MSWG Newsletter 02 February 2018 (English)

Friday, 2 February, 2018

02.02.2018

MSWG’S QUICK TAKE ON-ONGOING CORPORATE DEVELOPMENTS

 

Chin Teck Plantations Berhad (“CTPB”)

CTPB held its 59th Annual General Meeting (AGM) on 30 January 2018. MSWG’s representatives attended the meeting. The meeting was opened by the Chief Financial Officer (CFO) cum Company Secretary.

MSWG’S COMMENTS:

MSWG’S QUICK TAKE ON-ONGOING CORPORATE DEVELOPMENTS

Since 1 December 2016, CTPB’s Company Secretary was also the CFO. The role of a company secretary is an important role – so important, that the requirement to have a company secretary is mandated by the Companies Act 2016. The role of a CFO is also an important role – as chief financial officer of the Company, the CFO is deemed as a director for certain provisions of the Companies Act 2016. Also, changes to the CFO are disclosure items for public dissemination under Bursa Malaysia’s Listing Requirements. Combining both these roles in a single person dilutes the relative importance of these distinctly different and challenging roles.

Also, there are potentials for conflicts of interest. It is normal, and in fact better governance, for the company secretary to take minutes at the board committee meetings. An important governance practice for an audit committee is to discuss certain matters without management presence. Thus, if the company secretary cum CFO was the minute-taker, there would be management presence at the audit committee meeting when certain discussions are supposed to proceed without management presence. Needless to say, a substantial portion of the audit committee deliberations would involve finance, and by extension, the CFO.

Thus the position of the CFO and company secretary can be viewed as incompatible functions and should be held by different individuals.

At the last AGM held on 24 January 2017, MSWG highlighted this same issue. The Company informed that “The comment is noted and will be considered in the succession planning process”. We hope the Company would seriously consider having different persons for the CFO and company secretary position.


MSWG’S AGM WEEKLY WATCH 5 – 9 FEBRUARY 2018

For this week, the following are the AGMs of companies which are in the Minority Shareholder Watchdog Group’s (MSWG) watch list.

The summary of points of interest is highlighted below, while the details of the questions to the company can be obtained via MSWG’s website at www.mswg.org.my.

Date & Time

Company

Venue

09.02.18 (Fri)
10.00 am

Amcorp Properties Bhd 
(EGM)

Tropicana Golf & Country Resort, Jalan Kelab Tropicana, PJ

09.02.18 (Fri)
10.00 am

Enra Group Bhd
(EGM)

Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, KL

 

The points of interest to be raised:

Company

Points/Issues to Be Raised

Amcorp Properties Bhd 
(EGM)

  1. Please explain why the Board decides to invest in HK as the property prices are at record high as reported in the HK press. How would the Board mitigate the property risk if there is a severe downturn in property prices?
  2. Please provide some financial background on the joint venture partners for the property projects in Madrid, Spain and Hong Kong and please explain the selection process for these partners.

Enra Group Bhd
(EGM)

1. We note that Non-Executive Directors will be eligible to participate in the Proposed Employee Share Scheme (“ESS”) Awards.

MSWG does not encourage the practice of giving ESS Awards to Independent Directors. Independent Directors are required to be impartial. Receiving shares under the ESS Awards may compromise their independence and/or impartiality or at least create such a perception.

Independent Directors should be paid a fee that is commensurate with their roles and responsibilities and the skills and experience they bring to the Company. The ESS Awards, by definition, is meant for employees.

  1. The Proposed Employee Share Scheme (“ESS”) Awards will be administered and managed by the ESS Committee in accordance with the By-Laws.
  • Who are the members of the ESS Committee? If not appointed, who would be the proposed members of the Committee?
  • Please explain how the ESS Committee can function impartially as every Board member will be allocated shares under the ESS Awards.

MSWG’S WATCHLIST

WEIDA (M) BHD (“WEIDA”)

The Board of Directors of WEIDA (“Board”) had on 29 January announced that the Company has received a letter from Weida Management Sdn Bhd (“WMSB”) requesting the Company to undertake a selective capital reduction and repayment exercise pursuant to Section 116 of the Companies Act 2016 (“SCR Offer Letter”).

The Proposed SCR involves WEIDA undertaking a selective capital reduction and a corresponding capital repayment of a proposed cash amount of RM2.40 per ordinary share in WEIDA held by all the shareholders of WEIDA (other than non-entitled shareholders, as set out in the SCR Offer Letter), whose names appear in the Record of Depositor of WEIDA as at the close of business on an entitlement date to be determined and announced later by the Board.

 [Source: WEIDA’s announcement on Bursa Malaysia’s website on 29 January 2018]


 

LOCAL NEWS AND DEVELOPMENTS

Foreign funds step up buying on Bursa Malaysia

https://www.thestar.com.my/business/business-news/2018/01/29/foreign-funds-net-buyers-on-bursa-for-5th-week/

Indonesia, Malaysia palm oil output to rise in 2018; may pressure prices

https://www.thestar.com.my/business/business-news/2018/01/29/indonesia-malaysia-palm-oil-output-to-rise-in-2018/

Should dual-class shares be introduced in Malaysia?

https://www.thestar.com.my/business/business-news/2018/01/27/should-dualclass-shares-be-introduced-in-malaysia/

Stakeholders Found Value in Enhanced Auditors’ Report

https://www.sc.com.my/post_archive/stakeholders-found-value-in-enhanced-auditors-report/

Bank Negara increases OPR to 3.25 pct

https://www.nst.com.my/business/2018/01/328660/bank-negara-increases-opr-325-pct

US tariffs to hit Malaysia PV exporters most

https://www.thestar.com.my/business/business-news/2018/01/25/malaysia-pv-exporters-to-be-impacted-by-us-tariffs/

SC Wins Insider Trading Case against Former Founder of WCT Bhd

https://www.sc.com.my/post_archive/sc-wins-insider-trading-case-against-former-founder-of-wct-bhd/

Mah: We should ban butter from the EU

https://www.nst.com.my/business/2018/01/329664/mah-we-should-ban-butter-eu

Inflation rises 3.5% in Dec 2017, full year 3.7%

http://www.thesundaily.my/news/2018/01/24/inflation-rises-35-dec-2017-full-year-37

Ire-Tex CEO sacked after five months, board rejects his showcause letter reply

http://www.theedgemarkets.com/article/iretex-ceo-sacked-after-five-months-board-rejects-his-showcause-letter-reply

Comintel falls into PN 17

http://www.thesundaily.my/news/2018/01/25/comintel-falls-pn-17

MSM CEO leaves, claims ‘constructive dismissal’

http://www.thesundaily.my/news/2018/01/22/msm-ceo-leaves-claims-‘constructive-dismissal’  


 

GLOBAL NEWS AND DEVELOPMENTS

How blockchain can end poverty

https://www.thestar.com.my/business/business-news/2018/01/27/how-blockchain-can-end-poverty/

China's December industrial profits rise 10.8 percent year-on-year, up 21.0 percent in 2017

http://www.theedgemarkets.com/article/chinas-december-industrial-profits-rise-108-percent-yearonyear-210-percent-2017

Hacked Tokyo cryptocurrency exchange to return ¥46 billion to coin owners

http://www.thesundaily.my/news/2018/01/28/hacked-tokyo-cryptocurrency-exchange-return-¥46-billion-coin-owners

Consumers, businesses seen buoying U.S. economic growth in fourth-quarter

http://www.theedgemarkets.com/article/consumers-businesses-seen-buoying-us-economic-growth-fourthquarter

Japanese inflation continues rising but no closer to target

http://www.themalaymailonline.com/money/article/japanese-inflation-continues-rising-but-no-closer-to-target#Vm1yl4d4pCqg0Q39.97


MSWG Analysts

Lya Rahman, General Manager, lyarahman@mswg.org.my
Rebecca Yap, Head, Corporate Monitoring rebecca.yap@mswg.org.my
Quah Ban Aik, Head, Corporate Monitoring banaik.quah@mswg.org.my
Norhisam Sidek, Manager, Corporate Monitoring norhisam@mswg.org.my
Wong Kin Wing, Manager, Corporate Monitoring, kinwing@mswg.org.my
Hoo Ley Beng, Manager, Corporate Monitoring linnert.hoo@mswg.org.my

Elaine Choo, Manager, Corporate Monitoring, elaine.choo@mswg.org.my
Lee Chee Meng, Manager, Corporate Monitoring cheemeng@mswg.org.my 

Abdul Halim Alias, Manager, Corporate Services, halim.alias@mswg.org.my

Mustaqim Yusof, Analyst, Corporate Services mustaqim.yusof@mswg.org.my

Muhammad Faris bin Mohamed Yusof, Analyst, Corporate Monitoring farisyusof@mswg.org.my


DISCLOSURE OF INTERESTS

•           With regard to the companies mentioned, MSWG holds a minimum number of shares in all these companies covered in this newsletter except Weida (M) Bhd.


Feedback
We welcome your feedback on our newsletter and our work. Email us at corporateservices@mswg.org.my with your comments and suggestions.


DISCLAIMER

This newsletter and the contents thereof and all rights relating thereto including all copyright is owned by the Badan Pengawas Pemegang Saham Minoriti Berhad, also known as the Minority Shareholder Watchdog Group (MSWG).

The contents and the opinions expressed in this newsletter are based on information in the public domain and are intended to provide the user with general information and for reference only. Best efforts have been made to ensure that the information contained in this newsletter is accurate and current as at the date of publication. However, MSWG makes no express or implied warranty as to the accuracy or completeness of any such information and opinions contained in this newsletter. No information in this newsletter is intended to be or should be construed as a recommendation to buy or sell or an invitation to subscribe for any, of the subject securities, related investments or other financial instruments thereof.

MSWG must be acknowledged for any part of this newsletter which is reproduced.

MSWG bears no responsibility or liability for any reliance on any information or comments appearing herein or for reproduction of the same by third parties. All readers or investors are advised to obtain legal or other professional advice before taking any action based on this newsletter.

Language: