchies Dude?

Read a fantastic news article posted on Business Times: http://www.btimes.com.my/Current_News/BT/Friday/Nation/makan.xml/Article/

• Shareholder watchdog: Forget the food, protect your rights
  By Chong Pooi Koon
  pooikoon@nstp.com.my
  
  August 10 2007
  
  SMALL shareholders need to be united so that their voice can be loud enough to be heard, a watchdog group said.
  
  Minority Shareholders Watchdog Group (MSWG) chief executive officer Abdul Wahab Jaafar Sidek and head of client services Lee Leok Soon - who have both attended over 200 shareholder meetings - observed that retail shareholders often come to meetings without a clear objective.
  
  Citing the example of FCW Holdings Bhd, Lee said the company's annual general meeting recently should have been adjourned after the chairman was absent from the meeting for two years in a row.
  
  "But some shareholders disagreed with MSWG's call for the meeting to be adjourned, simply because they were attracted to the food provided outside," Lee said, "That's ridiculous!"
  
  He said some unscrupulous directors may take advantage of such situations if shareholders are not united.
  
  In some cases, he said, directors who are not running the company in the right way need to be removed, but minority shareholders have to come together to get sufficient numbers to pass or block resolutions.
  
  "Don't be attracted by the food, that's not important - dividends from a well-managed company are," Lee said, reminding small investors to attend shareholder meetings with a clear investment agenda.
  
  MSWG yesterday held a retail shareholders' dialogue in Kuala Lumpur to discuss the way forward for the group.

A well-managed company!!!! That's so rather crucial from an investor point of a view yes?

Remember as an investor, you are a part owner of the company. As a part owner, it's simply imperative that you want to be invested in a company that's well managed.

Well here's the thing for me, if the company isn't well managed, why stick around for the agm? Shouldn't one have VOTED WITH THEIR FEET long ago?

Just mumbling out loud ya.

Hey, where's my munchie dude?

Pay Performance for Directors

Read this article in the Business Times: here

• PUBLIC-LISTED companies (PLCs) should pay their directors based on their performance in order to be fair to them, the stakeholders and minority shareholders, the Minority Shareholder Watchdog Group (MSWG) said.
  
  "The basic rule of pay per performance should apply. If the firms are making losses, the directors should just get nominal pay," MSWG chief executive officer Abdul Wahab Jaafar Sidek told Business Times.
  
  If the firms are to perform well, they should also equally reward the stakeholders and shareholders, he added.

Hmmm..... extremely good suggestion in my opinion. Far too many directors do not appear to be bothered about the performance of the listed company.

The article continues by saying...

• The MSWG is currently working on a similar salary survey that may take a few months to complete, Abdul Wahab said.One of the best ways to set the remuneration band is through key performance indicators, he said.Offering salaries based on that measure also suggests better transparency towards the minorities.The MSWG has been encouraging the PLCs to be more transparent in disclosing remunerations. It shares the same view as Bursa Malaysia Bhd's chief Yusli Mohamed Yusoff.

What say you?

Do you reckon that this is a good move?

And how about cleaning up the huge mess in the ESOS????

ps..

Let me SHOW YOU WHERE IS ZE MOOLA!!!!

back in July 2006, there was an article on Fortune stating the issue of high CEO pay. here

• Lee Raymond$405 Million That's the 2005 comp, lump-sum pension, and current value of various stock grants with which Exxon's chief rides into retirement.
• Bob Nardelli$250 Million The total value of the package Home Depot has paid him so far. He's collected about 30%. The rest varies with the stock price.
• William McGuire$1 Billion UnitedHealth's CEO holds a ton of options. Alleged accounting flaws have hit the stock. But his potential reward (above) remains rich.
• Hank McKinnell$99 Million Pfizer's CEO took heat for a hefty pension built up over many years (present value: $83 million). He earned $16 million in 2005.
• Franklin Raines$90 Million Fannie Mae's boss made that from 1998 to 2003. But auditors now say the earnings his comp was based on were overstated by $11 billion.
• Phil Purcell$66 Million Morgan Stanley's stock fell 25% in the past five years. Pushed out last year, he collected this amount in severance plus 2004 pay.