07 November 2014
MESSAGE FROM THE CEO
In the wake of last week's reports that Bursa Malaysia does not have unfettered
discretion in issuing a restitution order to directors of listed companies, it is our view
that the spirit of this legal remedy be nonetheless preserved and ought to be done in
accordance with the process of law and the governance structure.
We also note that EPF, vide its listed issuers, has appealed against Bursa's decision to
disallow it from voting in the merger proposal concerning RHB, CIMB and MBSB. Our
stance remains consistent: we believe Bursa had indeed looked at the merit and felt
the need to not allow EPF to vote.
Not merely because doing otherwise would flout Bursa's very own Listing Requirements, but also
because of the floodgates argument.
As it stands, EPF has every right to appeal, and Bursa is duty bound to entertain the appeal. Until then,
we shall have to wait and see whether new evidence is available to convince the regulators that it
should be given a waiver on the voting.
During the week, we had 2 forums to advise issues that were brought to us by minority shareholders on
the proposed RHB-CIMB-MBSB merger and the proposed acquisitions of OSK Property and PJ
Development by OSK Holdings. The forums were well attended and served as a good platform for
exchanging information and ideas which provides an understanding on mergers and acquisitions as well
as privatisation issues.
Yesterday was MAS’ EGM to privatise the Company via Selective Capital Reduction and Repayment
(SCR) to pave the way for a comprehensive restructuring exercise by Khazanah. The resolution received
93.98% in value, 70.6% in number of disinterested shareholders voting for AND 1.41% of the votes
attaching to all disinterested voting shares rejecting it.
Many who had supported MAS over the years must have felt very angry and disappointed given that
Khazanah had the best people around together with top consultants and advisers and yet unable to
save MAS.
It was a ‘Hobson’s Choice for minority shareholders at the EGM. Now that it is privatised, we still
believe that Khazanah has an even higher obligation to be transparent as it is a rakyat’s asset. We,
therefore, hope that Khazanah would execute its restructuring plan and deliver the desired results.
Regards,
Rita
MSWG IN THE NEWS
FORUM ON MERGERS AND ACQUISITIONS & PRIVATISATION
Of late, several substantive corporate developments have been announced namely the proposed RHBCCIMB-MBSB merger and the proposed acquisitions of OSK Property and PJ Development by OSK Holdings
and the subsequent MGO and VGO by OSK Holdings (OSK Holdings deals).
During the week, partly arising from complaints and concerns from some investors, MSWG held a forum
to address pertinent issues relating to the aforesaid proposed corporate deals. The forum was well
attended and received by close to 40 investors including some members of the public. The forum also
serves as a good platform for exchange of information, ideas and MSWG also had the opportunity to
further enhance participants’ understanding on various aspects and rules pertaining to privatisation
which was found to be lacking among many investors.
MSWG plans to carry out more such forums and encourage more members of the public to attend.
Watch out for announcements in MSWG’s website and in this regard, it also pays to be a retail
subscriber of MSWG where subscription is currently free until the end of the year as you will be
informed of such forums including any MSWG’s investors education programmes/seminars apart from
other benefits disclosed in MSWG’s website.
MARKET AND REGULATORY UPDATE
BANK NEGARA MALAYSIA (BNM) MAINTAINED OVERNIGHT POLICY RATE (OPR) AT 3.25%
At the Monetary Policy Committee (MPC) meeting on 6 November 2014, BNM decided to maintain the
OPR at 3.25 percent.
Inflation is projected to trend higher for the remainder of the year and will continue to be above its
long-term average next year due to domestic cost factors. However, the absence of external price
pressures and more moderate demand conditions are expected to mitigate the impact of these cost
factors on the underlying inflation.
The current stance of monetary policy remains accommodative and is assessed to be appropriate given
the developments in monetary and financial conditions. Moving forward, the MPC will continue to
carefully assess the balance of risks surrounding the outlook for domestic growth and inflation. The
MPC will also remain vigilant to the risks of destabilising financial imbalances. This is to ensure that
the monetary policy stance is consistent with the sustainability of the growth prospects of the
Malaysian economy.
MSWG’s QUICK TAKE ON ONGOING CORPORATE TRANSACTIONS
KINSTEEL BHD (“KINSTEEL”) / PERWAJA HOLDINGS BERHAD (“PHB”)
According to the announcement released by both Kinsteel and PHB, Bursa Malaysia via its letter dated 4
November 2014 notified both companies that their application for an extension of time to release their
annual audited financial statements for the period ended 30 June 2014 (“AFS”) until 14 November 2014
were rejected due to the reason that the application was submitted after the due date for submission
of the AFS.
In view of the above, if Kinsteel and PHB were unable to submit their AFS, on or before 7 Nov 2014,
trading in Kinsteel and PHB’s shares would be suspended from the next trading day, i.e. 10 November
2014 until further notice.
MSWG’S COMMENTS:
Minority shareholders are unhappy that both Kinsteel and PHB not only were late in submitting their
annual audited reports on time but also submitted their application for extension after the due date
for submission of the AFS.
So what were the reasons for such a delay? What would be the next course of action to be taken by the
relevant authorities to ensure that these 2 listed companies keep shareholders and also authorities
informed of their financial status?
MSWG’s WATCHLIST
LAY HONG BERHAD (“LHB”) / QL RESOURCES BERHAD (“QLRB”)
QLRB had extended the closing date for the conditional takeover offer for the remaining shares in Lay
Hong Bhd by another 21 days from 5 November 2014 to 26 November 2014. QLRB mentioned that all
other terms and conditions of the offer set out in the offer documents remain unchanged.
LOCAL NEWS AND DEVELOPMENTS
EPF makes appeal to vote in merger plan
http://www.thestar.com.my/Business/Business-News/2014/11/01/EPF-makes-appeal-to-vote-inmerger-plan/?style=biz
Malaysian Mosaics plans relisting
http://www.thestar.com.my/Business/Business-News/2014/11/03/Malaysian-Mosaics-plans-relistingCEO-says-it-will-do-it-in-two-years/?style=biz
Promising his best
http://www.nst.com.my/node/48775
No extension for Perwaja and Kinsteel
http://www.theedgemarkets.com/my/article/no-extension-perwaja-and-kinsteel
GLOBAL NEWS AND DEVELOPMENTS
Standard Chartered being investigated
http://www.thestar.com.my/Business/Business-News/2014/11/03/Standard-Chartered-beinginvestigated/?style=biz
Publicis to buy US-based Sapient for $3.7 billion
http://www.cnbc.com/id/102144631?trknav=homestack:topnews:4
BoJ bazooka to spark currency war
http://www.cnbc.com/id/102144507?trknav=homestack:topnews:6
British banker charged with murder in Hong Kong
http://www.cnbc.com/id/102143520?trknav=homestack:topnews:7
MSWG Analysts
Lya Rahman, General Manager, Corporate Services, [email protected]
Chong Chee Fern, General Manager, Corporate Monitoring [email protected]
Rebecca Yap, Head, Corporate Monitoring [email protected]
Quah Ban Aik, Head, Corporate Monitoring [email protected]
Norhisam Sidek, Manager, Corporate Monitoring [email protected]
Shahnul Niza Bin Dato’ Dr. Mohd Yusof, Manager, Corporate Monitoring [email protected]
Lee Chee Meng, Manager, Corporate Monitoring [email protected]
Wong Kin Wing, Manager, Corporate Monitoring, [email protected]
Nor Khalidah Khalil, Analyst, Corporate Monitoring [email protected]
Vinodth Ramasamy, Analyst, Corporate Monitoring [email protected]
DISCLOSURE OF INTERESTS
•

With regard to the companies mentioned, MSWG holds a minimum number of shares in all these companies covered in
this newsletter save for Perwaja Holdings Berhad.
The CEO has minimal shares in MAS.
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ENDS./