E&O AGM: Orchestrated to concert perfection
Another Brick in the Wall
Eastern & Oriental Berhad’s Annual General Meeting was held on Friday. One major item on the agenda was the nomination of ECM Libra Financial Group Bhd’s representatives to the Board of Directors and the re-election – or as the term used by the Bernama report, reappointment – of E&O chairman Azizan Abdul Rahman, managing director Terry Tham, and two other directors.
Bernama reported that 75% of the shareholders present rejected ECM Libra’s nomination, while 90 to 95% overwhelmingly voted for the reappointment of Azizan, Tham, Henry Chin, and Vijay.
That seemed like business as usual.
The same report quoted E&O Deputy Managing Director Eric Chan Kok Leong as claiming that shareholders gave overwhelming support for the collaborative agreement with Sime Darby Berhad (Sime Darby).
That is a business-as-usual, sanitised, positive remark from any businessman and corporate man.
With some knowledge of how AGMs and EGMs are staged and handled in Malaysia, shareholders may not have received the proper answers and most answers are sanitised. In any AGM and EGM of PLCs, there is more at work behind the scenes than meet the eye.
Despite the claim of support, Chan said, “The energy is high. They (shareholders) have more questions than usual.” What were the questions raised by the floor? How were they answered? Were they handled satisfactorily? Was there any suppression or diversion of issues raised by the floor?
The Chairman is Azizan, the controversial husband to the Chairperson of Securities Commission, Tan Sri Zarinah Anuar.
Read the Bernama report first:
E&O shareholders reject nomination of ECM Libra’s nominees
September 30, 2011
KUALA LUMPUR: Eastern & Oriental Bhd (E&O) shareholders today rejected ECM Libra Financial Group Bhd’s nominees – Mahadzir Azizan and Leong Kam Weng – to the company’s board of directors.
About 75% of the shareholders who attended the property developer’s annual general meeting (AGM) here, voted against ECM Libra’s request, E&O deputy managing director Eric Chan Kok Leong told reporters.
Mahadzir is currently a director of ECM Libra, Syarikat Takaful Malaysia Bhd, ECM Libra Investment Bank Bhd, Libra Invest Bhd and several other companies, and is a member of the investment committee of Amanah Raya REITS.
Leong sits on the board of directors and audit committee of TA Enterprise Bhd and TA Global Bhd.
As of Sept 22, ECM Libra holds 6.3% of E&O, making it the second largest shareholder after Sime Darby Bhd which owns 30% equity interest.
Sime Darby acquired its stakes from E&O managing director Terry Tham (12.2%), Wan Azmi Hamzah (9.1%) and GK Goh Holdings of Singapore (9.5%) on Sept 9 for RM766 million or RM2.30 per share.
After the sale, Tham still has 5.1% while Wan Azmi and GK Goh hold 2.9% and 3.5% respectively.
Chan said about 60% of the shareholders of E&O attended the AGM which lasted about four hours.
He said between 90% and 95% of the shareholders voted for the reappointment of E&O chairman Azizan Abdul Rahman, managing director Tham and two other directors – Henry Chin Poy Wu and Vijayaratnam Thamotharam.
“We received overwhelming support from the shareholders. The energy is high. They (shareholders) have more questions than usual,” he said after the AGM.
Chan also said E&O would hold its first meeting with Sime Darby in October to identify areas that both parties could work together.
“We’ve signed a collaborative agreement with Sime Darby. We’ll call for the first meeting next month in accordance with the agreement,” he said.
E&O and Sime Darby signed the three-year collaborative agreement on the same day share sale deal was concluded.
Chan said the group was now focusing on promoting E&O’s unique brand proposition as a true lifestyle developer.
He added that the strategic corporate recognition attained by the group from its sales and marketing collaboration with Mitsui Fudosan Co Ltd – the joint venture with subsidiaries of Khazanah Nasional Bhd and Temasek Holdings Pte Ltd to develop an iconic wellness township in Iskandar Malaysia – as well as the entry of Sime Darby would provide vital impetus for the group to move forward with its growth strategy. – Bernama
Did shareholders ask about insider trading?
All three parties involved in the sale of the 30% block to Sime Darby had existing shares in the company and bought some shares prior to the announcements of a share sale agreement and a collaborative agreement.
It is widely known that Chairman Azizan bought 100,000 shares on August 16th, about two weeks before the announcement. Some commentator defended Azizan with the argument that he has all along been holding few million shares in the Company. So what?
All members of the Board of Directors with shares in the company are confined to buying and selling shares in the company to within certain periods. Those “windows” are before and after a General Meeting, important price sensitive announcements, etc. It is unthinkable and almost impossible that the Chairman was not notified or alerted of an impending major corporate move two weeks before the announcement.
Not only that, Azizan also bought 100,000 and 50,000 shares on April 1st and April 6th respectively. That was less than six months before the announcement. If one refers to the simple chart below, that was the time of the initial market effort to “push” the shares
