SCwatch


STUPEFYING CONTRADICTION : ALLOWING INDEPENDENT ADVISERS TO SAY THAT AN OFFER IS ‘UNFAIR BUT REASONABLE’
April 23, 2013, 9:17 pm
Filed under: Corporate Governance | Tags: , , ,

I’m generally not the sort to criticize institutions……as they already have a thankless task at hand, what with the constant ‘interference’ from the ‘hidden hand’.

But this is too much to keep silent on.

I am of course referring to the mocking that is being inflicted on the Securities Commission relating to its amended guidelines which effectively allow the ‘splitting’ of the term “fair and reasonable”.

This is because the term has been used to determine the ‘reasonableness’ of an offer/transaction as provided for in SC’s guidelines.

To cut a long story short……with the amended guidelines, an offer/transaction can now be deemed “Unfair but Reasonable”……and I suppose in the same token, “Fair but Unreasonable”??

Too much has been written on this matter that I wish not to regurgitate. You may click HERE and HERE on Errol Oh’s sarcastic shots at the SC in StarBiz.

On my part, I’d like to ask if the term “TRUE & FAIR” which auditors have to opine in PLCs’ financial statements……will also be ‘split’ by the SC.

This may result in auditors stating that the accounts are ‘True but not Fair’……OR ‘Untrue but Fair’.

How embarrassing!

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THE SILENT CONCERNED MAJORITY IN MALAYSIA : THEY ARE THE ONES SENDING THE SHIVERS DOWN UMNO’S SPINE

It’s the numbers……you keep hearing!

Even the police appear to be scrambling to revise their estimate as to the numbers present at the People’s Uprising Rally or Himpunan Kebangkitan Rakyat.

Why the numbers?

Well, essentially it will contradict the spin spun by UMNO bloggers that the people have spurned the politics of the People’s Alliance.

They had said, “Look at their rally at the KL Stadium not too long ago where they could not even fill up half of the 25,000 capacity stadium.”

That may be so because it was a political rally.

But look at the People’s Rally on 112 i.e. January 12 People’s Rally.

It was spine chilling……as far as the UMNO warlords were concerned!

Not only were the political party members present, there were also the NGOs, grandfathers, grandmothers, fathers, mothers and (some) children. There were the office workers, factory workers……you name them, they were there.

And in economic jargon, can you imagine the multiplier effect this rally has had on the nation?

Most Malaysians do not participate in this kind of rally BUT for such numbers to do so indicates the kind of concern Malaysians have on the way UMNO has run the country to date.

And what about those silent concerned majority who have not participated?

Their concern does not diminish with non-attendance.

In fact, their determination to ensure change and reforms do occur becomes more pressing.

This is because we are now seeing the UMNO led Barisan Nasional (BN) government is now trying to lure the votes of the people by using taxpayers’ money.

This indicates the unwillingness of the warlords to cede their positions and power.

Why do you think Najib is having such a tough time to finalise his candidates’ list for the coming General Elections?

You cannot blame the warlords’ resistance against him – because they consider Najib equally tainted – a case of ‘pot calling the kettle black’?

The taint applies to the UMNO led BN government.

Yet, it is not a foregone conclusion that Pakatan Rakyat will prevail this time round in taking over Putrajaya.

This is due to the profoundly skewed non-proportional representation found in the state and parliamentary states in the country….thanks to the Election Commission.

This is their last line of defence in ensuring UMNO’s survival as the political masters of Malaysia.

However, like they say, Rome was not built in a day.

The process to remove UMNO started in the 1999 General Elections, shortly after the crude sacking and physical abuse of Anwar Ibrahim. In that GE, BN lost the state of Terengganu besides failing to regain Kelantan.

The 2004 General Elections was a landslide for BN as the people were prepared to give UMNO one more chance with the retirement of Mahathir.

However, Pak Lah failed miserably and the 2008 General Elections reflected the people’s verdict of the UMNO led BN, which lost its two thirds majority in addition to the states of Penang, Selangor, Kedah and Perak (Kelantan was retained by PAS under Tok Guru Nik Aziz).

Pakatan Rakyat has now proven to the Rakyat that they can indeed run the country efficiently as evidenced in the abovementioned states under their administration consistent with each state’s culture and sentiments – with them garnering the largest percentage of investments including foreign direct investments.

The electoral structure is the next to be revamped fundamentally – that has resulted in the Bersih rallies that have been met with stinging resistance from the UMNO establishment.

But change is inevitable.

And a two party state will be the way to go moving forward – a check and balance system of democracy.



SETIAWANGSA’S COLLAPSING WALL : SIMILAR TO UMNO’S COLLAPSING CREDIBILITY & TRUST AMONGST PEOPLE?

It was indeed ironic that the collapsing wall in Setiawangsa should affect two prominent UMNO warlords in the form of JJ (Jamaluddin Jarjis) and Zulhasnan Rafique, the only Barisan Nasional MP in the Federal Territory……and even then, with much help from ‘postal votes’ that till today, raises much controversy!

It appears, to the superstitious, that this was somehow a divine intervention of sorts to highlight that things come around much faster than one would have thought!

As acknowledged by the Kuala Lumpur mayor, this wall was buil in 1992 to facilitate the construction of the luxury bungalows occupied by the two prominent UMNO politicians, amongst others.

That’s 20 years ago which reportedly cost RM5.0 million each…….meaning that they were ‘substantial’ (read: monetarily) persons coming out of the economic crisis in the late 1980s.

What we actually see today is the accumulation of those deals and sub-standard works…..leading to the kind of controversies like collapsing walls, collapsing government initiated companies, massive losses at Government Linked companies, cronies linked to government contracts having the ability to be absolved (read: Tajuddin Ramli). The list goes on!

Of course we don’t want such calamities to occur at the expense of human lives…..but they were not natural disasters.

They were man-made!

I had raised this matter in an earlier posting (SLIDING CONNECTIONS) several years’ ago and the lessons do not appear to have learnt.

Look at the de-forestation of the Ulu Klang area and you will know what I mean.

People might recall the Highland Tower trajedy but not many recall that collapses had occured earlier in the Taman Melawati area in Ulu Klang……the Hollywood of Kuala Lumpur! The landmark is still there for all to see!

Putting plastic sheets over the area during rainy season is not the answer…….it will defer the inevitable…only for a short while.

One needs to confront the issue and be transparent about it.

Right now, nobody seems to trust the Government!



STEADY CARDIFF CITY : A SHINING EXAMPLE FOR ALL THOSE IMPATIENT FOREIGN OWNED FOOTBALL CLUBS PLAYING IN THE ENGLISH LEAGUE?

“THE RACE IS NOT WON BY THE SWIFT BUT BY THOSE WHO KEEP ON RUNNING.”

This is the first thing that came to my mind when I read about Indian-owned Blackburn Rovers sacking their manager, Henning Berg…….shortly after Kuwaiti-owned Nottingham Forest sacking Sean O’Driscoll.

Berg was sacked for only winning one match in six games….whilst O’Driscoll was culled for not having won more than two games on a trot!!

This brings us to the Malaysian-owned Queen’s Park Rangers, which not too long ago, sacked Mark Hughes because they did not want to lose the opportunity of having Harry Redknapp as their manager.

How shallow can they be……..as though a manager is the panacea for the performance of a football team?

Harry has inherited a team that is rotten to the core……..caused by the silly money made available by Tony Fernandes….easily funded by the equally silly transactions he effected in Malaysia, yes funded by institutions including the pension funds of Malaysia!

Harry was being polite when he said that Jose Bosingwa’s wages was higher than all the players at Tottenham Hotspur when Harry was manager there! Click HERE

Tony thought that he could do like what the UAE owners did for Manchester City.

Hey, come on. We’re talking about men stuff as far as City is concerned.

Do you recall how his offer to acquire West Ham was brushed off discourteously……..that the West Ham owners were not prepared to deal with the boy-stuff offer by Tony Fernandes which they described as bizarre & disappointing. Click HERE

Which brings me to the other Malaysian-owned Cardiff City…….which is sitting pretty at the top of the League Championship table after having beaten rivals Crystal Palace recently.

Yes, Cardiff City is not assured of Premier League football next season but they have been consistently challenging for the right the past few seasons.

And they have been doing it quiety and economically…….with Vincent Tan hardly making unnecessary appearances (read: gaffes) and bold statements…..very much unlike the SIS, Tony Fernandez!

Yes, it is only natural for magnates the world over to have a taste of the ‘action’ by owning football clubs playing in the English League.

But it seems foolhardy for such magnates to ‘waste’ monies on such ventures without a firm foundation and business plan.

Maybe in the case of Tony Fernandez, he could do it ……… because it’s not his money anyway!



LIM KENG YAIK : A STRONG CHIEFTAIN, THROUGH & THROUGH!
December 25, 2012, 1:23 am
Filed under: Corporate Governance, Malaysia politics | Tags: , , , ,

It was indeed sad to hear of the passing of Lim Keng Yaik.

As Deputy PM, Muhyiddin highlighted, Keng Yaik’s forthrightness did not endear him to the (many) less secure folk of his generation……but that’s the man.

When he was plucked out from obscurity to join the Malaysian Chinese Association (MCA), many in the party were intimidated by him.

Why? Because he was smart…….street smart……and could read the situation a mile away and strategise to his own advantage.

The insecurity of MCA then was so stark…….that Keng Yaik was sacked from the party….apparently for ‘rocking the boat’!!

His entry into Gerakan was equally stormy with many challengers over his nearly 27 years as President of the party.

Paul Leong, Goh Cheng Teik, Joseph Chong & Kerk Choo Ting came, challenged and departed.

None could unseat this China-man character!

Keng Yaik was known to be the smart one….notwithstanding his mannerism and frankness.

Indeed, he made things happen……unlike many other Ministers who not only waited things to happen, but also did not know what the ‘f–k’ was happening!

If he did appear to have any flaw, it was his backing of exPenang Chief  Minister, Koh Tsu Koon.

The manner in which Koh Tsu Koon portrayed himself as a weakling….especially when Ibrahim Saad was his deputy in Penang……led very much to the debacle in the 2008 General Elections as far as Gerakan was concerned.

Keng Yaik should have seen the signs and made the necessary changes before retiring.

But when one has stayed as long as Keng Yaik had in Gerakan, it was only human to wish and hope that things would get better!

My ‘hope’ is that there will be more ‘Keng Yaik’ characters in the Malaysian political arena……as it will only mean an inclination towards confronting issues………as opposed to confronting people!!



OLAM : SINGAPORE’S CALAMITY…..EQUIVALENT TO MALAYSIA’S AIR ASIA?
December 20, 2012, 12:12 am
Filed under: Airlines, Corporate Governance, Rakyat's concerns | Tags: , , ,

It was certainly amusing to see the Singapore authorities scrambling to contain the “Olam” fall-out arising from the ‘Muddy Waters’ attack on Olam’s perceived strong financial standing.

That’s because Temasek (the Singaporean equivalent to Malaysia’s Khazanah), the Singaporean government investment arm, has a significant stake in Olam, a commodity supply chain entitiy listed on the Singapore Stock Exchange, SGX.

To scramble means there must be credence in the view taken by Myddy Waters’ head, Carson Block…..that the manner Olam accounts for its profits and strong financial position…..tantamounts to what Carson Block describes as ‘legalised fraud’!

Of course the more polite ones would call it overly aggressive accounting.

Whatever one would call it, the profits aren’t real…..i.e. the money’s not in the pocket….although the company’s financial statements call it profits!!!

Hey, has the sub-prime mortgage loan fiasco, which precipitated the economic crisis in the US an Europe, been forgotten?

It certainly was interesting when Bloomberg quoted Carson Block (of Muddy Waters) about companies recognising the future profits of an asset (just acquired) in the current financial year…..causing these companies to perpetually buy such assets, if they can!

Well, Air Asia, for one, CAN!

Notice their recent announcement of acquiring another 100 planes…..leading to close to 500 planes in the pipeline!

Click HERE for MA Wind’s excellent coverage of the Olam matter in his CGMalaysia blog-site.

Is it no wonder that the Hongkong Stock Exchange has dis-allowed the inclusion of such unrealised profits in the computation of “profits” in order to qualify for listing?

Shouldn’t the same principle be applied in the valuation of a company’s share in the computation of ‘Earnings per Share’ and correspondingly, the ‘Price Earnings Multiple’?

Reading a set of financial statement of a public listed company is certainly NOT like what it used to be!



SOMBER CHARACTERIZATION OF MALAYSIA’S ECONOMY : LEADING TIGER ECONOMY, BUT IN A DIFFERENT ‘PACK’!

It was reported recently that the cosmetic firm, L’Oreal, was building its largest overseas factory in Indonesia…..costing about 100 million Euros, that’s about RM400 million Ringgit.

An accompanying story reported an expected 6.3% GDP growth for Indonesia.

Hold on…..I thought not too long ago, Indonesia was a sick; no, sorry economy where its citizens had to venture overseas to earn a living either as a maid or a construction worker.

That was during the Suharto era whereby the governors of the various provinces were a lord unto themselves…..most of them being  military personnel that then had the patronage of Suharto.

We also read about the family of the President…..from daughter, Tut-tut to his flamboyant son, Tommy…..enjoying the ‘privileges’ of being in the inner circle.

That seemed a distant past……including the Presidencies of Habibie, Wahid and Megawati.

The Indonesian economy has evolved significantly since the ouster of Suharto and credit has to be given to all the presidents since including the incumbent Susilo Bambang Yudhoyono a.k.a. SBY.

The key change instituted has been the plugging of the ‘leakages’ suffered by Indonesia and other economies that were wracked by corruption, nepotism and intimidation.

The effects of the change is clearly seen in the economic data of the country. Not only that, it is further evidenced by the significant investments made by foreign companies and the ensuing improvement in the country’s infrastructure.

Of course, corruption is a problem…….it is impossible to completely eradicate corruption (ask Singapore) but it can be curtailed to such a stage that the perception of the country improves correspondingly.

After all, it is perception that determines reality!

Which brings us to Malaysia.

People are oh so polite in their responses when asked about Malaysia’s economic prospects.

The latest was the label, ‘Tiger Economy’ was still tagged to Malaysia.

But hold on, that was in the 1980s and 1990s when Malaysia was in the pack with the likes of Singapore, South Korea, Taiwan etc. who have since moved on to a higher level.

So their response is that yes, Malaysia is now the leading Tiger Economy in the pack ahead of Vietnam, Cambodia, Laos, Burma etc!!

Well, that’s comforting!

But for the realists, it is indeed serious warning bells being sounded (again) for the political masters of Malaysia…..whoever they may be after the forthcoming General Elections!

Whichever coalition that wins has to take the necessary steps to enable the country to move up to the next level……on par or close to par with the likes of Singapore and South Korea.

Word out is that Najib is already doing it quietly……..by facilitating the privatization of major government linked companies and clearing the deadwood (read: Proton…….and sooner or later, MAS).

As far as the Rakyat is concerned, that’s music to their ears……as in the medium to long term, it means a curtailment to those massive ‘leakages’ that can only mean good things for the country!