SCwatch


TONY FERNANDES BUYS QPR : A ‘SYMBOLIC CAPTURE’ TO SIGNAL HIS LOSS OF CONTROL OF AIR ASIA?

 

The former head of scandal hit Satyam, Ramalinga Raju, was quoted, after his arrest for the shambolic farce relating to his company’s cooked up books including US$1.0 billion that was non-existent, as follows:

“IT’S LIKE RIDING ON A TIGER, NOT KNOWING HOW TO GET OFF WITHOUT BEING EATEN”.

It does make one wonder if Air Asia’s Tony Fernandes is facing the same predicament!

This entrepreneur, who took over an ailing airline from a croney Malaysian public listed company for only RM1.00 and then grabbed a huge portion of the Malaysian market previously monopolized by Malaysia Airlines ……. by running it more efficiently than the government airline, has now grown the airline by leaps and bounds.

He then made Air Asia’s financials look better than normal by applying purportedly acceptable practices like recognising profits before they have been earned!!

With such super figures, he listed Air Asia in the mid 2000 and is currently valued at RM10.5 billion!

Not bad for an initial investment of RM1.00!

This is when investors must take heed of the ominous signs that are currently taking place with respect to Air Asia.

He is on a roller coaster (of a tiger) ….. in an industry that is becoming impossibly competitive …. and is running out of good news!

This is when he indulges in promotional acts and statements to prop up the share price of Air Asia.

An example is a few days after having announced the acquisition of 200 planes, he makes another announcement of his intention to acquire another 100 planes!

Don’t these costly acquisitions require detailed study ….. unless it is just for show?

Of course, my critics will retort that I’m just being a sour puss …… how can a single man singularly raise Air Asia’s share price from 80 sen to RM3.95!

 

Ah, this is where the recently announced ‘collaboration’ between the government owned Malaysia Airlines and Tony’s Air Asia comes into play.

MAS is as good as a goner due to it being a political entity where besides having been a cash cow for UMNO cronies in the past (read: Tajuddin Ramli), laying off its largely dead woods amongst its 20,000 employees ….. is politically non-acceptable.

Therefore, whatever that needs to be done has to be done subtly and it will be in the form of Air Asia.

This leads me to the conclusion that Air Asia is not singularly controlled by Tony Fernandes nor Tune Air!

Why?

Air Asia’s phenomenal rise in share price is due to the accumulation and support of its shares by government agencies like EPF, Value Cap and Tabung Haji as reported in the press.

This is indeed an exit exercise for Tony Fernandes …… in order for him to indulge in other vices ….. like buying a football club like Queens Park Rangers!!


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