Asia Sentinel

MAS made an official announcement on June 22, 2012 to Bursa Malaysia regarding the suit with former executive chairman Tan Sri Dato' Tajudin Ramli (TSDTR). This is an imporant suit, and it has been dragging on for a long time (TSDTR was attached to MAS until 2001, 11 years ago). The content of the announcement: "We wish to announce that MAS and TSDTR have reached an agreement to settle the legal suits concerned on terms. As a result, the legal suits and all counter-claims in the legal suits against MAS will be withdrawn." According to this article in The Malaysian Insider: (Tajudin) has agreed to surrender valuable land in Langkawi where the Four Seasons Hotel stands,” a court source told The Malaysian Insider on condition of anonymity. But if that is true, why was it not revealed in the announcement to Bursa Malaysia?  On June 25, 2012 MAS came with a new announcement. a)        the parties in KLHC Suit No: S3-22-634-2006 will complete the Sale and Purchase Agreement dated 16 June 1997 (“SPA”) in which MAS purchased certain lands in Langkawi. MAS had sought to enforce the SPA by way of specific performance. This will result in the remaining land purchased (a 21 acre portion of the land held under HS(D) 623, Mukim Ayer Hangat, Daerah Langkawi) to be effectively transferred to MAS upon payment of the agreed balance purchase price of RM4,001,622.50 that is still outstanding under the SPA; b)        all Counter-claims in KLHC Suit No: S3-22-634-2006, KLHC Civil Suit No: S7-22-487-2006 and SAHC Civil Suit No: MT3-22-365-2006 are to be withdrawn against MAS and parties related; and  c)        MAS and parties related will withdraw its claims in the above legal suits. There is no adverse financial or operational impact on MAS arising from the settlement. MAS will not be incurring any financial or operational loss. I find the announcement puzzling at best, and it throws up more questions than it answers, for instance: What are the details of the SPA of 1997? Why does it take 15 years to complete the SPA? The claims against TSDTR and others were very specific and serious in nature, totalling many hundreds of millions of RM, why are they settled with a parcel of 21 acre land which even has to be purchased? The claims, as detailed in the 2011 year report:   The Annual General Meeting of MAS has just been held, so shareholders have to wait almost one year to air their possible grouses regarding this settlement.  I doubt if they are happy with the performance, this is the 5-year chart of MAS:   The MAS group has accumulated losses of more than RM 8,000,000,000.

Worrisome article in the MalaysianInsider regarding RBTR Asset Management: www.themalaysianinsider.com/malaysia/article/investors-want-news-on-asset-manager-probe-fear-cover-up/ Abdul Razak said that RBTR’s custodian UBB (Malaysia) Trustee Bhd had paid the monies to British Virgin Islands company Locke Guaranty Trust (NZ) Ltd (LGT). But in 2007 the Securities Commission of New Zealand has already issued a very alarming alert on this company: http://www.infonews.co.nz/news.cfm?id=2799 Investors should be warned about the scheme because the Commission believes claims made about it are likely to deceive, mislead or confuse investors," the Commission's Director of Primary Markets, Kathryn Rogers said. LGT advertised the plan on its website. It stated that the investment is safe and risk free. All investments have a degree of risk and the Commission believes these statements are deceptive and misleading. "The website may have given the false and misleading impression that LGT has been licensed and/or approved by the Securities Commission or the Reserve Bank," Kathryn Rogers said. "LGT is not a registered bank in New Zealand and is not subject to banking regulations." If its claim that New Zealanders are not eligible to invest is true, then the offer is not subject to the Securities Act. It does not comply with the Act. The description of the scheme is confusing because it is unclear how LGT intends to use investor's money and information about this appears inconsistent.

From a Corporate Governance point of view, one can not escape the case of PKFZ, with (as so often in Malaysia) conflict of interest on different levels, partly through the mixture between politics and business, a mixture that has done so much damage. I have not yet read the book myself, but the book review by Ong Kian Ming at TheMalaysianInsider makes a very good impression: www.themalaysianinsider.com/books/article_book/book-review-pkfz-a-nations-trust-betrayed/ One passage: "The timelines, together with the financial information highlighted, reveal how PKA was seemingly ‘duped’ not just once or twice but many times by KDSB. PKA not only paid above market rates for the PKFZ land but was also charged above market interest rates for the deferred payments. PKA was further ‘duped’ into paying for the development of the whole parcel of land in a single stage rather than the more financially prudent option of developing the project in stages. Time and time again, KDSB, the party who sold the PKFZ land to PKA, was appointed as the main contractor for an ever expanding scope of development work, without any open tenders. PKA would end up owing KDSB RM4.9 billion, which includes the land as well as development costs, almost 5 times more than the estimated RM1 billion debt level that was deemed sustainable for PKA".

Very good article in The Edge Malaysia from R B Bhattacharjee "Media freedom is about ethical choices too": www.theedgemalaysia.com/commentary/213293-media-freedom-is-about-ethical-choices-too.html The first part is about Bersih 3.0 about which I won't comment since this is not a political blog (although the readers should be able to guess to whom my sympathy goes).