English

16 March 2018

VOICE OF MSWG

In another welcome boost in the move for more transparency and accountability, Transparency International (TI) Malaysia launched the country’s first Business Integrity Country Agenda (BICA) Assessment Report, following other international T-I chapters in building a country specific body of evidence on business integrity as a platform for reform and change.

Such reports are set to become important reference points for fighting corruption in business practices in Malaysia and overseas.

For Malaysia especially, this is an especially important development, since Transparency International president Dato’ Akhbar Satar has rightly pointed out that this country is facing an “integrity crisis” following multiple examples of money leaks in government and government-linked bodies.

From the perspective of key stakeholders in large companies, the issue of leakages is an important one due to the close nexus of business and government, with the whole issue of GLCs and GLICS being a hotly debated Malaysia-centric subject.

09 March 2018

MSWG’S QUICK TAKE ON-ONGOING CORPORATE DEVELOPMENTS

MULTI-USAGE HOLDINGS BERHAD (“MUH”)

MUH has given a notice dated 5 March 2018 that its adjourned 25th Annual General Meeting will be held on 12 March 2018.

[Source: MUH’s announcement on Bursa Malaysia’s website on 2 March 2018]

MSWG’S COMMENTS:

The notice period for the adjourned AGM is only 7 days. This does not seem to be in compliance with Section 318 read in conjunction with 316(2)(a) of the Companies Act 2016 which states that the notice period for an AGM which is adjourned for thirty days or more should be at least 21 days.

It is imperative for the Board to explain to the shareholders the reasons for giving only 7 days for the Adjourned AGM. In the meantime, we hope the relevant regulators would look into this matter to ensure that no rules have been breached at the expense of shareholders.

VOICE OF MSWG

In two months’ time, the Malaysian Code on Corporate Governance 2017 (“MCCG”) will be a year old since taking effect on 26 April 2017.

Public listed companies will recall that the new MCCG introduced numerous changes, compared to the 2012 Code, in an effort to elevate the standards of corporate governance in Malaysia.

We are in the early stages of the annual report season and we have noticed that the first wave of companies that held their Annual General Meetings after 1 January 2018 have yet to comply with some of the provisions of MCCG 2017.

Most of the non-conformance relate to independent directors at the board level.

Two-Tier Voting Not Adhered To When Independent Directors Term Extended Beyond 12 Years

There have been some instances of boards failing to adhere to the two-tier voting process when retaining independent directors beyond their 12-year tenure.

Public listed company should be reminded that MCCG 2017 states that if a board intends to retain an independent director beyond nine years, it should justify and seek annual shareholders’ approval.

26 February 2018

MSWG’S QUICK TAKE ON-ONGOING CORPORATE DEVELOPMENTS

KRETAM HOLDINGS BERHAD (“KHB”) / HAP SENG PLANTATIONS HOLDINGS BERHAD (“HSPB”)

The Board of KHB announced that KHB has been informed by its Executive Director/Chief Executive Officer and the controlling shareholder, Datuk Lim Nyuk Sang @ Freddy Lim that he had on 21 February 2018 entered into agreements with HSPB to divest his direct and indirect shareholdings in KHB (“Proposed Disposal”).

[Source: KHB’s announcement on Bursa Malaysia’s website on 21 February 2018]

MSWG’S COMMENTS:

The Proposed Disposal looks like a good deal for shareholders of KHB, as the disposal price of RM0.92 per KHB Share represents an attractive price-to-earnings ratio of 76.9 times (based on the unaudited annualised EPS of 1.2 sen as at 30 September 2017) and price-to-book ratio of 2.3 times (based on the unaudited Net Assets per Share of 40.4 sen as at 30 September 2017).