As we bid the year 2017 adieu, let us take a look at some of the momentous events that took place particularly in the business world:
9. Supermax MD Convicted
On 24 Nov 2017, the Kuala Lumpur Sessions Court convicted former CEO of APL Industries Bhd (APLI) Datuk Seri Stanley Thai Kim Sim and former remisier Tiong Kiong Choon for insider trading offences under Section 188 of the Capital Markets and Services Act 2007. Thai was sentenced to a 5 year jail term and a RM5 million fine, while Tiong was sentenced to five years jail and a RM10 million fine. At the time of conviction, Thai was the Managing Director of Supermax Corp Bhd, the world’s no. 2 maker of rubber gloves.
Thai’s offence was for communicating non-public information between 26 Oct 2007 and 29 Oct 2007 to Tiong, while Tiong was convicted for two counts of disposing a total of 6.2 million APLI shares via accounts belonging to his mother-in-law and his mother. The non-public information related to the audit adjustments proposed by APLI’s auditors which resulted in APLI reporting a higher loss for FYE June 30, 2007, as compared to the previously reported unaudited Q4 results, and that APLI would be classified as a PN 17 company. On 31 Oct 2007, APLI announced to Bursa Malaysia Securities Bhd about the audit adjustments and its classification as a PN 17 company. APLI was delisted in February 2009.
Thai has vacated his post effective 24 Nov 2017, and is currently seeking court’s leave for re-appointment as a director, at the same time appealing against the conviction. Supermax chairman Tan Sri Rafidah Aziz said its board of directors “stand strongly behind” Thai, and that Thai’s charge was related only to APL Industries and not Supermax.
Supermax had assured that it is business as usual for the company and on 7 Dec 2017 announced that Thai’s daughter, Cecile Jaclyn Thai, and nephew Tan Chee Keong have been appointed as executive directors effective 2 Jan 2018. Cecile, 29, is the CEO of Aveo Vision, a division of Supermax Healthcare Incorporated in August 2017, while Tan, 39, has been the Executive Vice President of Supermax Healthcare Inc. since July 2000.
(Image credit: The Malaysian Times)
8. Demerger of Sime Darby
In late 2016, Sime Darby have announced that it would undergo a demerger, splitting the century-old conglomerate from one entity into 3 entities.
On 30 November, the company listed its pure plays Sime Darby Plantation Bhd, Sime Darby Property Bhd were listed on Bursa , apart from originally listed and Sime Darby Bhd.
The parent company Sime Darby Bhd will focus on its trading and logistics businesses, consisting of Sime Darby Industrial, Sime Darby Motors, Sime Darby Logistics and its healthcare business.
Sime Darby Plantation host all the plantation businesses within the group, and became the world’s largest listed oil palm plantation company, with a market capitalisation of about RM40 billion upon listing.
Sime Darby Property will likely take charge of the property businesses.
The restructuring is to allow each standalone entity to focus on individual growth strategies, and unlocking the values of the individual entities.
(Image credit: The Star Online)
7. IRB Crackdown
Throughout the year, the Inland Revenue Board (IRB) has been cracking down on tax bills in arrears, notable ones include:
IRB has also included the audit of 15 banks in Malaysia that have offshore dealings as part of its Operasi Mega 2017 on 20 November until 1 December. This is its largest operation to date involving 23 tax departments, 12 state tax offices, 37 tax branches, 17 tax investigation branches and a total of 4,219 of its 11,000 strong workforce in the country. As part of the Ops Mega, the IRB has sent out reminders and notices on unpaid taxes and taxes in arrears to 6,560 individual tax payers and companies that involve unpaid taxes amounting to RM434.175 million.
IRB’s target collection for year 2017 is RM127 billion, as at to-date, IRB have collected about to RM110 billion
(Image credit: The Sun Daily)
6. Acquisition of Old Town
One of the national favourite beverage brands, is on the verge to be owned by a Dutch company. On 11 Dec, OldTown Bhd, the owner of the Old Town White Coffee franchise, announced that it received a pre-conditional cash offer from a Dutch beverage company, Jacobs Douwe Egberts Holdings Asia NL BV (JDE Asia) to acquire its 100% stake, at a value of RM1.47 billion.
JDE Asia is an indirect wholly owned subsidiary of Jacobs Douwe Egberts BV (JDE), which is one of the market leaders on the global coffee and tea scene, with brands such as Jacobs, Tassimo, Moccona, Senseo and Douwe Egberts. In late 2016, JDE acquired Singapore-listed Super Group Ltd, adding the Super brand under its sleeves. JDE has a 9.5% revenue market share in global coffee retail, ranking it second to Nestlé with 22%.
OldTown Bhd was established in 1999 and was listed on Bursa Malaysia in July 2011. Old Town White Coffee products are exported to 17 countries worldwide namely Singapore, Indonesia, Philipines, Thailand, Brunei, Myanmar, Cambodia, Hong Kong, China, Macau, Taiwan, Australia, New Zealand, United Kingdom, The Netherlands, USA and Canada. To-date, it has more than 245 café outlets throughout Asia. It has recently expanded to Cambodia and scheduled to open its first outlet in Cambodia by first half of 2018.
OldTown Bhd announced that its majority shareholders, owning 51.45% of the public-listed company, had given their undertaking “to accept the offer”. JDE made the offer with the intention to delist and privatise OldTown. In order to do so, JDE Asia would need 90% ownership of OldTown.
(Image credit: Pavilion KL)
5. Malaysia Airlines CEO
On 17 October Ryanair Holdings PLC made a surprise announcement that Peter Bellew, is rejoining as its chief operations officer in Dublin from December 1. Which means, Malaysia Airlines Bhd would lose its chief executive officer, again.
Bellew was appointed as Managing Director and CEO of Malaysia Airlines effective 1 July 2016, replacing Christoph Mueller, who officially left the airline on 1 Sept 2016, after about one year in the airline. Bellew was brought in by Mueller as part of the management team on 1 Sept 2015, as chief operations officer, just a few months after he himself joined the ailing airline.
On 20 October, MAS announced its chief operations officer Captain Izham Ismail, as the new chief executive officer. Capt Izham has 38 years experience in the aviation industry and starting his career with MAS as a pilot in 1979. His appointment is in line with the airline’s succession plan as part of the 12-point MAS Recovery Plan.
(Image credit: Malaysia Airlines)
4. Felda’s Jalan Semarak Land
The plot of land, which has been earmarked for the Kuala Lumpur Vertical City (KLVC) development project, will feature seven towers, including Felda’s iconic tower, to be known as KLVC Tower1A.
Felda Investment Corporation Sdn Bhd (FIC) has appointed Synergy Promenade Sdn Bhd as its main developer on 3 June 2014. However, it was later discovered that ownership of the land had been transferred to the company in December 2015.
According to news reports on 14 May 2014, the area was initially earmarked for a mixed commercial and residential development project with a gross development value of more than RM500 million, to be undertaken by FIC’s subsidiary ENCORP Bhd. However, on 6 Nov 2014, DBKL received an application from KLVC’s main developer, and not ENCORP, to conduct the project planning in the same area. Checks with the Companies Commission of Malaysia also found that KLVC’s main contractor is a new company that was established only in January this year.
The market value of the land was said to be RM1 billion, significantly higher than the RM270 million it was sold for.
On 24 Dec 2017 Inspector-General of Police Tan Sri Mohamad Fuzi Harun said it is premature to draw conclusions on the controversy because the investigation is still at its initial stages.
(Image credit: The New Strait Times)
3. Proton –Geely Partnership
Malaysians have been anticipating with bated breath, over who would be the chosen one as the foreign partner of the national carmaker, Proton. After months of speculation, Proton’s holding company DRB-HICOM Berhad finally announced on 24 May that it has signed heads of agreement with Zhejiang Geely Holding Group (Geely) that allows Geely to acquire 49.9% of Proton shares, and 51% of Lotus shares from Proton.
The price of the acquisition for Proton’s 49.9% shares was RM460.3 million (including the Boyue Licence valued at RM290 million), while Lotus was sold to Geely and another company, Etika Automotive (who is acquiring 49%) for a total consideration of GBP100 million.
Geely’s acquisitions in Proton and Lotus were eventually completed on 29 September. On the same day, Proton announced its new chief executive officer, Dr Li Chunrong, becoming the first non-Malaysian CEO of Proton. He replaces Dato’ Ahmad Fuaad Kenali, who became CEO of Malakoff Corp Berhad.
This new partnership is key to the Proton’s turnaround plan as Geely is able to provide necessary support especially in terms of technology sharing, product development and market expansion regionally. Proton gained the rights to manufacture and distribute the Geely Boyue, which will be Proton’s first SUV model in its product line-up. The first Boyue model is said to be released for sale by end of year 2018. Proton’s manufacturing plant in Shah Alam will be relocated to Tanjung Malim within 5 years.
Geely’s global forays includes acquisition of Volvo Cars from Ford Motor in 2010, London Taxi Company in 2013, and most recently AB Volvo, a Swedish trucks manufacturer, in late December.
(Image credit: Free Malaysia Today)
2. Alibaba Group Collaboration
Another Chinese company that made headlines this year is none other than Alibaba Group. On 22 March, Prime Minister Dato’ Sri Mohd Najib Tun Abdul Razak launched the world’s first Digital Free Trade Zone (DFTZ) together with Jack Ma, the founder and Executive Chairman of Alibaba Group. The launch ceremony also witnessed the signing of 4 Memorandum of Understanding (MoUs) between the following parties:
In September 2017, Alipay (or zhi fu bao “支付宝”) became the latest e-wallet to land on the shores of Malaysia, collaborating with Maybank, CIMB, and later with Public Bank, and Touch n Go. 7-Eleven was the first retailer to fully accept the mobile wallet application with the payment option available at all its 2,100 stores. The target market of Alipay is Chinese tourists in Malaysia. Alipay adds to the existing e-wallet services already in Malaysia with the likes of Visa Checkout, Masterpass, CIMB pay, MOLPay and Samsung Pay. Alipay is currently available at Starbucks, Parkson, Royal Selangor, Duty Free Zone, Resorts World Genting and will be available in more merchants.
During the tabling of Budget 2018 on 27 October, the Prime Minister announced a RM83.5 million allocation to further advance the DFTZ. On 3 November, DFTZ went live by flagging-off more than 1,900 export-ready SMEs onboard. The launch of the KLIA Aeropolis DFTZ Park is Alibaba’s first regional e-fulfilment hub outside China
(Image credit: The Malaysian Reserve)
1. Bandar Malaysia
In December 2015, a joint venture of China Railway Engineering Corp (CREC) and Iskandar Waterfront Holding (IWH) entered into a share sale agreement with the Ministry of Finance-owned TRX City Sdn Bhd in a RM7.4 billion deal for a 60% stake in Bandar Malaysia Sdn Bhd and appointment as master developer of the Bandar Malaysia project. The agreement was part of a debt rationalisation programme for the embattled 1MDB.
The Bandar Malaysia project, owned by 1MDB, was to be developed on the former Sungai Besi airbase site, which will feature Kuala Lumpur Internet City, and Malaysia transport nucleus including the main terminal for the proposed KL-Singapore high speed rail (HSR), and connectivity to other parts of Greater KL via MRT lines 2 and 3, KTM Komuter, ERL, and future access to major highway networks.
In May this year, TRX City had terminated the agreement with the joint venture on the basis that it failed to meet payment obligations outlined in the conditions precedent. The joint venture had however disputed TRX City’s claims.
On 5 July, MoF launched a Request for Proposal (RFP) for companies to bid for the Bandar Malaysia Project estimated at RM200 billion. The RFP exercise was open only to Fortune 500 companies with a combined revenue of RM50 billion or more in the past 3 years. MoF was said to have received bids from 2 Japanese firms and 5 Chinese state owned entities for the project.
As at December, MoF reported that it is still in negotiations for a master developer.
(Image credit: The Star Online)
Disclaimer: Contents of this article were extracted from the various published articles in the mainstream media.