AirAsia: were all parties at the EGM equally informed?

AirAsia announced its latest quarterly results, the results were great, way above expectations and the share rose RM 0.28 to RM 2.40.

Yes, life can be good, that is, if you are a shareholder of AirAsia.

But life can be even better if you are allowed to buy 559 millions AirAsia shares at a price of RM 1.80.

And that is exactly what Tony Fernandez (Group CEO) and Kamarudin (Executive Chairman) are allowed to do through a private placement (PP). One of the largest I have seen on Bursa done by controlling shareholders.

On May 9, 2016 at the EGM non-interested shareholders approved the PP, as is required by the rules. So is everything above board?

Well ...... there is a nagging issue if all parties actually had the same information available at the EGM.

On one side surely Fernandez and Kamarudin must have known about the 2016/Q1 results, may be not in all detail yet, but at least the key numbers, and they must have known that the numbers were way better than expected by the analysts and the market.

On the other side, the non-interested shareholders were left in the dark, the official results were simply not yet announced, that would happen only about three weeks later.

According to data from Bloomberg analysts were surprised by the numbers: the results were 400% above expectation, pretty stunning.

The authorities should look into this situation, shareholders are supposed to have roughly the same amount of information when making an informed decision. The possible insiders knowledge of the Q1/2016 results appears to be material. If there was indeed a clear information bias, then minority shareholders should have been protected.

As written before, the whole issue could have been easily avoided if the company had replaced the PP by a rights issue of the same size, allowing all shareholders to participate.