Twist in E&O takeover saga

(updated version)


From The Straits Times (Singapore), January 30, 2012, written by Leslie Lopez. A long article that is only available for subscribers, some snippets:

• 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.

Update: the Malaysian newspapers still haven't picked up the story, but The Malaysian Insider has:

"SC task force found Sime Darby triggered E&O general offer"

http://www.themalaysianinsider.com/business/article/sc-task-force-found-sime-darby-triggered-eo-general-offer/