Twist in E&O takeover saga

  • In affidavits filled in the High court, The Securities Commission stated that Justice Tuan Abang Iskandar Abang Hashim was previously employed by the agency and that "in the circumstances, there is a real danger of bias prevalent in so far as the present dispute is concerned"

  • The yet-to-be-published court filings made available to The Straits Times represent the first responses by the Securities Commission to a closely followed suit filed in December by a minority shareholder of E&O.

  • The waiver granted to Sime Darby has stoked criticism of the coddling of listed state-controlled entitities that dominate the Malaysian stock exchange at the expense of minority shareholders.

  • The legal dispute is also offering a rare peek into the inner workings of the Securities Commission.

  • According to the affidavit signed by Datuk Francis Tan Leh Kiah, the second-most senior commissioner in the Securities Commission, Sime Darby's purchase of the stake in E&O underwent two layers of scrutiny to determine whether a general offer should be carried out.

  • A task force comprising senior officers from the agency's corporate finance and legal divisions examined the transaction and considered two key elements in the deal that could rise to a mandatory general offer obligation on Sime Darby. Mr. Tan said the task force ruled that the three groups which sold the blocks of E&O shares to Sime Darby did not collectively control the company and the disposal did not trigger a general offer.

  • But on the second issue, the task force was of the view that a new "concert party" has been created between Sime Darby and E&O's managing director Terry Tham, who jointly controlled more than 33 per cent in the property concern after the deal. Thus, a general offer obligation had been triggered, Mr. Tan's affidavit noted.

  • The recommendations were then forwarded to the agency's final ruling authority. Mr. Tan said that a three-member committee unanimously agreed with the recommendation from the task force that the three groups were not acting in concert and did not have control of the company.

  • But the committee in "a majority decision" ruled that Sime Darby and Datuk Tham were not acting in concert and a general offer obligation did not arise.