Friday, November 25, 2011

Mirzan Hogging the Headlines Again


Last evening, I went to Extol Corporation Bhd in Wisma UOA Pantai to attend the Kelab Pidato Kuala Lumpur – this is a Malay-speaking Toastmasters club. I must admit that it was a very different experience because everybody spoke in Malay and for the first time, I was lost for words. It has been a long, long time since I spoke Malay in a formal setting – the last time was when I did classroom teaching at Open University Malaysia in 2010 where I used both English and Malay, but predominantly the latter. Yesterday, I felt inadequate and only spoke when I had to. Anyway, I was requested to take on the role of time-keeper and I managed reasonably well. Needless to say, I collected my share of pauses and ‘speech crutches’ although on this particular evening, there was no ‘Ah’ counter.

I actually enjoyed this meeting. Kim Chow was outstanding in her role as the Toastmaster-of-the-Evening (“Pengacara Majlis” in Malay). I also liked the speech by Leong Oi Wah because it touched on the Obedient Wives Club or as she referred to in Malay as “Kelab Isteri Taat Suami” (KITS). And with Hadzrin Shah helming the Table Topics session (or as it is referred to as “Sesi Ucapan Spontan”), you can bet that it will be fun! All in all a good meeting – even if there were only nine of us!


ExxonMobil is selling off their interests in three downstream businesses in Malaysia to Philippine conglomerate, San Miguel Corporation for $610 million.

But this business transaction is not a simple deal as many have thought it to be. If we examine the sale individually – we will note that the two unlisted companies (i.e. ExxonMobil Malaysia Sdn Bhd and ExxonMobil Borneo Sdn Bhd) have much higher valuations than the listed vehicle (i.e. Esso Malaysia Bhd). San Miguel is expected to pay $206.02 million (RM614.25 million @ RM3.50/share for a 65% stake) for the latter as against $403.98 million (RM1,204.46 million) for 100% of the former! I am wondering why this is so? Also the latter operates the 88,000-barrels-capacity-rated Port Dickson refinery plus owning seven storage terminals and a network of 560 petrol service stations across the country. So far, I have no answer to this question!

San Miguel Corp has reportedly said that it will fork out another RM330 million to buy over the remaining shares from minority holders when the deal is completed. The price of RM3.50 per share is 1.07 times its book value but much lower than its market value! Why are minority shareholders getting a lousy deal?

The next question is who helped broker this deal? Yup, that same person whom I have highlighted in yesterday’s posting ("Mahathir’s First Son") – Mirzan Mahathir! He is the face of San Miguel in Malaysia. He was appointed director after acquiring 19.9 percent share in the corporation for RM2.9 billion. And although he has resigned from the board in April 2010, he surfaced as a director of Petron Corporation – an associated company of San Miguel Corp that owns a network of refineries and petrol dealership in Philippines – in timely fashion.

This whole deal sucks big-time right from the beginning! Stafford T Kelly, Vice President of ExxonMobil Corporation had pre-empted everybody by announcing to the whole country that the deal to his preferred partner San Miguel was final even before the Malaysian authorities had a chance to consider the Foreign Investment Committee ruling. Is it wrong to infer that he knew something we didn’t? Guess who is the Deputy Minister of International Trade and Industry? Yup, Mirzan’s brother, Mokhzani and we all know that he has benefitted greatly from the upstream sector of the oil and gas industry through Kenchana Petroleum. [Mokhzani is Kenchana’s group chief executive officer and was appointed to the Kenchana Petroluem board of directors in 2004]. Did you manage to piece together the jigsaw puzzle? If you did, you need not have to wonder who helped to get the FIC approval so quickly.

Where is the government’s commitment to corporate governance?

And another thing! I bet you Mahathir is in the swim too!

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