SC committee shot down general offer for E&O

KUALA LUMPUR: The Securities Commission’s (SC) task force and its
senior management recommended that Sime Darby Bhd trigger the
mandatory offer obligation for the remaining shares in Eastern &
Oriental Bhd (E&O). However, this recommendation was not agreed
upon by the takeovers and mergers committee.
This was revealed in the affidavit filed by SC member Datuk Francis Tan
Leh Kiah in opposing the judicial review filed by Michael Chow Keat
Thye, a minority shareholder of E&O.
The task force recommended that a new party acting in concert be
formed between Sime Darby’s wholly-owned Sime Darby Nominees Sdn
Bhd (SDN) and Datuk Terry Tham. Both collectively held more than 33%
of the voting shares in E&O.
However, this recommendation was not agreed upon by the takeovers and mergers committee. Via a majority decision, the
committee decided that SDN and Tham were not persons acting in concert and hence no new concert party was formed that
could trigger a mandatory offer.
The takeovers and mergers committee comprises SC chairman Tan Sri Zarinah Anwar, SME Bank chairman Datuk Gumuri
Hussain, finance ministry’s deputy secretary-general treasury (policy) Datuk Dr Mohd Irwan Serigar Abdullah, former Inland
Revenue Board director-general/CEO Tan Sri Hasmah Abullah and Tan, who is a consultant at Azman, Davidson & Co,
Advocates & Solicitors.
The affidavit said Zarinah had recused herself from the onset of the inquiry as her husband Datuk Azizan Abdul Rahman is the
chairman of E&O, while Irwan did not attend the meeting on Oct 10, 2011.
Tan said he and Gumuri acted as co-chairmen. The only other member who attended the meeting held from 4pm to 6.45 pm
was Hasmah.
The task force also recommended that the three vendors Tham, Tan Sri Wan Azmi Wan Hamzah and GK Goh Holdings Ltd
were not persons acting in concert, and collectively did not have control of E&O that could be passed to SDN in pursuant to
SDN’s acquisition.
This recommendation was unanimously agreed by the takeovers and mergers committee.
Two issues were considered by the task force. First if SDN’s acquisition of the 30% stake in E&O was an acquisition from a
controlling vendor of part of voting shares, and second whether a new group of persons acting in concert was formed
between SDN and Tham upon the acquisition.
The SC also applied to the court for Justice Tuan Abang Iskandar Abang Hashim to recuse himself as the sitting judge as he
was seconded to the SC enforcement division during his tenure in the Attorney-General’s Chambers.
IWH buying 33% stake of Tebrau Teguh at 76c a piece, to launch takeover
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SC committee shot down general offer for E&O [You must be registered and logged in to see this link.]
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After serving in the SC on secondment for two years, Abang Iskandar had opted for retirement and joined the commission on
a full-time basis in 2006 where he held the position of executive director of the enforcement division.
The SC said Abang Iskandar is a senior management of the commission and is familiar with the internal workings and
individuals who sit at the investigative committee level.
“In the circumstances, there is a real danger of bias prevalent in so far as the present dispute is concerned,” said the SC in
its application.
To recap, Chow filed for judicial review against the SC last December after the regulator decided not to compel Sime Darby
to make a general offer for all remaining shares in E&O. He is seeking a court order to compel the SC to revoke the waiver of
a general offer.
This came after Sime Darby’s contentious purchase of a 30% stake in E&O from its major shareholders — E&O managing
director Tham, Wan Azmi and GK Goh Holdings.
The deal sparked a debate whether Sime Darby could be deemed to be acting in concert with the three vendors, a claim
which Sime Darby and the three E&O shareholders denied.
After investigating the matter, the SC ruled in October last year that the plantations-based conglomerate’s acquisition of the
30% stake did not trigger a mandatory offer obligation for E&O.
The SC also found no collusion between Sime Darby and Tham with regard to the deal, where Sime Darby paid RM766
million for the 30% block.
At RM766 million, the deal valued E&O at RM3.20 per piece or a 59% premium to E&O’s share price when the deal was
announced on Sept 9 last year.