13.09.2019
MESSAGE FROM THE CEO
Axiata’s Announcement – More Transparency Needed
On 6 September 2019, Axiata Group Berhad (Axiata) announced that both Axiata and Telenor ASA (Telenor) (the Parties) have mutually agreed to end discussions regarding a non-cash combination of their telecom and infrastructure assets in Asia (the "Proposed Transaction").
Axiata went on to say that over the last four months, both Axiata and Telenor have been working on due diligence and finalising transaction agreements to be completed within the third quarter of 2019. However, due to some complexities involved in the Proposed Transaction, the Parties have mutually agreed to end the discussions.
Both Parties, however, still acknowledged the strong strategic rationale of the Proposed Transaction.
The summary of the announcement concluded by stating that the Parties do not intend to provide further comments.
The concluding statement itself is the starting point of an issue. Should Axiata be obliged to provide an explanation to minority shareholders as to what were the ‘some complexities’ that derailed the Proposed Transaction? Will PLCs, in future abort proposed transactions merely by citing ‘some complexities’ as a reason – and to round it up, state brazenly that ‘the Parties do not intend to provide further comments’.
Axiata was the top loser on Bursa Malaysia on Tuesday (10 September) with its share price plunging as much as 87 sen or 17.8% to RM4.01 before closing 77 sen or 15.8% lower at RM4.11 wiping off RM7.03 billion in its market capitalisation.
Digi.com Bhd, in which Telenor ASA has a 49% stake, went down as much as 59 sen or 12.1% to RM4.30. It closed the day down 29 sen or 5.9% at RM4.60 losing RM2.26 billion in market capitalisation.
Thus, between the two listed companies, a total market capitalisation of RM9.29 billion was wiped out in a single day.
This is material reduction of shareholder value. The share prices of both the PLCs had run-up due to the announcement of the Proposed Transaction due to the strong strategic rationale of the Proposed Transaction. In fact, Axiata’s announcement on 6 September 2019 calling-off the Proposed Transaction alluded to this very fact by stating ‘Both Parties, however, still acknowledge the strong strategic rationale of the Proposed Transaction’. It should be noted that at RM4.88, the share price of Axiata was up 9.84% over the past year. In fact, the share price hit a high of RM5.26 after the initial announcement of the Proposed Transaction on May 6.
We may be creating a dangerous precedent if we accept ‘some complexities’ as a valid reason for aborting a proposed transaction especially when the share prices had run-up due to the announcement of the proposed transaction.
Apparently, the motivation to create value for shareholders (since both parties acknowledged the strong strategic rationale of the Proposed Transaction) was not enough to surmount the ‘some complexities’.
Minority shareholders are left wondering, and speculating, as to what these ‘some complexities’ could be. And what could possibly be so confidential that the complexities cannot be revealed in the interest of transparency? It is said that rumours abound when there is a lack of information and this is especially true for a stock exchange.
Surely, minority shareholders deserve a more meaningful explanation for calling off the Proposed Transaction.
MSWG AGM/EGM Weekly Watch 16 – 20 September 2019
For this week, the following are the AGMs/EGMs of companies which are in the Minority Shareholders Watch Group’s (MSWG) watch list.
The summary of points of interest is highlighted here, while the details of the questions to the companies can be obtained via MSWG’s website at www.mswg.org.my.
|
Date & Time |
Company |
Venue |
|
18.09.19 (Wed) |
POS Malaysia Bhd |
Holiday Inn Kuala Lumpur Glenmarie, 1, Jalan Usahawan U1/8, Shah Alam, |
|
18.09.19 (Wed) |
Land & General Bhd |
the Sri Damansara Club, Lot 23304, Persiaran Perdana Bandar Sri Damansara |
|
18.09.19 (Wed) |
Daya Materials Bhd |
Kelab Golf Sultan Abdul Aziz Shah, Seksyen 13, Shah Alam |
|
One of the points of interest to be raised: |
|
|
Company |
Points/Issues to Be Raised |
|
POS Malaysia Bhd |
On Page 31 (Annual Report), it is stated that “A tariff rebalancing will not be sufficient to ensure our business sustainability. We have a transformation plan where cost leadership is the main theme”. Postal operators around the world are moving towards a more deregulated pricing model as this allows them increased pricing flexibility (Page 28, Annual Report).
(c) Please elaborate on the ‘cost leadership’ and to what extent can cost optimisation be able to turn around the postal services segment? |
|
Land & General Bhd |
Mr. Ferdaus Mahmood, a Non-Independent Non-Executive Director (“NINED”) has been paid a fixed advisory fee of RM10,000 per month for his advisory role in relation to operational matters of the Group since 1 January 2016. (page 21 of the CG Report 2019)
Why does the Board require Mr. Ferdaus Mahmood to advise the Group on the operational matters as this is the role and responsibility of an MD?
(c) The annual fee paid to Mr. Ferdaus Mahmood is RM120,000 which is the same amount as the Chairman’s fee. Please justify the high fee paid to Mr. Ferdaus Mahmood. (d) Did the Remuneration Committee approve and fix Mr. Ferdaus Mahmood’s advisory fee?
(e) How long is Mr. Ferdaus Mahmood’s contract of service?
(f) Is not Mr. Ferdaus Mahmood, in substance, an executive director instead of an NINED? |
MSWG’S WATCHLIST
BERJAYA LAND BERHAD
PUBLIC SHAREHOLDING SPREAD REQUIREMENT PURSUANT TO PARAGRAPH 8.02 OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD
Further to our announcements dated 2 August 2019 and 5 August 2019, the Board of Directors (“Board”) of Berjaya Land Berhad (“BLand” or “Company”) wishes to announce that Bursa Malaysia Securities Berhad (“Bursa Securities”) has, vide its letter dated 6 September 2019, resolved not to approve BLand’s application for an extension of time to comply with its approved minimum public shareholding spread requirement of 15% (“Public Spread”).
As provided in the Main Market Listing Requirements of Bursa Securities (“Listing Requirements”), Bursa Securities may:-
(a) impose any type of action or penalty pursuant to Paragraph 16.19 of the Listing Requirements; and
(b) suspend trading in the securities of BLand pursuant to Paragraph 16.02 of the Listing Requirements.
Currently, the public shareholding spread of BLand stood at 14.65%, a shortfall of about 0.35%.
In view of the current poor market condition and as the Company has not formulated any rectification plan to address the shortfall in the Public Spread but will explore all possible options to meet the Public Spread, the Board of BLand may contemplate an appeal on Bursa Securities’ decision on the extension of time to comply with the Public Spread.
This Announcement is dated 10 September 2019.
Source: http://www.bursamalaysia.com/market/listed-companies/company-announcements/6279985
TPC Plus Berhad
CHARGES UNDER SECTION 14(1) OF THE PRICE CONTROL AND ANTI-PROFITEERING ACT 2011
The Board of Directors of TPC Plus Berhad (“the Company”) wishes to announce that the Company’s wholly-owned subsidiary, Teck Ping Chan Agriculture Sdn Bhd (Company No.41913-X) (“TPCA”) has today received 2 summons, MA-63AP-4-08/2019 and MA-63AP-5- 08/2019, both dated 28 August 2019 to appear in the Melaka Magistrate Court on 1 October 2019 in relation to the following charges:
1. MA-63AP-4-08/2019
That TPCA had increased the markup of a Grade A egg by 29.33% from 26.92% to 56.25% allegedly infringing Regulation 3(a), Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit for Goods) Regulations 2018 and as a result has committed an offence under Section 14(1) Price Control and AntiProfiteering Act 2011; and
2. MA-63AP-5-08/2019
That TPCA had increased the margin of a Grade A egg by 14.63% from 21.37% to 36.00% allegedly infringing Regulation 3(b), Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit for Goods) Regulations 2018 and as a result has committed an offence under Section 14(1) Price Control and AntiProfiteering Act 2011.
TPCA will appoint a solicitor firm to act on its behalf in this matter.
The potential liability, financial and operational impact cannot be determined with certainty at the moment. Each of the above offences, if found guilty, is punishable up to RM500,000 for first-time offender and up to RM1,000,000 for a second or subsequent offence.
The Company will make further announcement on this matter in due course.
This announcement is dated 10 September 2019
Source: http://www.bursamalaysia.com/market/listed-companies/company-announcements/6279797
YGL CONVERGENCE BERHAD
RESIGNATION OF AUDITORS
The Board of Directors (“Board”) of the Company wishes to announce that the Company has on 12 September 2019 received a notice in writing pursuant to Section 281(1) of the Companies Act 2016 from CHENGCO PLT on their resignation as Auditors of the Company and their term of office shall come to an end after twenty-one (21) days from the notice date, 10 September 2019.
CHENGCO PLT who has been the Auditors of the Company were re-appointed as the Auditors of the Company at the Fifteenth Annual General Meeting (“AGM”) held on 27 May 2019 to hold office until the conclusion of the next AGM.
The resignation of CHENGCO PLT is due to Audit Oversight Board prohibits them from auditing the financial statements of a public interest entity for 12 months with effect from 6 August 2019.
Save for the above, the Board is not aware of any matter that need to be brought to the attention of the shareholders of the Company.
Further announcement will be made by the Company on the appointment of new auditors in due course.
This announcement is dated 12 September 2019.
Source: http://www.bursamalaysia.com/market/listed-companies/company-announcements/6282525
SARAWAK CABLE BERHAD
ARTICLE APPEARED IN THE EDGE MALAYSIA DATED 9 SEPTEMBER 2019 ENTITLED "SARAWAK CABLE SEEKS CDRC ASSISTANCE" ("THE ARTICLE")
In response to the Article, Sarawak Cable Berhad ("the Company") wishes to announce that the Company had received a letter dated 7 August 2019 ("the Letter") issued by the Corporate Debt Restructuring Committee ("CDRC") under the purview of Bank Negara, approving the Company's application for assistance to mediate between the Company and certain of its subsidiaries (collectively, the "Affected Companies") with its respective financiers ("the Lenders").
This is part of the Company's proactive effort in managing its debt exposure to safeguard the Affected Companies, whose core businesses are still viable. The Company had received the approval from the CDRC on 7 August 2019.
The Standstill Letter was issued by CDRC to the Lenders on 7 August 2019.
Notwithstanding the above, the operations of the Affected Companies shall remain as usual.
Further announcements will be made in due course as and when appropriate.
The announcement is dated 11 September 2019.
Source: http://www.bursamalaysia.com/market/listed-companies/company-announcements/6281053
PN17 Companies
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APFT BERHAD
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BARAKAH OFFSHORE PETROLEUM BERHAD
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BERJAYA MEDIA BERHAD
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BERTAM ALLIANCE BERHAD
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BRAHIM’S HOLDINGS BERHAD
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CHINA AUTOMOBILE PARTS HOLDINGS LIMITED
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COMINTEL CORPORATION BHD
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DAYA MATERIALS BERHAD
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EKA NOODLES BERHAD
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HB GLOBAL LIMITED
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KINSTEEL BHD
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KUANTAN FLOUR MILLS BERHAD
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LONDON BISCUITS BERHAD
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MAA GROUP BERHAD
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MALAYSIA PACIFIC CORPORATION BERHAD
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MAXWELL INTERNATIONAL HOLDINGS BERHAD
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MULTI SPORTS HOLDINGS LTD
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PERISAI PETROLEUM TEKNOLOGI BERHAD
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SEACERA GROUP BERHAD
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SUMATEC RESOURCES BERHAD
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TH HEAVY ENGINEERING BERHAD
GN3 Companies
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G NEPTUNE BERHAD
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IDIMENSION CONSOLIDATED BERHAR
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WINTONI GROUP BERHAD
Please refer to the link below for the latest status of the companies.
http://www.bursamalaysia.com/market/listed-companies/list-of-companies/p...
REGULATORY NEWS
Monetary Policy Statement
http://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=4914&lang=en
Former Deputy Executive Chairman Sentenced to Five Years Jail and RM9 Million Fine for Insider Trading
LOCAL NEWS AND DEVELOPMENTS
AirAsia, AirAsia X, MAHB slapped with fines for non-compliance https://www.theedgemarkets.com/article/airasia-airasia-x-mahb-slapped-fines-noncompliance
Guan Eng: Make insurance policies more affordable
Six UK AI companies to start operations in Malaysia
Malaysia end-August palm oil stocks slip to 13-month low
Nungsari: Mavcom's work benefits the aviation industry, not one player
World Bank: Malaysia needs fiscal buffer to face any contingency
GLOBAL NEWS AND DEVELOPMENT
China lifts investment quota limit for QFII, RQFII amid financial opening-up
http://www.xinhuanet.com/english/2019-09/11/c_138382088.htm
SoftBank Pushes WeWork to Postpone Its Contentious IPO
Aramco CEO: Domestic IPO is primary one, also prepared for int'l listing
Huawei chief offers to share 5G know-how for a fee
https://www.bbc.com/news/technology-49673144
MSWG TEAM
Devanesan Evanson, Chief Executive Officer, [email protected]
Quah Ban Aik, Head, Corporate Monitoring, [email protected]
Hoo Ley Beng, Head, Research & Development, [email protected]
Norhisam Sidek, Manager, Corporate Monitoring, [email protected]
Lee Chee Meng, Manager, Corporate Monitoring, [email protected]
Elaine Choo Yi Ling, Manager, Corporate Monitoring, [email protected]
Lim Cian Yai, Manager, Corporate Monitoring, [email protected]
Nor Khalidah Mohd Khalil, 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.
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ENDS. /
