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.