Screenshots

In other words, I would interpret this that the Malaysia company act is 'weak'? But I would think that a ECM board approval would be needed to provide such a loan facility - did that happen?

Its amazing how these corporate and financial chieftains can commit such a big boo-boo.

It is quite clear that they are in direct and criminal violation of Section 67 of the Companies Act. Astounding!

I think Mr Clean is now in big big trouble.

I think the folks at ECMLibra are smart enough not to break any laws.

The issue at hand is not whether the vendors want to sell the shares to KJ (they must see value in him being shareholder - that's a nobrainer!), or whether they lend him the money to buy the shares (willing lender and borrower).

The issue is plain and simple. There is a huge conflict of interest when ECMLibra acquired Avenue, owned by Ministry of Finance where Pak Lah is the Minister. So it is Father-in-law approving the sale of a GLC to a company where Son-in-law is a shareholder. And SIL subsequently profiting from the the deal.

For the transaction to be transparent, there should have been an open bid for Avenue, monitored by an independent party other than the MOF.

Eveyone keep asking Pak Lah to explain this. He CAN'T. It's done, and it's wrong, and there's no good explanation. So instead of 'explaining' the real issue of conflict of interest, the attention is diverted to how he can afford the millions to buy. Wrong issue.

Maybe Hindu God-Muslim cleric and gang from MOF set a bait for this boy and he went for it. Now they got him by the balls and reigned on him. total control of country's finance(projects/GLC's) now in the hands of the very people who screwed up in the Forex deal.Sack them before its too late.

an open question:

do you guys think the ECM - Avenue deal would have gone through if KJ was not part of ECM, probably acting as "broker"?

hint: consider that among the 4 founding members of ECM, 3 are chinese (BABA), and 1 is kALI. (correct me if i'm wrong...)

so there it could be, the reason why KJ was offered such a huge loan to buy ECM shares: to use his influence in "greasing" the ECM - Avenue deal. with friends in high places, some that he himself may have recommended (to "babah"), the wheels are well-greased...

I'm confused. Someone please correct me if I'm wrong.

1. The 3 musketeers sold shares to Oxbridge person.

2. Same Oxbridge person got sweet heart "loan" from musketeers to buy it from same musketeers.

3. Musketeers can sell shares to anyone they well please. Heck, they can even give it away.

4. Did the money for the "loan" come from the company bank account (where's the GL entry for this?), or from a personal unsecured load from the musketeers.

If the musketeers gave the loan, then:
1. It is fiscally above board.

2. It smells fishy, as it seems awfully like an inducement for favours, past-present-and-future.

See, its the classic being caught between the rock and a hard place.

sydput...ur getting it totally wrong..this deal was done by FIL and SIL...nothing got to do with the forex loss bunch...even if forex guy say no....FIL still have the power to proceed..boss maa...btw...ever tought of the forex gain??..heh...typical.

I believe TDM is reading this blog..
KEEP it UP! Jeff

JEFF OOI says: What makes you think so?

KUALA LUMPUR, Aug 10 (Bernama) -- The Public Accounts Committee (PAC), which sat Thursday on the issue regarding the merger between Avenue Capital Resources Bhd and ECM Libra Bhd, is satisfied that the exercise was done legally and in accordance with the relevant procedures.

PAC chairman Datuk Shahrir Samad said the Securities Commission (SC) had provided a thorough explanation on the issue, but the committee was, however, concerned with the "policy and strategy" adopted.

"The committee is worried of the government losing its control on this new merged entity as Avenue Capital is a government-linked company," Shahrir said.

"We are concerned who will sit on the board and who will regulate the company," he said at a press conference after chairing the four-hour meeting.

Shahrir said that he had requested for the PAC meeting after receiving a lot of information on the merger, which was widely discussed in Internet forums and had raised questions as it involved two well-known personalities.

When asked who the personalities were, he named Datuk Kalimullah Masheerul Hassan and Khairy Jamaluddin.

Shahrir said that the PAC would meet again on Aug 25 for further clarification from the Finance Ministry, which also addressed the forum today, on the policy aspect.

This is bad corporate governance!

He joins ECM as a Directory of Corporate Advisory, a redundant post since Lim is already doing the Corporate Advisory work. What corporate experience does he has that justify his position in the company as a senior member of the board?

"All senior managers can apply for the vendors loan." It would be interesting to know much vendors loan did the other senior managers get? And why SIL get so much? What justifies that amount?

Can we have some transparency in this?

Why was the nett tangible asset (NTA)
of ARCB not valued accurately and comprehensively
while taking into consideration only the main body and
not ARCB's interest in other companies such as Pos
Malaysia Berhad, and why ECM LIbra's business interest
are revalued much higher than its actual value?

I think it is very wrong to have a private entity to control the country's finance.

Eventhough MoF has the single largest stake of 15.4%, the combined stakes of the musketeers exceeds 20%, in which if they really wanted to control the country, they are capable of doing it.

End of story? Yup.

Those who are salivating at the prospect this company loan will ruffle SIL's feathers will have to take yet another bird-shot. Too many shooting topics lately.

Let's face it. Some people are just born lucky. SIL got this deal pecisely because he is the SIL. And the three musketeers hired him and each sold 1% to him because of the influence (i.e. ringgit)SIL is supposed to bring to the company. It's easy to react with disgust at such unholy practice, but no laws were broken.

Certainly I'm jealous someone like SIL has such good luck. Now, what about the usually ignored, driven-over minority shareholders? Well, collectively, they hold the same number of shares just before and immediately after the SIL's purchase from the 3M. Actually, any of them could have bought 3% more shares at or about the same price in the open market. Problem is that he/she does not have access to the company's special loan scheme, which, adding insult to injury,is most probably interest-free since the objective is supposedly to encourage "employees" like SIL to be committed to the organistation so the loan had better be a sweet one. But most minority shareholders probably take this in stride hoping SIL will bring more profits, hence better dividends and higher market price. At the end of the day, only non-shareholder bloggers are the ones who are pissed off. Damn! Should have bought the shares before SIL came into the picture.

Section 67(2)c is ever so friendly: it does not prohibit "the giving of financial assistance by a company to persons, other than directors, bona fide in the employment of the company or of a subsidiary of the company with a view to enabling those persons to purchase fully-paid shares in the company or its holding company to be held by themselves by way of beneficial ownership."

The sub-section does not even require any loan scheme for this purpose to be approved by the shareholders in general meeting and I doubt Bursa Malaysia requires any notification of such schemes.

Section 67(2)(c) is a good provision as it can be extremely useful to employees who wish to exercise share option scheme entitlements without the need to go to a financial institution . Now and then an SIL comes along.....

Looking at the above pic taken, wasnt he desperate? Anyway, would any musketeers gv out 3% if they dont expect something in return later on? too good to be true la. When u r somebody u hv all the luck.

Jeff asked "the BIG QUESTION is: Since it's the company directors -- not the company -- who were the vendors, why was it that it was the company (co-owned by the minority shareholders, remember that) and not the individual vendors that was providing Khairy's loan."

A fair question but you can see that the provision in Section 67(2)c is completely silent on the matter of vendors (sellers). As I noted earlier, it is a very "user-friendly" sub-section. I first thought that this section must surely relate to shares issued by the company, as in employee share option schemes. But no. The employee can buy the shares from just about anyone.

Frankly, this section, as is, may be used by crooked directors to make gains in the open market with the help of "selected" employees with hardly any risk, except to make sure the employee will not squeal later or does not run away with the gains. For example, the board of directors will first pass a directors' resolution authorising an employee share purchase loan scheme pursuant to Section 67(2)c. Before the company announces a major deal or development that is likely to excite the market, a selected employee will be given the loan to buy the shares in the open market. Then the shares are sold on announcement when the price goes up. If the price remains stagnant or falls for that matter, the employee simply holds the shares to give meaning to the term "beneficial ownership" in the sub-section. Needless to say there can be no limitation as to duration such shares must be held and thus is perfect for crooked directors.

Malaysia Boleh!

Regarding S67(2)(c), the exemption does not covers directors ("the giving of financial assistance by a company to persons, OTHER THAN DIRECTORS, bona fide in the employment....."). The question now is whether KJ was a director at that point in time when he acquired the shares. If so, then the company is prohibited to provide financial assistance for his acquisition.

MALAYSIAN,

Easy to solve your question. Just go to Bursa Malaysia website and take a look at the ECM-Libra Avenue annual report and you'll be able to determine whether SIL is a Director of the company within the meaning of the companies Act and, if so, the date of his appointment. While you're at it please check whether SIL's BIL is a director of Scomi. Please share with us the result.