Related parties make a mockery of Corporate Governance in Malaysia

S Dali recommends this blogsite on Corporate Governance in Malaysia:

http://www.cgmalaysia.blogspot.com/

If we had been following events happening in Malaysia, no matter what, our rules are already in place, but the main problem seems to be enforcement. Whether it is about elections, public security, road safety or corporate governance. Often, the people in charge failed in the process of upholding the law. The question is: who can check on the enforcers? Those knowledgeable can criticize, rant and rave, but if the political leaders are perceived to be in it by their inaction, life goes on. 'You scratch my back and I scratch yours' and 'you help me, I help you' seem to be the rule rather than the exception.

The current debate is on Sime Darby's purchase of 30% of E&O which seems like an ordinary corporate exercise. But when it involves public funded SD and the Chairman of E&O happens to be the husband of the head of Securities Commission (the enforcer of corporate governance), and he bought shares ahead of the proposed purchase, then it stinks a bit.

Dali's latest take on it:
http://malaysiafinance.blogspot.com/2011/09/more-on-sime-darby.html

S Dali and the blog also touched on MUI group. I am terribly disappointed with Tan Sri Khoo Kay Peng on this. I can still remember having traded in PM Corp shares at around Rm8.00 and when the company sold its cement plant it had a big cash balance. Who would have thought that a big chunk would be lent to a related company which could not repay later? We cannot complain about the turn of events which nobody could foresee, but as Dali mentioned, to be repaid not even in shares but ICULS (at lower than expected rate) which are irredeemable meant basically 'no choice' to the minority shareholders of PM Corp. To add insult to injury, the independent advisers seem to go along with the proposal! As some Chinese used to joke, 'ku piu' or 'shares' in Cantonese is like what it sounds like, as in 'ku' to mean 'guessing' as to whether a particular counter is going up or down! No need to know about fundamentals, just treat the stock market like a casino and you are quite right about it!

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