SCwatch


“MAS-AIRASIA ‘STRATEGIC COLLABORATION’ WILL CONTINUE DESPITE POSSIBLE ABANDONMENT OF SHARE SWAP” : COULD THE SHARE SWAP BE A ‘SMOKE-SCREEN COVER’ FOR SOMETHING ELSE?

We have been reading recently that, as political appeasement to some portion of the Malaysian electorate, the share swap between Khazanah and Tune Air of 20% in MAS and 10% in Air Asia may be unravelled.

MAS chairman, Md Nor Yusof has now been quoted as saying that irrespective of whether or not the share swap is to be unravelled …….. “the special collaboration between the airlines would continue”!

If collaboration was the over-riding consideration, why was the share swap concocted and made part of the deal in the first place?

Not only that, the run up in Air Asia’s share price was unbelievably steep and closed at its historical high of RM3.95 when the swap was priced in!

At the same time, MAS’s share price had fallen to a low of RM1.60.

And lo and behold, at those prices, 10% of Air Asia’s market capitalization  conveniently equated to 20% of MAS’ market capitalization ….. when the swap was made!!

Many are questioning as to why individuals have not been hauled up for the widely perceived fiddling and manipulation of the share prices of the two stocks.

 

OK, let’s assume that the share swap is now reversed by the government and both shareholders of MAS & Air Asia ….. i.e. Khazanah and Tune Air, are returned to status quo.

It sure doesn’t seem as though there is any effect or improvement to the scheme of things

What’s the catch then?

Well the catch is that ………. the horse has already bolted!!

When Air Asia’s share price was somehow stratospherically (relatively speaking) surging towards its high of RM3.95 ……. it allowed our dear’ol Tony Fernandes to cash out!! 

Do you recall the June 2011 report that a 2% block of Air Asia shares was sold by Tony’s private company, Tune Air that netted him about RM150m ….  that’s RM2.85 per share? Click HERE

The MAS-AirAsia share swap was announced in August 2011.

Interestingly, the Malaysian pension fund, EPF had increased its stake in Air Asia by about 2.85% in 2011!

Now, we all know many major shareholders of Malaysian PLCs have additional stakes in their respective PLCs via nominee companies.

Is Tony Fernandes any different?

Of course not!

Looking at the volume of shares traded during 2011, Tony F could have netted a much larger sum than the RM150m ……. vide the selling of Air Asia shares held by  his nominee companies to other ‘interested parties’ in portions of less than 2% (of Air Asia’s paid up capital) …… such that those ‘interested parties’ do not need to identify themselves through  filings to Bursa Malaysia.

As an illustration, if Tony F had privately through nominees, flogged off an additional 10% of AirAsia i.e. 285m shares  at an average of RM3.50, it would have netted him a cool RM1.0 billion!

 

And who are these ‘interested parties’ that Tony F had sold to?

Ask CIMB!

Bottom line is that the shares were pushed up to justify Tony F’s ‘exit’ at those high prices paid for by ‘institutions’ that are not in their interests. 

Bottom line is that it may explain how Tony F (even after paying ‘expenses’ to his ‘comrades-in-arms’) could afford to take over an English Premier League football team, QPR, and finance the acquisition of players like Shaun Wright Philips, Bobby Zamora, Djibril Cisse and Joey Barton to name a few!

Maybe, just maybe, the share swap between Khazanah and Tune Air was just a smoke screen of sorts ……. to be reversed at the appropriate time!

 

Maybe the real losers (and suckers) are EPF, the manager of the Rakyat’s (people’s) retirement funds and those ‘interested parties’ that CIMB can shed light on!

Maybe that’s why there are so many angry people in Malaysia when it comes to the MAS-AirAsia share swap deal …… except for those who concocted it ……. possibly for their own self-interests!

Advertisements


ACQUITTED EX-SIME BANK CEO ISMAIL ZAKARIA : ‘SHINING CZAR’ THEN …. JUST LIKE AHMAD JAUHARI, RASHDAN YUSOF, KAMARUDDIN MERANUN …. SHINING CZARS NOW?

Not many may recall Ismail Zakaria.

One couldn’t even easily get his photo online until Malaysian Business Times published it recently.

Ismail Zakaria’s name then (up to the late 1990s) was so highly thought of that he was actually touted for the position of CEO of Maybank, which he eventually lost to Ahmad Don.

Ismail Zakaria (or IZ as he is known), joined Sime Bank as CEO after a short stint with RHB Bank.

But what we read about now is IZ’s acquittal from court charges of acting beyond his authority in lending up to RM175m to companies back in the late 1990s when CEO of Sime Bank, a subsidiary of Sime Darby Berhad.

Sime Bank was previously UMBC Bhd (United Malaysian Banking Corporation Bhd).

It’s amazing that such a matter would take over a decade to be dealt with ….. and even that, at the level of the Session’s Court!

But I do recall of the amazement at the way monies were expended by a bank supposedly controlled by a world renown company with fantastic governance and checks & balances – SIME DARBY BERHAD.

It is equally amazing (and galling) that in a relatively short period thereafter, we could witness the same scenario in Sime Darby’s Oil & Gas Division …… losing close to RM3.0 billion resulting from slip-shod management practices.

Actually, my point in this posting is that Malaysia’s corporate mentality still seems to be very much that if one appoints a high profile individual as CEO to a company ……. it is bound for success.

The actual track record of that person appears to be secondary.

As long as he/she has had their profile raised, CV’s polished, references ‘corroborated’ …… they appear acceptable, so to speak.

That seems to be the case for IZ then ……. and we seem to see it even to this day?

Look at the short-list for the Managing Director’s post for MAS as reported.

They were Ahmad Jauhari, Rashdan Yusof, Kamaruddin Meranun and Shazali Ramli.

Just what exactly has each and every one of them actually achieved?

Ahmad Jauhari was a member of the Sikap Power team that got the mandate to build an IPP plant in Port Dickson.

Naturally, it would be built and financed by others and resulted in the project being flipped first to MRCB and then to Malakoff.

Those who originally got the mandate would make a ‘killing’ from the flipping!

Ahmad Jauhari, then spent a time as MD of Malakoff, whose control (vide MMC)  by then had moved from the government to UMNO financier Syed Mokhtar Al Bukhari.

As for Rashdan Yusof ….. besides being with an audit firm and then the Thinking Company (Bina Fikir), Rashdan was also a director and shareholder of listed company, Megan Media Berhad, which collapsed so calamitously around the same time as Transmile Berhad.

And what about Kamaruddin Meranun?

Before he got his break, thanks to Snake Charmer, Tony Fernandez, what did Kamaruddin Meranun actually achieve?

He did spend some time with the Innosabah Securities Bhd Group, a stock broking firm in Sabah with subsidiaries involved in related activities eg. options and futures.

Innosabah collapsed under the same exposure that Sime Bank had then!

As for Shazali Ramli, well, he’s an apparently good marketing man especially known for his oily rolled back hair!!

Therefore, there seems to be a serious dearth of good quality CEOs for the Malaysian corporate community!

Or is it that the post of MD for MAS was earmarked for a pliant, financially secure individual who would do the bidding of the puppeteers behind the scene?

Just like Ismail Zakaria?

Ex-Sime Darby Berhad CEO, Zubir Mursid, who is facing his own court charges, must be quite positive with IZ’s acquittal.

Click HERE for BTimes report on IZ’s acquittal.