Published September 5, 2008
No evidence of sodomy, says doctor
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(KUALA LUMPUR) A doctor who examined the man who accused Malaysian opposition leader Anwar Ibrahim of sodomy stood by his claim yesterday that he found no evidence of the alleged rape.
Mohamed Osman Abdul Hamid spoke in public for the first time since Internet news portals leaked a medical report in which he wrote that he discovered no signs that Anwar's 23- year-old former aide had been sodomised. 'Please be assured that I had merely done my job as a doctor,' Dr Mohamed Osman told a news conference. 'I am not involved in politics. I will always tell the truth.'
Anwar has said Dr Mohamed Osman's findings proved the accusation was false, though hospital authorities have claimed the doctor was not qualified to make any conclusions on sodomy.
Dr Mohamed Osman examined Mr Saiful at a private hospital on June 28, two days after Mr Saiful claimed the incident occurred.
Independent news websites later published his medical report, followed by a sworn statement by the doctor affirming the contents of the report.
Dr Mohamed Osman reiterated yesterday that his statement was 'correct'. He said he had gone on leave away from Malaysia following the release of the medical report because 'there was a lot of pressure' on him. -- AP
Friday, 5 September 2008
Published September 5, 2008
Razaleigh voices dismay at Pedra Branca decision
By PAULINE NG IN KUALA LUMPUR
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TENGKU Razaleigh Hamzah, a contender for the presidency of Umno, has voiced his unhappiness over the outcome of an international court's decision to award Pedra Branca to Singapore, and suggested arbitration proceedings are incomplete because Johor was not made a party to it.
Tengku Razaleigh: Interests of Johor were never brought to the attention of the ICJ
'I am deeply dismayed that the interests of the state of Johor were never brought to the attention of the court,' the Kelantanese prince said in comments to Foreign Minister Rais Yatim in a letter dated Sept 3 which was also released to the media.
'Perhaps I should point out to you that Malaysia is a federation of sovereign states and Johor retains territorial jurisdiction on some matters, including its territorial seas. This interest is paramount.
'Johor has a right to be a party to these proceedings and to seek the necessary variations, particularly in relation to sovereignty over the seas surrounding Batu Putih, which has always been in the hands of Johor and never surrendered to the British government nor to Singapore.'
Tengku Razaleigh's letter comes in the wake of a joint statement by Mr Rais and Singapore Foreign Minister George Yeo on Monday that both countries would honour and abide by the decision of the International Court of Justice (ICJ) on Pedra Branca (Batu Putih), Middle Rocks and South Ledge, and would fully implement its decision.
In the joint statement, both countries agreed to complete technical preparations for a joint survey of the area so as to enable further discussions on how the territorial seas in the area are to be delimited.
One of Prime Minister Abdullah Ahmad Badawi's most vocal critics, Tengku Razaleigh has described his leadership as weak and lacking the credibility needed to keep the country together.
Such political gamesmanship is common, analysts say, and Tengku Razaleigh's current posturing is no different.
'It is a populist view he is adopting and I think he has a right to it,' said Universiti Teknologi Mara professor of law Shad S Faruqi.
'Basically Singapore won because Johor people had not kept their important papers properly. But both parties agreed to international arbitration, so the decision has to be observed,' he added.
Razaleigh voices dismay at Pedra Branca decision
By PAULINE NG IN KUALA LUMPUR
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TENGKU Razaleigh Hamzah, a contender for the presidency of Umno, has voiced his unhappiness over the outcome of an international court's decision to award Pedra Branca to Singapore, and suggested arbitration proceedings are incomplete because Johor was not made a party to it.
Tengku Razaleigh: Interests of Johor were never brought to the attention of the ICJ
'I am deeply dismayed that the interests of the state of Johor were never brought to the attention of the court,' the Kelantanese prince said in comments to Foreign Minister Rais Yatim in a letter dated Sept 3 which was also released to the media.
'Perhaps I should point out to you that Malaysia is a federation of sovereign states and Johor retains territorial jurisdiction on some matters, including its territorial seas. This interest is paramount.
'Johor has a right to be a party to these proceedings and to seek the necessary variations, particularly in relation to sovereignty over the seas surrounding Batu Putih, which has always been in the hands of Johor and never surrendered to the British government nor to Singapore.'
Tengku Razaleigh's letter comes in the wake of a joint statement by Mr Rais and Singapore Foreign Minister George Yeo on Monday that both countries would honour and abide by the decision of the International Court of Justice (ICJ) on Pedra Branca (Batu Putih), Middle Rocks and South Ledge, and would fully implement its decision.
In the joint statement, both countries agreed to complete technical preparations for a joint survey of the area so as to enable further discussions on how the territorial seas in the area are to be delimited.
One of Prime Minister Abdullah Ahmad Badawi's most vocal critics, Tengku Razaleigh has described his leadership as weak and lacking the credibility needed to keep the country together.
Such political gamesmanship is common, analysts say, and Tengku Razaleigh's current posturing is no different.
'It is a populist view he is adopting and I think he has a right to it,' said Universiti Teknologi Mara professor of law Shad S Faruqi.
'Basically Singapore won because Johor people had not kept their important papers properly. But both parties agreed to international arbitration, so the decision has to be observed,' he added.
Published September 5, 2008
Fuel-price cut by Oct if crude stays at US$109: Abdullah
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(KUALA LUMPUR) Malaysian Prime Minister Abdullah Ahmad Badawi will cut gasoline prices as early as October should crude oil remain at US$109 a barrel or less, as he attempts to gain support and fend off leadership challenges.
Cheap petrol again?: Malaysia will review prices at the pumps by the middle of next month, and may reduce them by 15 sen to RM2.40 a litre
Prices at the pumps will be reviewed by the middle of next month, and may be reduced by 15 sen to RM2.40 (S$1) a litre, Mr Abdullah said yesterday.
After leading his coalition in March to its worst election performance in five decades, Mr Abdullah is defying demands to quit the leadership of his party.
A fuel-price cut would follow a reduction in August and may win him domestic support as opposition leader Anwar Ibrahim mounts a bid for power.
'The people need help with the global crisis and the increase in the price of food and goods,' Mr Abdullah told reporters. He said he would be 'happy' to cut fuel prices. Inflation in Malaysia reached 8.5 per cent in July, the fastest pace in more than 26 years.
Last week, Mr Abdullah said the government's budget deficit this year would swell to 4.8 per cent of GDP, the biggest overspend since 2003. He said yesterday the ringgit, down 3.6 per cent against the US dollar this year, hasn't yet reached a 'worrying level'.
He said he's 'confident' of cutting the budget deficit to 3.6 per cent of GDP in 2009. -- Bloomberg
Fuel-price cut by Oct if crude stays at US$109: Abdullah
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(KUALA LUMPUR) Malaysian Prime Minister Abdullah Ahmad Badawi will cut gasoline prices as early as October should crude oil remain at US$109 a barrel or less, as he attempts to gain support and fend off leadership challenges.
Cheap petrol again?: Malaysia will review prices at the pumps by the middle of next month, and may reduce them by 15 sen to RM2.40 a litre
Prices at the pumps will be reviewed by the middle of next month, and may be reduced by 15 sen to RM2.40 (S$1) a litre, Mr Abdullah said yesterday.
After leading his coalition in March to its worst election performance in five decades, Mr Abdullah is defying demands to quit the leadership of his party.
A fuel-price cut would follow a reduction in August and may win him domestic support as opposition leader Anwar Ibrahim mounts a bid for power.
'The people need help with the global crisis and the increase in the price of food and goods,' Mr Abdullah told reporters. He said he would be 'happy' to cut fuel prices. Inflation in Malaysia reached 8.5 per cent in July, the fastest pace in more than 26 years.
Last week, Mr Abdullah said the government's budget deficit this year would swell to 4.8 per cent of GDP, the biggest overspend since 2003. He said yesterday the ringgit, down 3.6 per cent against the US dollar this year, hasn't yet reached a 'worrying level'.
He said he's 'confident' of cutting the budget deficit to 3.6 per cent of GDP in 2009. -- Bloomberg
Published September 5, 2008
Protesters want KL hillside bungalow project halted
Residents in suburb hand over papers to anti-graft agency alleging corruption
By S JAYASANKARAN IN KUALA LUMPUR
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RESIDENT activism in a middle class suburb of Kuala Lumpur could force a RM400 million (S$167 million) development of 21 bungalows on a nearby hillside to come to a grinding halt, illustrating a rare combativeness among Malaysians in the wake of the March 8 general election.
On Wednesday, nearly 20 residents from Medan Damansara, a leafy, upper middle-class suburb of retired government servants and younger professionals, descended on the Putrajaya offices of the Anti-Corruption Agency to hand over papers alleging corruption on the part of City Hall when it allowed the developer permission to build on the slope. The ACA has promised to get back in three weeks.
The resident's assertiveness has redefined the way hillside development is carried out in the capital and has put Kuala Lumpur's powerful City Hall under siege from relentless media attacks and on the defensive.
Moreover, government lawmakers, who would have normally defended City Hall as a rule, are seemingly sympathetic to the residents in a bid to win popularity. The area, normally pro-government, swung heavily to the opposition in the March elections partly as a result of the unpopular development.
Meanwhile, the protests have put the developer - listed Selangor Dredging - in a bind. It paid RM58 million for the land and claims to have spent over RM30 million since in infrastructure work. The company, which even advertised the homes in Singapore, denies any wrongdoing, arguing that hillside development is common in places like Hong Kong.
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The residents beg to differ, pointing out that the Cabinet of former prime minister Mahathir Mohamad banned development of any hillside with a gradient of over 30 degrees. The Medan Damansara slope is well over 39 degrees.
Development of the slope began in December last year but the residents continued protesting with their efforts intensifying after the general elections. In June, City Hall slammed the developer with a stop- work order after it determined that several by-laws had been contravened.
Since then, trees have fallen in the area followed by a massive landslide last week that nearly demolished two houses in the middle of the night.
'Only then did everyone, including the mayor, come out to see the place,' said Randhir Singh, one of the neighbourhood's most vocal critics. 'All of us snubbed him. Where was he when we needed him?'
The resident's tactics have been effective. Following the stop-work order, they wrote to the 17 government agencies whose permission is required in any urban development, asking about the Medan Damansara development.
Five agencies replied, some revealing that certain approvals hadn't been obtained for the development. These were the documents lodged with the ACA.
Even so, the residents aren't completely hopeful that they will win out in the end. 'Whatever the outcome, I think we have demonstrated one thing,' said Mr Singh. 'I don't think City Hall will ever take Kuala Lumpur residents for granted again.'
Protesters want KL hillside bungalow project halted
Residents in suburb hand over papers to anti-graft agency alleging corruption
By S JAYASANKARAN IN KUALA LUMPUR
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RESIDENT activism in a middle class suburb of Kuala Lumpur could force a RM400 million (S$167 million) development of 21 bungalows on a nearby hillside to come to a grinding halt, illustrating a rare combativeness among Malaysians in the wake of the March 8 general election.
On Wednesday, nearly 20 residents from Medan Damansara, a leafy, upper middle-class suburb of retired government servants and younger professionals, descended on the Putrajaya offices of the Anti-Corruption Agency to hand over papers alleging corruption on the part of City Hall when it allowed the developer permission to build on the slope. The ACA has promised to get back in three weeks.
The resident's assertiveness has redefined the way hillside development is carried out in the capital and has put Kuala Lumpur's powerful City Hall under siege from relentless media attacks and on the defensive.
Moreover, government lawmakers, who would have normally defended City Hall as a rule, are seemingly sympathetic to the residents in a bid to win popularity. The area, normally pro-government, swung heavily to the opposition in the March elections partly as a result of the unpopular development.
Meanwhile, the protests have put the developer - listed Selangor Dredging - in a bind. It paid RM58 million for the land and claims to have spent over RM30 million since in infrastructure work. The company, which even advertised the homes in Singapore, denies any wrongdoing, arguing that hillside development is common in places like Hong Kong.
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The residents beg to differ, pointing out that the Cabinet of former prime minister Mahathir Mohamad banned development of any hillside with a gradient of over 30 degrees. The Medan Damansara slope is well over 39 degrees.
Development of the slope began in December last year but the residents continued protesting with their efforts intensifying after the general elections. In June, City Hall slammed the developer with a stop- work order after it determined that several by-laws had been contravened.
Since then, trees have fallen in the area followed by a massive landslide last week that nearly demolished two houses in the middle of the night.
'Only then did everyone, including the mayor, come out to see the place,' said Randhir Singh, one of the neighbourhood's most vocal critics. 'All of us snubbed him. Where was he when we needed him?'
The resident's tactics have been effective. Following the stop-work order, they wrote to the 17 government agencies whose permission is required in any urban development, asking about the Medan Damansara development.
Five agencies replied, some revealing that certain approvals hadn't been obtained for the development. These were the documents lodged with the ACA.
Even so, the residents aren't completely hopeful that they will win out in the end. 'Whatever the outcome, I think we have demonstrated one thing,' said Mr Singh. 'I don't think City Hall will ever take Kuala Lumpur residents for granted again.'
Published September 5, 2008
When to forgive and forget?
By ANGELA TAN
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HIS annual pay package could easily have been in the six-digit range when he was the managing director of Speedo Corrosion Control and consultant to See Hup Seng Limited back in July 2006. Yet, Yap Sew, now 60 and executive director as well as chief executive officer of See Hup Seng, took the centrestage this week after the Monetary Authority of Singapore (MAS) slapped him with a civil penalty of $50,000 for insider trading which net him a mere profit of $4,020.
On Monday, the MAS - which plays the dual role of central bank and securities regulator - disclosed that between July 21 and 24, Mr Yap bought a total of 900,000 See Hup Seng shares while he was in possession of 'non-public price-sensitive information' concerning an impending acquisition. He was a consultant to See Hup Seng on July 25, 2006 when the company announced a deal to buy Speedo Corrosion Control for $3.5 million from CT Holdings. As a result, he made a profit of $4,020.
Mr Yap has admitted civil penalty liability and will pay the fine without court action.
On Wednesday, See Hup Seng - a provider of corrosion prevention services for the marine, offshore oil and gas and construction industries - said its board has 'unanimously decided that it would be in the best interests of the company that Mr Yap be retained in his current capacity'. It felt the incidents had taken place when Mr Yap was not a director or employee of the company. And since Mr Yap joined the company as CEO in August 2006, he has been instrumental in turning the loss-making company into a profitable one, it said. By fiscal 2007, its net profit was $13.57 million, partly due to its purchase of Tat Petroleum.
All totally reasonable arguments. But in the corporate world, one wonders if the marital vow of 'in good times and bad' should apply.
See Hup Seng's shares continue to languish at around 25 cents and the already thin trading volumes remain so.
Privileged information
Is See Hup Seng's board making the right decision to stand behind Mr Yap even if he made an egregious error in judgment and has promised the board of his full commitment to spur the company forward?
While Mr Yap's poor judgement to trade on privileged information did happen in the past and when he was not a staff of the company, investors can't help but be more averse to putting money in a company whose CEO has been rapped by the authorities for insider trading. The laws here are clear - if in possession of such information, the person is prohibited from trading.
One can argue that it is a fine line between a civil penalty and a criminal action. The former requires a lower burden of proof and less stringent rules about admissibility of evidence.
Civil penalty
Under the civil penalty regime in Singapore, the person is subject to a minimum amount of $50,000; $100,000 for corporations. But while it may appear less serious than court action, it doesn't mean the offence is less wrong. A civil penalty could simply mean there was insufficient evidence for a criminal case, which could see the person disqualified as a director if convicted.
If that is the case and if one of the roles of a CEO is to set and build the moral and ethical tone of a company on top of securing performance, then a CEO with the little black mark of insider trading in his book can potentially become an issue - whether in dealing with staff or external parties including clients. It can become an albatross he cannot rid of.
But should CEOs who made mistakes be simply axed? After all, there are good CEOs who make mistakes and CEOs who don't but are also unable to drive profitable top-line growth. See Hup Seng's board obviously feels it has a compelling case to retain the services of Mr Yap, who has over 20 years of experience in the marine and offshore industries.
At the end of the day, the reality is no CEO is mistake-free. When a CEO blunders and investors call for his head, directors should ask first whether the CEO can correct the problem. Pressuring boards to fire the CEO quickly isn't always in the company's best interest. Afterall, the board's relationship and trust in a CEO take time to build and a board might do better in fixing the matter and person at hand than hire and nurture a new one.
See Hup Seng's board seems to have chosen to do that. It acted decisively to keep its CEO but not without first putting in place a new structure to strengthen the board. It has appointed its chief operating officer, Lum Chee Kong, as executive director.
So while investors can be unforgiving when a CEO goes astray, an effective board can choose to forgive but hopefully not forget a CEO's slip by keeping him on his toes.
When to forgive and forget?
By ANGELA TAN
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HIS annual pay package could easily have been in the six-digit range when he was the managing director of Speedo Corrosion Control and consultant to See Hup Seng Limited back in July 2006. Yet, Yap Sew, now 60 and executive director as well as chief executive officer of See Hup Seng, took the centrestage this week after the Monetary Authority of Singapore (MAS) slapped him with a civil penalty of $50,000 for insider trading which net him a mere profit of $4,020.
On Monday, the MAS - which plays the dual role of central bank and securities regulator - disclosed that between July 21 and 24, Mr Yap bought a total of 900,000 See Hup Seng shares while he was in possession of 'non-public price-sensitive information' concerning an impending acquisition. He was a consultant to See Hup Seng on July 25, 2006 when the company announced a deal to buy Speedo Corrosion Control for $3.5 million from CT Holdings. As a result, he made a profit of $4,020.
Mr Yap has admitted civil penalty liability and will pay the fine without court action.
On Wednesday, See Hup Seng - a provider of corrosion prevention services for the marine, offshore oil and gas and construction industries - said its board has 'unanimously decided that it would be in the best interests of the company that Mr Yap be retained in his current capacity'. It felt the incidents had taken place when Mr Yap was not a director or employee of the company. And since Mr Yap joined the company as CEO in August 2006, he has been instrumental in turning the loss-making company into a profitable one, it said. By fiscal 2007, its net profit was $13.57 million, partly due to its purchase of Tat Petroleum.
All totally reasonable arguments. But in the corporate world, one wonders if the marital vow of 'in good times and bad' should apply.
See Hup Seng's shares continue to languish at around 25 cents and the already thin trading volumes remain so.
Privileged information
Is See Hup Seng's board making the right decision to stand behind Mr Yap even if he made an egregious error in judgment and has promised the board of his full commitment to spur the company forward?
While Mr Yap's poor judgement to trade on privileged information did happen in the past and when he was not a staff of the company, investors can't help but be more averse to putting money in a company whose CEO has been rapped by the authorities for insider trading. The laws here are clear - if in possession of such information, the person is prohibited from trading.
One can argue that it is a fine line between a civil penalty and a criminal action. The former requires a lower burden of proof and less stringent rules about admissibility of evidence.
Civil penalty
Under the civil penalty regime in Singapore, the person is subject to a minimum amount of $50,000; $100,000 for corporations. But while it may appear less serious than court action, it doesn't mean the offence is less wrong. A civil penalty could simply mean there was insufficient evidence for a criminal case, which could see the person disqualified as a director if convicted.
If that is the case and if one of the roles of a CEO is to set and build the moral and ethical tone of a company on top of securing performance, then a CEO with the little black mark of insider trading in his book can potentially become an issue - whether in dealing with staff or external parties including clients. It can become an albatross he cannot rid of.
But should CEOs who made mistakes be simply axed? After all, there are good CEOs who make mistakes and CEOs who don't but are also unable to drive profitable top-line growth. See Hup Seng's board obviously feels it has a compelling case to retain the services of Mr Yap, who has over 20 years of experience in the marine and offshore industries.
At the end of the day, the reality is no CEO is mistake-free. When a CEO blunders and investors call for his head, directors should ask first whether the CEO can correct the problem. Pressuring boards to fire the CEO quickly isn't always in the company's best interest. Afterall, the board's relationship and trust in a CEO take time to build and a board might do better in fixing the matter and person at hand than hire and nurture a new one.
See Hup Seng's board seems to have chosen to do that. It acted decisively to keep its CEO but not without first putting in place a new structure to strengthen the board. It has appointed its chief operating officer, Lum Chee Kong, as executive director.
So while investors can be unforgiving when a CEO goes astray, an effective board can choose to forgive but hopefully not forget a CEO's slip by keeping him on his toes.
Thursday, 4 September 2008
Published September 4, 2008
Maybank aborts Panin buy
Indonesia's Ministry of Finance blocks deal, saying it doesn't meet foreign investment rules
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(KUALA LUMPUR) Malaysia's largest lender, Maybank, has dropped a plan to buy a controlling stake in an Indonesian insurer after protracted negotiations.
'Maybank would like to inform that due to unavoidable circumstances not within its control, both Maybank and Panin are unable to proceed further in formalising the proposed joint venture partnership,' Maybank said in a statement yesterday.
Maybank had been in discussions with Panin on the acquisition of a 60 per cent stake in its Indonesian insurance arm, PT Anugrah Life Insurance. But Indonesia's Ministry of Finance blocked the transaction in November, saying that it did not meet the country's foreign investment rules.
The Indonesian regulations require a foreign holding company to maintain a majority of its portfolio in insurance business should it wish to become a shareholder of a local insurance company.
In a bid to meet the requirement, Maybank announced in April that its Malaysian insurance arm, Mayban Fortis Holdings, would take the lead in the deal, spurring hopes that a tie-up might result.
The latest development marks the second failed attempt by Maybank to gain a foothold in the most populated Islamic country in South-east Asia due to regulatory issues.
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Last month, Bank Negara Malaysia, the central bank, scuppered a Maybank proposal to buy a controlling stake in Bank Internasional Indonesia. It was concerned that new Indonesian takeover rules could lead to material losses. - Reuters
Published September 4, 2008
Bank Islam eyes M&As in M'sia, Indonesia
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(KUALA LUMPUR) Malaysian syariah lender Bank Islam is on the hunt for merger and acquisition opportunities at home and in neighbouring Indonesia to boost its market share, its managing director said yesterday.
 |
| On the hunt: Bank Islam could either take a strategic stake in or buy an Indonesian Islamic lender to tap opportunities there, says its managing director |
Bank Islam, Malaysia's oldest syariah lender which began business in 1983, is trying to claw back market share after heavy losses and stiff competition eroded its pioneer advantage.
The lender, a subsidiary of financial group BIMB Holdings Bhd, is the second biggest Islamic bank in Malaysia in terms of assets.
'Bank Islam is prepared to merge with anybody if it is the right partner,' managing director Zukri Samat told reporters.
'We are looking for partners. Anybody who has a proposal, who wants to talk to Bank Islam, we are open to that.' He said the bank had held talks with some institutions but there were no concrete results as yet.
Regionally, Bank Islam's immediate expansion target was neighbouring Indonesia and it would explore growth opportunities in Thailand and Singapore later, Mr Zukri said.
'We have targeted Indonesia as our prime target,' he said. 'It's an obvious choice - it's very near to us, we are very familiar with the country. Also it's a country with a 250 million population and the majority are Muslim.'
Mr Zukri said Bank Islam could either take a strategic stake in or buy an Indonesian Islamic lender to tap opportunities in consumer financing in Southeast Asia's largest economy. He did not elaborate.
Indonesia, the world's most populous Muslim country, recently issued its first Islamic bond, in a move it hopes will prod more domestic companies to raise funding from Islamic capital markets and kickstart its syariah banking industry which lags Malaysia's.
Syariah banks have less than 5 per cent of Indonesia's domestic banks' total assets. The Indonesian central bank has said the syariah banking industry will have a 10-15 per cent share of national banking assets by 2015.
Islamic banking accounts for about 13 per cent of total banking assets in Malaysia, and is tipped to be one of the economy's leading growth drivers, thanks to a big government push aimed at making the country a global syariah finance hub.
Mr Zukri said Malaysia's Islamic banking industry was overcrowded with 14 full fledged Islamic banks and some lenders having syariah windows or limited operations, but there were still some growth areas.
'Islamic banking is growing at a much faster rate than conventional banking, now it's growing at a rate of close to 20 per cent a year,' he said. -- Reuters
Published September 4, 2008
Telekom wins RM11.31b M'sian broadband project
Award ends RM18b rival bid from firm partly owned by Pahang state govt
By S JAYASANKARAN
IN KUALA LUMPUR
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THE government's award of a RM11.31 billion (S$4.7 billion) nation-wide, high- speed broadband project to Telekom Malaysia (TM) on Tuesday will ensure a high- growth business for the utility going forward and closes the door to another politically linked RM18 billion bid from a private company in Pahang state.
In an announcement to the stock exchange late Tuesday, TM said that it has received a letter of award from the Malaysian government for the project with the funding split between Kuala Lumpur (RM2.4 billion) and TM (RM8.91 billion). Pending a formal agreement between the government and TM, analysts said that the rollout would probably kick off by the first quarter of next year.
The deal was supposed to have been sealed much earlier because TM had announced that it had been chosen by the government in May. But the award was postponed twice because of the emergence of High Speed Broadband Technology (HSBT), a private company that proposed building the same network for RM18 billion but without any government aid.
HSBT is 20 per cent owned by the Pahang state government and the team that delivered its sales pitch to the Cabinet Committee on Broadband, chaired by deputy premier Najib Razak, was led by Pahang chief minister Adnan Yaakub.
The bid failed, apparently, because HSBT's concept paper on the project was vague on specifics. The fact that Mr Najib also hails from Pahang may have also helped derail it: giving it the OK would have inevitably triggered questions about the 'political' flavour of the award.
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TM, on the other hand, isn't a stranger to broadband: it currently has an 88 per cent market share, while mobile phone operators Maxis and Celcom have a 6 per cent share each.
But TM desperately needs new growth drivers going forward: the restructuring of the parent company last year split the utility: Telekom Malaysia International which held all the international and wireless business and TM which held the drying-up fixed line business and broadband which will contribute the bulk of its revenue going forward.
With voice revenue falling off, analysts believe that revenue from data services will be the key growth driver for TM, rising to 44 per cent of revenue from around 26 per cent currently.
Broadband penetration rates in Malaysia are around 25 per cent or so and are expected to almost double in three years. That will be crucial to TM's ambitious nation-wide project which the company should easily finance. It is owed RM4 billion by its sister company TMI, an amount expected to be repaid by 2010.
According to CLSA, despite its expenditure for the broadband project, the company is still expected to be in a net cash position of RM2.5 billion next year.
The only problem is that its grip on the broadband market is expected to be loosened with stiffer competition, new products and the entry of new players like mobile company Digi and niche wireless operators Green Packer, Redtone, YTL-e and Asiaspace into the fray. Indeed, analyst Claire Chin expects its market share to slide to 77 per cent by 2010.
Published September 4, 2008
Bio-treat: stuck between a rock and a hard place
By VEN SREENIVASAN
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CHINA water treatment specialist Bio-Treat Technology expects earnings for the current financial year to be higher than the previous year, thanks to the absence of bad debt provision and higher revenue stream from its completed wastewater treatment projects.
Just last week, the company announced that its net profit for the full year ended June 30 had plummeted 62 per cent to 125.43 million yuan (S$26.3 million), a key reason being bad debt provision. Revenue slid 11.6 per cent to 1.41 billion yuan as a fall in turnkey project flows and longer credit cycles slowed wastewater treatment revenues by 19 per cent to 1.1 billion yuan.
Meanwhile, the company is toying with plans to set up a business trust to contain water-related infrastructure assets. If this comes to fruition, it will be the second pure water trust to list on the Singapore Exchange (SGX) after Hyflux Ltd's Hyflux Water Trust last November.
The $234 million Hyflux raised via its water trust was a brilliant move to raise boost liquidity, recapitalise, lighten its balance sheet and realise shareholder value.
But Bio-treat is no Hyflux.
This is a company which has been struggling with boardroom problems, project financing issues, slumping earnings and a huge debt which hangs like an albatross around its neck.
Even as it was announcing its FY07/08 results, the company was receiving notices from four creditors for full redemption of convertible bonds (CB) which had come due in January this year.
The current problems have their roots in 2006 when the company issued a $206 million seven-year CB programme that allowed bondholders to cash out two years from the start of the issuance. But with Bio-Treat's projects typically paying back only in 8-9 years, the group soon found itself stuck with inadequate funds to meet the obligations on put options due this January.
Huge current debt
As it stands, Bio-treat has some $106 million in bonds which fell due earlier this year, and another $63 million which will be due in January 2011. In addition, the company has some $70 million in shareholder loans, on top of bank loans amounting to about $80 million. It has also committed project financing to the tune of some $63 million in an effort to boost capacity from 550,000 tonnes/day at the moment, to 1.24 million tonnes/day by the middle of next year.
So its current debt totals some $382 million.
Meanwhile, applying a 10 times price-to-earnings multiple, its $26 million profit translates into an enterprise value of just $260 million.
It doesn't take a financial genius to figure out how this $260 million stacks up against a debt of $382 million.
Faced with the prospect of action by bondholders whom it cannot repay, Bio-treat has looked at various ways to raise cash and capital, including placements and rights issues. But nothing has come of it in the face of a collapsing share price.
Securitisation may be a final best bet. But the odds are stacked against it.
For a start, unhappy bondholders could block any attempt to hive off assets. And even if some assets could be spun off to raise cash, it would take a very brave investor to plough more funds into a company whose earnings visibility is somewhat cloudy.
As the company claims, bad debts could indeed be lower this year, but the fact remains that the operating environment for China-based wastewater treatment companies is getting increasingly tougher amid strictly controlled tariffs and a rapidly slowing Chinese economy.
Myriad of problems
Given its serious problems, it is remarkable that Bio-treat's stock price has even held up at current levels.
Perhaps there is some hope of bondholders taking a massive haircut to save the company. Perhaps the company might gain access to more credit lines.
But the bald truth is that under the current uncertain economic climate where credit tightening is the order of the day, neither bondholders nor other lenders are likely to bail out a business which faces a myriad of problems ranging from falling turnkey project flows, bad debts, cut-throat competition, and the shadow of serious allegations by former chairman Wing Hak Man over share ownership.
Whichever way one slices or dices it, Bio-treat is stuck between a rock and a very hard place.
Published September 4, 2008
Temasek, GIC dominate world's largest SWF deals
The S'pore units invest a combined US$9.1b, 47% more than a year ago
By CONRAD TAN
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(SINGAPORE) Temasek Holdings and the Government of Singapore Investment Corp (GIC) have been involved in five of the 10 biggest deals involving sovereign wealth funds on record, according to the latest estimates by Thomson Reuters.
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Singapore's two state-owned funds have poured billions into US and European banks since last year. The sheer size of their recent investments has surpassed many of the biggest purchases made by sovereign wealth funds in the past.
GIC's injection of 11 billion Swiss francs (S$14.24 billion) into Switzerland's biggest bank, UBS, last December is the single largest investment by a sovereign fund on record, according to data compiled by Thomson Reuters.
GIC was also part of the consortium led by Spain's Ferrovial Group that bought UK-listed BAA, the world's biggest airport operator, for £10.3 billion (S$26.7 billion) in May 2006. That deal, which also included Canadian pension fund Caisse, still stands as the largest investment involving sovereign funds on record.
So far this year, both GIC and Temasek have made a combined US$9.1 billion worth of investments, more than a third of all deals involving sovereign funds worldwide and a 47 per cent increase from a year earlier, according to Thomson Reuters estimates.
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The bulk of these investments were in the US, the largest of which was GIC's US$6.88 billion investment in banking giant Citigroup in January.
That was the single biggest investment by any sovereign fund this year and the fourth largest on record.
GIC was also one of four investors in the fifth-largest sovereign fund deal on record - a £2.5 billion takeover of Associated British Ports, the UK's largest port operator, in March 2006.
GIC invests Singapore's foreign reserves including pension savings, estimated at over US$300 billion, while Temasek manages a separate S$185 billion investment portfolio.
Temasek's US$4.4 billion investment in US investment bank Merrill Lynch last December is the 10th largest sovereign fund deal on record. In January, two other sovereign funds, the Korea Investment Corp and the Kuwait Investment Authority, each poured another US$2 billion into Merrill.
Separately, Temasek invested £975 million in UK banking group Barclays in July last year. It is now likely to raise its stake in Merrill to as much as 14 per cent from about 9 per cent, after US regulators gave their approval this week (Aug 26).
Together, GIC and Temasek accounted for 10 of the 22 major deals involving sovereign funds this year, until Aug 28.
Investments by sovereign funds worldwide rose 65 per cent to US$25.5 billion, from US$15.4 billion for the same period last year, according to Thomson Reuters.
Published September 4, 2008
Ailing Tang gets day's jail as judge invokes mercy
Short sentence for retail magnate caught in organ trading storm
By JAMIE LEE
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(SINGAPORE) Tang Wee Sung, former executive chairman of retailer C K Tang, served a day in jail yesterday and was fined $17,000 in total for trying to buy a kidney and making a false statutory declaration that his Indonesian donor was a relative.
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| Time served: Tang (left) leaving the Queenstown Remand Prison yesterday evening after serving a day in jail. He was also fined a total of $17,000 |
The 55-year-old, who is the first Singaporean to be sentenced for illegal organ trading, had pleaded guilty to an attempt to purchase a kidney from Sulaiman Damanik between April and June 19 this year and for lying to the Commissioner of Oaths that he was related to Damanik.
He was also charged with lying to the transplant ethics committee but this was taken into consideration in his sentence.
Delivering his sentence to a packed courtroom, District Judge Ng Peng Hong rejected a conditional discharge plea to remove a mandatory sentence for Tang's false declaration due to the gravity of the offence, but shortened the jail term in the light of Tang's poor health.
Besides taking into account Tang's long list of medical woes, including kidney and renal failure, diabetes, high blood pressure and clinical depression, Judge Ng said he had considered the social disapproval of Tang's charges.
'It is clear that the main disapproval is focused on the middlemen who profit from illicit organ trading and not the dying patient in need of a transplant or the poor, socially disadvantaged donor,' said Judge Ng, noting that based on a recent Ministry of Health parliamentary speech, the government said it would be sympathetic towards 'the basic instinct of kidney patients to try to live'. A long prison term would be 'extremely harsh' because Tang had never intended to exploit the donor and a lengthy term could endanger his life, he added.
'In view of the complex daily medical regime and medical condition, I think it is appropriate to invoke the doctrine of judicial mercy,' said Judge Ng.
'We are very gratified that he (the judge) has accepted our submissions on judicial mercy,' said Tang's lawyer Cavinder Bull of Drew & Napier, adding that there would be no appeal.
Friends and family members murmured 'amens' as the judgement was being read out, with many dabbing at their eyes after Tang - who was allowed to sit down half way through the sentence reading - was led out from the courtroom, clutching a plastic water bottle in hand.
'It's important for this to be over so that he gets on with his life,' said Foo Tiang Sooi, chief executive of C K Tang.
'I'm just very sad for my brother, for his life. He's very sick,' said eldest sister Janet Liok. A red-eyed Jannie Tay, president of Singapore Retailers Association, said: 'Why should he be jailed at all. He's been suffering and he's contributed so much to society.'
Tang was released at 5.45pm from Queenstown Remand Prison, a company spokesman said.
Wednesday, 3 September 2008
Published September 3, 2008
Anwar promises more responsible Budget
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(KUALA LUMPUR) Opposition leader Anwar Ibrahim yesterday slammed a widening deficit in the government's 2009 Budget that sparked concerns over Malaysia's economic health and vowed to unveil a more responsible Budget if he topples the ruling coalition this month.
Mr Anwar, who was re-elected to Parliament last week, said his plans to seize power from the National Front coalition through parliamentary defections by Sept 16 remains on track.
He said he has held talks with ruling party lawmakers and the response was 'very good' but declined to elaborate.
'If we can form a government within this short period, then a new (2009) Budget will be introduced,' Mr Anwar told reporters. 'We are not proceeding with this irresponsible expansionary Budget.'
Prime Minister Abdullah Ahmad Badawi last Friday unveiled a record RM208 billion (S$87 billion) Budget for 2009, with wide-ranging aid for the poor and higher development spending amid sharply higher inflation.
The fiscal deficit is forecast to balloon to 4.8 per cent of gross domestic product this year and 3.6 per cent in 2009, from 3.2 per cent in 2007.
Mr Anwar said the 4.8 per cent deficit was untenable as there were few measures in the Budget to boost the country's productivity and economic competitiveness.
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International credit rating company Standard and Poor's recently downgraded Malaysia's credit rating outlook to the fourth-lowest investment grade, which indicates government mismanagement and excesses, he said.
Mr Anwar said the opposition's budget would focus on wooing foreign investment by dismantling a 37-year-old affirmative action policy which gives privileges in contracts, jobs, business and education to ethnic Malays.
However, he promised affirmative action programmes would be retained to help the poor irrespective of their race.
'Affirmative action policies must continue to help the poor and the marginalised,' he said. 'It will be transparent. It will not be done at the expense of the economy. The Malays will not lose (out); the country will win.'
Mr Anwar also pledged to roll back multi-billion-dollar projects proposed by Mr Abdullah's government to cut the Budget deficit. He promised to cut business taxes and lower fuel prices. -- AP
Published September 3, 2008
Bursa to consider shorter trading hours
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(KUALA LUMPUR) Bursa Malaysia and several associations met yesterday to discuss the possibility of shortening the trading hours while a dialogue with the Securities Commission (SC) will be held later, says a report in The StarBiz.
When contacted, Bursa Malaysia chief market operations officer Devanesan Evanson said the meeting would be held 'early this month'.
'The session will allow the parties to discuss the feasibility and impact of shorter trading hours,' he told StarBiz.
The parties involved include the Association of Stockbroking Companies Malaysia, Malaysian Futures Brokers Association (MFBA), Remisiers Association of Malaysia (Persama), Bumiputra Remisier Association, Malaysian Investment Banking Association, Malaysian Association of Asset Managers and Federation of Malaysian Unit Trust Managers (FMUTM).
Mr Devanesan said Bursa would discuss with the SC about the proposal on trading hours and that the talks might involve possible rules changes, reported Starbiz.
'Bursa is conducting a jurisdictional study,' he said.
Mr Devanesan said Bursa would review the request for shorter trading hours only after the discussion with market participants, before making a recommendation.
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'It is premature at this juncture to comment on the impact of the shortened trading hours as feedback from the relevant parties needs to be sought before any recommendations can be made,' he said.
Persama president Sam Ng Soon Lee said shorter trading hours would improve the efficiency and volume of the market as well as provide significant cost savings for brokers and Bursa.
'This could allow brokers to practise the pre-order which was supposed to be launched at the end of July this year,' he said.
MFBA president Steven Lai said the association and futures brokers were likely to ask Bursa to adjust the KLCI futures trading hours in line with any change in the cash equity trading hours, reported StarBiz.
A spokesman from FMUTM said as this would be the first meeting with Bursa, it was likely to be more of an exploratory discussion.
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