(Petaling Jaya, Saturday): On Wednesday, Renong chief Tan Sri Halim Saad evaded a large group of journalists who had been waiting for more than one-and-half-hours for him to give a press conference after the Renong annual general meeting at the Parkroyal Hotel in Kuala Lumpur by leaving via a side entrance.
Halim Saad's evasion of the press at the Renong AGM highlights the abysmal state of corporate transparency and governance which is inimical to restoration of investor confidence.
It was reported that about 50 shareholders turned up for the AGM, and only three shareholders raised questions, mainly on the accounts of the company, but none on the UEM-Renong deal.
As far as the corporate world is concerned, confusion continues to reign about the status of the waiver granted to UEM from having to make a general offer for Renong shares it does not own following the announcement on Nov. 17 of UEM acquiring 32.6 per cent stake in Renong.
The Securities Commission executive chairman Datuk Dr. Munir Majid said on 5th December that the Securities Commission would wait for the United Engineers Bhd's (UEM) extraordinary general meeting of shareholders to ratify the company's plan to buy 32.6 per cent of its parent Renong Bhd., before deciding on whether it should make a general offer for remaining Renong shares.
Munir, who was interviewed by reporters, said: "If the shareholders approve it, then the commission will study the waiver given (by the Foreign Investment Committee) on whether UEM complied with the regulation".
The next day, 6th December, a spokeswoman of the Securities Commission reiterated that the Securities Commission had yet to decide whether UEM still retained its waiver from making a general offer on the 23% balance of Renong shares still floating publicly.
This is a contradiction of the announcement by the Finance Minister, Datuk Seri Anwar Ibrahim, who had announced the withdrawal of the waiver in his Ministerial statement in Parliament on 25th November on the UEM-Renong deal as UEM together with Renong chief Tan Sri Halim Saad and associated company Time Engineering Bhd would hold a combined 76.9 per cent stake in Renong.
I had asked the government for a clear-cut clarification of this confusion during the debate on the Securities Industry Amendment Bill in Parliament.
In his reply on Wednesday, the Deputy Finance Minister, Datuk Wong See Wah reiterated Anwar's position that the waiver given by the Foreign Investment Committee to UEM on 24th October 1998 from having to make a mandatory general offer for shares in Renong it does not own, as UEM had violated the conditions for the FIC granting of the waiver, namely:
However, with 32.6 per cent acquisition, with Halim Saad's 23.3% stake and associated company Time Engineering Bhd.'s 21% stake, UEM holds a combined stake of 76.9%, the waiver granted by FIC was no more applicable and UEM is obliged to extend the mandatory general offer to Renong shares it does not own.
See Wah said UEM has been given up to 10th January 1998 to convene an Emergency General Meeting (EGM) of shareholders for the approval of the 32.6 per cent stake in Renong. UEM would have to make the mandatory general offer if the EGM approves the Renong acquisition.
If the EGM rejects the Renong acquisition, the waiver issue would then be considered by the Securities Commission depending on the views expressed at the EGM. See Wah did not explain why the waiver issue would have to be considered by the Securities Commission if the EGM rejects the proposal by UEM to acquire the 32.6 stake in Renong shares.
Wong See Wah's explanation has thrown some light as well as added to confusion in the UEM-Renong deal, as what he said clearly contradicted Munir's statement.
When I pressed See Wah about these contradictions, he said that I should seek any further clarification from the Securities Commission Chairman himself.
It does not inspire confidence when the Finance Ministry and the Securities Commission cannot give a clear-cut answer on a simple issue as to whether the waiver granted to UEM to make a mandatory general offer to minority shareholders had been withdrawn as announced by Anwar in Parliament, or whether the waiver still stands. Who can blame the foreign press therefore in reporting that "A regulatory haze" surrounded the murky UEM-Renong deal?
As See Wah says the "ball is in the court" of the Securities Commission, Munir should issue a statement to clear the "regulatory haze".
See Wah said that his answer came from the Securities Commission. Munir should all the more explain why UEM must go through with the mandatory general offer if the UEM EGM approves the deal, and why the waiver issue would be considered by the Securities Commission if the UEM EGM rejects the deal.
Munir Majid should realise that the restoration of investor confidence would hinge considerably on how the UEM-Renong deal is handled by the Securities Commission, as although the catastrophe it caused to the stock market could not be undone, a proper Securities Commission response could help to restore some market confidence instead of further undermining already very weak market sentiments.