When will the noises (bitching) stop?

“All I and AirAsia have ever tried to do was to make it cheaper for the average man to dream and fly like those with money. One day airports, regulators and politicians will understand,” he said alluding to the controversy over the increase in passenger services charges (PSC) at klia2, which is the main hub for AirAsia.“I’m probably one of the most unpopular men for being outspoken and trying to make flying affordable. But won’t stop till the slogan I came up with in the shower becomes true. ‘Now Everyone Can Fly’. The battle must never stop,” he wrote on his FB page.

How many times have we heard the same scratched record being played. Ironically it's loudest when there is something happening that we are not meant to know, so lets create the smoke screen!  

Now if I want to create a low cost organisation, logic will tell me that there are two costs that I am required to give my attention too, 

A. Cost that are outside my control(external), primarily these are the cost that I incur from my suppliers because I need goods and services. These costs I manage by employing frameworks like Supply Chain Management, Just in Time, Bulk Buying, Long Term Supply Agreements, Heavy Discounting, etc, etc. But ultimately there is a level beyond which the supplier will say, "Sorry ole chap, I cannot do that as I would be making a loss!"

B. Then there are internal costs, cost that are within my control. Again there are various solutions I could employ to keep a tight reign on the costs. I could employ large scale IT systems to increase productivity, making front line personnel cleaners(never thought about the hygiene situation - one minute cleaning, next serving food) keeping head counts to a minimum, doing fanciful things like hedging and getting rid of the trappings of grandeur.   But this will entail leadership and setting the tone at the top, the very top! That means giving up the Bombardier private jet that in itself incurs a bag load of money. After all why should it not be them using their own product, would not the towkays be great ambassadors for the organisation?  

C. The pass through "financial items(costs)" that organisations are required NOT to incur in their own right but are mere de-facto collection agents of other organisations or the government, like PSC(a consumer tax levied on the passenger), GST(a consumer tax levied on the user of goods and services) or PCB( tax deducted at source for salary I the employee earns). These cost have nothing to do with the organisation and its costs structure. Does anyone remember the times when we went to the airport to check in, at the time of checking in we had to hand over cash for our passenger service tax, there are still countries that employ this method. This has nothing to do with the airlines!

So stop all this noise, concentrate on A and B, if you feel that you are not getting what you pay for, than please go talk to MAHB, don't treat your customers as being less informed. Anyway what happened to the Muhibbah Dinner that the organisation had with MAHB?, I suppose MAHB may once again need to suggest making public the debtors position of its various clients!    

For 2018 I hope towkay remembers that not only ‘Now Everyone Can Fly', but also everyone went to school, can read and rationalise. 

Happy New Year Towkays!

Of Youth, Skills and Relevant Experience.

This is what was contained in the filing with Bursa:

"Neelofa Mohd Noor has been at the helm of NH Prima Sdn Bhd for the last 3 years as its director. Under her leadership, the brand Naelofar Hijab is sold in more than 23 countries including Brunei, Indonesia, Australia, UAE, United Kingdom and Europe. As an actress and TV host, she acted in a number of blockbuster movies and hosted popular TV shows. She had also produced her own reality TV show. Neelofa has a strong presence on social media with more than 5 million followers on Instagram. She has received many local and international awards including being listed as Forbes Asia 30 Under 30 Class 2017, SME 2017 Celebrity Entrepreneur of The Year, MSMW 2017 Social Media Celebrity of The Year and In Trend Malaysia InTrend Gala Night 2017 Most Charming Celebrity of The Year, The Inspiring Woman Award and The Iconic Role Model Award. She has been invited to speak at forums and talks, most notably at the 2017 Forbes Asia Summit in Manila, 2017 UNDP-MiSK in New York and 2017 Forbes Summit in Boston. Many international brands like Lancome, Swarovski and Titan have recognised her achievements thus signing her as their ambassador."

Another public interest entity appointed two directors to replace the top man as he was appealing a 5 year prison sentence and a fine for insider trading, one is a 29 year old female the daughter of the man in hot soup, not much information other than academic qualifications, the other is a 39 year old gent, the nephew, again primary information on academic qualifications and that he has been involved with the company since 2000.

My amusement is how both companies can say ( in the case of both ladies) that these appointments meet the requirement of persons with relevant skills and experience that will contribute to the business of the companies. This is not just a requirement of The Malaysian Code of Corporate Governance 2017, but a requirement of CA 2016 with regards to the application of Duties and Responsibilities of Directors.

Needless to say I am sure there are many valid reasons that are unknown to me, I wonder if it includes *%#@ to the r_g______s ? People sometimes forget that a plc is a different kettle of fish, there are fiduciary responsibilities, oh well,Malaysia Boleh.

At the encouragement of BV!

After lunch and over a cup of tea, BV enquired as to what had become of my blogging. I said I thought no one bothered, his response was that I should continue as there were those that read this blog, at least for amusement. So for BV's and others that indulge, I decided I shall make another attempt. 

What they don't want you to know!

Chinese New Year, in fact all festive occasions, with the exception of Hari Raya, there is such joviality and happiness brought about by that poison, that tongues get loose and many things are divulged, as they say, caution is thrown to the wind.

One of the stories that I heard is of such repercussions that I am wondering how come we have not heard the crumbling  sound of the whole organisation as it comes crashing down.

Now it seems that when ever a berhad (not just listed berhad, but berhads) solicit funds from the public they need to get permission from the Capital Markets Regulator ("CRM"). Apparently there was such a case where the berhad did not get approval, and naturally the CMR took action. Now here is the intrigue,

1. Apparently the case was thrown out, it seems that the judge thought that the law and or facts were incorrectly applied. Larger issue is, is this only referenced to this particular case or does it effect all future solicitation of funds. Can you imagine, the wider net that it could apply too.

2. Apparently it was handled by a junior prosecuting officer, why a case that had the potential for far reaching ramifications was not handled by the Head of the Department needs to be questioned. Maybe the belief is that since they are the CMR, the judiciary will always grant them what they wish!

3. Now this is the more interesting part, that the defending lawyer was a former employee of the CMR and there are rumblings that some sort of pally relationship exist between the former and current prosecuting officers. Apparently a number of former prosecuting officers have gone on to set up their own legal practise and for some reason specialise in CMR's cases.  I wanted to ask more, but I was afraid if I did that I would have alerted them and that would have been the end of the stories.

I am told that there would be an appeal lodged, but what is ironic is that how could it have happened in the first case. It only adds to what I have been saying, the organisation has become totally dysfunctional with no leadership, more time is spent with opening ceremonies, photo taking and overseas trips. The time has come for change!

Maybe Mr. Tan Sri Dato Seri needs to have people that are willing to challenge his decision and instructions rather then having silence, remember Silence does not mean acceptance (read correct), Only God Can Be Correct All the Time!

Calling a Spade a Spade - The Continuing Sime Darby Fiasco - Update

Just a short note, did you guys notice that on Saturday last and today there were rating agencies being negative on the proposal with regards to separately listing the Plantation and Property Group. I hope that PNB is taking note and will do the right thing. What was it that the late President Kennedy said.

you can fool some people all of the time,
you can fool all of the people some of the time,
But you cannot fool all of the people all of the time!

Truly I hope that the new Chairman and CEO of PNB will do the right thing. The right thing takes time, effort and strength and addresses the root cause of the problem.  After all no pain, no gain.

Calling a Spade a Spade - The Continuing Sime Darby Fiasco

So in the late 90s and early 2000s the owners of Sime Darby Berhad started the process of taking public listed entities within the group private. Some suggested that it was to make sure that income flowed totally to the holding without any dilution (by way of minority payments).

Then in the mid 2000s there was the merger with other plantation companies within the PNB group, the saying was that big was beautiful, synergies, economies of scale etc etc etc.

Now since the new Chairman of PNB has come in, its let's re-list property and plantations (I understand the Motor entity was to be included but the numbers are not so good) to unlock value.

Wow within 15 years we are back to another round of list, delist and re-list, (of course the thought did occur to me whether it has equally to do with generating income for the Maybank group).

Now lets be realistic, its time for brutal honesty;

1. Is this really for unlocking value or to hide the fact that the group is a non performing group.

2. Fact remains that the current CEO is a non performing chap, every where he has been too, FELDA, Bank Islam, TH etc etc, he has never enhanced the value, many argue that in fact he left the entity worse off.

3. Reality is that after the Sime/Qatar debacle they have never been able to recover. At that time there was a light weight CEO, he was removed another lightweight was appointed, nothing has changed. Why when almost all the management left/was replaced from the time of the Sime/Qatar but the  CFO still remains puzzles many. Does the CFO not play an important and pivotal part, is the CFO not the check and balance to the CEO, could the CFO not have been more effective then and now, or was the package more alluring that the right thing to do was to be silent and hold on to dear job.

4. Ignoring the fact that the current CEO is really not a toughie, what really happened was Sime went and over geared itself in purchasing NBPOL, and what that means is if you are not an efficient company, eventually you will not be able to meet your obligations.

So Sime was forced to par down its debts by selling prime assets. Lucky for them their PR department was able to sell to the media as a monetisation program.  So now we got this poor performing CEO and lepak CFO being made to look like heros. One must also ask what happened to the much vaunted Risk Management system, they should have spotted red flags.

So cutting the story short, PNB Chairman and CEO, lets face reality, its not a case of unlocking value, its a case of hiding the incompetency of the Board, its CEO, CFO, Risk Management division, oops it looks like maybe the whole group.

You guys don't believe me that the whole system is broken, ask the CEO whether he tried to appoint his buddy as Chief Internal Auditor and when Audit Committee said maybe not, he continued with current one till now, maybe its some new management philosophy!  

So Tan Sri Chairman, to generate real value please put the group right, ring out the inefficiencies and ineffectiveness, it might take some time, you might be surprised that the group will be far more profitable then you imagined.

Maybe to start of you may want to ask why not only the CEO has a BMW 7 series but all his direct reports, why when they travel they travel in entourages etc etc.

Remember nice people do not run performing companies, they run charities! Doing the delist, re-list, delist etc is not addressing the real issues, it only delays the inevitable.
                   

You just simply don't listen! - The AA situation - An Update

Last week there was this long, almost a page,  news report in the financial edge relating to the fact that AAX was quoted in a charge relating to the Rolls Royce ("RR") bribery. The report's opening para said that AA has no relationship or dealings with RR, and claims no knowledge of the matters relating to the USD3.2m graft! All I can say is yes they are correct, AA it would seem has no relationship but sister company AAX did sign to have their A330s powered by RR's Trent engine.

Now we all know that there are two heavyweights (no pun intended) that are instrumental in all major transactions that involve the group. So by saying AA is not involved and stating that there are no relationships with RR is technically correct, we also know that when a statement is made it must be unequivocally clear, especially when it involves a group where management is considered as one by the general public.

Now I believe, in my simple mind, that what AA/AAX should do is to make a very firm denial regarding this matter, appoint a top solicitor and challenge the Serious Fraud Office, after all its reputation is being hung outed and questioned, and I am sure the heavyweights in particular would not want this to happen, especially when they are planning an IPO, or are there reasons that they prefer that remains unknown.

It would additionally be nice if the group would also shed more light regarding the transaction with the Executive jet, yes it was reported that it all went through the Audit Committee, but considering its seriousness it would be good for transparency and it would make interesting reading for the simple mind and demonstrate a high degree Good Corporate Governance.

Considering the seriousness of this matter, I am wondering if Bursa have or will be asking for further clarification! Oh maybe not, since they have this situation of "we have a new CRO, we don't have a new CRO, no no our CRO is still our CRO!

Finally  remember my theory of patterns, there is a single occurrence, then two occurrences, and finally its a way of live..........................people don't fail because they are stupid, they fail when they become arrogant!

OK Guys Its now Comical

Ok guys, I know I am not very good with this blogging thing, my attempt to be cynical sucks, my sentence  construction leaves much to desired and my attempt to garner sufficient readership is failing, but I tell you that I seriously believe in my abilities to smell trouble. Remember my 1, 2, 3 approach to life's occurrences ( well thats all one needs to embrace and it makes you look like a genius), well guess what, its happened again!

Anyone reading these pages will note that I focus quite a bit on the Capital Market Regulator and its front line regulator, simply because I strongly believe that in order for them to be effective they have to be cleaner than clean, beyond reproach.

But I am beginning to believe that these guys are so arrogant that they could not care less! I suppose that they are of the opinion that they are so "powderful' that even if they are caught they can get away with it, or they have not realised that crooks get caught not because they are stupid but because they are arrogant!

In this weekend's Option magazine (a giveaway with the Edge Magazine) is an article under creative enterprise entitled "Empowering via Embellishment", there is a nice smiling photo of the entrepreneur! Its about a chap that is doing online business. In fairness to this chappie, he does say, "What's also been a challenge is balancing my day job and this business - I love what I do so I give it 100% when I'm at work and only do the stuff for XX after hours"........please give us a break! You can 100% segregate yourself while at your day job, wow , you must be the only one on this planet with such abilities. But it is not about this chappie and his business its about the general state of organisational effectiveness of his day workplace!

So once again, Mr. Tan Sri Dato Sri Chairman, not only do you have to put the Capital Market in order (I am sure you have seen and read the double page in today's Sun newspaper regarding one of our top groups. These Indian fellows are simply too persistent)  you also have internal challenges, there simply are not enough hours in the day for you.

Putting all this aside Mr. Tan Sri Dato Sri, out of curiosity can you clarify the following:

1. Does your employment contracts/letters not demand that an employee indulge in other jobs.

2. Is the remuneration so bad, that this example is only the tip of the iceberg, that while you and your entourage jet around to exotic locations, the rank and file need to moon light to make ends meet!

3. Did you and your senior management know of this or were you all spending valuable time working about the confusing designations that the organisation recently applied!

4. Do your people also think there is one set of rules for us and then there are the others!


Once again Mr. Tan Sri Dato Sri Chairman we all eagerly await your responses!

You just simply don't listen! - The AA situation.

When they asked Jesus why he was not accepted amongst his own, his response was that a prophet is always accepted last in his own land. I can never be a religious conscious because I am not worthy enough! But as a start I can certainly try to be a governance conscious!

Now those that have read my pieces will note that I have this 1, 2, and 3 approach to behavioural patterns. If it happens once it's just a mistake, twice means a pattern is emerging and you need to keep an eye on it and if it is three times it's too much of a coincidence, there is a clear cut behaviour that communicates the culture and the ethical and moral persuasion of the organisation.

Now folks, I don't know if you have noted but the Indian authorities have cited the organisation (that likes to dress their serving ladies in bright red) for investigation in RS220 crores in alleged money being paid for issuing a licence via Singapore, I cannot remember if there is also alleged inference to money laundering!

And now in today's UK paper, the Guardian, there is a piece on the Rolls Royce bribery, Thailand, Indonesia and Malaysia is cited. Now guess which company is involved, this is how it was displayed, "Extract from statement of facts on charge that Rolls gave AA executive credits worth USD3.2m for maintenance of a private jet.

Now please remember we must not jump the gun and assume that they are guilty, remember everyone is innocent until guilt is proven.

But what puzzles me is that there seems to be a pattern of questionable behaviour emerging when the group wants to sell its air leasing arm and seek dual listing. To me, the man on the street is,

1. Why has the company not issued any denial of the two situations.
2. Would it not effect the transaction price of the two proposed corporate transactions thereby denying its shareholders better returns.
3. Would the company not be exposing itself to regulatory sanctions and reputational  risk since their Annual Report has a CG statement about their strong respect for good governance.
4. Is this the private jet that was transferred to the company sometime in 2016 burdening the company with unnecessary costs.

What intrigues me is that it's as though this company thinks it can do anything it wants at its own liking and can get away with it, past examples,

1. the passenger service tax saga when they first started, if they got a discount, should that money not have been refunded to the people that paid the tax?
2. We don't like Malaysia, we will move our regional HQ to Indonesia and then quietly with tails between the legs coming back months later.
3. Then the ruckus on klia2 was not being built to our specifications, so we refuse to move, until the airport management company started releasing documents to show otherwise.
4. The GMR saga, at first denials but subsequently and quietly doing some of the things that was highlighted as not done.
5. Further complaints about KLIA2 until the airport operators said they would release info on who the major debtors were. The response was, oh we will have a Muhibbah meal.
6. Then we want KLIA2 name changed.

And now the Indian and RR saga. Whats wrong with these guys, they behave like babies always wanting their way and if not given will sulk!

Tan Sri Dato Seri Chairman, since this is a public interest entity, I believe that at the very least you should demand that your front line regulator ask the company to make clarification, oh dear cannot do that now, got confusion on who is the CRO and not the CRO, hi ya one thing has so much effect on others.  What will people say about corporate Malaysia when the regulators are so ineffective!


        

The promises for a new year - an update

My friend has informed me that whenever there are senior management changes in Bursa it  seems that the SC is required to give it approval, ok, wink, nod or whatever! What he cannot say is whether this is because it is a MOF procedure or a licensing requirement or whatever!

Now the point here is that because (it would seem that) the Tan Sri Dato Seri Chairman has not approved, oked, winked or nodded, there is a state of flux at Bursa about the situation (internally), I was the Chief Regulatory Officer, now I am the Chief Commercial Officer but to the public I am still the Chief Regulatory Officer even though someone else is doing the work of CRO (internally).

Now detractors of our dear  Tan Sri Dato Seri Chairman say that it is typical of the man, that anything sent to him is left on the back burner with the hope that the issue will take its own natural course and magically resolve itself. Some of the more venomous detractors accuse our Tan Sri Dato Seri Chairman of being more interested in overseas travel and opening ceremonies.

Putting all this aside, is there maybe a more serious issue at the frontline regulator (Bursa) of the SC, is there discord within the organisation that the CEO tried his own coup d'etat (by removing the CRO and creating a new position for her - some say a cold storage position), even if that be the case, then there is the situation of the CEO jumping the gun and making internal announcements and senior level movements before exhausting due process! Is this not ultra vires of his office, which should rightly now be referred to for disciplinary inquiry and worse of all, are there multiple cases of constructive dismissal, like the previous case of the Senior Management guy (at Bursa) that had to be paid out in millions, I am told.

Rt. Hon. Mr. Finance Minister, I would put it to you that both the dear Tan Sri Dato Seri Chairman and the CEO of Bursa are proving to be wanting in their abilities, especially in these difficult economic times, and therefore I humbly put myself forward to be the next Tan Sri Dato Seri Chairman.  

The Promises for a New Year

Like all of us in the animal kingdom, I am more than prone to my fair share of shooting from the hips. So, as a resolution for 2017, I have told myself that I will count to 10 or even 100 or even sleep on things for more than 10 days before I rush head first with my comments.

Ok I have waited, as the older folk would say, "there are things that need to be said, keeping quiet does no one any good".  So in no particular order,

1. Who regulates the Regulator.

Mr. Tan Sri Dato Seri Chairman (of the SCM), can you please tell us whether you are going to take action against your frontline regulator Bursa Malaysia for making a false and misleading statement.

You see in the early part of 2017 I received  a screenshot that senior management changes had taken place in Bursa Malaysia, that the then CRO had now been made CCO (Chief Commercial Officer - whatever that means). There were many that were elated that this dowager was no longer CRO as she was a person that only took action against the less connected and bully-able.

In the just concluded sustainability conference, the CCO (previous CRO) continued to be passed off as the CRO, and was reported as such in Focus Malaysia. Present in all the photo shoots together with the old yet again CRO was the CEO of Bursa, in other words, he aided and abetted.

So Mr. Tan Sri Dato Seri Chairman, in my humble opinion if what I say is true then action must be taken, and a strong message sent out that who you are is irrelevant, that if you fall foul of the high standards, action will be taken against you.

Looking forward Mr. Tan Sri Dato Seri Chairman  to your unbiased resolution of your wayward front line regulator.

2. MWSG

As the mat sallehs' would say, "For crying out loud!" Can someone please explain the purpose of this most questionable of organisation. I always thought that with the phrase "watchdog" that it will have some bite provoking substance and be of value to the minority shareholder and all shareholders generally. Personally I think that the organisation should be renamed MSLDG (minority shareholders lapdog group).

Did anyone read that this organisation had come out with the Asean CG Scorecard! There are two things that I noticed and it straight away got my diminishing grey matter into hyper drive.

a. In most groups there is a common group management that draws up policies etc etc and that culture permeates throughout the organisation, so naturally you would see that a common thread  and this is manifested in high CG disclosure and performance.

Hence I noted that there were groups where all the listed entities were cited in the Top 100. However there were certain companies that are part of a group, yet their sister listed vehicle is not included. Now does that not pose questions especially when there is common senior management,  whats the message here, half well run, the other half not well run and shareholders taken for a ride. Didn't the chappies in MWSG/MSLDG challenge and ask the necessary questions?

b. I noticed that a company that not long ago was IPOed for over Rgt4.00 and now labouring below Rgt2.00 was listed both for , now wait for it "Good Disclosure and Overall CG and Performance. Come MWSG/MSLDG gives us a break, don't you know that no report is better than a laughing report.

So Mr. Tan Sri Dato Seri Chairman, since in the introduction it says that this organisation is licensed under CMSA 2007 and funded by the Capital Market Development Fund, it must come under your purview and hence there is another need for a investigation or at least getting them to do what they were intended.

Mr. Tan Sri Dato Seri Chairman you better do things quick, MACC is scoring so many points while you are only seen performing ceremonial duties.

Finally and what I thought was the best one during the period of indulgence (unnecessary eating and consumption of the fermented fruit juice)

3. The need for a body that is to register CFOs

Over the December lala time we heard that the Chairman of the Accounting or is it Auditing body proposed that all Chief Financial Officers should be part of a body that will educate these chappies (CFO) in the fine art of IFRS. MASBs and other accounting conventions.

So for the Chairman that proposed this, I have just two questions (by the way the Chairman is a Dato Seri, and Executive Chairman of a Big 4 -auditing practice),

1. The company prepares the financial statements, you the auditor audits them and if there are disagreements you have avenues to address and even redress the situation, with the ultimate qualification as your most powerful tool.

Hence are you suggesting that the large majority of CFOs are not in compliance with the requirements. If that be the case, then should there not have been an increase in the number of late filings and/or qualifications. Maybe Dato Seri Chairman needs to have another news conference to provide more detail.

2.  I have it from reliable sources that those that live in glass houses should not throw stones, I understand that there have been a number of infringement especially in the areas of governance amongst the practice and within individual big firms  that only resulted in slaps on the writs or being swept under the carpet. If that be the case should not it be better to clean ones own industry/home before venturing into other places?

Maybe in this situation the recently appointed Chairman of the AOB can have a look see, but Mr. Tan Sri Dato Seri Chairman the AOB also comes under you, again more work, sigh it never rains but pours.