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BTS: Halim Saad Shareholders Clash
By Kapal Berita
12/10/2000 5:16 pm Thu
Nampak saja OK, tetapi kalau sudah diarah, semua
fund managers ini ikut aje... Bayangkan bagaimana EPF
boleh melabur dalam Bakun atau bagi "derma" kepada Perwaja.
From The Business Times, Singapore
11th October 2000
Clash seen between minority shareholders and Halim Saad
High-level watchdog to be formed by year-end has to decide on put
option granted by Renong boss to UEM
By Eddie Toh in Kuala Lumpur
A HIGH-LEVEL committee to protect the rights of Malaysia's
long-suffering minority shareholders will be put to the test as soon
as it becomes operational early next year when it will have to grapple
with the controversial put option granted by tycoon Halim Saad to
United Engineers Malaysia (UEM).
The Finance Ministry's Parliamentary Secretary Hashim Ismail said
yesterday the watchdog -- comprising six large state-owned funds --
will be formed by the end of this year so that it could begin work by
early next year.
Spearheading the movement is the Employees Provident Fund which
manages a large pool of workers' savings. It is also the largest
domestic fund manager with assets in excess of RM30 billion (S$13.8
billion) in the Malaysian bourse.
Other members include Kumpulan Wang Amanah Pencen (a state retirement
fund), Social Security Organisation, Permodalan Nasional Bhd
(investment arm of the Malaysian government), Lembaga Tabung Angkatan
Tentera (LTAT or the fund management unit of the country's army) and
Lembaga Tabung Haji (the pilgrims' fund).
Analysts said the formation of the watchdog is timely as a gauge of
the new corporate governance mood in the country.
The litmus test is likely to involve listed UEM's decision on whether
to force Mr Halim to buy a substantial block of Renong Bhd shares from
UEM when his put option ends on Feb 14 next year. He controls both UEM
In 1997, UEM bought 32.6 per cent in parent Renong from unnamed
shareholders for RM2.34 billion, or RM3.24 per Renong share. Following
a public uproar over the transaction, the tycoon gave UEM the right
but not the obligation to ask him to buy the Renong shares if the
share price remains below RM3.24 apiece by next February. The counter
closed at RM1.35 yesterday.
UEM has said it will "adhere" to the terms in the put option
agreement, effectively dismissing the possibility of extending the
However, analysts are unsure if Mr Halim is capable or willing to
raise about RM3 billion -- equivalent to Renong's current market
capitalisation -- to buy the Renong shares and pay UEM the holding
Despite the calibre of the members of the new watchdog, they may not
have the power to force Mr Halim's hand or that of his associates.
EPF, LTAT and Lembaga Tabung Haji are substantial shareholders of UEM
with a combined stake of 9.11 per cent. EPF is the third largest owner
of UEM with a stake of 8.26 per cent. On the other hand, Renong, in
which Mr Halim has an estimated 17 per cent stake, owns 37.93 pe cent
Nevertheless, analysts said it is essential for UEM to fulfil its
obligation if Renong's share price remained depressed.
"We think there can only be one positive outcome as far as investors
are concerned, which is for UEM to exercise the option and be repaid
in full. Any shortfall, substantial or otherwise, is expected to lead
to sharp sell-down of the share," said investment adviser Surf88