Front page article today from The Business Times (Singapore):
Ruling may lead to huge damages claims, affect major govt complex in KL
"A large plot of land in Kuala Lumpur occupied by various government agencies for almost three decades has been found to have been illegally acquired by the government of the-then British Malaya in 1956 in a unanimous court ruling that could open Putrajaya to potential damages running into the hundreds of millions of ringgit
In late November, the Federal Court refused leave to government counsel to appeal a decision by the Court of Appeal that decided that the 1956 acquisition by the government of 263.3 acres of land belonging to private firm Semantan Estates (1952) was not "lawfully" executed and that the government had been acting as "a trespasser" since then,
The title under which the land is held was prepared in the 1950s and would have been changed by now so it isn't clear what the area includes exactly as it is now highly developed. Even so, it would almost certainly include the Jalan Duta Government Complex which includes the Internal Revenue Board, the Ministry of International Trade and Industry, and two bank branches including CIMB.
But what isn't clear is whether the land in question extends out into the immediate vicinity of the government complex. That is possible as the complex appears to take up far less than 263 acres. If so, it could include buildings like the High Court Complex, the National Archives' building, the Federal Territories Mosque, even part of the new palace of the Malaysian King."
- It will put paid to a proposal to privatise the Jalan Duta Government Complex
- It will likely cost the government dearly, probably several hundreds of millions of RM
I love court cases where the underdog wins. The case has dragged on for some time (60 years!), but better late than never.
Thursday, 10 January 2013
Wednesday, 9 January 2013
Israeli corp governance standards are much higher than those in Singapore
I wrote before that Singapore has clearly better CG than Malaysia. In my opinion, for a good part because of much better enforcement.
But according to Mak Yuen Teen, in a letter written to the Business Times, Israel has much better standards than Singapore.
An excerpt (emphasis mine) including a few interesting issues and the way they are handled in Israel:
"Israeli Company Law imposes higher standards of corporate governance in a number of key areas compared to what currently exists in our (note: Singaporean) regime. For example, an "external director" who is independent and possesses special qualifications (such as accounting or finance expertise) must be elected by a majority of shareholders who are not controlling or interested shareholders, or not objected to by more than 2 per cent of non-interested shareholders ("special majority").
Another important requirement is for a comprehensive remuneration policy for officers to be approved by a similar special majority, although the board can still adopt the remuneration policy if it is rejected by shareholders. In general, the remuneration packages of the CEO, controlling shareholders and their relatives also require the approval of the special majority.
Rules on disclosure and approval of related-party transactions have also been enhanced to improve minority shareholder protection. What this means is that minority shareholders in Sarin (note: a company based in Israel, listed in Singapore), including Singapore shareholders, will have more say over the appointment of the "external director" and approval of a transparent remuneration policy and remuneration packages of key officers, and greater protection in general, compared to minority shareholders in even Singapore-incorporated companies.
It is ironic that an emerging market like Israel (albeit classified as "developed" by MSCI) has now run ahead of us in key corporate governance requirements because it recognises the importance of protecting minority shareholders. It should certainly make us humble when we make claims about our own "world-class" standards of corporate governance."
As noted, "us" and "our" in the above text refers to Singapore. Since Singapore has higher standards than Malaysia, their authorities also might want to pay attention. It is really about getting a more even playing field for the minority shareholders versus the majority shareholders. And Malaysia still has a long way to go on that area.
But according to Mak Yuen Teen, in a letter written to the Business Times, Israel has much better standards than Singapore.
An excerpt (emphasis mine) including a few interesting issues and the way they are handled in Israel:
"Israeli Company Law imposes higher standards of corporate governance in a number of key areas compared to what currently exists in our (note: Singaporean) regime. For example, an "external director" who is independent and possesses special qualifications (such as accounting or finance expertise) must be elected by a majority of shareholders who are not controlling or interested shareholders, or not objected to by more than 2 per cent of non-interested shareholders ("special majority").
Another important requirement is for a comprehensive remuneration policy for officers to be approved by a similar special majority, although the board can still adopt the remuneration policy if it is rejected by shareholders. In general, the remuneration packages of the CEO, controlling shareholders and their relatives also require the approval of the special majority.
Rules on disclosure and approval of related-party transactions have also been enhanced to improve minority shareholder protection. What this means is that minority shareholders in Sarin (note: a company based in Israel, listed in Singapore), including Singapore shareholders, will have more say over the appointment of the "external director" and approval of a transparent remuneration policy and remuneration packages of key officers, and greater protection in general, compared to minority shareholders in even Singapore-incorporated companies.
It is ironic that an emerging market like Israel (albeit classified as "developed" by MSCI) has now run ahead of us in key corporate governance requirements because it recognises the importance of protecting minority shareholders. It should certainly make us humble when we make claims about our own "world-class" standards of corporate governance."
As noted, "us" and "our" in the above text refers to Singapore. Since Singapore has higher standards than Malaysia, their authorities also might want to pay attention. It is really about getting a more even playing field for the minority shareholders versus the majority shareholders. And Malaysia still has a long way to go on that area.
Monday, 7 January 2013
YTL Power, why was it listed?
The below article is from The Edge of last week, based on research by RHB (December 24, 2012), the emphasis is mine:
We are disappointed that YTLP declared only 0.9375 sen per share for its first interim single-tier dividend. We had expected 1.875 sen/share, as was declared in 1Q12. Therefore, we revised our FY13 dividend per share forecast lower from 4.9 sen to 3.7 sen. Yields do not look attractive at 2.5%.
Historically, the rationale for the cut in dividends was to prepare the group for any potential M&A. As at end-Sept, YTLP is sitting on RM 10 billion in cash.
We think YTLP's start-up operating losses may have peaked given a larger WiMAX subscriber base now. WiMAX losses widened to RM 309.8 million in FY12. A languishing stock price could potentially turn YTLP into a privatisation target. We believe this will help achieve YTL Corp's goal of transforming into a dividend yield play by reducing the cash outflows to minority shareholders among its subsidiaries.
YTL Power reduces its dividends, it sits on a huge cash pile of RM 10,000,000,000.00, its stock price is languishing, which means YTL Power might be privatised so that YTL Corp can lay its hands on the full cash pile, instead of sharing it with YTL Power's minority shareholders?
Minority shareholders must hope that a company does well and generates a lot of cash. But if that happens, then it will be privatised?
This sounds rather disturbing, minority investors can share in the risk, but not in the returns? Why then did YTL Corp list YTL Power in the first place?
This graph does indeed show that the share price has been coming down, from a level of RM 2.20 to now RM 1.65.
Good postings about YTL Power can be found here and here.
Updated: and a newer one from "Market Watcher" here regarding insider buying and selling of YTL Power, shares and warrants.
We are disappointed that YTLP declared only 0.9375 sen per share for its first interim single-tier dividend. We had expected 1.875 sen/share, as was declared in 1Q12. Therefore, we revised our FY13 dividend per share forecast lower from 4.9 sen to 3.7 sen. Yields do not look attractive at 2.5%.
Historically, the rationale for the cut in dividends was to prepare the group for any potential M&A. As at end-Sept, YTLP is sitting on RM 10 billion in cash.
We think YTLP's start-up operating losses may have peaked given a larger WiMAX subscriber base now. WiMAX losses widened to RM 309.8 million in FY12. A languishing stock price could potentially turn YTLP into a privatisation target. We believe this will help achieve YTL Corp's goal of transforming into a dividend yield play by reducing the cash outflows to minority shareholders among its subsidiaries.
YTL Power reduces its dividends, it sits on a huge cash pile of RM 10,000,000,000.00, its stock price is languishing, which means YTL Power might be privatised so that YTL Corp can lay its hands on the full cash pile, instead of sharing it with YTL Power's minority shareholders?
Minority shareholders must hope that a company does well and generates a lot of cash. But if that happens, then it will be privatised?
This sounds rather disturbing, minority investors can share in the risk, but not in the returns? Why then did YTL Corp list YTL Power in the first place?
This graph does indeed show that the share price has been coming down, from a level of RM 2.20 to now RM 1.65.
Good postings about YTL Power can be found here and here.
Updated: and a newer one from "Market Watcher" here regarding insider buying and selling of YTL Power, shares and warrants.
Sunday, 6 January 2013
Syed Mokhtar, please expose those who abuse the system
From the website of The Star: "The caring side of Syed Mokhtar":
"Fresh from the publication of his biography recently, tycoon Tan Sri Syed Mokhtar Albukhary has released a 195-page coffee table book on his global charity work, which many ordinary Malaysians are not familiar with.
Until the release of his biography Syed Mokhtar Albukhary: A Biography by Premilla Mohanlall, where he opened up on many issues for the first time to put the record straight, the reclusive billionaire had always shied away from the media.
He has rarely talked to journalists, except a privileged handful and even then, it is always on an off-the-record basis. This continuous distancing from the media has only put him under greater media scrutiny.
“I wonder why I get bad press when others who have abused the system for personal gains have not been subjected to such media scrutiny. Perhaps it is time to come out and defend myself,” he said in his book.
Envy, jealousy, fascination and simply selfish politics may have been reasons why SM, as he is known, has found it difficult to get the kind of coverage he wants, and deserves."
I have written about the first book (a biography) about Tan Sri Syed Mokhtar here.
This second book about his charity seems again a PR exercise, according to the Linkedin profile of the writer. A pity, because what Malaysia needs is thoroughly investigated books written by independent writers.
But the most interesting of the article in The Star is the above quote in bold. Syed Mokhtar is surely very well informed, why does he not simply name and shame those that have abused the system for personal gains? If laws are broken, it is even his obligation to do so. If no law is broken, he could still come with recommendations how to improve the system to end the abuse, he is in an ideal situation to do that.
Regarding the charity, there has been controversy in the past. Listed companies controlled by Syed Mokhtar have donated huge amounts of money to his charity. Was it not more appropriate to give this money in dividends to all shareholders and to let them decide for themselves what they want to do with their money? And if they want to give it to charity, let them choose the charity of their liking? MSWG has also tackled this issue. "Where is Ze Moola" wrote about it here.
"Fresh from the publication of his biography recently, tycoon Tan Sri Syed Mokhtar Albukhary has released a 195-page coffee table book on his global charity work, which many ordinary Malaysians are not familiar with.
Until the release of his biography Syed Mokhtar Albukhary: A Biography by Premilla Mohanlall, where he opened up on many issues for the first time to put the record straight, the reclusive billionaire had always shied away from the media.
He has rarely talked to journalists, except a privileged handful and even then, it is always on an off-the-record basis. This continuous distancing from the media has only put him under greater media scrutiny.
“I wonder why I get bad press when others who have abused the system for personal gains have not been subjected to such media scrutiny. Perhaps it is time to come out and defend myself,” he said in his book.
Envy, jealousy, fascination and simply selfish politics may have been reasons why SM, as he is known, has found it difficult to get the kind of coverage he wants, and deserves."
I have written about the first book (a biography) about Tan Sri Syed Mokhtar here.
This second book about his charity seems again a PR exercise, according to the Linkedin profile of the writer. A pity, because what Malaysia needs is thoroughly investigated books written by independent writers.
But the most interesting of the article in The Star is the above quote in bold. Syed Mokhtar is surely very well informed, why does he not simply name and shame those that have abused the system for personal gains? If laws are broken, it is even his obligation to do so. If no law is broken, he could still come with recommendations how to improve the system to end the abuse, he is in an ideal situation to do that.
Regarding the charity, there has been controversy in the past. Listed companies controlled by Syed Mokhtar have donated huge amounts of money to his charity. Was it not more appropriate to give this money in dividends to all shareholders and to let them decide for themselves what they want to do with their money? And if they want to give it to charity, let them choose the charity of their liking? MSWG has also tackled this issue. "Where is Ze Moola" wrote about it here.
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