the syed mokhtar factor · the syed mokhtar factor the tycoon’s involvement in ecoworld indicates...

THE SYED MOKHTAR

FACTORThe tycoon’s involvement in EcoWorld

indicates a much bigger role in the merger with UEM Sunrise and deep ties

with Liew Kee Sin. P.8&9

www.focusmalaysia.myPP 19339/05/2018 (034908)

APRIL 7-13, 2018WEEKLY ISSUE 279

Comintel’s tough task to turn around Banking on bids for jobs worth RM600 mil after disposing of only profitable unit. P.14

Cashless boost with QR code payment

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Sapura Energy Bhd group CEO Tan Sri Shahril Shamsuddin feels the worst is over. The group has strengthened its presence in five continents despite the turmoil in the oil and gas sector. P.10-12

HeveaBoard’s differentiation strategy to sustain profits P.8

www.focusmalaysia.myPeninsular Malaysia RM4.50 | Sabah & Sarawak RM5.50PP 13917/10/2012 (030948)

Prudent Deleum focuses on core biz

O&G services player cautiously optimistic on sector’s recovery. P.13&14

FocusLife

Property

Sporty Star

Enter the dragon

P.16&18

P.5

P.IV&V

‘We have weathered the storm’

9 772289 234001

00362

NOV 30-DEC 6, 2019

F&N hampered by rising cost, competition P.15

Bursa’s new regulation CEO, what does it mean? P.29

WEEKLY ISSUE 362Peninsular Malaysia RM3.50

Government should focus on real issues P.22

A reprieve for house buyers following Federal Court ruling P.12

Four in the running for immigration system re-tender P.14

1DECEMBER 2019DECEMBER 2019

DECEMBER 2019

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THREE SPORTY INFLUENCERS IMPART THEIR TIPS ON HOW TO STAY FIT AND FABULOUS.

FITNESS MEETS FASHION

FITNESS MEETS FASHION

Three fitness influencers impart tips on how to stay fit and fashionable. Read about it in PURSUIT

contents2 FocusM | Nov 30-Dec 6, 2019

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20-21

▪ Columns

28 QuestionTime: As Sri Ram enters Taman Rimba fray, should Khalid Samad be sued?

29 PoundFoolish: Bursa Malaysia has a new regulation CEO. So what?

30 Social protection necessary to quickly end poverty, hunger

▪ Markets

31 Boycott Black Friday, save the world

▪ Income+

32 Underserved SMEs are driving the growth of P2P financing

34 Face up to financial reality

▪ Focus Lite

36 Couple enrich themselves with SEGi’s PACE

37 Kenanga focuses on ethics and integrity

▪ Mainstream

10 A Question of Business: Raising revenue through the anti-money laundering law

12 Federal Court verdict on EOT a welcome relief for homebuyers

14 A re-tendering for the RM2.5 bil immigration system?

15 Intensifying competition, price pressures weigh on F&N

16 Sime Darby: New year sees con-tinued portfolio rationalisation

18 MSPO-certified palm oil may not command a premium price

20-21 Will Westports 2 be a game changer for the company?

22 Government should focus on the real issues for the country’s sake

▪ Property

23 Share units in strata properties: Time bombs, one after another

24 Indian hotel chain Oyo targets more rooms in Southeast Asia

25 Gamuda Cove to commence water theme park at end-2021

26 Difficult road ahead for WeWork

Syed Mokhtar a key player in ECW-UEMS merger?

CUSTOMER HOTLINES Tel: 603-7710 3883 Fax: 603-7710 3882 Editorial: Ext 106 Email: [email protected]

Advertising: Ext 107 Email: [email protected]

Circulation: Ext 122 Email: [email protected]

Subscription: Ext 122/101 Email: [email protected]

Focus Malaysia is published by: Milan Integrasi Sdn Bhd (1251956-W) Unit 6.13, Level 6, 1Tech Park, Jalan Tanjung Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan

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EDITORIAL Editor-in-Chief: P Gunasegaram | Executive Editors: Amie Ong, Doreenn Leong | Senior Writers: Emmanuel Samarathisa, Ranjit Singh | Writers: Xavier Kong, Sharina Ahmad, Chee Jo-Ey | Sub-Editor: Geraldine Tan | Senior Designers: Eugnice Han, Quek Chun Leng | Designer: Purvinn Raj Chai | Photographer: Iqbal Ismail

CORPORATE Executive Director, Business Development: Christopher Ang

ADVERTISING Sales Director: Pearly Ng (012) 2012139 | Sales Manager: Kelvin Ng (018) 2928861 | Sales Support Executive: Parimala Devi (012) 2424122 | Account Manager: Aznul Faizal Ahmad (019) 3953552

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CIRCULATION & PRODUCTION Manager: Kanna Matthew (012) 5070750 | Executive: Silas Emmanuel (014) 640 4733

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• Through a web of linkages, the tycoon emerges as the largest shareholder of ECWD. He would not only benefit from an entity with a larger landbank but also the possibility of injecting some of his land assets into the merged company

P.8&9

Nov 30-Dec 6, 2019 | FocusM | 3

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mainstream4 FocusM | Nov 30-Dec 6, 2019

Dear Reader, THIS will be the last copy (Issue 362, Nov 30-Dec 6, 2019) of the weekly print (and digital) edition - after seven years in operation. It’s because Focus Malaysia is catching up in the digital race. We will transform into an online business news portal focusing on news, fea-tures and opinion and a monthly print publication.

The work to officially launch the news portal on Jan 1 has already started. There will be “wet-testing” for uploads of articles and features during the whole month of December prior to the launch on Jan 1.

Simultaneously, work will continue for the produc-tion of a solid monthly print publication to be simply called Focus Malaysia Monthly, which will also be avail-able in a digital format. It will hit the stands in the last week of December/first week of January for the first issue of the new year, 2020.

We are doing this to meet the demands of a rapidly changing market place. These are all too apparent for those in the media industry - the reader wants infor-mation at the tips of his fingers literally - through the smartphone, the notebook and the desktop. With a few clicks, he wants to know all there is to know as quickly as possible. Speed is of the essence. And mostly for free, I might add.

To do that, we have to be agile and quick - the only way out is to increase our digital presence and respond rapidly on a platform that is very easily accessed. But that does not mean we will abandon print totally.

We are a weekly print newspaper now and maintain a modest online presence. What we intend to do is to substantially increase our online presence but at the same time reduce the frequency of print to a monthly.

By doing that we hope to have the best of both worlds. We will bring breaking news, make rigorous analyses, and come up with brave, unvarnished com-ments on the business scene in Malaysia and the world, especially where it relates to us, 24/7.

For those who want depth, clarity, more analysis and more substantial material, we will have a print monthly which will also be distributed digitally in an easily accessed format. The online material will be free to all but we will eventually ask for donation “subscrip-tions” and donations from those who don’t mind con-tributing towards cost recovery and a decent salary for our staff.

Our aim is to give free access to good business news and views to all who want them but to recoup the costs incurred through donations and advertisements as well as organising events and fora which will be of interest to readers.

That’s the way we will go in future. We will start small. We will grow our digital presence and look for new ways to keep print - as long as there is a market for it. That’s part of our efforts to stay relevant.

While the market place is a very competitive one, we are not looking to displace anyone and overtake others but will be focused - pardon the pun - on bring-ing the news, analyses and comments that matter to a developing country, providing insights and solutions and building awareness.

What we hope to bring to you is some value in terms of information - the news, analyses and com-ments - which are independent, impartial, properly researched, written well and even entertainingly and which you will at least in part find enlightening. That would hopefully translate into justification and expan-sion of our market presence.

We thank you, readers, each and every one of you, for continuing to support alternative media. We hope you will find our future endeavours worthy of your continued support, and if so do pass the word around. Feel free to give your feedback - bricks and bats or bouquets as the case may be or anything in between at [email protected]. That will help us improve. FocusM

Focus Malaysia goes online daily and prints monthly

Wynton Private Equity Group

M A L A Y S I A

BUSINESS ANALYSED

Slow and steady for insurer P&O ... page 16

Asean airline plan scuttled ... page 14

WEEKLY ISSUE 038

Aug 24-30, 2013

PP 13917/10/2012 (030948) www.focusmalaysia.my

Rubber glove maker has hands full with nitrile competition

.... page 22

2014 looksmurky forTop Glove

Inside: 16 pages of Focus Learning supplementPENINSULAR MALAYSIA RM4.50 | SABAH & SARAWAK RM5.50

No sequence to successMalaysian Genomics Resource Centre’s Munirah Abdul Hamid has made some unorthodox decisions in her journey to becoming the co-founder of a Bursa-listed genetic research company

... pages 04&05

YTL ripe for re-rating ... page 18

Eversendaiundervalueddespite gains

Sharesof KPJattractive?

Share price struggles despite strong financials and track record

... page 20

Healthcare group’s price correction follows adverse court decision

... page 24

FocusView Leave MAS management alone

Blacklist PTPTN loan defaulters

... page 05

Wheat or Chaff SapuraKencana to snap up Labuan Shipyard stake?

Mercedes to introduce its electric cars

Tok Bali port woos Petronas for anchor tenant

... page 06

How a 31-year old has linked up with top politicians, royal families and Hollywood celebrities ... pages 10-12

Low Taek Jho, CEO, Jynwel Capital Ltd

Jho Low high flier

O&G services company earmarks renewable energy as its next growth catalyst... page 08

See brothers unite to fight off Can-One’s YeohOnce divided, brothers now join forces to prevent sale of Kian Joo Can Factory

... page 16

Silterra at a crossroadsKhazanah Nasional may be unwilling to stomach more capital outflow for wafer fab unit

... page 20


WEEKLY ISSUE 078

Peninsular Malaysia RM4.50 | Sabah & Sarawak RM5.50

Ho Wah Genting must do more Pestech hitches ride on SEA power demand Shareholders demand loss-making company come up with a turnaround plan ... page 18

Electric-power technology company to expand products and services under three-year blueprint ... page 13

JCY Inter-national powers ahead of HDD peers Hard disk drive component maker rebounds strongly while Notion VTec flounders

... page 22

MAY 31-JUNE 6, 2014

Trading on fashion

May 31-June 6, 2014Focus Malaysia

andrew Tan of andrews Models is head honcho of the much-anticipated KL Fashion Week, a five-day platform connecting designers with retail opportunities

... pages 04&05

Since being cast in popular 1970s television series The Love Boat, Princess Cruises has made dreams come true for more than 1.7 million people from around the world annually ... pages 12&13

extreme angler adventurer Jeremy Wade shares his experiences fishing for monsters and being the star of his own television programme ... pages 08&09

Angling for adventure A royal cruisebenchmark 16 pages

mainstream

mainstream mainstream

mainstream

Pullout

mainstream

Wah Seong gears up for renewable energy business

FocusviewJustice should not be delayedNo reason to omit directors’ profiles ... page 05

WheatorChaffABB caught up in dam brouhahaSawit Kinabalu uses cloned tissue to ramp up production ... page 06

Despite incurring big losses, listed companies continue to make high payouts to their directors. Is this fair to minority shareholders?

... pages 10-12 (The Focus List)

Overpaid directors50

Kinsteel Bhd MD, Tan Sri Pheng Yin Huah

Masterskill Education Group Bhd ex-CEO, Datuk Seri Edmund Santhara

Perwaja Holdings Bhd chairman, Tan Sri Abu Sahid Mohamed

Scomi Group Bhd group CEO, Shah Hakim Zain

Mulpha International Bhd executive chairman, Lee Sheng Huang

Melewar Industries Group Bhd executive chairman, Tunku Yaacob Abdullah

Tanco Holdings Bhd group MD, Datuk Tan Jing Nam

Unisem (M) Bhd chairman and group MD, John Chia Sin Tet

Globaltec Formation Bhd group exec chairman, Datuk Goh Tian Chuan

Hubline Bhd CEO, Dennis Ling Li Kuan

Proposed hike expected to boost the Penang water company’s topline

... pages 20-21

GDEX to gain from Alibaba- SingPost dealCourier company may have to scale up operations and enhance technologyin anticipation of big volumes from the tie-up

... page 08

Differing by-laws impede speedy constructionUniformity hard to achieve as authorities seek to protect their turf

... page 24


WEEKLY ISSUE 079

Peninsular Malaysia RM4.50 | Sabah & Sarawak RM5.50

Sowing a new Sunway community Investment scams continue to thriveEach precinct in Sunway Iskandar development will be a self-sustaining integrated city ... pages 46-47

Unscrupulous parties still exploiting legal loopholes for a quick buck ... pages 14-15

TAHPS emerging from obscurityLaggard group makes comeback with Puchong property projects

... page 18

JUNE 7-13, 2014

mainstream

mainstream mainstream

There have been alleged anomalies and irregularities in technical specifications of vessels in the run-up to Icon Offshore Bhd’s listing

exercise. While this raises questions as to what really happened, the company has denied the accusations ... pages 10-12

Tossed by allegations

mainstream

PBA nears nod for tariff hike

Will Hong Leong Cap be delisted?

Chang’s perfect finish

With company failing to comply with public shareholding spread, time is fast running out

... pages 16

Darren Chang leads a team who turn vehicles into showroom worthy models with their signature touch ... pages 29, 32-33




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Enter the dragon

P.16&18

P.5

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mainstream Between populism and sustainability P.13

income+ Investing in luxury handbags P.29

www.focusmalaysia.my

mainstream Tune Protect looking at re-pricing some of its products P.11-12

mainstream

BGMC: Long-term

outlook for construction

sector is good

P.6

WEEKLY ISSUE 285

PP 13917/10/2012 (030948)

JUNE 9-15, 2018Peninsular Malaysia RM3.50

mainstream Business and politics do not mix P.14

property UEM gears for

better results from Melbourne P.20-21

Getting down to business

Datuk Seri Dr Wan Azizah finds her new job “exhilarating”. The Deputy

Prime Minister talks about fighting corruption, reforming GLCs, women

empowerment, 1MDB, media freedom and how it is like working

with Tun Dr Mahathir Mohamad. P.8-10

“They have to pay the price”Datuk Seri Anwar Ibrahim says those in govt who were involved in excesses didn’t have the honour and integrity to resign. P.8-10

SEPT 1-7, 2018

mainstream Sustainability reporting boosts business P.14

income+ Tips when buying your first car P.30-31


mainstream Axiata’s

edotco mulls fund raising via

private equity

P.12

mainstream Pantech

eyes new markets after US

blow P.6

WEEKLY ISSUE 297

PP 19339/05/2018 (034908)

THE BULLS ARE BACK.RECHARGED.

27 SEPTEMBER 2018 BursaBullCharge

REGISTER NOWbullcharge.bursamarketplace.com

Peninsular Malaysia RM3.50

mainstream Making quality healthcare accessible to all P.16




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P.16&18

P.5

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9 772289 234001

00297

property Will integrated living be the way forward? P.20-21

MARCH 30-APRIL 5, 2019

mainstream Cycle & Carriage looks to several strategies to grow P.5

income+ Rethinking credit card usage P.28-29


WEEKLY ISSUE 327

PP 19339/05/2018 (034908)

Project Name: Focus Malaysia AdvertPrinting: Colour

File Size: 26.2cm x 7cmActual Size: 26.2 x 7cm

Bleed line in Red

Peninsular Malaysia RM3.50

mainstream MyKris eyeing a leap into ACE market P.14

"I'm in a hurry"The world’s oldest prime minister, Tun Dr Mahathir Mohamad, is facing a time crunch as he races to fix the country’s ills before handing the reins to his successor. This includes GLC reforms, high cost of living and bringing Jho Low to justice. P.8-10




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Sporty Star

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P.16&18

P.5

P.IV&V


Under Billion Companies + Investment

property Paramount: Leveraging on education P.20-21

focuslist GLCs deliver mixed set of results P.11-13

Don't miss out on the latest issue of Pursuit

9 772289 234001

00327

EXCLUSIVE INTERVIEW

People & Life

pp 13917/10/2012 (030948) | peninsular Malaysia rm4.50 | sabah & sarawak rm5.50

Weekly issue

001

December 8-14, 2012

Defining the ‘true north’ | Idris Jala on how ETP has spurred the country’s economic growth ... page 16

Lifeline for Perwaja | Set to return to profitability after securing iron ore mining concession ... page 26

Inside

A picture of grace and grit

CHErmaInE Poo shows gumption and

backbone in scaling the heights of the glamour world

... pages 8-9

TAn Sri HAlim SAAD, corporate high-flyer of the 90s, has surfaced as

the frontrunner to take over the National Feedlot Corp cattle-farming project. He is also linked to three other mega ventures

pages 08 & 09

Halim’s cash cow

16pages of

Cash in or cash out? EPF has to decide whether to subscribe to maS rights issue

... page 12

Syed Mokhtar’s ‘demolition derby’ Three old buildings in KL to be torn down

... page 31

Bob Chua on Bob ChuaBrand goes global

... page 50

Corn man nelson heads west

Labour shortage at home forces

nelson’s to Indonesia and africa to farm sweet corn

... page 38

arT of nurturing business ties,

the Chinese way, has evolved to keep up with technology

... page 37

The reinvention of guanxi

COmPLImEnTarY COPY – nOT FOr SaLE

pg26


AHS: 1984 (S9) THE GOOD DOCTOR (S3)

NEW AMSTERDAM (S2) THE WALKING DEAD (S10)THE FLASH (S6)

ARROW (S8)

The latest, just for you

Your favourite hit shows are back with brand new seasons.Catch them all on Astro – same day as the U.S. www.astro.com.my

USA HOMESAME DAY AS THE U.S.

TM

AHS: © 2019 – 2020 Twentieth Century Fox Film Corporation. All rights reserved. THE GOOD DOCTOR: © Sony Pictures Television Inc. All rights reserved. NEW AMSTERDAM: © 2018 NBCUniversal Media, LLC. THE WALKING DEAD: © 2019 AMC Network Entertainment LLC. All rights reserved. THE FLASH: © and ™ DC Comics, © Warner Bros. Ent. Inc. ARROW: © and ™ DC Comics, © Warner Bros. Ent. Inc. | MEASAT Broadcast Network Systems Sdn. Bhd. (240064-A)

Can Penang pull it off?A state government selling reclaimed land to finance infra projects under a RM46 bil transport master plan is raising concern over the huge financial risks, the ‘excess capacity’ and the environmental impact. P.8-10




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Property

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Enter the dragon

P.16&18

P.5

P.IV&V


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00358

Leading Malaysian YouTuber Phei Yong shares the secrets to his social media success.

NOV 2-8, 2019

Special draws have little impact on NFOs P.15

Anthony Loke reveals inside info? P.29


Let experts decide on PLUS takeover bids P.26

Syarikat Takaful’s high degree of financial discipline P.14

IHH doubles down on India ops P.6

Read about it in PURSUIT

Penang Forum spokesperson Khoo

Salma Nasution

Does Dr M really control

Corporate Malaysia?


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The prime minister wields enormous influence over businesses held by government-linked

companies. Some quarters are calling for effective checks on the PM’s power that could see the unequal distribution of wealth. P.8-10




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Property

Sporty Star

Enter the dragon

P.16&18

P.5

P.IV&V


9 772289 234001

00359

Cigarette players crimped by illicit market P.5

Smaller oil palm planters

favoured if the crop prices rise

P.14

NOV 9-15, 2019

Smart cities: A real estate play? P.18&19

Bitcoin still the leading crypto despite huge drop in prices P.33


Growth & taxes: Tough balancing act P.17

A regional hub for energy-efficient vehicles? P.11&12

+ InvestmentUnder Billion Companies

NOVEMBER 2018

1DECEMBER 2019AUGUST 2019 1DECEMBER 2019NOVEMBER 2019

Leading Malaysian

YouTuber Phei Yong

shares the secrets to

his social media success.

Leading Malaysian

YouTuber Phei Yong

shares the secrets to

his social media success.

NOVEMBER 2019

13

Monthly

A selection of past coversby P Gunasegaram Editor-in-Chief

Weekly

mainstream 5FocusM | Nov 30-Dec 6, 2019

People & Life

pp 13917/10/2012 (030948) | peninsular Malaysia rm4.50 | sabah & sarawak rm5.50

Weekly issue

001

December 8-14, 2012

Defining the ‘true north’ | Idris Jala on how ETP has spurred the country’s economic growth ... page 16

Lifeline for Perwaja | Set to return to profitability after securing iron ore mining concession ... page 26

Inside

A picture of grace and grit

CHErmaInE Poo shows gumption and

backbone in scaling the heights of the glamour world

... pages 8-9

TAn Sri HAlim SAAD, corporate high-flyer of the 90s, has surfaced as

the frontrunner to take over the National Feedlot Corp cattle-farming project. He is also linked to three other mega ventures

pages 08 & 09

Halim’s cash cow

16pages of

Cash in or cash out? EPF has to decide whether to subscribe to maS rights issue

... page 12

Syed Mokhtar’s ‘demolition derby’ Three old buildings in KL to be torn down

... page 31

Bob Chua on Bob ChuaBrand goes global

... page 50

Corn man nelson heads west

Labour shortage at home forces

nelson’s to Indonesia and africa to farm sweet corn

... page 38

arT of nurturing business ties,

the Chinese way, has evolved to keep up with technology

... page 37

The reinvention of guanxi

COmPLImEnTarY COPY – nOT FOr SaLE

pg26

story on corporate high-flyer in the 90s, Tan Sri Halim Saad, as he had emerged as the frontrunner to take over the National Feedlot Corp cattle farming project.

Jho Low is now the most wanted man in Malaysia for his 1MDB involvement. And we were among the first to reveal Jho Low’s links with top politicians, royal families and Hollywood celebrities.

A journey of seven years, and still going strong

by Doreenn Leong

who were retained were unsure of the future of the paper under the new direction. But Charles, who took the helm as the new EIC in 2018, instilled much confi-dence in us. Under his leader-ship, we continued to make an impact in the industry. Charles was also instrumental in Focus Malaysia securing an exclusive interview with Prime Minister Tun Dr Mahathir Mohamad.

Charles decided to leave due to personal reasons and the only pioneers left are executive editor Amie Ong and me.

This time, Focus Malaysia is going for another change. We are moving with the times by going online and printing monthly to increase our digital footprint while reducing but maintaining a significant print presence.

Although going online is tough given the existing players in the market, we believe as long as we continue to be bold and unafraid to report the truth, there should be a market for what we do. We have a smaller but still dedicated team of people which is prepared to take the challenge. FocusM

on Icon Offshore Bhd. In my arti-cle, I raised alleged anomalies and irregularities in technical specifi-cations of vessels in the run-up to its mega listing exercise.

There were many more arti-cles which garnered much atten-tion. Our efforts paid off as read-ers started to see us as essential reading.

In just a matter of four years or so, we managed to overtake the incumbents and became the No. 1 business weekly in terms of circu-lation with 44,720 print and digital copies combined.

Despite enjoying success within a short time frame, it was insufficient to sustain our opera-tions. In 2018, the workforce was cut to a third of the original staff strength. Along with this move, the paper turned digital, making it available on a mobile app.

Understandable - it is impera-tive for the owner to do whatever is necessary to try to keep Focus Malaysia afloat. This was the lowest point during my tenure with the paper. It was not easy seeing my colleagues losing their jobs.

At that time, several of those

Seven years! This is how long Focus Malaysia has existed. And boy, what a journey it has been for us. It seems

like just yesterday when I took the leap to re-enter the journal-ism world. I was itching to get back to doing what I love most – writing and unearthing corpo-rate scandals and shenanigans as well as giving first-hand news on what is happening in the busi-ness world.

When I got wind of a new weekly publication looking for writers, I couldn’t pass up the chance to give this a go. I recall meeting with Focus Malaysia’s numero uno, Chong Cheng Hai, who was the paper’s first editor-in-chief (EIC). He is not a man of many words and has a dry sense of humour – I could never tell if he was serious or joking. Chong, a veteran in the media industry, has a great eye for detail. We can always rely on him to spot the slightest mistake or error. But Chong had great help from then deputy EICs Toh Lye Huat and Charles Raj.

I have worked with Toh during my stint at The Edge Financial Daily. He has a nose for news and guides the writers well. What really intrigued me was the chance to work with Charles Raj, who has built a name in the industry, with his thought-pro-voking articles when he was at Malaysian Business magazine.

The three “musketeers” as they were fondly known, man-aged to put the paper together for launch in December 2012. It was certainly not an easy task. Trying to convince experienced writers, sub-editors, graphic designers, photographers to

Our Focus List articles, pub-lished once a month, were based on extensive research by our research team on various topics. One of the most awaited Focus List articles was on overpaid directors as we listed the direc-tors who were highly paid despite the company making losses.

And who doesn’t love a corpo-rate shenanigan? One of the much-talked about articles was

Chong (centre), Toh (left) and Charles who were the EICs in that order

Chong, holding a copy of the 200th issue of Focus Malaysia, with some of the pioneer staff

leave their cushy jobs to join a start-up newspaper company was not a walk in the park.

Among the top two questions of potential candidates were how deep is the owner’s pocket and what is Focus Malaysia’s unique sell-ing proposition. As it is, the incumbent had established a strong following in the indus-try and it seemed like an insurmountable task to take them on.

The answers? The owner believed there is room for another weekly publication. Our differ-entiation – in-depth analysis of the news, focusing mainly on local companies, hence the name of the paper.

He also gave us five years to be profitable. As the team started to shape up in Focus Malaysia, we were all raring to make our presence felt.

I must say, we did a fine job producing the first issue of the weekly on Dec 8, 2012, with the cover A screenshot of the new Focus Malaysia website

newsbreaks6 FocusM | Nov 30-Dec 6, 2019

Khazanah to set up equities trading desk

SOVEREIGN wealth fund Khazanah Nasional Bhd is establishing an equities trading desk as part of a measure to deliver higher dividend income, say sources close to the matter.

It is believed that Datuk Hisham Hamdan will be in charge of the unit but details are scant as to logistics and operations.

According to the Khazanah website, Hisham is cur-rently the fund’s executive director, head of public mar-kets and head of research. Prior to joining Khazanah in

2011, he served in Sime Darby Bhd and UDA Holdings Bhd.

Khazanah was not available for immediate comment. The implementation of the equities trading desk

comes at a time when Khazanah registered higher impairments and lower dividend income last year. The fund posted a loss of RM6.27 bil in 2018 with its realis-able asset value falling 21.6% to RM91 bil as of Dec 31, 2018, from RM116 bil a year ago.

Economic Affairs Minister Datuk Seri Azmin Ali, in a Nov 19 parliamentary reply, said Khazanah sold stakes slightly more than RM5 bil in the first 16 months under Pakatan Harapan. Khazanah is estimating a pre-tax profit of at least RM5 bil this year. That would be the highest amount in eight years. FocusM

by Emmanuel Samarathisa

The commercial elements of an EcoWorld development

BANK Negara Malaysia (BNM) has held a meeting with four development finance institutions (DFIs) as part of the central bank’s efforts to consolidate public lenders, say industry sources.

It is believed the first meeting took place sometime in November while the outcome of the meeting is not known.

The four DFIs are: Bank Pembangunan Malaysia Bhd (BPMB), Danajamin Nasional, Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) and Export-Import Bank of Malaysia (Exim).

BNM, in a previous reply to FocusM, said a transforma-tion committee comprising representatives from the four

DFIs together with the Ministry of Finance and the central bank would be formed to ensure a “smooth and effective consolidation exercise.”

According to the federal budget, the four DFIs are to merge through a “two-phase restructuring plan” to form a “new financial institution.” It is understood that the first phase involves BPMB and Danajamin while the second phase involves SME Bank and Exim.

BNM noted that the rationale behind the merger was to “leverage on the complementaries of business and to further unlock synergistic value propositions of entities.” FocusM

Eco World to cut staff? THE Eco World group is considering retrenching staff in a move to cut costs, according to sources.

Eco World Development Group Bhd (ECWD) and sister company Eco World International Bhd (ECWI) are mulling a mutual separation scheme (MSS) after going through a financially challenging phase.

ECWD is highly geared with 0.75x net gearing as of June 30, 2019 while ECWI is struggling with cash flow problems after seeing its cash, bank balances and deposits drop 55% to RM436.96 mil in the financial year ended Oct 31, 2018 from RM992.39 mil last year.

ECW did not respond to FocusM’s queries on the possible rightsizing of both companies.

The property group has been making headlines recently for being the subject of a potential merger with UEM Sunrise Bhd. While ECW has been silent on the matter, UEM Sunrise has denied knowledge of any merger talks. It is believed that Khazanah officials have met UEM board members informally to gather feedback on the matter. FocusM

BNM kickstarts DFI merger talks

Nov 30-Dec 6, 2019 | FocusM | 7

lead8 FocusM | Nov 30-Dec 6, 2019

Syed Mokhtar a key player in ECW-UEMS merger?• Through a web of linkages, the tycoon

emerges as the largest shareholder of ECWD. He would not only benefit from an entity with a larger landbank but also the possibility of injecting some of his land assets into the merged company

• Syed Mokhtar also has a track record of purchasing Khazanah assets

Three years ago, Tan Sri Liew Kee Sin was a jubi-lant man. After getting out of a corporate tussle involving property giant

SP Setia Bhd, he immediately found his footing and made a mer-curial comeback through a pair of property ventures: EcoWorld Development Group Bhd (ECWD) and its sister EcoWorld International Bhd (ECWI).

Such was the brisk growth of the EcoWorld group of companies that Liew was confident of fielding questions from the local press. That was what he did on Jan 23, 2016. Among the earliest questions posed to Liew was how he obtained a plot of land for his maiden development.

Without hesitation, the prop-erty developer name-dropped one of the most important figures in Corporate Malaysia: Tan Sri Syed Mokhtar Albukhary.

Liew was quoted in a local newspaper as saying: “When I came out of SP Setia, I was given an opportunity to buy land from him. He offered me two parcels of land in Johor - parked under DRB-Hicom Bhd and Tradewinds Corp Bhd.

“He sold me huge parcels of land next to Nusajaya and Tebrau in Johor. But he is a very smart

entrepreneur. He owned 402ha but sold me only 281.4ha and kept the rest,” he said.

He would go on to add that the right partnerships were crucial because “in today’s world, you can’t only think of yourself… Thank goodness. We have good partners for all our projects.”

The makings of a mega-merger Naturally such a prominent part-nership will be the talk of the local scuttlebutt. What’s more, Syed Mokhtar and Liew control more than 50% of mothership ECWD. (See chart.)

Now, punters have been specu-lating for yonks the links between Syed Mokhtar’s and Liew’s busi-ness dealings, especially with ECWD and ECWI. But such chatter dialled up a notch as the duo recently emerged as spearheading a purported merger between ECW group of companies and UEM Sunrise Bhd (UEMS).

The talk is that both ECWD and ECWI will be merged with UEMS. The latter will take the lead in the merger and will have a larger stake but with Liew and his partners having management control. Syed Mokhtar is allegedly influencing such talk with an aim to complete the merger due to his close asso-ciation with Prime Minister Tun Dr Mahathir Mohamad as well as Liew and the main shareholders of


ECWD and ECWI. Mahathir’s involvement here

comes by way of his chairmanship of Khazanah Nasional Bhd. The sovereign wealth fund owns UEM Group Bhd which in turn controls UEM Sunrise with a 76.1% stake.

Sources familiar with the matter say Syed Mokhtar and Liew might have been pushing for the deal. “That is part of business. And, yes, the Syed Mokhtar factor might be the ‘catalyst’ for the merger.”

But one corporate insider is not surprised at these develop-ments. “If true, then this is normal. You should remember that Liew and Syed Mokhtar’s relationship goes back a long way, even during Liew’s career with SP Setia. Liew, Syed Mokhtar and (Tan Sri) Abdul Rashid Manaf. They were part of Tun Mahathir’s circle,” she tells FocusM.

Rashid was chairman of SP Setia (1997-2012) when Liew was CEO of the company. Naturally, the former has been earmarked as an ally and trusted business associate of the latter - he owns 85% of Eco World Development Sdn Bhd which owns 7.24% and 0.92% in ECWD and ECWI, respectively.

A byzantine connection But Liew’s tenure at SP Setia was actually one of the earliest instances of his relationship with Syed Mokhtar. For example, SP Setia purchased 360ha in Johor in 1999 from Syed Mokhtar’s private vehicle Kelana Ventures Sdn Bhd for RM11.06 mil.

SP Setia also entered into a 50:50 partnership with Syed Mokhtar-controlled Tradewinds to build cheap housing under the now defunct 1Malaysia People’s

Housing Programme (PR1MA) in Taman Ikan Emas, Cheras.

That said, Syed Mokhtar’s rela-tionship in the ECW group is markedly different. To be sure, charting Syed Mokhtar’s presence in both ECWs, or in any company for that matter, is a byzantine affair as the tycoon hides behind layers of proxies and shell companies.

In this case, the first place to begin is unpacking private compa-nies Sinarmas Harta Sdn Bhd and Sigma Seleksi Sdn Bhd. Sinarmas and Sigma Seleksi own 32.94% and 3.28% in ECWD and 3.28% and 0.28% in ECWI respectively. Sinarmas is ECWD’s largest share-holder and is owned by Syabas Tropikal Sdn Bhd which in turn is held by ECWD deputy chairman Datuk Leong Kok Wah (99.99%) and Fisool Musa (one nominal share).

At this stage, the link Sinarmas and Sigma Seleksi have with Syed Mokhtar is that both companies share the same business addresses with companies directly held by the tycoon such as private vehicles Restu Jernih Sdn Bhd and Perspective Lane (M) Sdn Bhd.

Next is Leong’s relationship with Syed Mokhtar. The former is known as a confidant of both Syed Mokhtar and Liew. Industry sources say Leong is akin to the gel between the two and he is believed to hold a majority shareholding in Syabas Tropikal on behalf of Syed Mokhtar.

“I believe this was the arrange-ment when Liew wanted to debut with EcoWorld. Note that Leong and (Tan Sri Abdul) Rashid (Manaf) played an important role in securing the maiden plot of land from Syed Mokhtar,” says a source familiar with the initial dealings of ECWD.

UEM Sunrise’s Puteri Harbour is a prestigious waterfront development in Iskandar Puteri, located along the southern coast of Johor

But Leong’s relationship is fur-ther substantiated by the fact that he was a shareholder of Tradewinds Plantations Bhd. The Tradewinds brand has been syn-onymous with the Syed Mokhtar clan. The company is owned by Perspective Lane and counts Syed Mokhtar’s son Syed Danial Syed Mokhtar among its directors.

Sigma Seleksi, on the other hand, has smaller stakes in both EcoWorlds. But one of its share-holders, Azhar Mohd Awal, is the chief financial officer of PNMB, which is wholly owned by Syed Mokhtar.

MGO in the making? PNMB has been labelled a bastion for many of Syed Mokhtar’s lieu-tenants. Case in point, the appointment of Mohamad Abdullah as director of media giant Media Prima Bhd, which is con-trolled by Syed Mokhtar. Mohamad is the managing director of PNMB and was chairman of TMR Media Sdn Bhd - the publisher of The Malaysian Reserve.

What is Syed Mokhtar’s end-game with both EcoWorlds or the merger with UEMS is unknown. But a source familiar with the tycoon’s business dealings says it is common for him to flirt with trig-gering a mandatory general offer (MGO).

“That is why Sinarmas, despite having 32.94% in EcoWorld, has not pushed the MGO button. Of course, Leong is there as majority owner of Sinarmas and that is part of the plan, just like what he is doing with Media Prima.”

To issue an MGO, a share-holder has to breach the threshold of 33% or be in a position to control the majority of the board of direc-tors. Syed Mokhtar, through his vehicle Aurora Mulia Sdn Bhd, owns 31.9% of Media Prima.

But being the largest share-holder of ECWD, albeit indirectly, puts him in an advantageous posi-tion. If these assumptions hold water, Syed Mokhtar’s interests will put him in the driver’s seat with a 35.79% stake, hence the con-clusion that he is spearheading the UEMS-ECW merger. Some say he could not only benefit from an entity that has a larger landbank but also the possibility of injecting some of his land assets into the merged company.

Endless possibilities It is estimated that if a UEMS-ECW merger happens, a mammoth entity will be born with a sizeable landbank of 7,284ha and branding, second only to Sime Darby

lead 9FocusM | Nov 30-Dec 6, 2019

Property Bhd which owns a developable landbank of more than 8,093ha. Based on all three compa-nies’ realised net asset value, UEMS stands to be the majority shareholder with roughly 52%.

Others posit a possible sell-down by Khazanah when the merged company stabilises to take its stake below 50% and realise some cash, which seems to be its avowed aim now given a slew of asset disposals of over RM5 bil recently.

It is known that UEMS is part of Khazanah’s commercial assets and is believed to be among the clutch of companies that are up for sale. If the Bumiputera agenda, a policy favouring ethnic Malays for the sale of government assets, is factored in, then Syed Mokhtar arrives as a potential winner. Firstly, due to a lack of Bumiputera tycoons, what more one with clout and political con-nections.

Secondly, Syed Mokhtar has had a track record of purchasing Khazanah assets such as national carmaker Proton Holdings Bhd and national postal service Pos Malaysia Bhd.

Government officials familiar with the matter say while Syed Mokhtar and Liew have made their request for the merger known to Mahathir, there could be possibil-ity of inaction on the part of Khazanah.

“The only thing credible about this deal, imaginary or otherwise, is that it has not been tabled to the Khazanah board. While the PM wields significant influence as chairman, he doesn’t write the board papers to discuss it. It is the Khazanah management team that drafts the papers.

“Liew and Syed Mokhtar have every right to push the deal as they see fit, but nothing moves without being discussed at the Khazanah board first,” says an official. Heading the Khazanah manage-ment team is managing director Datuk Shahril Ridza Ridzuan.

Pushback It is understood that some in Khazanah’s management team are not for the deal. But despite some resistance, Khazanah officials had met with UEMS board members informally to talk about the merger. The outcome of those ses-sions is not known.

Dissidents of the merger raise the fact that the union could be more beneficial to ECW, and hence Syed Mokhtar and Liew. Also UEMS does not need ECW’s exper-tise for a turnaround, the numbers and demands (particularly man-agement control) do not make sense, and the lack of choice in contemplating other proper devel-opers to merge with UEM. “Being limited to only EcoWorld raises questions. Why wasn’t UEM given any leeway?” notes one such pro-tester.

Liew had a bad exit from SP Setia. He joined the company in 1996 and dedicated 20 years of his life to transforming the company into one of the country’s largest listed property firms. Liew was also pivotal in helping Malaysia secure the Battersea Power Station project in the UK.

But those accomplishments were overshadowed by conflicts leading to his exit from SP Setia. In

Ownership Syed Mokhtar linkRelationship

Syed Mokhtar’s EcoWorld Connection

SOURCES: COMPILED FROM BLOOMBERG, SSM, ANNUAL REPORTS

NOTES:1. Syed Mokhtar Albukhary and Liew Kee Sin control Eco World. Chart shows Syed Mokhtar’s interests control 35.79% of the mothership Eco World Development Group Bhd. Liew Kee Sin’s interests, including son and wife, come up to 22.85%2. * Business Address: No 110, Jalan Maarof, Bangsar Baru, 59000 KL

Owns 100%

Owns 100%

Owns 100%

Owns 99.99%

Owns One nominal

share

Director

Former shareholder

Owns 100%

50%

50%

Owns 100%

Owns 3.28%

Owns 0.92%Owns 0.28%

Owns 27%

Owns 85%

Owns 32.94%

Owns 7.24%

Owns 7.67%

Owns 10.09%

Owns 100%

Son

Owns 2.85%

Owns 5.09%

Son

Chief Financial Officer

Wife

Owns 50%

Owns100%

Owns 10.27%

Owns 1.83%

Owns 15%

Liew Kee Sin Liew Tian Xiong

Eco World Development

Group Bhd

Jernih Padu Sdn Bhd

Abdul Rashid Manaf

How Teng Teng

Eco World Capital(International) Sdn Bhd

Eco World Development Holdings Sdn Bhd

Restu Jernih Sdn Bhd

PerspectiveLane (M) Sdn Bhd

Syed Danial Syed Mokhtar Shah

Syabas Tropikal Sdn Bhd

Eco World International Bhd

Leong Kok Wah (Deputy Chairman EcoWorld Dev)

TradewindsPlantation Bhd

Percetakan Nasional Malaysia Bhd

Azhar Mohd Awal

Sigma Seleksi Sdn Bhd

Sutera Bakti Sdn Bhd

Same BusinessAddress *

Sinarmas Harta Sdn Bhd

Fisool Musa

Zahari Mohamad

Syed Mokhtar Albukhary

2011, Permodalan Nasional Bhd (PNB) offered to take over SP Setia but Liew and his board rejected the offer. However, Liew surfaced as a joint offeror with PNB for the takeover.

The exercise ended in 2012 with PNB becoming a major share-holder. Liew was also set for an exit in 2015. But he raised eyebrows after purportedly bankrolling his son’s portion amounting to RM124 mil of a reverse takeover by ECW of then-Focal Aims Holdings Bhd. He did this while still holding office in SP Setia.

Things went further south when Liew tendered his resigna-tion in January 2014 citing retire-ment wishes, only for the then SP Setia chairman Tun Zaki Azmi to clear the air that Liew would remain chairman of the Battersea Power Station redevelopment pro-ject as well as managing director of the Qinzhou industrial project in China - two positions he held during his time as SP Setia head honcho.

The only difference was that he remained in both jobs while com-mandeering ECW as a director, despite denying any links to the group. This was no mere storm in a teacup. It raised serious issues of corporate controls in Malaysia.

Searching for dividends Some fear that this merger with UEMS will be a SP Setia 2.0. Indeed, some have said the merged company will help ease the ECW group’s finances. Both ECWs as well as UEMS certainly need some tailwinds. The former has had problems with cash flow by way of ECWI, which saw its cash, bank balances and deposits falling to RM436.96 mil in the financial year ended Oct 31, 2018 from RM992.39 mil in the previous year. ECWD is highly geared with 0.75x net gearing as of June 30, 2019. ECWI is also expected to conduct a mandatory separation scheme in a move to cut costs (read Newsbreak on page 6).

But one analyst also points out that UEMS’ recovery has been slow. The group has been delever-aging but it has yet to provide “attractive” dividends. “That is an important factor because Khazanah wants dividends. To do that, they look to Liew who still has a reputation for being a property developer ace.”

Indeed Liew and Shahril have worked together in the past when Shahril was CEO of the Employees Provident Fund through various property tie-ups. “This yielded positive results for EPF,” says the analyst. “I feel this is more of a deciding factor of the merger, the Liew-Shahril dynamic, then the Syed Mokhtar one. Syed Mokhtar is just one of the cogs in this machine,” he adds.

Another analyst agrees that while the merger will be a union of unequals, Liew is still perceived to have the know-how of running a property company. “We are still speculating. But UEMS needs a proper managerial team. This is something up Liew’s alley.”

Whichever way this pans out, many of those FocusM spoke to believe that the merger will happen. But one thing is certain: some of the warhorses of old still retain significant shine under the “new” Malaysian sun. FocusM


Raising revenue through the anti-money laundering law• IRB has created the

perception that it only goes for the small man in striving to increase the government’s tax revenue

• It should hunt those who flaunt wealth that they cannot explain away

• IRB should work with investigative authorities to nab money launderers

Former prime minister Datuk Seri Najib Razak’s wife Datin Seri Rosmah Mansor is among members of his family facing money laundering chargesHere’s something for

Finance Minister Lim Guan Eng to consider very seri-ously in terms of

raising revenues given the very ostentatious, and even crude, display of wealth of many in society who may not be paying the requisite amount of tax.

It’s been a bone of contention with salaried workers and small-time self-employed people that the Inland Revenue Board or IRB notoriously targets the small man/woman while those who are much richer and have plenty of assets get away with, not murder, but not even paying taxes in some cases.

For instance, taxpayers who have been regularly paying taxes under the pay-as-you-earn scheme are sometimes fined more than a couple of thousand ringgit for merely filing the tax returns late, even by a day.

And this is when your tax obligation may be of the order of RM14,000 for the full year.

If you are charged RM2,000 for paying a RM14,000 obligation a day late that’s an interest rate of 14.3% a day or 5,200% a year - 520 times the 10% a year rate which is usually the late payment charge.

But till today, that system still operates as an easy means of garnering quick income for the government from the unsuspect-ing small man who may have been derelict only in terms of late filing, although he has long since made the payment.

It comes as a shock later when IRB, which is under the finance ministry, sends you a letter for the payment of that amount and casually lists it as income tax arrears when it is not - it is a penalty charge, only 520 times the usual one!

How do I know? It happened to me - and I had a valid reason.

It is still puzzling that as the government hunts high and low for government revenue, forcing the sale of valuable Khazanah

was not declared. And then, if it is apparently

illegal income, bring in the big guns via Amla which allows the finance minister to appoint a “competent authority” to investi-gate the wrongdoing.

Wide-ranging law Under Amla, it is an offence to: • engage, directly or indirectly,

in a transaction that involves proceeds of an unlawful activity or instrumentalities of an offence;

• acquire, receive, possess, dis-guise, transfer, convert, exchange, carry, dispose of or use proceeds of an unlawful activity or instrumentalities of an offence;

• remove from or bring into Malaysia, proceeds of an unlawful activity or instru-mentalities of an offence; and

• conceal, disguise or impede the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of, proceeds of an unlawful activity or instru-

mentalities of an offence. The person who commits a

money laundering offence shall on conviction be liable to impris-onment for a term not exceeding 15 years and, hear this, shall also be liable to a fine of not less than five times the sum or value of the proceeds of an unlawful activity or instrumentalities of an offence at the time the offence was com-mitted or RM5 mil, whichever is the higher.

To my mind, if the IRB and the finance ministry can work hand-in-hand with the Malaysian Anti-Corruption Commission (MACC), there are billions and billions of ringgit out there which the government can recover.

Why, it may even dwarf the net funds lost via 1MDB.

Not just that; Amla allows for the forfeiture of a property or asset upon prosecution for an offence.

The courts can make an order for forfeiture of any prop-erty relating to the commission of such offence and are bought with the proceeds of an unlaw-

ful activity. Even if you have sold the

property, you cannot escape. Where the offence is proved against the accused but the property has been disposed of, “diminished in value or cannot be traced, the court shall order the accused to pay as a penalty a sum which is equivalent to, in the opinion of the court, the value of the property, and any such pen-alty shall be recoverable as a civil debt due to the Government of Malaysia and shall not be subject to any period of limitation pre-scribed by any written law.”

No time limit, in other words. All these powers to bring the

powerful and wealthy to book and nobody is doing a damn thing about this.

Instead, the poor small man or woman is made to pay 5,200% in interest per year on tax he has already paid!

Obvious cases stand out If you thought, for any reason, that there is only small money here, think again. Consider this case reported by Bernama in August this year:

“KUALA LUMPUR (Bernama): The mother of a former minister, the late Tan Sri Jamaluddin Mohd Jarjis, has failed to reach a settlement through mediation for her suit against her two grand-children over their failure to include three company shares worth RM1.3 bil in the list of her son’s estate.”

Three company shares worth RM1.3 bil - and that’s not all of the inheritance assets that we are talking about. It’s a hell of a lot of money to be in the hands of a career Umno politician and minister who never had a large business to talk about.

Remember, if all of these are ill-gotten gains under the law, then it is laundered money and the penalty is a fine of not less than five times the illegal pro-ceeds.

The estate may be liable for at least RM6.5 bil! This amount can be recovered through a civil process.

I don’t see why the finance ministry and the MACC don’t use these powerful laws at their dis-posal to recover monies but instead continue to mope about the previous government run-ning up a large debt.

Why, you can even take action against them now because many of them embezzled money and are living in a style far in excess of their incomes.

And there are many more in other sectors of the economy.

I can’t see why the finance ministry is not taking such action. Can you? FocusM

P Gunasegaram is editor-in-chief of Focus Malaysia. He says there is a way if only some people will open their eyes to solutions

Nasional assets amongst others, the IRB has not tapped into a very simple way of collecting tax - investigate those who have assets they can’t account for, be they cars, houses or expensive paintings.

Obvious targets There are registers of car and house ownership which can be easily checked by name and if they don’t declare the kind of income that can explain the assets, well, its most of the time an open-and-shut case. IRB already has the power to do that.

Ministers/former ministers with dozens of cars in very expensive houses with similarly pricey underground garages are an example of an easy target.

And on top of that, you can even use the powerful Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Amla).

First, the IRB moves in and questions them about their assets.

If they can’t provide valid reasons, tax them on the implicit income and put a penalty on that - I would like to see them charge the 5,200% a year like they did me.

That is, if that income is from legal activities and that income

by P Gunasegaram

A Question of Business

The Sabah Water Department’s former director and his deputy are awaiting trial for money laundering after RM114 mil was seized from their homes and cars as well as jewellery and land titles worth RM30 mil

Nov 30-Dec 6, 2019 | FocusM | 11

Circumventing cybersecurity riskTIME’s suite of security solutions is able to provide businesses with peace of mind against ever-evolving cyberthreats

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In its quest to power the digital wave for Malaysia to become a digital-first nation – a pre-requisite for the country to remain competitive in this millen-nium – the Government has rolled out “out-of-the-box” technological initia-tives along the lines of Industry 4.0, digi-tal transformation, smart nation as well as providing incentives in the form of tax exemptions to companies with MSC status in Malaysia (for approved activi-ties).

However, the increasing reliance on technology is not without consequence. The rush to digitalise systems and proc-esses is not always accompanied by a corresponding focus on digital security to safeguard critical data. This leaves companies more susceptible to cyberat-tacks, which are more difficult to pre-vent or stop once in progress, and can have devastating consequences.

Cyberthreats on the prowl Data – especially personal data – is invaluable. With cyberattacks becoming more sophisticated and rampant, busi-nesses that fail to employ proper cyber-security measures risk jeopardising their business processes, customer trust and may even open themselves up to legal lawsuits.

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4,000

3,000

2,000

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The report also discovered that one in 10 transactions are attacks by auto-mated bots and malicious humans.

Between January and December 2018, Microsoft analysed 6.5 trillion cyber-threat signals from several data points belonging to cloud vendors. Its findings, which were published in the recently released Security Intelligence Report (SIR), singled out Malaysia as becoming extremely vulnerable to cyberattacks.

Microsoft Malaysia’s national tech-nology officer Dr Dzahar Mansor has

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Henceforth, the adoption of cyberse-curity can no longer be seen as a volun-tary enhancement feature, but as a basic (compulsory) requirement. Companies need to realise the value of the customer data in their possession, how imperative it is to guard that data from harm, and the consequences of failing to accord proper protection.

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Federal Court verdict on EOT a welcome relief for homebuyers• Apex court ruled

that the Housing Controller cannot give EOTs to developers to complete their projects

The Federal Court’s ruling on EOT is seen as a positive development for homebuyers

The recent ruling by Malaysia’s apex court that the Housing Controller cannot give property developers

an extension of time (EOT) to complete their projects is a posi-tive development for homebuy-ers.

An EOT is a delay that could not be reasonably foreseen at the time of contract signing. The granting of an EOT relieves the developer from liability of dam-ages, such as liquidated damages, from the original date of contract completion for the period of the claim.

National Housing Buyers Association (HBA) secretary-gen-eral Datuk Chang Kim Loong tells FocusM that the Federal Court’s decision is a major victory for house buyers.

“It’s a major victory; for a long time, house buyers were being ‘bullied’ by errant and irresponsi-ble housing developers. We are indeed glad that the Federal Court has made a wise and fair decision for house buyers’ pro-tection in the spirit of the Housing Development Act,” he says.

Chang adds that the lawyers who had represented HBA had fought the case on a pro bono basis for four years.

Real Estate Housing Developers’ Association (Rehda) president Datuk Soam Heng Choon told FocusM on Nov 28 that Rehda would not comment on the matter until it has studied the written judgement and has met the housing and local gov-ernment (KPKT) minister on Nov 29.

“We will withhold our com-ments on the issue at this junc-ture as the written judgement has not been analysed yet, and our meeting with the minister has not taken place as the judgment has far-reaching consequences,” says Soam.

How it started HBA, representing Kondominium Sri Istana’s 104 homebuyers, had presented three appeals at the Federal Court against the Housing Controller for granting

an EOT to the project’s developer, BHL Construction Sdn Bhd.

The case was brought by the homebuyers against the then Ministry of Urban Wellbeing, Housing and Local Government and BHL Construction in July 2016.

The Kondominium Sri Istana development located on Jalan Kuchai Lama was slated for com-pletion in April 2016, which was 36 months from the date of the sale and purchase agreement (SPA).

However, the developer sub-mitted an application to the Housing Controller on Nov 17, 2015 for an EOT for the delivery of vacant possession (VP) on the grounds that there were com-plaints by nearby residents. There were also stop work orders issued by the local authorities and investigation conducted on the piling contractor. This led to a delay in delivering the VP based on the completion period of 36 months as stipulated in the SPA.

In April 2016, the purchasers received a letter from the devel-oper stating that they were not entitled to be compensated in liquidated ascertained damages as there was an EOT of 12 months that had already been granted.

The buyers then filed a judi-cial review application in July 2016, challenging Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 as well as the EOT issued on Nov 17, 2015.

Regulation 11(3) confers powers on the controller to waive and modify the terms and condi-tions of the contract of sale between purchasers and the developer.

On March 30, 2018, the Court of Appeal ruled that the then

Ministry of Urban Wellbeing, Housing and Local Government must give homebuyers the right to be heard before developers are given an EOT to complete a pro-ject.

But the bench ruled and dis-agreed with the Kuala Lumpur High Court’s decision, saying that Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 was not ultra vires or against the Housing Development (Control and Licensing) Act 1966.

In delivering the recent Federal Court decision, Chief Justice Tan Sri Tengku Maimun Tuan Mat said that granting extensions or modifications to the prescribed terms and condi-tions would deny house buyers the right to claim for liquidated damages.

“These modifications and the granting of EOTs to the developer do not appear to protect the pur-chasers, which militates the intention of Parliament,” she was quoted as saying in allowing the appeal of the 104 buyers.

“As can be seen from the long line of authorities, it is the inter-ests of the purchasers that prevail over that of the developer.”

She adds that EOTs would only determine payment of dam-ages. However, the court did not mention whether the minister could grant an EOT to developers as the point was not raised during the proceedings.

Is EOT being abused? On Nov 6, KPKT announced that 75.4% of EOT applications by developers from January to July 2019 had been approved. In 2018, the number was 78.15%, while 67.8% of EOT applications were allowed in 2017.

After KPKT’s announcement was made, Chang has hit out at the current government for con-tinuing what he calls a “Barisan Nasional-era” practice of giving property developers EOTs with-out justified and valid reasons.

He says under the statutory SPA, housing developers are sup-posed to complete a unit and hand over the keys to a buyer within 24 month (for landed property) to 36 months (for stratified property) of the signing of the SPA, failing which they will have to pay 10% per annum com-pensation in liquidated ascer-tained damages to the buyer.

Chang states that the delivery date can be extended without the need to pay compensation if the developer can get an EOT from the Housing Controller or the KPKT minister due to “special circumstances”.

“We are disappointed that the ministry has approved 75% of EOT applications between January and July this year and

by Ranjit Singh and Sharina Ahmad

78% of EOT applications in 2018,” he says.

PPC International Sdn Bhd executive director Datuk Thiruselvam Arumugam says an EOT can technically be granted if there is no contract or SPA signed.

“If there are no sales, then there is no impact to anyone and the developer should be able to delay its project in order to re-strategise its marketing policies or strategies in order to secure buyers,” he tells FocusM.

In the first place, marketabil-ity studies should have been done before the commencement of the project, but since it was not com-pleted on time, an EOT can be used to re-strategise, he adds.

However, he says it will be a worrying issue if there are sales and buyers locked in.

“The government should not grant any EOT because it can burden the purchasers. Any excuses given should have been anticipated before the start of the project.

“Moreover, their cost of pur-chase will increase since they have to incur additional interest to be paid to their financiers as well as their loan tenure. If they don’t own a house then they will be paying rent for a longer period together with the interest.”

He advises buyers to be cau-tious of the completion date stated in SPA. “The buyers must always check with the developer on the completion date and if EOT is granted before the sales. Then it is the decision of the buyers to proceed with the sales, provided that the buyers are notified about the completion date.”

Impact of construction delay Recently, KPKT in a written reply to a query in the Dewan Rakyat cited that the reasons for EOT applications include local council restrictions on permitted hours, abiding by infrastructure requirements such as the inte-grated water supply scheme, high-rise design of the building and additional earthworks.

Other reasons mentioned were the need to construct podi-ums and basements, and consid-erations over the location of a project, including restrictions due to proximity to schools.

Although the law did not specify the “special circum-stances”, Chang says poor plan-ning and project management should not be seen as a special circumstance but as “incompe-tence”.

“If there is an event of force majeure, earthquake or civil commotion, then yes, those are reasonable, but if a developer does not do its homework prop-erly, then house buyers should not be denied their rights to compensation,” he says. FocusM

Chang says the Federal Court’s decision is a major victory for house buyers

BLOOMBERG

Nov 30-Dec 6, 2019 | FocusM | 13


The government is believed to be re-tendering the RM2.5 bil Integrated Immigration System (IIS) due to some changes in the project’s specification. The

request for proposal had closed on Aug 16 and saw some 30 bidders for the project.

It is learnt that there are four frontrun-ners for the project: Datasonic Group Bhd, HeiTech Padu Bhd, Opcom Holdings Bhd and S5 Systems Sdn Bhd.

The ISS is supposed to replace the RM3.5 bil Sistem Kawalan Imigresen Nasional (SKIN) project, which was awarded to educa-tion software licence purveyor Prestariang Bhd via direct negotiation in 2017.

A re-tendering for the RM2.5 bil immigration system?• S5 Systems is one of the

shortlisted bidders and could even be the dark horse in this bid

by Doreenn Leong

At that time, SKIN was to replace the Malaysian Immigration System, which was awarded to HeiTech Padu. However, the new government under Pakatan Harapan termi-nated the project due to high cost and “weaknesses” in the SKIN concession.

Prestariang decided to make a legal claim of RM732.86 mil from the government as a result of the termination.

While much is learnt about the three listed bidders for the IIS contract, it is intriguing that S5 Systems is among the shortlisted bidders and could even be the dark horse in this bid.

S5 Systems is a global integrated security solutions provider, delivering solutions to

governments and enterprises. It has a global clientele base spanning across many seg-ments, including identity and documents security, law enforcement, intelligence monitoring, customs, immigration and border control.

So, who is behind S5 Systems? Based on filings on Companies Commission of Malaysia, NSA Technology Sdn Bhd is the holding company of S5 Systems. Meanwhile, NSA Technology is held by NSA Technology (L) Inc, which is believed to be controlled by a Malaysian businessman who is also involved in the e-government solutions and services.

There are talks that S5 Systems could seek a back-door listing via ConnectCounty Holdings Bhd, an interconnect and cable solutions provider.

The directors of S5 Systems are Syed Mohammad Hafiz Syed Razlan, Adi Wira Abd Razak and Aaron Lok Khy-Min.

The company posted a net profit of RM152.84 mil in the financial year ended June 30, 2014 (FY14), on the back of RM234.92 mil in revenue. However, its earnings and revenue plunged to RM7.23 mil and RM55.3 mil respectively in the subsequent financial year.

On a positive note, its financials started to improve in the following years. S5 Systems posted a higher net profit of RM108 mil in FY18 from RM64.5 mil the previous year, on the back of increased revenue of RM147.75 mil versus RM96.1 mil previously.

Key projects with Malaysian Immigration Among S5 Systems’ key projects with the Malaysian Immigration Department are the i-Kad, National Enforcement and Registration System (NERS), and the Immigration Security Clearance (ISC) pro-jects. The company is the key technical pro-vider for these projects using its NexCode system. These projects contributed more than 93% of its FY16/FY17 revenues.

The i-Kad is a government-issued iden-tity card for registered foreign workers, expatriates and their dependants in Malaysia. The i-Kad is a straightforward contract and is not a concession. S5 Systems’ subsidiary S5 Biotech Sdn Bhd is the contracting party with Percetakan Nasional Malaysia Bhd, the national printing agency that is responsible for supplying the card. The i-Kad was gazetted by the govern-ment on Feb 21, 2018.

The NERS project was established by the government to enable a nationwide regis-tration and monitoring for all foreigners into and from Malaysia.

The contract tenure is for 12 years from 2011 to 2023.

The ISC project functions as the first and mandatory step of screening for pro-spective foreign workers, as the application processes take place in the respective home countries. The purpose of the ISC is to help the government combat unwanted or black-listed foreign workers, and the detention or deportation of foreign workers after arriv-ing in the country.

In 2017, S5 Systems was appointed by HeiTech Padu to integrate the foreign work-ers’ medical examination (FOMEMA) system with the Immigration Department’s system, and the provision of biometric verification capabilities at all clinics nationwide.

Only foreign workers with their finger-prints recorded under the biometric system can go through health screenings before getting employment. FocusM


Intensifying competition, price pressures weigh on F&N• Upstream

production may give boost to the group facing rising competition and price pressures

• Funding for the dairy farming project will not be an issue for the cash-rich beverage group

F&N has been plagued by rising competition and price pressures since the implementation of the sugar tax from July 1 this year

for approval from the relevant authorities but does not foresee any major delays to the conclusion of the sale and purchase agree-ment, which is expected to be completed in the second quarter of 2020. The land transaction is subject to approvals from the rele-vant federal and state authorities.

The proposed project will reduce the company’s exposure to foreign exchange fluctuations, currency outflow from the country and uncertainties in importing fresh milk and feed, while achiev-ing control over the quality of milk from “grass to glass”.

F&N CEO Lim Yew Hoe says the company aims to be a major player in the health and wellness segment, with fresh milk as its new pillar of growth.

“While the project is seen as more of an upstream insourcing exercise, it will also allow the com-pany to deepen and widen its equity in the liquid milk business, growing the organic and inorganic aspects of our business,” he says.

The integrated dairy centre will create a new income force. “We’ve seen other similar com-panies doing really well after starting an upstream production,” TA Securities’ Lye notes. F&N can draw upon the Vinamilk example. The Vietnam-based dairy company has seen leaps and bounds in its growth following its

by Chee Jo-Ey

involvement in upstream milk insourcing.

Funding not an issue F&N plans to allocate RM650 mil to develop the new land in Perlis, which will include the clearing and purchasing costs of Phase 1 of the project.

Nabil explains that a venture into dairy farming comes with challenges and is not an easy feat, given the failures of similar pro-jects undertaken by other parties in the past. “With careful plan-ning, we estimate that the dairy farming project could take at least five years before it can give a meaningful profit contribution to the group,” he notes.

Currently, F&N is evaluating various investment options to develop the upstream fresh milk operations. It expects to have its first production of fresh milk within 24 months of vacant pos-session.

“We are still looking at a sus-

Lim says the company aims to be a major player in the health and wellness segment

Fraser & Neave Holdings Bhd

CONSUMER PRODUCTS & SERVICES

SOURCE: BLOOMBERG

One-year price chartRM

KEY BOARD MEMBERS AND MANAGEMENTTengku Syed Badarudin Jamalullail (chairman)Lim Yew Hoe (CEO)

MAJOR SHAREHOLDERSFraser & Neave Ltd

55.5%Employees Provident Fund

10.1%MARKET CAP ( Nov 27)

RM12.71bShare price (Nov 27)

RM34.6652-week high (April 5)

RM36.96 52-week low (Dec 18, 2018)

RM29.20

FINANCIAL RESULTS(4Q ended Sept 30, 2019)Revenue

RM975.09mNet profit

RM68.03m

27/11/18 27/11/1930

31

32

33

34

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tainable farm model and are cur-rently studying various options. Hence, more details, including the return on investment, will be shared in due course. The pro-posed acquisition will be funded via internally generated funds and/or external borrowings.

“The exact funding mix will be decided by the management of F&N at a later stage after taking into consideration F&N’s gearing level, interest costs as well as internal cash requirements for F&N and its subsidiaries’ business operations,” explains Lim.

Although there are challenges to the dairy farming project, cash will not be an issue for the group.

“As per its latest filing, the group is still on a strong net cash position. Hence, we do not expect that its gearing ratio will be severely impacted by this latest venture,” Nabil says.

“The group will not have any issue with funding. The company has a strong cash balance of RM569.72 mil as at Sept 30 and the borrowing is minimal,” Lye says. He believes that the group’s busi-ness direction for vertical integra-tion would lead to meaningful results in the medium term.

In Phase 1 of the project, F&N will import 4,000 dairy cows with a potential output of 40 million litres of fresh milk per annum. Subsequent phases will take place upon stabilisation of Phase 1. In the longer term, Ladang Chuping will be capable of hosting 20,000 dairy cows to produce 200 million litres of fresh milk yearly, ena-bling the group to have the capac-ity to export fresh milk from being a net importer of fresh milk. FocusM

Fraser & Neave Holdings Bhd (F&N) will likely be boosted by its move to go upstream but there are concerns that the

rising competition as well as higher input cost will continue to dampen the company.

Based on a Bloomberg poll, there are two Holds, one Buy and one Sell recommendations. The average target price for the last 12 months is RM34.55.

MIDF Research analyst Nabil Fikri Zainoodin, who gave a Neutral rating, notes that intensi-fying competition and competitive price pressures especially in the canned milk and ready-to-drink segment in Malaysia could be a factor for not turning bullish on the counter.

He tells FocusM that the group’s earnings will continue to grow, driven by the better prospect for its Thai operations, but con-cerns on its near-term outlook for the domestic operations still remain.

The beverage segment in Malaysia has been plagued by rising competition and price pres-sures since the implementation of the sugar tax from July 1 this year.

However, TA Securities Holdings Bhd analyst Jeff Lye Zhen Xiong is positive on the stock with a Buy recommendation on F&N. “I’m looking forward to the com-pany’s shift of focus on upstream production. The project is still at its early stages. The company has proposed to buy the land and the deal has not gotten through yet but the direction they are headed to is right,” he explains.

The research house maintains Buy on F&N with an unchanged target price of RM42 per share.

Fruitful Thai operations Lye’s optimism is also attributed to the growing strength of the Thai baht and F&N’s operations in Thailand have been fruitful. He points out that the October-December quarter also tends to be the company’s strongest, thanks to recovery in sales and preparation for the Chinese New Year.

He forecasts that the group will prioritise its commercial execution in preparation for an early 2020 Chinese New Year festive sale, accelerate product innovations, and enhance operational efficien-cies alongside expanding its global reach through new market expan-sion and e-commerce penetration.

With regard to the volatile input cost, Lye is hopeful that the group’s proactive management of its procurement and optimal pric-ing could mitigate any sharp and unfavourable movements in raw material prices.

F&N recently announced plans to widen its equity in the liquid milk business by venturing into integrated dairy farming and milk production with the purchase of 4,454ha of land in Chuping, Perlis.

The company is still waiting


Sime Darby: New year sees continued portfolio rationalisation• 1QFY20 results

above expectations, say analysts

• With Hong Kong in the throes of an unrest, will continued expansion be on the cards?

Despite the protests in Hong Kong, Sime Darby’s motor division sales in that region ‘held up well,‘ says Jeffri

Sime Darby Bhd reported better than expected results in the first quar-ter of its 2020 financial year ended Sept 30, 2019

with a net profit of RM246 mil, an increase of 9.3% quarter-on-quarter (qoq).

This was attributed to a strong contribution from the group’s industrial division, with analysts calling the improved growth “remarkable.’’

“We have reported a good set of results, with our industrial division recording wins in most markets, riding on the mining and construction waves to enjoy increased sales in China and the Australasia region.

“Our order book for the industrial division is solid at RM2.5 bil as at Sept 30, 2019. Our motor division too saw significant improvements, particularly in the China market, this quarter due to higher margins from vehicle sales,” says Sime Darby’s group CEO Datuk Jeffri Salim Davidson.

Sime Darby stands as a strong industrial and auto player, with luxury auto brands such as BMW, Jaguar and Porsche under its umbrella. It also has long-stand-ing partnerships with Caterpillar Inc (CAT) and other brands, which see Sime Darby distribut-ing industrial vehicles and machinery in 18 countries.

Other than that, Sime Darby features a healthcare segment, made up of six hospitals and a day surgery centre, which had a flat contribution of RM15 mil to the group’s 1QFY20 results.

Malaysia, as well as the 3,561.23ha of land in the Malaysia Vision Valley in Negeri Sembilan owned by the group.

Interestingly, the four ports still sit pretty in Sime Darby’s books. This raises the question as to whether the group is still look-ing to divest the ports or hold on to them given their encouraging performance.

Earlier, Sime Darby met a stumbling block in the form of a nationwide port consolidation initiative being put in place by the Chinese government. This has led to the group putting its port divestment plans on hold.

“The ongoing nationwide port consolidation exercise has changed the dynamics of the ports business in China and cre-ated significant downside risks to obtaining a strong valuation,” says Jeffri in the group’s 2019 annual report.

“In view of this, we made a strategic decision to delay the divestment of our ports until the port consolidation exercise is completed, at which time divest-ment is expected to be more beneficial to the group,” he adds.

Referring to a previous report, Yeoh from Affin Hwang notes that the floor price for the ports is estimated at RM2.3 bil, which is equivalent to the total of Sime Darby Logistics’ invested capital in FY18.

Hong Kong blues Sime Darby has large business interests in Hong Kong, with all of its core competencies having a foothold there. Not only does Sime Darby Industrial deal in CAT vehicles there, Hong Kong (together with China) is also a market for the group’s luxury car brands under Sime Darby Motors.

Even the healthcare segment, which the group is looking to grow, has a day surgery centre in Hong Kong, which was opened in November 2018.

The group’s CEO has also gone on record at the group’s recent annual general meeting, stating that Sime Darby will not be pulling out of Hong Kong.

“Hong Kong is a mature

market with 56 years presence in the country. It has an affluent society with a large market share of the luxury segment,” says Jeffri, adding that the group’s businesses there make up 5.9% of Sime Darby’s revenue.

“We need to hunker down and wait for things to settle down. We have to ensure that our staff are safe,” he notes, adding that the group employs about 1,200 staff in Hong Kong.

AmInvestment Bank analyst Jeremie Yap notes that he had expected sales by the motor divi-sion to be sluggish due to the Hong Kong protests.

“Nevertheless, the region’s sales volume held up well at 10,800 units, an increase of 8% yoy,” he adds.

Trade tensions In the recently-ended quarter, China was identified as a key driver for Sime Darby’s beyond-expectations results, as the trade superpower contributed strongly to the group’s industrial and auto divisions.

TA Securities analyst Angeline Chin notes that, for the auto seg-ment, the “higher contribution was mainly driven by improving margins and higher revenue in China, which has helped to offset lower sales in Malaysia as a result of the absence of the zero-rated Goods and Services Tax (GST).”

Chin adds that “the strong performance (from the industrial segment) was underpinned by higher equipment deliveries to the mining and construction sec-tors in Australia and China.”

However, she cautions that the ongoing US-China trade ten-sion could impact the group’s earnings moving forward.

“Despite growing demand from Australasia, Malaysia and Southeast Asia, management sees a more cautious investment approach due to the trade ten-sion, which is also expected to weigh on consumer spending,” she adds.

Valuation Affin Hwang and AmInvest are maintaining hold calls on Sime Darby, with a target price of

RM2.23 and a fair value of RM2.64 to adjust for the strong 1QFY20 results. TA Securities also upgraded the group to a hold call, along with a target price of RM2.43.

Moving forward, analysts lean towards concern over the group’s long-term prospects, with Yap from AmInvest hoping that “the group will continue its efforts to monetise other non-core assets, such as Lockton Insurance, the 30% stake in Tesco Malaysia and its 11.6% stake in Eastern & Oriental Bhd.”

Affin Hwang’s Yeoh shares the sentiment, noting that “while we raise our FY20 earnings per share forecast by 12% on the strong 1QFY20 results, Sime Darby’s long-term prospects look shaky in view of its susceptibility to an economic slowdown.” FocusM

by Xavier Kong

26/11/1926/11/183.4

3.6

3.8

4

4.2

4.4

4.6

Westports Holdings Bhd

TRANSPORT SUPPORT & SERVICES

SOURCE: BLOOMBERG

One-year price chart

Nov 26RM4.24

RM

KEY BOARD MEMBERS AND MANAGEMENTTan Sri G. Gnanalingam (chairman) Datuk Ruben Emir Gnanalingam (group managing director)

MAJOR SHAREHOLDERSPembinaan Redzai Sdn Bhd 42.4% South Port Investment Holdings Ltd

23.5%MARKET CAP (Nov 26)

RM14.5bShare price on (Nov 26)

RM4.24 52-week high (Nov 13)

RM4.54 52-week low (Dec 24, 2018)

RM3.45 FINANCIAL RESULTS(3Q ended Sept 30, 2019)Revenue

RM460.4mNet profit

RM159.2m

26/11/18 26/11/192.05

2.1

2.15

2.2

2.25

2.3

2.35

2.42.45

2.5

Sime Darby Bhd

PRODUCTS & SERVICES

SOURCE: BLOOMBERG


Nov 26 RM2.31

RM

KEY BOARD MEMBERS AND MANAGEMENTDatuk Abdul Rahman Ahmad (chairman)Datuk Jeffri Salim Davidson(group chief executive officer)Tan Sri Samsudin Osman(director)

MAJOR SHAREHOLDERSSkim Amanah Saham Bumiputera42.5%Employees Provident Fund9.47%Kumpulan Wang Persaraan7.07%MARKET CAP (Nov 26)


RM2.31 52-week high (Dec 3, 2018)

RM2.44 52-week low (Aug 21)


RM9.48bNet profit

RM246m

Jeffri: The group’s industrial division excelled in China and the Australasia region

Finally, there is the logistics segment, which provided a weaker contribution year-on-year (yoy), as its RM6 mil profit before interest and tax came in 46% lower than in 1QFY19.

Affin Hwang Research analyst Brian Yeoh notes that the drop in contribution was due to the 1QFY20 loss before interest and tax from joint ventures of RM6 mil.

“Excluding the disposed Weifang Sime Darby Water Management Co Ltd and joint venture losses, the ports (parked under the logistics division) recorded a core profit before interest and tax (PBIT) of RM15 mil, an increase of 88% yoy, from higher bulk cargo throughput at Weifang Port. This amounted to a 4% increase yoy to 7.3 mil metric tonnes,” he adds.

Portfolio rationalisation Sime Darby is looking towards divesting its non-core businesses in a portfolio rationalisation exercise over five years. What this means is that the industry and auto arms will continue to be its primary focus while it looks to grow its fledgling healthcare seg-ment.

Its non-core assets include the logistics arm, which operates a sea port and three river ports in the Shandong region of China. Its other businesses under the logis-tics division - a water treatment plant, along with its management firm - have already been sold.

Other non-core assets include its 30% stake in Tesco

Sime Darby has a sea port and three river ports in China and the outlook for them depends on that country’s port consolidation initiative

Nov 30-Dec 7, 2019 | FocusM | 17


IN an attempt to enhance the sustainability features of palm oil, MPOCC recently launched an IT platform known as MSPO

Trace, a continuous certification monitoring platform which aims at delivering sustainabil-ity, accountability and traceability throughout the oil palm value chain from grower to cus-tomer.

The MPSO certification is awarded for a period of five years and after the period lapses, the oil palm company has to be recerti-fied. Minister of Primary Industries Teresa Kok recently announced that companies which fail to get their oil palm plantation MSPO-certified will lose their planting licence from the Malaysia Palm Oil Board (MPOB).

MPOCC is targeting 100% traceability through MSPO Trace of certified palm oil from plantations nationwide by 2025. The trace will have digital and real-time statistics which dis-play complete traceability from product to cultivation equipped with Geo location fea-tures, seamless data update via cloud connec-tivity, protection of data and privacy of users coupled with merging features with the

MPOB’s E-Trace System. MSPO Trace was developed by AIREI Sdn

Bhd, an IT systems developer with expertise in agriculture software solutions. It comprises four modules which include certification, traceability, logo usage, and complaints and grievances.

Development of the certification and traceability modules are ready to be imple-mented while the second stage of the project on logo usage and complaints is targeted to be completed by December.

The development of MSPO Trace is aimed at allaying various accusations against the oil palm industry in Malaysia of deforestation, worker exploitation, indigenous peoples’ rights violation, greenhouse gas emissions, biodiversity and habitat loss, and illegal land conversion.

If the MSPO Trace identifies any breach by the plantation company of the certification requirement, its certificate will be revoked.

MSPO Trace integrates all the activities of the local palm oil industry using big data man-agement and data decision making.

MSPO-certified palm oil may not command a premium price

The government’s drive to ensure 70% of the oil palm produced in the country obtains the Malaysian

Sustainable Palm Oil (MSPO) cer-tification by February 2020 may not result in higher prices for the product.

Ong Chee Ting, plantation sector analyst at Maybank Investment Bank, tells FocusM that buyers of palm oil have come to expect the certification and would not attach a premium to it.

“We should not expect any premium for Malaysian palm oil certified under MSPO. This ini-tiative is pursued to provide comfort to international buyers that Malaysian palm oil is pro-duced in a sustainable manner,” he says.

According to Bloomberg in a recent report, the world’s biggest growers of palm oil say they’re stepping up efforts to produce the commodity more sustainably, but consumers are unwilling to pay more for environment-friendly supply.

Production of sustainable palm oil has jumped to a record 13.6 million metric tons a year, about 20% of global output, according to the Roundtable on Sustainable Palm Oil (RSPO).

But only half of that is sold as sustainable oil. In the report, Sime Darby Plantation Bhd, the top planter in the world by acre-age, says sustainable palm oil is more expensive to produce but hardly anyone is willing to pay a premium.

It quoted Simon Lord, chief sustainability officer at Sime Darby, as saying “there is increasing resentment among growers that the other actors in the supply chain are not stepping up”.

According to a plantation analyst at a bank-based broker-age, the reception towards MSPO-certified palm oil had been encouraging in advanced economies but the take-up was lukewarm among many other importing countries.

“MSPO-certified palm oil has not really taken off in many countries with the exception of advanced economies. Currently, less than 50% of the palm oil pro-duced in Malaysia is MSPO certi-

fied,” the analyst tells FocusM. She adds that buyers in many

importing countries were price sensitive and would not pay more for MSPO-certified palm oil.

Palm oil is increasingly con-troversial, particularly in Western countries, as images of deforesta-tion and dying orang utan turn popular opinion against the ubiq-uitous commodity. But producers are hitting back, saying consum-ers aren’t willing to put their money where their mouths are.

To gain certification, it costs producers a minimum of RM8 to RM12 a tonne, and there are other

additional expenses such as audit fees, logistics and environmental assessments, says Sime Darby, the biggest producer in the world of certified, sustainable palm oil (CSPO).

So who isn’t buying? According to WWF International, demand for CSPO among major consumers India, China, Malaysia and Indonesia remains low.

The Bloomberg report also quoted Nestle SA as saying that about half the tropical oil it sour-ced in 2017 was traceable to the plantation, adding that buying the certified variety is one way of

ing factor when it comes to spur-ring adoption of sustainability standards, says RSPO.

Palm oil is the world’s high-est-yielding oil crop, with an output five to 10 times more per hectare than other leading vege-table oils. Combined with histori-cally low prices, relative shelf sta-bility, and reported nutritional benefits, palm oil has natural advantages that position it as a likely long-term staple of the global diet.

Rapidly expanding popula-tions and changing consumption patterns, as well as increasing demand from the bioenergy and oleochemical industries, have resulted in sustained high prices for crude palm oil.

Intense scrutiny Malaysia which is the second-largest producer of palm oil in the world has come under intense scrutiny by the West amid claims that its palm oil industry has contributed to massive deforestation, destruction of wildlife and ill-treatment of indigenous people.

Buyers of palm oil have been more discerning on their calls that palm oil must be cultivated in a sustainable manner which has prompted the government to get the commodity MSPO certi-fied.

“If we have certified 100% of our palm oil, we would be the first country in the world to do it,” Malaysian Palm Oil Certification Council (MPOCC) chairman Datuk Franki Anthony Dass tells FocusM.

The MSPO is the national palm oil certification scheme and is operated by MPOCC as the scheme owner.

According to MPOCC, as at the end of October, around 3.4 million hectares or almost 60% of planted areas and 328 mills or 73% of total mills have been MSPO certified. These include smallholders with a planted area of 546,000ha and 1,565 estates with a total area of 2.8 million ha.

The government has been aggressively promoting the certi-fication of palm oil among indus-try players but has received lim-ited buy-in, especially from smallholders.

Cost of compliance Besides the cost of compliance, there were other obstacles faced by planters, especially smallhold-ers, in obtaining certification, according to Ong of Maybank Investment Bank.

“Ongoing education of small-holders who are not aware or fully aware of the need for MSPO certification, especially European buyers’ requirements in ensuring palm oil is produced in a sustain-able manner, is necessary. Hence, smallholders have been slow in getting their plantation MSPO certified,” says Ong. FocusM

by Ranjit Singh

pushing the industry toward a sustainable future and it aims to use 100% RSPO-certified oil by 2023.

Discerning consumers Still, buyers do face challenges procuring the oil “in specific geo-graphies due to the lack of prox-imity to available CSPO”, says Nestle.

“Consumers today want to know what is in their food, where the ingredients come from and how it is made,” adds Nestle.

Market commitment and uptake of CSPO will be the defin-

Tracing sustainability practices

From left: Dass, Kok, Deputy Primary Industries Minister Datuk Seri Shamsul Iskandar and MPOCC CEO Chew Jit Seng at the launch of the Malaysian Sustainable Palm Oil Trace platform on Nov 18

• The certification is more of an initiative to provide comfort to international buyers that our palm oil is produced in a sustainable manner

Nov 30-Dec 7, 2019 | FocusM | 19

1st September to 30th November 2019

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Will Westports 2 be a game changer for the company?• Westports 2 will

require a capex of around RM10 bil, which is earmarked for between 2020 and 2040

Westports derives its income from providing container handling services, conventional cargo services and a wide range of other port services

by Ranjit Singh

26/11/1926/11/183.4

3.6

3.8

4

4.2

4.4

4.6

Westports Holdings Bhd

TRANSPORT SUPPORT & SERVICES

SOURCE: BLOOMBERG


Nov 26RM4.24

RM

KEY BOARD MEMBERS AND MANAGEMENTTan Sri G. Gnanalingam (chairman) Datuk Ruben Emir Gnanalingam (group managing director)

MAJOR SHAREHOLDERSPembinaan Redzai Sdn Bhd 42.4% South Port Investment Holdings Ltd

23.5%MARKET CAP (Nov 26)


RM4.24 52-week high (Nov 13)

RM4.54 52-week low (Dec 24, 2018)


RM460.4mNet profit

RM159.2m

Ruben believes Westports will be able to attract more businesses with larger capacity

The worsening trade talks between China and the US are expected to result in a pullback in global

trade. This is where shipping companies and port operators are the first few players to suffer.

However, it appears that Westports Holdings Bhd is on the right track with a commend-able 11.9% increase in net profit to RM159.24 mil for the third quarter ended Sept 30, 2019 (3Q19), against a RM142.32 mil net profit in 3Q18 due to a double-digit growth in container volume and the implementation of a container tariff hike that took effect in March 2019. The group’s revenue for the quarter also grew 10.3% to RM460.43 mil from RM417.55 mil in the same quarter last year.

The company derives its income from providing con-tainer handling services, con-ventional cargo services and a wide range of other port serv-ices.

In the nine months just ended (9M19), Westports’ net profit climbed 20% to RM465.46 mil from RM387.93 mil in the previous corresponding period, while revenue expanded 11.1% to RM1.33 bil from RM1.2 bil previ-ously.

It handled 8.04 million twenty-foot equivalent units (TEUs) of containers during the period, an increase of 16% from a year ago, contributed by trans-shipment containers which rose to 5.39 million TEUs, while gate-way volume expanded to 2.65 million TEUs.

Transshipment is the ship-ment of goods or containers to an intermediate destination, then to another destination, while gateway means handling the import and export of the container business.

For vessels calls in 2019, Westports says it has accommo-dated a greater proportion of ultra large container vessel at its berths, especially its newer wharves, as the liner industry deploys bigger container vessels.

“We expect volume growth to be in the region of 13% to 15% for 2019 and 3% to 8% for 2020,” the group adds. Utilisation of the port during 9M19 was at 76%.

if volumes continue to grow. However, analysts are not

ready to call a buy on the counter just yet despite the much improved numbers.

Based on a Bloomberg poll, there are seven “buys”, nine “holds” and one “sell” recom-mendations. The only “sell” rec-ommendation was by TA Securities. Its analyst Steven Tan tells FocusM that he had factored in the souring US-China trade talks which would translate in a pullback in global trade.

“Normally, if there is a slow-down in global trade, shipping companies would suffer first, followed by port operators,” he says.

Tan’s target price for the company is RM3.87. Westports’ shares closed at RM4.24 on Nov 25. The analysts’ consensus price for the company is RM4.43.

TA Securities says the 3Q19 results in terms of trade lanes witnessed slower intra-Asia and

Growth in volume ‘robust’ The volume mix between trans-shipment and gateway was 67:33 for 9M19. According to Maybank Investment Bank, the growth in volume for the company was “robust”, driven by transship-ment volume which increased 17% yoy.

This was mainly due to the Ocean Alliance moving four of its services from PSA Singapore to Westports in April 2019. Ocean Alliance is a major alliance of international shippers including CMA CGM SA, China COSCO Shipping Corp Ltd, Orient Overseas Container Line Ltd and Evergreen Line. Currently, around 50% of Westports’ busi-ness is derived from this alli-ance.

The research firm adds that local volume also increased due to faster exports from the weak ringgit and the relocation of paper mills from China to Port Klang. During that period, local

volume grew 6% yoy. However, UOB Kay Hian

believes that the yield hike impact during the period was muted. It says stripping out con-tainer costs, Westports’ net con-tainer yield was unchanged at RM209 per box from the previ-ous period. It says the manage-ment had alluded that besides the lower mix of high yielding gateway at 33%, the flattish net yield was due to fewer value-add services.

Previously, it said there was very high demand for storage and reefer container movements but this has moderated in 2019. Reefer containers are big fridges used to transport temperature-controlled cargoes such as fruits, meat, fish, seafood, vegetables, dairy and non-food products such as flowers and pharmaceu-ticals. UOB Kay Hian says the moderation was due to seasonal-ity and customer efficiency, adding that demand may recover


THE International Monetary Fund, in its World Economic Outlook’s July

update, downgraded the global GDP growth from 3.3% to 3.2% in 2019 with a decrease in trade volume growth from 3.4% to 2.5%.

Accordingly, Alphaliner has revised downwards its growth outlook for global container throughput to 2.5% in 2019 (from 3.5%). The global economic downturn has also led the World Bank to project the developing East Asia Pacific growth to

soften to 5.9% in 2020. BIMB Securities says the

outlook for South Asia is strong, with growth anticipated at 7% in 2020 and 7.1% in 2021. This bodes well for the region and implies growth in cargo volume for coun-tries therein. From this develop-ment, ports in Malaysia are expected to benefit from the intra-Asia trade lane growth and exhibit resilience in the face of the current global economic slowdown.

The National Transport Policy 2019-2030 and Budget 2020’s

allocation would see government efforts to improve the country’s transportation ecosystem and network. The aim of turning Port Klang into a regional maritime and logistics centre could have spillover effects to Westports Holdings Bhd.

Westports group managing director Datuk Ruben Emir Gnanalingam is very receptive to the government’s initiatives to improve conditions in Port Klang.

“Budget 2020 has allocated funds to improve the roads and land connectivity in Port Klang.

That is something that has been much needed for a long time,” he says.

Under Budget 2020, the gov-ernment allocated RM50 mil for the repair and maintenance of roads leading to Port Klang, while the Transport Ministry will com-mence feasibility studies on the Serendah-Port Klang Rail Bypass for cargo shipments and the Klang Logistics Corridor which will be a dedicated privatised highway connecting Northport and Westports. Both projects are estimated to cost RM8.3 bil.

The way forward for Westports

Asia-Europe volume growth at 15% and 32% respectively, com-pared to 24% and 47% in 2Q19. Intra-Asia volume continued to dominate with 63% share of Westports’ total throughput in 3Q19, followed by Asia-Europe’s 17%. Meanwhile, Asia-America growth contracted for three con-secutive quarters by 27% in 3Q19.

Westports 2 to require RM10 bil capex The global outlook does not appear to be turning positive any time in the near term. However, this does not deter Westports from embarking on its ambitious growth drive. Its planned devel-opment dubbed Westports 2 will require a capital expenditure (capex) of around RM10 bil, which is earmarked for between 2020 and 2040.

However, critics are ques-tioning whether businesses will go to Westports if it has a bigger capacity especially in light of the slowing global trade. Westports group managing director Datuk Ruben Emir Gnanalingam believes the company will be able to attract more businesses with larger capacity.

“We need to build capacity and the business will come in. Look at Singapore – its Tuas pro-ject will increase its capacity to 65 million TEUs when the project is completed (in 2040). We would

have a capacity of 35 million TEUs by then,” Ruben tells FocusM in an interview.

The Tuas container terminal, when fully developed in 2040, will make the island state the operator of the world’s largest container terminal located in a single location.

On Aug 25, 2017, Westports received an approval in-princi-ple from the government to expand its container terminal

facilities from Container Terminal 10 (CT10) to CT17.

According to Ruben, the company had acquired a 154.2ha leasehold plot under the sea in Pulau Indah from the Selangor State Development Corp for RM116.9 mil. It is looking to buy another piece of land to enable it to build new container terminals CT10 to CT17. However, the com-pany will only purchase the second piece of land once the

concession agreement with the government is finalised.

Ruben says the proposed expansion would further strengthen the company and Port Klang’s role as the pre-emi-nent port for the nation’s gate-way trade and also reinforcing the terminal as one of the main transshipment hubs in the Southeast Asia region for inter-national container shipping alli-ances.

He adds that the company has completed technical studies and the environmental impact assessment as well as the layout for Westports 2.

Westports is one of the two ports in Port Klang, the other being Northport, which is con-trolled by tycoon Tan Sri Syed Mokhtar al-Bukhary.

UOB Kay Hian says the land reclamation for the first phase (CT10-CT13) of Westports 2 is likely to cost RM1 bil over two years, while each container ter-minal may cost around RM700 mil to RM800 mil. It adds that concession talks with the gov-ernment could be finalised by 1Q20 to 2Q20.

In view of the large capex requirement for Westports 2, how will the company finance the development?

Ruben says the company is open for discussion with finan-ciers on the issue.

“We may go for a mixture of debt and equity but would dis-count a rights issue,” he adds.

For 9M19, the port operator had a net gearing of 0.33x.

“This mix of debt and equity raising is sufficient and will be structured to not affect the existing 75% dividend payout policy and debt covenants,” says UOB Kay Hian.

AllianceDBS Research opines that the financial impact of the expansion is difficult to gauge at this juncture as there is still no confirmation of terms (including concession payments) to be agreed with the government.

The expansion will more than double Westports’ capacity to 35 million TEUs from its cur-rent 14 million TEUs. The new terminal will be utilising the same facilities as the existing terminal but will be under a new concessionaire.

An economic impact study by PricewaterhouseCoopers indi-cates that Westports’ expansion plan is expected to generate an economic output of RM55.3 bil from 2021 to 2080.

It also found that the project could contribute around RM19 bil to Malaysia’s GDP over the 60-year period, generate over 6,000 jobs on average and act as a catalyst for trade growth.

“Westports is strategically located for expansion, as it has an excellent track record in operational capability, good con-nectivity via railway line, road and sea, and the availability of space for expansion to meet demand quickly,” adds the study.

Ruben’s father, Tan Sri G Gnanalingam, is the largest shareholder in the company with an equity interest of 45%. FocusM

Westports: Container volume by trade lane

(3Q19)

Asia-Australasia

8%

Asia-America

5%

Intra-Asia63%

Asia-Europe

17%

Asia-Africa

4%Others3%

SOURCE: COMPANY, MAYBANK IB

FUTURE WESTPORTS EXPANSION

FUTURE TERMINALS FACILITIES

FUTURE FREE TRADE ZONE

(400 acres)

PKFZ

ODD ODD ODD ODD ODDODD

2400m

2400m

B24 B23 B22 B21 B20 B19

Westports 2.0 layout

SOURCE: WESTPORTS & TA SECURITIES

Transshipment Gateways

3Q19

1Q19

3Q18

1Q18

1Q17

3Q16

1Q16

3Q15

1Q15

1Q15

3Q14

1Q14

mn TEUs3.00

2.50

2.00

1.50

1.00

0.50

0.00

9M19 transshipment volume surged 20% yoy due to additionalservices from Ocean Alliance

0.55 0.

62 0.65

0.65 0.

61

0.65 0.

62 0.61 0.60 0.

66

0.63 0.

66

0.61

0.71

0.72 0.

77 0.77

0.81 0.

87 0.85

0.82 0.

90 0.92

1.38 1.4

7

1.51

1.54

1.65

1.51 1.6

7

1.73

1.80 1.8

4

1.85

1.89

1.82

1.52

1.42

1.46

1.48

1.43 1.5

8 1.73

1.71 1.8

3

1.85

SOURCE: TA SECURITIES


• The Malaysian economy is precariously running on only one leg, private consumption, which is being impacted by lower wage growth

• Political leaders should put the country’s and people’s interests ahead of those of their parties while the government and technocrats should focus on addressing long-term issues, not just the “here and now”

• Malaysians now have to think of the possibility of being placed in situations they have never before been forced to confront

• The government should act sternly against those fanning racial and religious hatred while it focuses on restoring confidence, managing the economy, implementing sound and clear policies and addressing the bread and butter issues

Government should focus on the real issues for the country’s sake

The government must strive harder to lift Malaysians out of a low-wage economy even as it focuses on creating a united nation

The government and Malaysians face a set of domestic and exter-nal challenges that arguably needs the

greatest focus and attention of policy makers since the 2008-09 global financial crisis.

The economy grew by 4.7% in the first nine months of this year, and the government expects con-tinued economic expansion esti-mated 4.8% in 2020 as against consensus estimates of between 4.4% and 4.6%.

Risks to the forecast are skewed to the downside. External headwinds weighing on the global economy are the US-China trade conflict, renewed financial stress, sharper-than-expected slowdown in major economies and geopolitical risks and ten-sions.

Malaysia’s trade will continue to be caught in the crossfire of the US-China trade tensions, which is likely to drag on for a while longer as negotiations are ongoing on the different phases of trade deals.

This means that weak exports will remain a drag on the econ-omy. Exports are estimated to grow by 1.0% in 2020.

The domestic growth engine also faces hurdles. The Malaysian economy has been running on one leg, which is private con-sumption, which makes up 58.1% of total GDP and had contributed an average of 5.0 percentage points to real GDP growth (an average of 5.0% a year in 2016-18) and 3.9 percentage points to real GDP growth of 4.7% in Jan-Sept 2019.

A discernible pullback in con-

by Lee Heng Guie

sumer spending could drag down the domestic economy. Real pri-vate sector wage growth moder-ated to 3.8% in 3Q19 from 4.2% in 2Q and 5.2% in 1Q.

Real wage growth in the manufacturing sector also paced slower to 3.2% in 3Q19 from 3.9% in 2Q. Cooling wages could restrain households’ spending.

Private investment growth remains slack as businesses and investors wait to see what any shakeup in both the international environment and on the domes-tic front will be like.

Between 2013 and 2018, Malaysia had suffered net out-flows of portfolio investment averaging RM23.7 bil a year, with 2018 recording the largest net outflow of RM44.4 bil.

In the first nine months of 2019, the net outflows remained substantial at RM34.9 bil.

For 2018-19, a confluence of negatives has caused investors to shun domestic equities and bonds: • Increasing downside risks to

the global economy. • The unsettling China-US trade

dispute. • Slowdown in China’s eco-

nomic growth. • Brexit uncertainty.

Domestic-inflicted issues and

Competition from Asean rivals On a positive note, Malaysia is still enjoying net inflows of direct investment (long-term capital investment) which measures the difference between foreign and outward direct investment.

In 2016-18, net inflows of direct investment registered an average of RM13.8 bil a year, a sharp turnaround from the aver-age net outflows of RM12.3 bil a year for six successive years (2010-15).

In Jan-Sept 2019, net direct investment registered net inflows of RM7.2 bil.

Approved investment in the manufacturing, services and pri-mary sectors increased moder-ately by 1.9% a year from RM193.1 bil in 2015 to RM204.4 bil in 2018.

In 1H 2019, approved invest-ment increased by an annual rate of 7.6% to RM92.0 bil.

While FDI inflows averaged RM38.7 bil a year in 2010-18, Malaysia’s Asean competitors are fast catching up to absorb a lion’s share of the FDI for the region.

Today’s complex environment is characterised by rapid changes, rising protectionism and competi-tion, technological disruption in the market and workplace as well as the presence of domestic struc-tural weaknesses.

These include low productivity growth and capital efficiency; high youth unemployment; shortage of skilled manpower supply; the eco-nomic divide; wider growth and income disparities between states as well as between rural and urban households; limited eco-nomic empowerment for the Bottom 40 (B40) income house-holds; as well as somewhat limited fiscal space.

How we navigate these chal-lenges could have implications now and over the medium and long terms. Political leaders should put the country’s and

racial and religious hatred while it focuses on restoring confi-dence, managing the economy, implementing sound and clear policies and addressing the bread and butter issues.

Policy initiatives must be well executed and communicated to the stakeholders to avoid public and investor confusion about their good intentions.

For the country, Malaysia needs to have credible economic policies and growth narrative if it is to continue to move forward.

Ordinary Malaysians want a united nation living in a climate of mutual tolerance and trust as a respected society that is caring, economically just and equitable, progressive and prosperous.

For businesses and investors, it is important for the govern-ment to consistently foster a stable and conducive business environment for economic growth and business investment.

Besides the 3Cs - clarity, con-sistency and continuity - busi-nesses want a competitive tax regime, an investment-friendly business environment and a sup-portive regulatory landscape.

Malaysians now have to think of the possibility of being placed in situations we have never before been forced to confront. These include a highly disruptive global environment; a more intense market and capital revo-lution powered by technology and innovation; disruptive technology and innovation; as well as work-force disruption.

In confronting future chal-lenges, the government will have to be prepared to forthrightly and honestly engage Malaysia as a whole, its institutions and its people. FocusM

Lee Heng Guie is executive direc-tor of the Socio-Economic Research Centre, an independent organisation

people’s interests ahead of those of their parties while the govern-ment and technocrats should focus on addressing long-term issues, not just the “here and now.”

We should put aside rampant political bickering, conflicts and infighting. Rather, we should rec-ognise and deal with issues arising from external headwinds and domestic structural weaknesses that are impacting the domestic economy.

For now, we really need to unite for the country's sake. A positive political environment is a condition for future and sustained economic growth.

Political stability is a variable of great importance in building a coherent and continuous path for sustainable development.

The uncertainty associated with an unstable political environ-ment may undermine confidence, reduce investment and hinder the pace of economic development.

A house divided cannot stand. If we can manage the differences under a common goal, they can be turned into a dynamic force and strength to create an inclusive, dynamic and competitive New Malaysia.

Political leaders and Malaysians must constantly remind themselves to look at issues and problems facing the country with an open mind and rationally.

We ought to have an outreach-ing heart to help each other to grow this country.

We should not be complacent with what we have achieved thus far as our competitors in the region are fast catching up and becoming strong contenders for FDI.

Malaysians want united and caring nation The government should act sternly against those fanning

BLOOMBERG

concerns weighing on inves-tors’ sentiments are:

• Post-2018 general election political and policy transition.

• The lack of fresh catalysts. • Investors’ “wait and see”

approach. • FTSE Russell placing Malaysia

on the World Government Bond Index (WGBI) watch list.

• Placing Malaysia on the US Currency Monitoring List.

• Lingering uncertainty and concerns about political developments, including leadership transition and the policy changes that will follow.

property 23FocusM | Nov 30-Dec 7, 2019

Share units in strata properties: Time bombs, one after another• What confuses

everyone - law makers, enforcement authorities, consultants and buyers - is how share units are allocated

• Until the issues are resolved, developers and management bodies have to allocate huge sums for lawyers, because everyone is suing everyone for every reason

Ppeople nowadays are better aware of the term ‘share unit,’ which is a very fundamental unit of measurement in

stratified properties. For the public, if it is not

because they are billed monthly based on ‘share unit,’ many may still not be familiar with this term and still think service charges are being measured or billed on the basis of ringgit per square foot (RM/sq ft).

Probably a large majority of strata property owners, too, have no clue what a ‘share unit’ is or how it is being associated with their assets because many build-ing managements, when com-pelled by the authorities to comply with the law, move to bill owners on the basis of ‘RM per share unit’ - and that is when the problems start.

For very complex mixed developments, the time bomb which had lain dormant for many years finally erupted when the Strata Management Act (SMA) came into force.

What is ‘lawful’ does not seem to tally with what is “practical,” and before the public, property stakeholders/consultants and even lawyers/judges are able to catch up with the shock wave, everyone started suing everyone else and judgements with all sorts of interpretations are writ-ten and rebutted from court to court.

So, what is so wrong with the “share unit” in our country that does not seem to be even an issue in other countries like Hong Kong or Singapore which have a much longer history of strata proper-ties?

The truth is, there is no clear definition of share unit in the SMA, nor in the Strata Title Act

to the purchase price; in fact, that is one of the best models com-pared with the rest.

Disputes arise when policy makers and law enforcers allow developers/consultants to apply an “inequitable” share unit calcu-lation with incomplete consid-eration of an asset’s purchase price versus its yield and its con-sumption.

This results in people paying very little money to buy very pre-mium assets yet do not contrib-ute an equitable share of the service charges. That’s the root of the evil here.

What could have been done is to tighten the process of share units allocation and fix it to asset value (not purchase price) against yield and against the costs of maintaining the premises.

But before condemning the so-called "malpractices" in share unit allocations, we must recog-nise that there are valid reasons for some of these practices regarding the basis of share unit allocations.

For example, one reason why car parks are downrated in the share unit allocation by lower car park prices as the basis is that this will contribute to the long-term sustainability and equitabil-ity for the parcel owners.

Car parks are low-yielding - say with a cost of RM30,000 per car park bay at 3.5% net yield, this implies a minimum income of RM3/bay/day.

If these car park bays are to be imposed a rate of RM0.5/sq ft x 120 sq ft, that’s RM2 a day serv-ice charge. Therefore, unless a car park can enjoy a turnover of more than two or three times, the gross profit for the car park bay remains RM1/bay/day only.

Therefore, the service charge of a car park cannot be expensive. Our forefathers, who assigned car park share units by purchase price, seemed to have done it in an equitable, fair and reasonable way.

Similarly, 80,000 sq ft for an anchor tenant space can fetch RM2/sq ft rent, compared to

had to be forced into accommo-dating their collection by this share unit formula against the actual costs of operation.

In the Act, the term “different rate,” although principally wrong, provides an avenue to do some realignment in service charge rates.

Hence, it is not necessary to introduce a whole new scheme of share unit calculation. This is making a mistake on top of another mistake.

Recently, another SMA self-implanted time bomb caused a fiasco in the industry, where dif-ferent judgements were made in two different courts on the issue of whether the joint management body ( JMB) can apply different rates as allowed for by the MC.

This problem should not even have occurred in the first place; if strata title is issued on vacant possession, we could have first gone to the MC instead of the JMB. Then we don’t need two sets of laws.

In fact, there are trickier issues that require very close attention: Is it fair that early bird retail lot buyers are given a dis-count - when buying the same-sized unit and allocated the same share units – over those who buy later at full unit prices? What about condominiums? Let’s not get into this for time being.

But if we consider this issue positively, we should be grateful that everyone is making an effort to improve the situation.

We are trying to address the issues as they arise, and as long as we are converging and not diverging, eventually we will figure out something workable for most strata stakeholders.

But until then, without know-ing when, for all the developers, JMBs and MCs out there, you have to allocate large amounts of money for lawyers, because eve-ryone is suing everyone for every reason. FocusM

YL Lum is a committee member, research, of Persatuan Pengurusan Kompleks Malaysia (PPK)

by YL Lum

RM10/sq ft for a 2,000 sq ft space. There is a disparity in rent of 1:5 and the only way to balance this disparity legally is to adjust the selling price/sq ft or share unit weightage so that either such dis-parity is addressed on the basis of "lower buying price" or "paying less long-term service charges" - this is totally equitable, fair and reasonable, too, isn’t it?

But sadly, instead of fixing the root of the evil, we made two mistakes, one after another, when drafting the laws.

In SMA, we allowed the man-agement corporation (MC) to apply “different rates” on “signifi-cantly different” components in the development, which is a typi-cal “diplomatic” Malaysian way to solve problems - “apa-apa pun boleh bincanglah” - and we totally forgot that the share unit assigned already (supposedly) takes into serious consideration the different weightage of signifi-cantly different components in a development.

Hence, allowing “different rates” on a post-strata register is like allowing an annual general meeting of a public listed com-pany to apply a different multipli-cand on top of the shares equita-bly allocated to every shareholder - this time bomb is principally and mathematically wrong.

Adding salt to the wound And to add salt to the wound, SMA has introduced a new weightage factor into the share unit allocation that has totally no association with the asset’s value, and assumes that every strata development’s operational cost fits into this pre-determined table.

This immediately triggered another time bomb (totally unnecessarily), causing the fol-lowing problem: a unit owner who paid a premium price for an asset suddenly had to be allo-cated a share unit which does not tally with his perpetual service charges and which impairs his yield expectation.

Then, mixed development

(STA) or the Building and Common Property Act (BCPA) which are now obsolete.

There is only “implied” use and implications of share unit; it may be that policy and law makers assumed that the term is so trivial and that “everyone knows it well.”

Unfortunately, strata stake-holders have been driven up the wall for various reasons just because of issues related to share unit.

What is it? Basically, share unit is a numeri-cal representation of the benefits and liabilities relating to a strata owner’s parcel. In other words, the more the share units, the more the service charges that need to be paid, and the more the voting rights - there is absolutely no rocket science about this.

What confuses everyone, from law makers, enforcement authorities and consultants to purchasers, is how share units are allocated.

Once we get that right, the rest will follow through. It’s like, if you know how much “share” you have been allocated in a com-pany, you will have no headache administering the company shareholder’s activities.

Shareholders of a company get their shares by a purchase price or other means, and they enjoy the benefits and liabilities proportionally, except that in the case of strata living, the “share unit” owner has to continuously and perpetually contribute a fixed amount of money propor-tionately.

This is where people feel the pinch every month, hence there is greater demand for clarity in share unit allocation in a strata development.

So, the key issue here is not whether it’s fair or not but whether it is equitable or not. Fair is subjective, equitable is measurable.

For example, is it fair that the service charges for condomini-ums are the same as for retail space? Is it fair if a car park is given a lower weightage in share unit allocation? Is it fair that one party owns all the car parks? Is it fair if one owner buys/owns half of the condominium units in the same block? Is it fair if all the big lots in the strata malls belong to one owner? Is it fair that one penthouse owner is being allo-cated 10 parking bays?

The answer to the above is simple: it will be “fair” if everyone is charged “equitably.”

Because the only piece of puzzle missing in all these ques-tions is “acquisition price,” i.e. if you want more voting rights, you pay for it, and you must be really sure that you can afford to pay service charges perpetually.

So fundamentally, it is not wrong that share units are linked

It’s great to own a home in the sky or an office with grand, commanding views but be educated on what exactly the costs are besides the purchase price

property24 FocusM | Nov 30-Dec 7, 2019

Indian hotel chain Oyo targets more rooms in Southeast Asia

Travelling across India at the age of 17, Ritesh Agarwal stayed in more than 100 bed and breakfasts, guest

houses and hotels, leading him to realise there was a massive dearth of affordable and good-quality hotels in the unbranded budget hotel category.

This spurred him to establish Oyo Homes & Hotels in 2013. His original business model was to aggregate and brand small budget hotels in India, offering a common reservation platform and branding with minimum quality standards. Oyo is an acro-nym for “On Your Own”.

In the span of six years, Agarwal managed to grow the company in India to become the world’s third-largest and fastest-growing hospitality chain of leased and franchised hotels, homes and living spaces.

And he is not resting on his laurels. Malaysia is Oyo’s first venture outside India and the company has been expanding rapidly here as well as in the Southeast Asia region.

Oyo is targeting to achieve two million rooms by 2025 in Southeast Asian market from 75,000 currently. The company has a presence in Indonesia, Vietnam, Thailand and the Philippines.

Since its foray into Malaysia in 2017, Oyo Rooms Hospitality Sdn Bhd has received one million room bookings in all its managed and franchised properties throughout Malaysia.

To date, the company has more than 16,000 franchised and leased rooms in more than 450 properties across some 50 cities throughout the country.

Oyo Rooms Hospitality coun-try head Tan Ming Luk says the company has achieved significant growth in the last two years since its inception.

“Malaysia is a strategic growth

market for Oyo in Southeast Asia. We are constantly looking at being a long-term, wide-scale, impact-ful and sustainable company for our customers, our asset owner partners, our stakeholders and our Oyopreneurs.

“We look forward to strength-ening our footprint across the country with a diverse portfolio and relentless commitment towards delivering more choices and delighting our guests with exceptional customer experi-ences,” he tells FocusM.

Apart from the budget hotel, Malaysian homeowners also show strong enthusiasm towards Oyo Homes, which is the company’s new offering.

“We are witnessing a lot of interest in this category. Travellers trust our brand and we are already known for pioneering effective solutions tailored to their needs, and Oyo Homes is designed to do exactly that,” Tan adds.

Chic living spaces According to Tan, the hospitality chain aims to extend the new Oyo Homes offering to the most travelled destinations in the country, such as Kuala Lumpur, Selangor, Melaka, Penang, Kedah and Johor.

Oyo Homes combines Oyo’s existing on-ground operations, hospitality technology, house-keeping skills, revenue manage-ment algorithms and distribution prowess to deliver a hassle-free solution to homeowners.

More than 1,000 homeowners in major cities in the country have been part of the Oyo chain of home management service.

Tan says the company is working towards creating quality

by Sharina Ahmad

and chic living spaces. “What we are attempting with

Oyo Homes guarantees a unique experience for our guests and higher yields for homeowners. Malaysia offers a huge market opportunity, and travellers visit-ing the country are keen to explore the comforts of a fully-managed holiday home.”

On the topic of collaboration and partnership, Tan notes that the company is open to working with brands that can leverage the synergies of each other, seamless experiences and customer-first approach backed by innovative technology.

Embracing technology Technology is deeply embedded in Oyo’s DNA – the company util-ises technology-based solutions on the suppliers’ side to help them manage end-to-end opera-tions.

“Technology continues to be a key growth driver and competi-tive advantage for Oyo. We use innovative technology solutions end to end to facilitate standardi-sation of services, amenities and in-room experience, thereby helping maintain service stan-dards.

“This is further enhanced by the diverse talent that includes people with a design background, tech experts, and more,” Tan says.

He adds that the company has an in-house stack of proprie-tary technology powering more than 20 applications for all its stakeholders, including custom-ers, asset owners and employees.

Backed by more than 400 microservices and 2,100 full-stack engineers spread across multiple locations, Oyo is able to deliver a consistent high-stan-dard experience to travellers.

“We’re using machine learn-ing for dynamic pricing, and arti-ficial intelligence and natural lan-guage processing for helping cus-tomer services. The Internet of Things is a big area for us where we are experimenting with smart switches and smart lighting to significantly improve guests’ overall experience,” Tan says.

Industry forecast With Visit Malaysia 2020 only a month away, Tan says the com-pany is optimistic that its col-laboration with Tourism Malaysia to extend Oyo Malaysia’s brand will help achieve the target of 30 million tourist arrivals in Malaysia by December 2020.

“We hope that our 450 Oyo hotels or 16,000 rooms across the 50 towns and cities in Malaysia are ready to offer our guests a unique brand of Malaysian hos-pitality. In fact, we hope the guests will gain experience as well as better value each time they stay with us,” he says.

He adds that the company will continue to bring its suc-cessful model of combining design, hospitality and techno-logical expertise, financial acumen and operational capa-bilities to real estate owners around the world.

These methods will give them the ability to get a higher return on investment, access easy financing opportunities, trans-form their hotels, and offer good quality customer service, thereby significantly increasing occu-pancy and profitability. FocusM

To date, Oyo has more than 16,000 franchised and leased rooms in more than 450 properties in Malaysia

IN 2012, Ritesh Agarwal launched Oravel Stays to enable listing and booking of budget accommodations. After under-

taking months of research and staying in various bed and breakfast homes, guest houses and small hotels across India, he rebranded Oravel Stays to Oyo in 2013.

Oyo partners with hotels to give similar guest experience across cities. Shortly after launching Oravel Stays, Agarwal received a grant of US$100,000 as part of the Thiel

Fellowship from Paypal founder Peter Thiel. Agarwal is the first resident Asian to be

accepted to the Thiel Fellowship. The fellow-ship is intended for students under the age of 23 and offers them a total of US$100,000 over two years, as well as guidance and other resources, to drop out of school and pursue other work such as scientific research, creat-ing a startup or working on a social move-ment.

Except for three properties that it owns

through partnership funds, Oyo does not own any of the hotels it manages around the world, including Malaysia. The business is purely management franchising.

In 2018, Oyo acquired two assets – a Chennai-based service apartment operator Novascotia Boutique Homes and Weddingz.in, a Mumbai-based online mar-ketplace for wedding venues and vendors. In May this year, Oyo acquired Amsterdam-based @Leisure Group, Europe’s largest vacation rental company.

Over a span of six years, the startup expanded globally with thousands of hotels and vacation homes, and millions of rooms in

India, Malaysia, the United Arab Emirates, Nepal, China, the UK, the Philippines, Japan, Saudi Arabia, Sri Lanka, Indonesia, Vietnam and the US, among others.

The company’s investors include SoftBank Group Corp, Greenoaks Capital Partners, Sequoia Capital India, Lightspeed India Partners, Hero Enterprise, Airbnb Inc and China Lodging Group Ltd.

Oyo currently has over 17,000 employ-ees globally, of which approximately 8,000 are in India and South Asia. Oyo Hotels & Homes is now identified as a full-fledged hotel chain that leases and franchises assets.

History of budget chain Oyo

Tan says Oyo is working towards creating quality

and chic living spaces

property 25FocusM | Nov 30-Dec 6, 2019

Gamuda Cove to commence water theme park at end-2021

Gamuda Land recently held a tree-planting ceremony at its Gamuda Cove town-ship in Dengkil,

Selangor, to mark the com-mencement of its 7.3ha rainfor-est-themed water park which is targeted to open in December 2021.

The water theme park, which is expected to drive the 619ha Gamuda Cove township towards being the catalyst of growth in the Southern Klang Valley, will showcase 18 rides – all of which will be featured in Malaysia for the first time. Around 70% of the water theme park area will be dedicated to green spaces filled with tropical trees, shrubs and flora.

Other than the exciting rides and slides, the water theme park also features a 300m lazy river, twin surf beach pool with private cabanas, simulated surf-ing and interactive waterplays.

Aside from the water theme park, there is also a discovery park nearby that provides two recreational zones – The Adventure Park and the Hangout Village. The Adventure Park allows thrill seekers to enjoy indoor go-carting, moun-

tain biking and aerial climbing through rope courses, while the Hangout Village offers leisure experiences such as shopping, dining and relaxing by the pool. The discovery park is slated to open in December.

Gamuda Land leisure and hospitality director Aaron Soo says what differentiates the

company from other property developers is its strong town-making principles.

“We do not shy away from upfront investment to create value for our customers. Between mindful master-plan-ning and good placemaking, we are creating a hive of tourism activities to drive socio-eco-

nomic growth in this area. “From the recently opened

interchange to the 24ha central park, the laying of 5G infra-structure, the opening of Discovery Park in December and the work commensuration for the water theme park, we are confident that our custom-ers will benefit from the value

being generated for Gamuda Cove,” he says.

Soo adds that Gamuda Land has obtained approval to part-ner the Ministry of Water, Land and Natural Resources and Selangor state government to jointly manage and operate Paya Indah Wetlands, which is located adjacent to Gamuda Cove.

Paya Indah Wetlands will also be rebranded as Discover Wetlands to promote eco-tour-ism in the area. Visitors can look forward to new addition of raw and rustic activities such as cycling, fishing, bird watching, horse riding and bamboo trail walking in a natural pristine and wild setting. There will also be hot air balloons for those who would like to have an aerial view of the wetlands.

Soo is confident that Gamuda Cove will be the key destination for local and inter-national visitors alike.

“Ultimately, it is not just about creating quality products for our customers, but also pro-viding a good experience and sustainable value creation to people who will call this place home, a place where they would want to be a part of, grow up and grow old in,” he says. FocusM

Core Residence @ TRX officially launchedCore Precious Development Sdn

Bhd, a joint-venture company between China Communications

Construction Group (CCCG) and WCT Holdings Bhd, recently launched Core Residence @ TRX – the first residential project at the Tun Razak Exchange (TRX).

Core Residence @ TRX is a high-end freehold property worth a gross development value of RM1.4 bil. Developed on a 0.6ha land area, it fea-tures three blocks of serviced resi-dences with units ranging from 624 sq

ft to 1,022 sq ft. TRX, an integrated 28ha site at the

heart of Kuala Lumpur, was developed by TRX City Sdn Bhd, which is wholly owned by the Ministry of Finance.

Core Precious chairman and man-aging director Zhang Bao says the resi-dential project, which has Green Building Index and LEED green build-ing certification standards, offers many amenities for professionals and finan-cial practitioners who will live and work in the business district of Kuala Lumpur.

“The 50-storey building – featuring an infinity pool, air gym and a seven-storey podium with a central park on the roof – is equipped with many other world-class amenities that can cater to the upscale lifestyle of financial profes-sionals and expatriates.

“Core Residence @ TRX enjoys ulti-mate accessibility with the integration of transportation services and access to multiple highways, and provides a seamless connectivity with prime facili-ties nearby in retail, entertainment, education and healthcare,” he says. FocusM

From left: Gamuda Cove GM Wong Yik Fong, Gamuda Land executive director Datuk Abdul Sahak Safi, CEO Ngan Chee Meng, COO Aw Sei Cheh and Soo at the ground-breaking ceremony

Zhang says Core Residence is equipped with many world-class amenities

An artist’s impression of Bandar Bukit Raja Industrial Gateway

Sime Darby Property JV offers BTS facilitiesSime Darby Property Bhd and its partners,

Mitsui & Co Ltd and Mitsubishi Estate Co Ltd, recently marked a significant mile-

stone with a ground-breaking ceremony for build-to-suit (BTS) industrial facilities at Bandar Bukit Raja Industrial Gateway.

The development will be undertaken by their joint-venture company, SDMIT Development Sdn Bhd, and is spread across 15.8ha of prime land within the Bandar Bukit Raja township.

The BTS facilities are built to match the customer’s business requirements, offering flexible spatial designs for high degree of warehouse customisation, long lease options to optimise costs, and the latest technology to suit technical and operational needs.

They provide tenants ready infrastructure that includes water, power supply and telecom-munications, and is strategically located amid Malaysia’s industrial heartland of Bandar Bukit Raja.

The first two tenants at Bandar Bukit Raja Industrial Gateway – global logistics service provider Leschaco (M) dn Bhd and consumer electronics chain store Senheng Electric (KL) Sdn Bhd – were unveiled during the ground-breaking ceremony.

Construction on the BTS facilities for the two tenants is slated to begin simultaneously in November 2019. Both facilities have been planned on a combined land area of about 10 acres with build-up area of about 385,000 sq ft. FocusM

property26 FocusM | Nov 30-Dec 6, 2019

South Korea sees rise in sales of covered bonds

Difficult road ahead for WeWork

Policy makers often bemoan unintended consequences, but in South Korea they

may be smiling upon one stem-ming from efforts to cool a siz-zling housing market.

Those steps are prompting a jump in sales of covered bonds, a type of debt that’s not so common in Asia but that’s proved a reliable source of fund-ing even in times of crisis in Europe.

Korea has been promoting covered bonds for over five years to help banks finance the coun-try’s household debt in the long term, but only now are sales really taking off.

Home prices in Seoul have jumped 13% in the past two years, as the central bank cut interest rates to the lowest ever.

Korea has been promoting covered bonds for over five years

There is a lot of hard work ahead for WeWork in order for it to survive

To curb the growth of Korea’s record household debt stemming from housing costs, financial regulators will encourage banks to cut household loans while

boosting lending to companies in rules from next year. That’s where covered bonds come in.

The securities, guaranteed by the issuer and backed by a pool

of assets such as mortgages, can be partly counted as deposits when banks calculate their loan-to-deposit ratio, helping lenders that have made a lot of home loans. That’s prompted sales of covered notes to almost quintu-ple to 3.7 trillion won (RM13 bil) so far this year, with Standard Chartered Bank Korea and Shinhan Bank issuing them for the first time, and Woori Bank planning an offering.

President Moon Jae-in has reaffirmed that his administra-tion will bring rising housing prices under control by deploy-ing tougher measures if current steps don’t work, adding that the government won’t use the real estate market to stimulate slug-gish economic growth.

Lenders may sell more cov-

ered bonds to preemptively secure a stable loan-to-deposit ratio, and that could cause short-term market interest rates to rise, according to Hanwha Investment & Securities Co.

The new rules from next year will increase the weighting of household loans when banks cal-culate their loan-deposit ratios while reducing it for corporate debt.

Covered bonds differ from securitisation such as mortgage-backed securities in that the assets remain on banks’ balance sheets. Since the Korean Covered Bonds Act took effect in 2014, Kookmin Bank had been the only lender that sold such debt until Standard Chartered Bank Korea’s debut offering in June. – Bloomberg

There has been a lot of pain for WeWork in the last few months. It doesn’t get easier from here.

The office leasing startup has been on a wild ride. Its planned initial public offering was derailed in September by inves-tors’ shock at the company’s red ink and self-dealing by its CEO. It was close to running out of cash before an emergency financing last month. Its valuation withered to less than the investment money it had collected.

Masayoshi Son, the SoftBank Group Corp founder and WeWork’s biggest backer, said turning around the startup would be “simple”. It isn’t.

To be viable, WeWork must continue to slash costs, reassure a nervous workforce, build out hundreds of new offices with uncertain financial prospects, possibly mollify tenants and land-lords who might be unsettled about working with the company, reevaluate its office portfolio and stabilise declining average rent payments and occupancy rates.

For now, WeWork’s five-alarm fire is doused. SoftBank agreed last month to move up a US$1.5 bil (RM6.3 bil) investment it had planned to complete next April. SoftBank is also backing a plan – not fully fleshed out – for WeWork to borrow US$3.3 bil and obtain a backstop for as much as US$1.75 bil more.

Thus, WeWork will be dependent on SoftBank, which has already expressed regret for putting so much faith in WeWork and Adam Neumann, the co-founder and ousted CEO.

Second thoughts inside SoftBank about a stock repur-chase that is part of WeWork’s bailout make me question SoftBank’s commitment to see through a multiyear WeWork turnaround.

Assuming the bailout goes

through, WeWork also must get its costs under control – and that comes at a high human toll.

WeWork has said it’s laying off 2,400 people, or nearly 20% of the more than 12,500 employees it had at the end of June. The com-pany is likely to shed more employees as WeWork offloads side businesses.

The job cuts might slice hun-dreds of millions of dollars from WeWork’s costs, and there is more to do. In the 12 months ended June 30, WeWork’s corpo-rate overhead totalled about US$1.9 bil, or the equivalent of three-quarters of WeWork’s reported revenue for that period.

Fitch Ratings, using different numbers, has calculated that WeWork’s overhead costs need to come down from about 60% of its revenue to a “low double-digit percentage” in the coming years.

Fitch figured it would take about US$1 bil in cost reductions to put the company on sounder footing. WeWork recently outlined management changes to employ-ees and said the company has a

target to generate positive cash flow by 2023. That’s a long time to be financially unsustainable. The company appears to have burned through US$1 bil of cash in the most recent quarter.

But WeWork can’t just cut its way to health. It also needs to spend to bring in revenue from its rapid expansion. In the 12 months ended in September, the number of WeWork locations bal-looned from 334 to 625, according to a company presentation to bondholders. It’s unclear how many of those offices have paying tenants, but it’s likely the com-pany must revamp a chunk of those offices to WeWork’s specifi-cations and perhaps wait out free rent periods for new tenants.

Each fresh tenant, however, comes with an uncertain finan-cial profile. WeWork in its disclo-sures to prospective IPO inves-tors said it had been expanding into cities and countries where rents tend to be lower than they are in more established WeWork markets such as New York, London and Washington. WeWork

on average generated US$1,522 from each paying tenant in the third quarter of 2017 and US$1,327 for the three months ended in September.

The percentage of its open desks with paying tenants has also dropped. The company needs to stabilise, if not increase, occupancy rates and per-location revenue. This is a tall order.

WeWork has signalled it is reassessing office deals it signed or was considering. The company may be smart to wriggle out of unpromising leases, but that could force WeWork to pay penal-ties.

Walking away from deals may also make other landlords wary of renting their buildings to WeWork or less eager to give it breaks on rent and help with construction costs. Having fewer locations, or locations leased on less generous terms, puts a ceiling on potential future rental income. The com-pany as of June 30 had committed to making US$47 bil in lease pay-ments in coming years.

WeWork’s new executive

chairman also told employees about a planned change to its business model, according to the Financial Times. Instead of sign-ing long-term office leases, carv-ing them into chunks and re-leasing them for shorter-term rentals, WeWork wants to manage commercial properties for land-lords in most cities. The business approach is similar to that of hotel chains such as Hilton and may be a more viable strategy – assuming landlords go along. But WeWork will still need to clean up the mess from all the leases it signed in its expansion binge.

There are good ideas at the heart of WeWork. Businesses don’t want to track down office space, commit to long leases and deal with the hassle of keeping an office running. But all that WeWork has proved is that it’s possible to build a big business with some innovative approaches as long as it spends money like there’s no tomorrow. Now that WeWork is trying to last, there is a lot of hard work and many diffi-cult choices ahead, and there are no guarantees that WeWork can make it work.

My rough numbers: If WeWork eventually reduces its payroll by 4,000 people, at an average compensation cost of US$150,000, that works out to US$600 mil in savings. That doesn’t factor in severance and benefits that WeWork has said it will make to people it is laying off.

My calculations include WeWork’s reported operating expenses for its locations before they open to tenants, minus WeWork’s adjustments to account for periods where it doesn’t owe rent to landlords on buildings without tenants. The costs also include WeWork’s sales and marketing operations, costs to scout and develop new build-ings and new markets, and gen-eral and administrative costs. – Bloomberg

Nov 30-Dec 6, 2019 | FocusM | 27

XTRA_b3_BE_2015_008_Totale_262x370_4c_Q.indd 1 19.03.19 10:28

columns28 FocusM | Nov 30-Dec 6, 2019

The sequence of events leading to a revised approval for the RM3 bil Taman Rimba Kiara development shows

there are serious questions as to why the new government is going ahead with the project, albeit one that has been scaled down.

As if that were not contro-versy enough, prominent lawyer Datuk Seri Gopal Sri Ram stepped into the fray when he offered himself pro bono to defend KL City Hall in an ongoing court case brought by residents against the private development City Hall questionably approved.

This raises legitimate ques-tions such as when does the gov-ernment limit the acceptance of pro bono cases involving itself and its agencies and the further question of how does it ensure whether it is in the public interest to do so.

There is another issue to con-sider - whether Federal Territories Minister Datuk Khalid Samad can be sued for misfea-sance, basically, abuse of author-ity, given a recent ruling by the Federal Court.

The apex court had unambi-guously ruled that prime minis-ters and ministers are public offi-cers which allows them to be sued for misfeasance. Also, if misfeasance or abuse of authority is proved, then not only is the government liable for damages but it is possible the public officer is too.

It was reported the RM3 bil Taman Rimba Kiara develop-ment, a joint venture owned 49% by Yayasan Wilayah Persekutuan (YWP - the charity arm of City Hall) and private developer Memang Perkasa Sdn Bhd linked to Pavilion group’s Tan Sri Desmond Lim Siew Choon, was approved in 2014. Lim and his family are known to be close to former premier Datuk Seri Najib Razak and his wife Rosmah.

The project involves the con-struction of luxury service apart-ments, as well as an apartment block to accommodate the long-house residents displaced by the development. Subsequently, the new government scaled down the project, a move which is still opposed.

With such a chequered, dubi-ous history, should City Hall have accepted Sri Ram’s offer of pro bono services? Such pro bono services came into public promi-nence following charges against Najib. Sri Ram was among those procured to prosecute Najib.

The federal territories minis-try said in a statement that Sri

QuestionTime

As Sri Ram enters Taman Rimba fray, should Khalid Samad be sued?

Ram offered to work for City Hall for free. And it accepted. Sri Ram reportedly said: “It’s been 36 years since the longhouse people were promised accommodation and DBKL (City Hall) is doing its best to deliver it to them. DBKL asked me whether I would do it free of charge for them and I said yes.”

But not all longhouse resi-dents are for the project, with significant numbers opposing it while the Taman Tun Dr Ismail Residents’ Association (TTDI-RA) and Friends of Bukit Kiara, oppose the development and have outlined alternatives which would take into account long-house residents’ needs as well.

The idea of pro bono in the Najib prosecution would have been two-fold - it is a public interest case where it is impor-tant to mount a strong case against potentially strong defences. And if the services were free there can be no accusations of possible private gain - every-thing is above board.

Not in the public interest It would be a stretch to say that if Sri Ram served pro bono in the Taman Rimba case he would be acting in the public interest - many of those opposed to the project are residents and there may well be many elements of criminality in the original approval of the massive Taman Rimba Kiara development.

Under such circumstances, it is not prudent of City Hall to accept the services considering that it is a government agency which is routinely involved in many commercial ventures, such as approving projects undertaken

by developers. Besides, City Hall has a direct interest in the pro-ject.

Also, by engaging a promi-nent lawyer such as Sri Ram for free, it raises the spectre that this may become a marketing plat-form for Sri Ram’s services. Sri Ram has routinely done work for many prominent corporate per-sonalities as well as corporates. The outcome of the pending case will have a major bearing on the fortunes of the developer involved in the project.

The allegations that are being made about the Taman Rimba project are very serious and it was made into a campaign issue in the last elections, especially by current Segambut MP Hannah Yeoh who has tirelessly champi-oned the issue.

Yeoh, who is also the Deputy Women, Community and Family Development Minister, said free legal aid does not make sense as DBKL does not need free legal service from Sri Ram. It is the TTDI residents, who fought against the development of a por-tion of Taman Rimba Kiara, who deserve free legal aid, she added.

“They (City Hall) don’t need help as they have deep pockets,” she was quoted as saying by The Malaysian Insight, “The residents, on the other hand, are passing the hat around and carrying out fundraising on their own to save a neighbourhood park.

“I hope the Federal Territories minister realises that Kuala Lumpur residents are informed voters and that his explanation on this pro bono offer simply doesn’t make sense,“ Yeoh added.

Yeoh and a group of TTDI residents had opposed a scaled-down version of the project in July. The Malay Mail quoted Yeoh as saying: “I have also obtained support from the other KL MPs, seven of them.

“They have given me a letter on our proposed resolution which is to revoke the develop-ment order given, and number two - if you want to continue to allow them to build, they must build in the current longhouse footprint - 4.4 acres and not go beyond this footprint.”

MACC urged to step in Yeoh said then that she had requested a meeting with (the then) newly appointed Malaysian Anti-Corruption Commission (MACC) chief Latheefa Koya to discuss the issue, as Federal Territories Minister Khalid Samad’s predecessor, Datuk Seri Tengku Adnan Tengku Mansor had abused his power in granting the development of the Pavilion Taman Tun project.

“My hope is that MACC will look into all the reports that have been lodged, also the fresh report lodged by TTDI-RA last week (in July).”

Khalid had said it was not practical to scrap the Taman Rimba Kiara project as City Hall would have to pay a compensa-tion of over RM200 mil. However, legally speaking, a contract can be invalidated if it was procured illegally.

In a report in July, Malaysiakini had reported that the firm allegedly used by Tengku Adnan to allegedly receive bribes from developers is also linked to

the controversial Taman Rimba Kiara development, after a search of company shareholdings.

In his ongoing court trial, Tengku Adnan is charged with receiving RM3 mil in bribes from two developers through the firm Tadmansori Holdings of which he is the majority shareholder.

Further, an investigation by anti-corruption watchdog NGO C4 shows that Tadmansori is also linked to the Taman Rimba Kiara development, thus raising allega-tions of a conflict of interest as Adnan was federal territories minister when the project was approved, Malaysiakini reported.

All these strongly indicate, at the very least, serious conflicts of interest and probable corruption by those involved in the approval process, particularly Tengku Adnan, which can invalidate the approval process.

Under such circumstances, Sri Ram’s entry into the fray on the side of City Hall, which appears to have had serious lapses in control processes when approving the project, cannot be considered to be in the public interest, especially since City Hall’s YWP is itself inter-ested in the project.

And in the unlikely event that the TTDI residents lose the court action to stop the development because of conflicts of interest and corruption, they may yet have further avenues to sue the minister directly because of that Federal Court ruling. FocusM

P Gunasegeram is the editor-in-chief of Focus Malaysia. He says the entire process for development approvals needs a major overhaul and a close watch by the MACC

by P Gunasegaram

The Taman Tun Dr Ismail Residents’ Association and Friends of Bukit Kiara are opposing the RM3 bil Taman Rimba Kiara development

columns 29FocusM | Nov 30-Dec 6, 2019

Bursa Malaysia has a new regulation CEO. So what?

Recently, Bursa Malaysia Bhd announced it would be a leaner entity next year. Or at least that was the crux

of its statement on Nov 22. As usual, when most of us

hear such pledges, we gush. “Finally, there will be a separa-tion of powers. Also, what’s not to love about having a lean entity?” analysts tell me.

What will happen at Bursa Malaysia is some positions such as the chief commercial officer (CCO) and chief operating officer (COO) will cease. This means current CCO Selvarany Rasiah and COO Azalina Adham will not have their contracts renewed. Also bidding goodbye is chief regulatory officer Yew Yee Tee.

Instead, there will be a new position: the chief executive offi-cer (CEO) of regulation, among others. Perhaps for the first time, in the history of Bursa Malaysia, we will have a dual-CEO struc-ture. Does this mean the powers of current CEO Datuk Muhamad Umar Swift will be curtailed?

Sure, according to Bursa Malaysia, what we now have is a flatter organisation. The current business leadership team will report directly to Umar. The man himself will also be bestowed upon a greater span of direct management and oversight of business functions.

“The organisational restruc-turing will make Bursa Malaysia a more agile and efficient organisa-tion, better able to meet the changing needs of customers and stakeholders in a fast-evolving global market,” Umar said in a statement on Nov 22 in response to the managerial shifts.

Opaque overhaul But who are we kidding here? First, the void has to be filled. We have one transition on paper – that is the chief regulatory officer will now become the CEO of regulation. Also, Bursa Malaysia promised a smaller, purpose-driven outfit. But we are only privy to the bits and bobs – not the entire setup. So we don’t know whether the end result is truly a leaner outfit.

Here’s the bigger picture: Without the regulations aspect, Umar is just the CEO of a typical publicly listed company. He is a man with minimal influence in

the Bursa scheme of things. But I could be wrong here because organisational structures might paint a different picture – a pic-ture we do not clearly have at this point in time.

Now Umar’s appointment as CEO in December last year did pique curiosity. Prior to Bursa Malaysia, he was group CEO and group managing director of insurer MAA Group Bhd. He is a chartered accountant and has a significant experience in banking and financial services.

His predecessor Datuk Seri Tajuddin Atan was on a different league. Before leading Bursa Malaysia, Tajuddin was managing director of RHB Bank Bhd and group managing director of RHB Capital Bhd. He also had a chance to familiarise himself with the Malaysian capital market as he served as a non-executive director and public interest director on the board of Bursa Malaysia from July 2008 until March 2011. Umar lacked that pedigree.

On paper, at least, the new structure separates the business

and regulatory aspects of Bursa Malaysia. This balancing act between stern and sexy is not unique to Bursa. Regulatory safeguards have been debated and mulled when stock exchanges worldwide began demutualising in the 1990s. The concern revolves around stock exchanges and their need to attract and retain listings to rake up earnings. They have to do this without neglecting their fiduci-ary duty to shareholders.

According to Bursa Malaysia’s 2018 annual report, there were 783 listed companies on the Main Market, 119 on the ACE Market and 13 on the Leading Entrepreneur Accelerator Platform (LEAP) Market. The latter is geared towards small and medium enterprises (SMEs). LEAP remains a draw as SMEs could circumvent the stringent requirements of the Securities Commission (SC) over Main Market listings.

Also as per the annual report, Bursa Malaysia receives its sales and profits from running the stock market. Its operating reve-nue mostly comes from securities and derivatives trading as well as listing and issuer services. According to its yearly financials, Bursa Malaysia recorded a net profit of RM224 mil for FY18.

Regulatory challenges But, Bursa Malaysia is the stock market police. It has to regulate the behaviour of public-listed companies and market interme-diaries which are a source of its income. The nature of our stock exchange is that it is a disclo-sure-based regime, so while regulators are tasked to protect investors and uphold public interest, investors are expected to be responsible for their investment decisions based on information provided by the

listed companies. The problem is the quality of

the disclosure. Market partici-pants also point out that the unwritten rule is still a “merit-based” regime. One of the pain points they highlight is the unusual market activity (UMA) query. Here Bursa Malaysia promises action to companies that do not provide a reply when slapped with a UMA.

This is prescribed in Paragraphs 9.11 and 9.16 of the listing requirements where com-panies are obligated to announce to the bourse any material infor-mation not previously released to the market that may trigger a UMA query as well as ensuring that the disclosure is accurate.

Critics of this system say there has to be a balance of the carrot-and-stick approach used by Bursa Malaysia. “You need to allow some – keyword here: some – speculation in the market,” says a market participant.

Solution across the straits? One answer to how we should approach business and regula-tion at the stock exchange is found across the causeway. The Singapore Exchange in 2016 announced that it will set up a separate entity called the Singapore Exchange Regulation Pte Ltd (SGX RegCo) to assume regulatory powers.

Questions still remain over SGX RegCo’s independence, transparency and, most of all, effectiveness. This last bit is usu-ally justified through that infa-mous case involving Malaysians John Soh Chee Wen and Quah Su-Ling. Both have been charged with 189 and 178 charges respec-tively. These mostly involved the giving of instructions over sev-eral trading accounts used to allegedly manipulate shares in Asiasons Capital Ltd, Blumont

Group Ltd and LionGold Corp Ltd. Hooray, Malaysia Boleh!

Over here, enforcement has been at a snail’s pace. Just look at the number of insider trading cases that are open. Till today we are awaiting the fate of Supermax Corp Bhd co-founder Datuk Seri Stanley Thai over his insider trading charge. He was sentenced to five years’ prison on Nov 24, 2017. That was like... two years ago?

But whichever way you see it, the answers to an effective stock exchange are complex. Maybe, in our case, we should defer regula-tions totally to the SC. So that acts as the long arm of the law while Bursa Malaysia is purely business. But the longer we mull over this, the more we will be at a disadvantage. Our stock market remains unattractive.

If foreign funds were the benchmark, then they have yanked RM9.17 bil of local equi-ties as of Nov 22 or 78.4% of last year’s total foreign outflow of RM11.69 bil. This makes Malaysia, in terms of indices, a laggard as compared to its peers in Southeast Asia. According to Bloomberg data, the FBM KLCI’s 12-month forward earnings esti-mate has dropped more than 12% since Pakatan Harapan assumed power in May last year.

While the reasons for that are complex, from the US-China trade war to political uncertainty from within, the point is we are no longer an attractive destina-tion. That should be fixed.

Sadly, a new chief of regula-tion doesn’t point to a resolution in that direction. In fact, if any-thing is clear about this whole reshuffling drama, it is that ironically, the Bursa, a publicly listed entity with a fiduciary duty to its shareholders, was never entirely transparent with all the changes. FocusM

Will Umar’s powers as CEO be curtailed by the appointment of the new regulation CEO?


Pound Foolish

Bursa Malaysia recently announced that it will phase out the CCO and COO positions starting next year

columns30 FocusM | Nov 30-Dec 6, 2019

Social protection necessary to quickly end poverty, hunger

Historically, most social security sys-tems have devel-oped in the formal sector of rich

economies. However, most of the poor and hungry in the world live in rural areas, surviving in the informal economy.

Meanwhile, the world econ-omy continues to struggle to recover following the 2008 finan-cial crisis. Prospects remain bleak as many governments pursue fiscal austerity in the face of per-ceived financial market pres-sures.

Most developing countries continue to experience high underemployment, even if official unemployment rates remain low. With low commodity prices and escalating trade tensions, things are likely to get worse in the medium term.

Eliminating hunger and poverty Even if long-term growth really lifts all boats, which there is no evidence for, it cannot eliminate hunger and poverty by 2030, especially as inequality mutes the impact of growth on poverty reduction. The struggle to escape poverty is slowed as growth is not inclusive.

Many non-poor households remain vulnerable to poverty as they face various shocks which cause them to fall into poverty. Such shocks typically have long-lasting negative impacts on the poor. However, with the requisite political commitment and fiscal resources, poverty and hunger can be reduced quickly with well-

designed social protection. The United Nations 2030

Agenda for Sustainable Development Goals (SDGs) com-mits countries to “implement nationally appropriate social pro-tection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable”.

The Food and Agriculture Organisation’s (FAO) 2015 State of Food and Agriculture showed that social protection can not only quickly reduce hunger, extreme poverty and deprivation, but also economic and social risk as well as vulnerability. Having social protection in place also enables governments to better respond to crises.

Reducing vulnerability Social protection should involve policies and programmes designed to reduce and prevent poverty and vulnerability. World Bank estimates suggest that social protection prevented 150 million people worldwide from falling into poverty in 2010, albeit unevenly.

Social protection can also enable investments by benefici-aries to enhance their own pro-ductive capacities, earned incomes, consumption, health, education, and wellbeing.

Contrary to widespread popular prejudices, it does not reduce adult work effort and incomes, enabling children to work less, and to attend school instead.

Lack of social protection leaves people vulnerable to pov-erty, inequality and social exclu-sion, constituting a major obsta-cle to economic and social devel-opment. Higher incomes also

boost demand in local economies, with desirable multiplier effects.

Social protection can ensure more and better food consump-tion, reducing food insecurity and seasonal hunger besides increas-ing dietary diversity. Improving food access and diets reduces the economic burden of undernutri-tion, improving living standards, productivity and incomes.

It also helps poor households better manage risk, reducing reli-ance on, and vulnerability to usury, clientelism and other exploitative arrangements. Gender-sensitivity in the design and delivery of social protection not only improves food security, but also empowers women.

Limited social protection Social protection is a universal human right. But the International Labour Office’s (ILO) World Social Protection Report 2017-19 found only 45% of the global population had at least one social benefit, while the remaining four billion people are totally unprotected.

Coverage gaps reflect under-investment in social protection, particularly in African, Asian and Arab countries. The World Bank’s The State of Social Safety Nets 2014 reported that 345 million are covered, while 870 million of the extreme poor in the world are not covered at all.

Unsurprisingly, the biggest shortfalls are in low-income countries, where 47% of the population is extremely poor, less than a tenth of the population, or about one in five of the extremely poor, has some support.

In lower middle-income countries, 173 million (28%) extreme poor are covered, but 479

million are not. In upper middle-income countries, 74 million (45%) of the extreme poor get some support, while 93 million do not.

According to the World Bank’s World Development Report 2019, only 18% of the poorest quintile in low-income countries gets social assistance, while 2% have social insurance, with these rates rising to 77% and 28% respectively in upper-middle-income countries.

Affordable? Fiscal austerity has undermined social protection in recent times. Together with persistent unem-ployment, lower wages and fiscal austerity measures have contrib-uted to increasing poverty, now affecting 86 million people in the European Union alone.

Efforts to induce private investments in recent decades have seen sharp declines in mar-ginal tax rates as countries engage in harmful tax competi-tion. This has also adversely affected governments’ abilities to maintain and extend social pro-tection.

The Rome-based UN food agencies estimated how much it would cost to sustainably end hunger and poverty by 2030. The ILO’s costing estimates for 57 lower-income countries imply that even the poorest countries can afford to extend some social protection to all their citizens.

While some countries have the fiscal space to quickly develop and extend social protection floors, others will have to gradu-ally extend coverage and benefits. Most low-income countries will need external budgetary support, at least initially.

Countries normally achieve universal coverage through a

combination of contributory social insurance and tax-based social assistance. Countries can use the ILO Social Protection Floors Calculator to estimate the costs of child and orphan allow-ances, maternity benefits, dis-ability and old-age pensions as well as public works programmes for those without jobs.

Sustainable? Enough social protection can quickly end hunger and poverty, but is not sustainable without higher earnings for the poor able to work. An early big push for pro-poor investments will gener-ate such additional incomes ear-lier, reducing longer term financ-ing costs.

Over three-quarters of the world’s poor live in rural areas, where almost half the world’s population resides. Raising rural incomes sustainably is necessary to eliminate poverty and hunger.

Rising incomes should, in turn, increase investments, expe-diting exit from the vicious cycle of poverty, and eventually reduc-ing the need for social protection.

Clearly, ending hunger and poverty sustainably is eminently viable, feasible and affordable. With sufficient political will and solidar-ity, we can end hunger and poverty quickly and permanently. FocusM

Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. Anis Chowdhury is Adjunct Professor, Western Sydney University and University of New South Wales (Australia)

• Lack of social protection leaves people vulnerable to poverty, inequality and social exclusion, constituting a major obstacle to economic and social development

• Most developing countries continue to experience high underemployment. With low commodity prices and escalating trade tensions, things are likely to get worse in the medium term

by Jomo Kwame Sundaram and Anis Chowdhury

Over three-quarters of the world’s poor live in rural areas, where almost half the global population resides

markets 31FocusM | Nov 30-Dec 6, 2019

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Boycott Black Friday, save the world• Whether it’s for

environmental or commercial reasons, any break on the event is welcome

On London’s Oxford Street last weekend, you could almost forget we were in the midst of a retail

apocalypse. Christmas lights and a slew of special offers marking an ever earlier start to the imported bargain frenzy, Black Friday, brought out the crowds. Similar holiday cheer and promo-tions have spread elsewhere in Europe too.

But European retailers face a new worry: Shoppers are deliber-ately staying away in order to safeguard the planet.

Conspicuously skipping con-sumption is a long-term threat. But when it comes to Black Friday, the more shoppers who shun it, the better.

For European stores, intro-ducing the crazy US holiday shopping tradition has been an act of self-harm. If protests per-suade stores to cut back on this margin-destroying activity, both the planet and profitability would benefit.

Black Friday first reared its ugly head in the UK around the start of the decade when local chains responded to Amazon.com Inc’s unleashing of post-Thanksgiving discounts onto the British public. The trend hit con-tinental Europe later, but French and German retailers have stepped up their participation over the past few years.

As the phenomenon grew, so did resistance, with, for exam-ple, International Buy Nothing Day urging us to switch off from shopping. But this year, the anti-consumerism movement is

gaining traction. In France, where retailers are

bracing for a Dec 5 nationwide strike that may last longer, youth activists are joining with Extinction Rebellion to protest at shopping malls and elsewhere on Friday in an action called #BlockFriday.

Ecology Minister Elisabeth Borne has weighed in, warning people about the pollution gener-ated by Black Friday between all of the extra delivery runs and packaging. “We can’t at the same time call for a reduction in greenhouse gases and call for a consumer frenzy like that,” she says. There’s even a proposal by lawmakers to ban Black Friday promotions altogether.

In Lyon, ethical-clothing spe-cialist WeDressFair planned for the second year to close its store and website on Black Friday. Instead, customers can bring in their ripped jeans and shirts with missing buttons to be mended. They will also learn now to make more eco-friendly washing powder.

These different initiatives underline the increasing focus on shopping’s impact on the envi-ronment.

The CEO of Hennes & Mauritz AB, which has been seek-ing to make its clothing more sustainable since the 1990s, recently warned of the threat of consumer shaming.

Associated British Foods Plc’s Primark has been struggling in Germany, in part because some consumers there believe that because it’s cheap, it’s got to be bad for the environment. To address the growing concerns about fast fashion, the chain has introduced clothing recycling stations in its stores and increased its use of sustainable cotton.

ABF CEO George Weston has also argued that it is greener to shop in physical stores than it is to buy online. That’s significant because Black Friday is still pri-marily a web-based phenome-non.

Determining which is greener is not straightforward. There is

some academic evidence to sug-gest that shopping online is actu-ally more sustainable. But that is not always the case. When a whole range of factors are taken into account, including returns, ultra-fast delivery, subscription programmes that encourage repeat purchases, collecting par-cels by car and showrooming – where customers travel to stores to evaluate products before ordering – the picture is far less clear cut.

Whether it’s for environ-mental or commercial reasons, any break on the event is wel-come. Deloitte estimates that the average discount in the UK this November is about 27%, similar to last year, although deals started earlier.

Retailers may win some incre-mental sales, but given the diffi-cult market conditions, that’s not guaranteed. So, unless they are offering products that would have gone into the January sale anyway, or items specially made to be sold cheaply on Black Friday, this level of reduction means they will be

by Andrea Felsted

sacrificing margin. Some store groups that previ-

ously embraced Black Friday have now rowed back, led by Asda, the UK arm of Walmart Inc. Wm Morrison Supermarkets Plc is also getting less involved.

Others, such as the electron-ics chains AO World Plc and Dixons Carphone Plc, plan pro-motions with suppliers months in advance.

This year, the effect of Black Friday will be particularly perni-cious. Falling after payday and kicking off the main spending weeks in the run up to the holi-day, it will be difficult for retailers that offer discounts to return to full price. Add in Brexit uncer-tainty in the UK and the upcom-ing strikes in France, and it increases the potential for a highly promotional period.

More conscious consumers are too late to prevent Black Friday from taking place in 2019. But if they force retailers to come to their senses in future, it won’t just be the environment that wins. – Bloomberg

When it comes to Black Friday, the more shoppers who shun it, the better

income+32 FocusM | Nov 30-Dec 6, 2019

Small business owners in Malaysia still have lim-ited access to financing despite making up 98% of the business sector. It

is unsurprising then that an alter-native investment, peer-to-peer (P2P) financing, is gaining trac-tion.

The P2P financing industry in the country has reportedly raised nearly RM377 mil as of June this year, funding over 1,100 small and medium enterprises (SMEs).

P2P financing involves inves-tors lending money to individuals and businesses via P2P platforms. Investors with limited capital can start investing with as little as RM50 in P2P lending while busi-nesses get access to funding with-out having to go through the stringent requirements set by banks.

FinTech Association of Malaysia committee member Adam Malik believes that the P2P financing industry will continue to scale as many underserved SMEs do not have the requisite years of audited accounts required by traditional financial institutions due to their limited operation tenure and track record.

“More often than not, SMEs are looking for smaller financing amounts that make it less appeal-ing for financial institutions,” he says.

According to Adam, the P2P financing industry in Malaysia has raised more than RM500 mil as of September this year for more than 1,500 SMEs since the first approved P2P platform launch in 2017.

P2P is gaining traction, espe-cially on the demand side, as SMEs require only small working capital to ensure that their cash-flow is uninterrupted as well as to expand their business.

On the investor side, 55% of

Underserved SMEs are driving the growth of P2P financing• P2P financing is an

alternative investment option that was introduced only recently but is already seeing rapid growth

• Although it generally offers more than 10% returns, the risk of potential default can deplete investors’ returns if they don’t diversify

P2P financing investors are below the age of 35, which illustrates that these alternative investments through regulated online plat-forms are garnering interest amongst a new generation of investors that may be less inclined to invest in traditional asset classes like real estate, stocks, unit trust and bonds.

“P2P platform operators have disclosed that as an industry, 69% of the financing disbursed to SMEs are for amounts not exceeding RM50,000.

“This indicates that the indus-try is serving a micro-segment of the broader SME base in Malaysia,” Adam adds.

Growing need for P2P financing Despite only being introduced by the Securities Commission in 2016, the P2P financing platform has already shown significant upward momentum.

According to Funding Societies co-founder and CEO Wong Kah Meng, the P2P financ-ing industry’s disbursal amount has grown from RM212 mil in 2018 to RM520 mil up to September this year - a 150% growth!

“Funding Societies has grown from RM100 mil in disbursements in 2018 to more than RM300 mil in 2019. The figures also serve to highlight Funding Societies’ more than 50% market share domi-nance in Malaysia,” he adds.

Fundaztic CEO Kristine Ng opines that the P2P industry is still in its infancy stage in Malaysia. The first six registered P2P financing platform operators including Fundaztic only came into being around two and a half years ago.

However, the growth is very commendable and P2P looks set to become a strong alternative funding and investment vehicle for Malaysians as the industry is on its way to cross the RM700 mil mark in disbursements by end-2019.

“Fundaztic focuses on micro, small and new businesses and has been disbursing funding at an average size of RM75,000. We target to serve 1,000 micro, small and medium enterprises by the end of this year,” explains Ng.

Usually, traditional financial institutions assess SME financing applications by using two metrics: creditworthiness and bankability.

Creditworthiness – can the SME commit to the financing repayment? Bankability – the financing amount and tenure applied for may be too small or too short and thus not viable for banks to provide.

Also, many SMEs are not able to provide the necessary collateral and documents required by tradi-tional financial institutions.

Some SMEs are unable to meet the complex requirements of traditional financing or the products offered by these institu-tions may not be suitable or cannot be ‘customised’ to SME applicants’ needs.

This is where the flexibility of P2P financing in offering shorter-term or lower-amount financing to the SMEs fits in nicely in serv-ing these SMEs.

Some businesses may be viable and are growing but lack

equal investment in each bor-rower, resulting in an unequal spread. The portfolio was not bal-anced to reduce my risk.

“ So, use the minimum alloca-tion amount regardless of how much capital you have.

“Due to this limitation, inves-tors can’t scale up the interest income from P2P financing. You will hit the limit when you have lent a substantial amount.”

Rigorous due diligence B2B Finpal head of business development and operations Er Chiang Chuan says, “We work closely with our collaborative partner to provide assistance during the initial screening and with business performance ana-lytics.

Most issuers on B2B Finpal’s platform are suppliers in the fast-moving consumer goods (FMCG) sector.

Prior to signing up each issuer, B2B Finpal will run a rig-orous due diligence and credit assessment which includes anti-fraud checks, litigation search, credit screening and financial review.

Each issuer will be assigned a risk grade which determines the applicable interest rate. The issuer will also be assigned a credit limit according to factors like financial standing, historical business volume and risk level.

B2B Finpal requires a mini-mum investment amount of RM1,000 to open an account. But the minimum amount an investor can place for each issued note is RM100.

Fundaztic places a lot of emphasis on credit behaviour and sets a very low exposure limit of up to RM200,000 in funding.

“As we focus on small-sized funding and our entry barrier is just RM50, even the smallest investor would be able to diversify and build a portfolio of at least a 100 notes with as little as RM5,000,” says Ng.

Investors are advised to spread their risk thinly and evenly by investing in almost equal amounts in all notes.

If an investor on Fundaztic’s platform has built a portfolio of 100 notes within 12 months and in amounts that do not deviate more than three times from the average investment per note, he or she is entitled to Principal Protect.

Principal Protect is Fundaztic’s assurance to investors that should an investor lose any capital, the platform would bear the losses if all terms and condi-tions are met.

The minimum investment amount on Fundaztic’s platform is only RM50 and it charges a fee of 1% on the monthly repayments. The fees are only charged upon receipt of monthly repayments.

The default rate for P2P financing platforms in Malaysia ranges from 0.18% to 3.52%. FocusM

by Chee Jo-Ey

the track record or collaterals that conventional lenders or financial institutions require.

The ease of investing and the attractive returns are definitely strong pullers for the continuous growth of the P2P industry.

High returns, high risks P2P lending may promise higher returns than most traditional investments but investors take on greater risks as well.

Finance blogger KC Lau explains that P2P financing gener-ally promises more than 10% returns but the risk of potential default can deplete investors’ returns if they don’t diversify.

He says the general rules of thumb for investing in P2P lend-ing are to spread your capital equally to several borrowers and to go with the minimum invest-ment amount, say RM50 or RM100 and nothing more.

Lau relates,”I made the mis-take of wanting to invest RM1,000 equally in each opportunity. But I was not able to lend RM1,000 to each borrower.

“Some opportunities were taken up in no time and I could only put in RM100 due to high demand.

“In the end, I don’t have an

A typical SME industrial park whose tenants’ activities account for the bulk of the country’s business

Adam: Almost 70% of the financing disbursed to SMEs are for amounts up to RM50,000

The industry’s disbursement grew 150% within two years, says Wong

Nov 30-Dec 6, 2019 | FocusM | 33

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income+34 FocusM | Nov 30-Dec 6, 2019

In my career as a chartered financial analyst (CFA) charter holder, I’ve come across my fair share of financial horror stories.

While some are victims of cir-cumstance, others quite simply had poor financial management skills – which become apparent when they receive a bump in income. What should have been a great opportunity to grow wealth instead left these individuals dig-ging themselves deeper into debt.

Last year, we decided it was time to take action. We believe it was our responsibility to shed some light into the state of finan-cial literacy in the country. Our first simple survey done last year had results which left us in no doubt that Malaysians really are in trouble. With most respon-dents coming from Greater Kuala Lumpur, it was eye-opening to see just how big the number of respondents was who were effec-tively living from pay cheque to pay cheque.

Financial illiteracy is a national problem We believe it is crucial to con-tinue to highlight financial liter-acy as a national problem, and that making the RinggitPlus Malaysian Financial Literacy Survey (RMFLS) an annual affair would give Malaysians the oppor-tunity to see if we have pro-gressed as a financially-literate society. The data would also be shared, allowing analysts and members of the media to further expand from our findings.

For this year, we are happy to collaborate with Visa International, a global entity which was also on a mission to improve financial literacy among consumers. This collaboration was a strong justification of our cause, and allowed us to take the survey one step further and gather data from a much larger pool of respondents. We then got our data scientists to employ stratified sampling to obtain a dataset that is statistically repre-sentative of our population.

Once again, the results show that Malaysians still have poor financial literacy. In fact, our results show that in general, financial literacy is just as much an issue for urbanites as it is for those living in rural areas. We found that in some cases, the rich and the poor faced the same financial issues.

Malaysians in denial Our headline finding led us to believe that Malaysians may be in denial of their financial reality. About 69.3% of respondents said they are in control of their finances, but a shocking 53% of this group also admit to not being able to survive for more than three months with only their sav-ings. How exactly do they believe to be in control is a worrying thought.

Not only that, 43.4% of Malaysians spend equal to or more than what they earn, essen-tially living from one month’s earnings to the next. Interestingly, this particular sta-tistic holds true both in the rural and urban areas – the variance is less than 5% across Peninsular

Face up to financial reality

• A survey done last year showed a significant proportion of respondents were living from one month’s salary to the next

• This year, the results show that Malaysians still have poor financial literacy

• There’s a glimmer of hope that more youths aged between 20 and 29 are saving and are also being more frugal

by Hann Liew

truly worrying. One part that surprised me

about the RMFLS 2019 results was the data we got from the youths in the country. Compared to other age groups, more youths (respondent age between 20 and 29) saved above RM500 in a month. They are also more frugal, making up the largest proportion who spend less than RM30 per day on meals and the second-largest age group that spends below RM150 on a night out.

The data goes against the notion that youths live a so-called “YOLO lifestyle”, stressing that you only live once, and so you should meet the wants of today and ignore the needs of tomor-row. They instead display some basic understanding of financial management.

However, there are still areas to address. For instance, 54.6% of youths do not have a retirement plan – even when more than 90% agreed that their EPF sav-ings will not be enough. On top of that, a quarter of youths in Malaysia are not covered by any form of insurance. These two data points are a strong indica-tor of a lack of financial literacy and awareness.

Collaborate to get ahead The shocking results of the RMFLS 2019 is another strong call to Malaysians to wake up and face their financial realities. The results also echo the motivation behind the National Strategy for Financial Literacy 2019-2023, which aims to cultivate financial literacy across all age groups. Further to that, I believe the goal of improving financial literacy should be a shared responsibility between the government and private entities.

As business owners, we are better exposed to the very real consequences of poor financial management. As entrepreneurs, we take calculated risks that may yield better profits over time – and sometimes we fail. Surely, our experience and expertise can be pooled and shared with other Malaysians both on an organisa-tional and public level.

Our collaboration with Visa International demonstrated what we can achieve when we pool both resources and expertise towards a common goal. At RinggitPlus, we have collaborated with various partners who share the same goals.

Whether it is creating a chat-bot that assists first-time home-buyers, developing a series of videos that explain life insurance in layman terms, or even organ-ising free workshops with certi-fied financial advisers, we believe our actions speak volumes as champions of financial literacy.

Let us work together – friends, colleagues, and peers – and play our part in creating financially-smart Malaysians.

FocusM

Hann Liew is the CEO of Malaysia’s leading financial com-parison website, www.ringgit-plus.com. He is also a Chartered Financial Analyst (CFA) and a member of the Financial Planning Association Malaysia (FPAM) as a Certified Financial Planner (CFP)

The notion is that youths live a so-called YOLO lifestyle, caring for the present only and leaving tomorrow to take care of itself

The RMFLS 2019 results also reveal Malaysians’ perspectives on insurance. We found that more than half of the respon-dents are ready to spend above RM100 on a night out with friends, but of this same group, an incredible 44.3% are not cov-ered by insurance at all.

Those in their 20s show promise That’s right – there’s a significant number of Malaysians who would spend more money in one night than to protect themselves for a month. With a huge selection of affordable insurance policies, some of which can even be pur-chased online without medical check-ups, I find this statistic

Increasing financial literacy is a shared responsibility between the government and private entities

Malaysia, before widening to around 12% when we include Sabah and Sarawak.

Another interesting statistic we found shows that regardless of demographic, Malaysians simply do not save enough: a staggering 20.7% do not save any money each month.

The popular Malay proverb, Sediakan payung sebelum hujan, espouses being ready for an emergency. But as our data shows, the umbrella is almost always not big enough.

Nov 30-Dec 6, 2019 | FocusM | 35

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focuslite36 FocusM | Nov 30-Dec 6, 2019

Auto Bavaria relocates to largest BMW dealership facility in SEA Auto Bavaria Glenmarie, the

Sime Darby-owned BMW, MINI and Motorrad dealer-

ship, has moved to a new facility befitting its size at Sime Darby Motors’ auto mall.

For more than two decades, Glenmarie has been home to the BMW, MINI and Motorrad brand as well as for more than 350 employees, steadily strengthen-ing its position as one of the key BMW dealerships in Malaysia with multiple award wins, including the Best BMW Dealer in the Diamond Category for eight

A group photo of the management of Auto Bavaria at the farewell event in Glenmarie, Shah Alam

Ng (left) and Sim smiling proudly on their graduation day at SEGi University Kota Damansara

When Sim Cheng Wui and Catherine Ng made a deci-sion to pursue their post-graduate studies four years ago, they were determined

to support each other morally and intellec-tually.

After a brief period shopping online and at education fairs, the couple decided to pursue their Master of Business Administration (General Management) through the Professional and Continuing Education or PACE channel offered by SEGi University Online.

Things went well in the beginning, especially since the programme had flexi-ble study options like weekend classes and an online application that allowed them to study independently. They were able to bounce ideas off each other and strengthen their research findings from different per-spectives.

Ng’s pregnancy became the motivating factor that pushed her to complete her thesis just before her delivery last year. Sim, however, was unable to catch up due to his heavy work schedule that involved a lot of travelling.

“I do technical sales so my work travel arrangements can be unpredictable, hence the delay in completing my MBA,” he says.

When it was time for Ng to graduate in November last year, she decided to post-

Couple enrich themselves with SEGi’s PACE

scrolls along with over 900 graduates from various programmes at the SEGi University Convocation Ceremony held at the Kota Damansara campus.

Sim, who scored a CGPA of 3.92, was elated as he shared this joyous moment with his wife who also graduated at the top of her class.

“With both our jobs, the baby in between and us moving into a new place,

we decided that we’d take our time to complete this programme as we wanted to do this for our own self-development,” explains Ng, a 36-year-old banker.

She adds that their families and friends, while surprised at the beginning, ended up being supportive of her move to postpone her graduation and wait for Sim.

For the couple, the MBA was meant to widen their knowledge and skills in the field of general management so that they are able to perform better at their respec-tive workplaces. Sim also expressed hope that the qualification could pave the way for him to start his own business in the near future so that he could provide a better future for his family.

MBA (General Management) promotes an understanding of core business and management disciplines and students are taught ways to enhance their management skills and develop new ideas in the areas of analysis, decision-making, communica-tion, problem-solving and leadership.

The two-year programme covers core modules like marketing management, organisational behaviour, operations, and quality management as well as specialised topics that include research methodolo-gies, managing in an international econ-omy, project management framework and sustainability and international entrepre-neurship development.

Apart from MBA, SEGi PACE also offers various programmes ranging from diploma to postgraduate studies in the fields of Business and Accounting, Communication Studies and Early Childhood Care.

SEGi PACE encourages flexible learning via applications, such as Blackboard, that allow students to log in to their virtual classrooms from anywhere, anytime. FocusM

years in a row from BMW Group Malaysia.

Auto Bavaria Glenmarie marked the move with a splendid farewell event held in conjunction with Deepavali with almost 400 guests, including employees, former dealer principals and managing directors of Auto Bavaria gathering to feast on classic Indian cuisine buffet, whilst reminiscing fond memo-ries made together and new experience in store for them at their new home in Ara Damansara.

Auto Bavaria MD Jeffrey Gan says: “It is really important to celebrate the legacy and mile-stones of Auto Bavaria Glenmarie to ensure that the united spirit among our employees transitions over when we begin a new chap-ter at the new facility in November.

“The relocation signifies our continued efforts and commit-ment towards delivering Sheer Driving Pleasure as well as an exclusive buying experience that is synonymous with the BMW brand.”

Spanning over 23,161 sq m and costing RM57 mil, the Auto Bavaria Ara Damansara 4S which will represent the BMW, MINI and Motorrad brands as well as BMW Premium Selection will be

the largest BMW facility in Southeast Asia. It boasts the newest brand identity, expres-sion, experience and double the workshop capabilities of the Glenmarie facility. FocusM

pone her graduation so that she could share that special moment with her hus-band this year.

“My wife’s decision to postpone her graduation came as a shock initially, but that quickly turned into a motivation that pushed me to complete my programme and submit my thesis as soon as possible,” relates 38-year-old Sim.

The duo recently received their MBA

Universal Traveller unveils collection for trendy generation

Inspired by today’s generation of fash-ion-forward millennials, winter wear and travel accessories brand Universal

Traveller (UT) has launched the #UTEvolution campaign for its 2019-2020 Fall/Winter Collection (FW19/20).

The play-off between timeless sophistication and trendy innovation effortlessly captures the stylish and savvy modern traveller.

“In this digital era of social media and accessible travel, the new trendsetting generation is at the forefront of fashion,” says Universal Traveller head of mer-chandising Victoria Zhuang.

“We see the #UTEvolution campaign as an opportunity to tell our fashion-for-ward story via digital platforms. The move will see the brand adapt to a digi-tal-savvy lifestyle and incorporate modern elements, appointing celebrity

influencers and creating omni-channel campaigns.”

The #UTEvolution campaign began on Nov 6 and features a wordplay video that depicts an urban and relevant per-spective on winter-fashion elements that stay true to six keywords – YoUThful, aUThentic, oUTrageous, beautiful, abso-lute, and oUTstanding.

The campaign also saw the launch of a series of wordplay visuals and videos featuring celebrity influencers - Amelia Henderson, Azira Shafinaz, Daiyan Trisha, Aedy Ashraf, Venice Min and Juwei Teoh -who will each represent one of the six keywords.

The 2019-2020 Fall/Winter collection presents an extensive range of silhou-ettes, lengths and fabrics inspired by function-first designs that resonate with the sophisticated fashionista. FocusM Classic slim down jacket for the chic traveller

focuslite 37FocusM | Nov 30-Dec 6, 2019

Kenanga Investment Bank Bhd (KIBB) recently organised an internal effort to proactively fight against fraud, in keeping with the gov-ernment’s battle against corruption and fraud.

This initiative by the investment bank is organised in conjunction with International Fraud Awareness Week (FAW). The overarching aim of the event is to further heighten an anti-fraud, anti-bribery and governance culture in the organisation.

This is the third consecutive year that KIBB organised the event to raise awareness on the importance of fraud prevention in the financial services industry.

Similar to previous FAWs, KIBB came up with creative activities, conducted fun games and quizzes over the last few weeks to demonstrate fraud awareness, detection and prevention in an interactive manner.

Through these efforts, it aims to inspire and set a leading example for the financial services industry as well as for other Malaysian corporations in propagating the importance of collaborative efforts to fight fraud.

This year, apart from 16 teams from KIBB, 22 teams from the regulatory, enforcement and professional bodies, other financial institutions as well as KIBB’s ven-dors took part in the anti-fraud games. FocusM

Le Méridien Kuala Lumpur is swinging into the party mood with an array of

scrumptious Yuletide delights, special performances and more.

To get patrons into the spirit, there will be special perform-ances and Christmas carolling at its dining outlets on the eve and Christmas Day.

Gastro Sentral will be offer-ing a three-course Christmas Eve dinner priced at RM188 nett per person. Look forward to dishes such as warm apple-yuzu smoked duck magret and citrus confit duck leg roulade complete with foie de canard gyoza or the extra virgin olive oil seared king-

fish and filo-wrapped tiger prawns served with ragu of kiefler potato, artichoke and warm shallot-caper vinaigrette.

One may also indulge in Gastro Sentral’s four-course New Year’s Eve dinner priced at RM218 nett per person that includes complimentary entrance to the New Year’s Eve countdown party at Pool Bar & Grill@8.

From Dec 2 to 31, visit ArtCacao at lobby level to check out the hotel’s festive goodies. From ginger bread house and yule logs to the classic Panettone and festive eclairs, there is something for everyone. FocusM

Festive spread and shows at Le Meridien KL

Kenanga focuses on ethics and integrity

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

From third left: Malaysian Anti-Corruption Commission chief commissioner Latheefa Koya, KIBB founder and adviser Tan Sri Tengku Noor Zakiah Tengku Ismail, chairman Izlan Izhab, and KIBB group MD Datuk Chay Wai Leong (right) at the launch of Kenanga’s 2019 Fraud Awareness Week recently

In conjunction with World Lung Cancer Awareness month, Subang Jaya Medical Centre (SJMC) is collaborating with Lung Cancer Network Malaysia to provide free low-dose computed tomography (LDCT)

screening to 20 patients. The free screenings are provided with the

aim of creating greater awareness of lung cancer and to educate the public on early detection.

To commemorate the month, SJMC CEO Trish Hogan planted a tree in front of Mediplex with guest of honour, Wong Chen, who is the Member of Parliament for Subang, and SJMC consultant cardiothoracic surgeon and Lung Cancer Network Malaysia president Dr Anand Sachithanandan.

Lung cancer is on the rise and 90% of cases here are diagnosed too late, either in stage three or four with poor outcomes. Screening detects

lung cancer early when it can be treated more effectively and this could lower the mortality rate.

Screening of high-risk individuals with LDCT is cost effective and could be life-saving. Long-term smokers or former smokers aged 45 to 75 may benefit.

“The Magnolia Champaca tree represents life, as it gives fresh air for our lungs. It will be a nice addition to our garden in front of the Mediplex building, which is where our Health Screening Centre is situated. We hope as it grows in size, lives are saved with early health screenings,” Hogan says.

“Through appropriate screening, we hope to achieve stage migration so that more Malaysians with lung cancer are diagnosed at an earlier stage that is amenable to curative therapy and better outcomes,” adds Dr Anand. FocusM

SJMC sponsors lung screening for 20 patients

From left: SJMC consultant clinical oncologist Dr Yap Beng Khiong, Dr Anand, Wong and Hogan planting a tree to commemorate World Lung Cancer Awareness month

Gastro Sentral’s Christmas dish of warm apple-yuzu smoked duck magret

rewind38 FocusM | Nov 30-Dec 6, 2019

1AmBank (M) Bhd cards & mer-chant services acting head Brian

Boey (right) and Mastercard account management for Malaysia & Brunei VP Rakesh Chauhan (left) with the winners of the AmBank Mastercard Fly, Stay and Play cam-paign phase 2 on Nov 26.

2Universiti Utara Malaysia deputy vice-chancellor for research &

innovation Prof Ayoib Che Ahmad (second from right) presenting a completion certificate to one of the SME graduates, accompanied by Bank Islam Malaysia Bhd CEO Mohd Muazzam Mohamed (left) and SME Corp Malaysia CEO Noor Azmi Mat Said (right) recently.

3From left, seated: Arts, Live Festival and Events Association

(ALIFE) VP, co-founder & director Brian Johnson Lowe, Deputy Tourism, Arts and Culture Minister Muhammad Bakhtiar Wan Chik, ALIFE president Rizal Kamal and KLCC GM Alan Pryor with ALIFE council members and panel of speakers recently.

4Health Minister Datuk Seri Dr Dzulkefly Ahmad (centre) with

Axiata Digital Services Sdn Bhd CEO Mohd Khairil Abdullah (left) and RHB Banking Group MD Datuk Khairussaleh Ramli (second from left) at the launch of Boost e-wallet at Klinik Kesihatan Cheras on Nov 26.

5From left: China Harbour Engineering Co Ltd CFO Xiong

Sheng Quan, TRX City Sdn Bhd COO Tan Hwa Min, CCCG Real Estate Group VP & CCCG Overseas Real Estate Pte Ltd chairman Sui Zhen Hai, Core Precious Development Sdn Bhd chairman & MD Zhang Bao, WCT Holdings Bhd deputy MD Goh Chin Liong and China Communications Construction Co Sdn Bhd MD Ni Qing Jiu at the launch of the RM1.4 bil Core Residence @ TRX on Nov 27.

REDtone International Bhd AGM Dec 3, 10am This meeting seeks approval for the audited financial statements for the year ended June 30 , 2019, re-election of directors and direc-tors’ fees. Bukit Jalil Golf & Country Resort, Bukit Jalil, KL Gamuda Bhd AGM & EGM Dec 5, 10am The AGM seeks approval for the audited financial statements for the year ended July 31, 2019, re-election of directors and direc-tors’ fees. The EGM seeks approval for a dividend reinvest-ment plan. Kota Permai Golf & Country Club, Section 31, Shah Alam, Selangor Berjaya Food Bhd AGM Dec 5, 10am Shareholders’ approval is sought for the audited financial state-ments for the year ended June 30, 2019, re-election of directors and directors’ fees. Bukit Jalil Golf & Country Resort, Bukit Jalil, KL MK Land Holdings Bhd AGM Dec 5, 10am This meeting seeks approval for the audited financial statements for the year ended June 30, 2019, the re-election of directors and directors’ fees. Sime Darby Convention Centre, Bukit Kiara, KL GD Express Carrier Bhd AGM Dec 5, 11am Shareholders’ approval is sought for the audited financial state-ments for the year ended June 30, 2019, a single-tier dividend of 0.25 sen per share, re-election of direc-tors and directors’ fees. Setia City Convention Centre , Setia Alam, Shah Alam, Selangor Berjaya Sports Toto Bhd AGM Dec 6, 10am This meeting seeks approval for the audited financial statements for the year ended June 30, 2019, re-election of directors and direc-tors’ fees. Bukit Jalil Golf & Country Resort, Bukit Jalil, KL Technodex Bhd AGM & EGM Dec 6, 10am The AGM seeks shareholders’ approval for the audited financial statements for the year ended June 30, 2019, re-election of direc-tors and directors’ fees. The EGM seeks the consent fo r placement of up to 30% of the issued shares of the company. Connexion Conference & Event Centre, Bangsar South, KL

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Compiled by Iqbal Ismail and Xavier Kong Photos by Iqbal Ismail

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rewind 39FocusM | Nov 30-Dec 6, 2019

1Deputy Tourism, Arts and Culture Ministerr Muhammad Bakhtiar

Wan Chik (fifth from right), Kuala Lumpur Pavilion Sdn Bhd retail CEO Datuk Joyce Yap (fourth from right) with anchor tenants at the unveiling of the major tenants of Pavilion Bukit Jalil on Nov 26.

2Digi Telecommunications Sdn Bhd chief digital officer Praveen Rajan

(left) and AXA Affin Life Insurance Bhd CEO Rohit Nambiar after annoucing Digi’s Omni Hotline as its preferred virtual office phone pro-vider on Nov 27.

3Damansara Realty Bhd group MD Brian Iskandar Zulkarim (right)

receiving the award from Deputy Human Resources Minister Datuk Mahfuz Omar (second from right), witnessed by Malaysia Board of Technologists president Tan Sri Ahmad Zaidee Laidin (second from left) and registrar Mohd Nazrol Marzuke (left) on Nov 25.

4Malaysia Digital Economy Corp CEO Surina Shukri (left) and Luno

CEO & co-founder Marcus Swanepoel at the launch of Luno in Malaysia on Nov 27.

5Credit Guarantee Corp Malaysia Bhd president & CEO Datuk

Mohd Zamree Mohd Ishak (right) presenting the Back-to-School packages to students of SK Jeram.

6Youth and Sports Minister Syed Saddiq Syed Abdul Rahman

(centre), Permodalan Nasional Bhd president & group CEO Jalil Rasheed (third from right), RHL Ventures man-aging partners Raja Hamzah Abidin (second from right) and Rachel Lau (third from left) at the RHL Ventures accelerator programme launch on Nov 26.

7Energy, Science, Technology, Environment and Climate

Change Ministry deputy secretary-general Dr Mohd Nor Azman Hassan (right) receives a jacket from Cradle Fund Sdn Bhd acting group CEO Razif Abdul Aziz during the Cradle Startup Awards and Media Appreciation Night recently.

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40 | FocusM | Nov 30-Dec 6, 2019

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