Tuesday, 23 August 2011

Feedback on the Corporate Governance Blueprint 2011

The Securities Commission Malaysia's five-year Corporate Governance Blueprint (Blueprint) was launched on 8 July 2011. The SC welcomes feedback from all interested parties and the public on the Blueprint. All feedback can be emailed to CGblueprint@seccom.com.my by 15 September 2011.
The link to the Corporate Govenance Blueprint 2011 (CGB) can be found here:
Two very interesting feedbacks (I strongly agree with all they wrote) can be found here:

I mostly underwrite the recommendations of the (CGB), some are good, some are very good (mandate poll voting, more whistleblowing protection, litigation funding, empowering the SC to initiate action against oppression).
I also like the recommendation to try to connect with “Influencers”, there are many out there who could perform such a role, unfortunately from my own experience, being twice stonewalled by SC/BM, each time for three years and those of others, there is a huge gap that SC/BM has to bridge due to the past. See also:
Some other recommendations are meant good, like all recommendations regarding (independent) directors, but I don’t expect much of them, history has shown so far that Malaysian directors simply toe the line, I don’t know a single instance of the opposite (only four directors have resigned as a sign of not agreeing with the decisions taken by the management, all four were foreigners). At most we can hope for is Directors trying to have some influence behind the scenes, but even this will be very limited in my opinion and the results can not be measured.
However, what is very much missing is admissions of current procedures that are completely biased and don’t give the Minority Shareholder any chance at all, most notably:
  • Related Party Transactions
  • General Offers with Delisting Threat
I think that it is very important to get to the bottom of these procedures, why are so many horrific deals approved? And why are the “Independent” reports so hugely biased?
Another issue is the rampant insider trading: http://cgmalaysia.blogspot.com/2011/08/when-smoke-signals-are-right.html 
Also, I don’t find a single word of criticism on the enforcement (or rather lack of it) by the authorities. Although the situation has improved slightly recently, enforcement still only deals with the minor corporate players, never the major ones, why the enormous bias?


  1. Glad that finally a blogger bluntly wrote about this. An eye opening statement of how obvious the system being abuse and as one of the former holder of Maybulk stock, shameless to say I have never discover much of the info disclose by the blogger. Wondering where is the voices of the rest of minority shareholder or it is the generous culture of Malaysian who always forgive the misconduct of the authorities...will SC take the feedback seriously...???

  2. Thanks, I will indeed go into detail regarding the Maybulk/POSH case, another example of a horrible RPT gone wrong, with Minority Investors not standing a chance.

    I am not counting on anything from the authorities, but at least I have voiced my opinion.

  3. I would agree that this is a pending issue in the corporate governance situation in Malaysia.

    The people affected are the minority, hence there is no real influence that can be exerted. The minority in a company is not news that garners enough attention from the public to pressure authorities to make changes.There probably isn't enough to create a strong voice to capture the authorities' attention.
    It would probably take a group or person who has been hit by such unfair deal multiple times to make it into the news and capture public awareness about such lack of governance.

    Sometimes it is indeed the culture of Malaysians to accept the bias-ness as "part-of-life". Sad?

  4. Thanks, yes, we need more awareness, also culture needs to change (will take time though), but for me very important is enforcement. That will show what is not acceptable and encourage people to come forward with more cases.