Updates @ 6:50 pm on 11-9-2013: “The avenging goddesses eventually caught up with anyone who had outraged all decency by killing their father, marrying their mother or serving red wine with fish.” By Jonathan Guthrie of Financial Times, UK
Updates @ 6:10 pm on 10-9-2013: “Deloitte has been fined a record £14m for failing to manage conflicts of interest during its role as an adviser to collapsed British carmaker MG Rover. On Monday the Financial Reporting Council, which brought the case against Deloitte, said the outcome of an independent tribunal was a “strong vindication” for its six-year-long probe into Deloitte’s work for companies involved with the carmaker in the lead-up to MG Rover’s collapse.”
In the case of the MAS-AirAsia share swap, there were two advisors namely Dato’ Sri Nazir Razak and Bain & Co but it is unclear about their scope of appointment. For full report of the fine imposed against Deloitte, please read HERE & HERE,.
MALAYSIAN COMPETITION COMMISSION (MYCC) has spoken for the Government and the nation by imposing a fine of RM10 million each against AirAsia and MAS for flagrant violation our Competition Act, 2010. MyCC has given the nation a breath of fresh air. Thank you , YAA Tan Sri Siti Norma Yaakob, you and your officers have done the nation proud. For background story please read HERE.
Under the Competition Act 2010, MyCC has the power to impose fine against company that committed the offence under Section 42 of the Act. Unfortunately, there is no provision under the Act to impose the fine against its directors and/or persons instrumental in causing companies to commit the offence.
Many bloggers and yours truly have written many articles against the MAS-AirAsia share swap, which we all knew that it was a smelly deal from day one. Yours truly had to toil for a good 8 months to expose certain unscrupulous personalities within and outside MAS that were trying to “rape” and/or assisting to “rape” MAS at the material time.
On 29-8-2011 Malaysia Corporate Digest has reported that “CIMB Investment Bank was appointed advisor for the share deal representing both parties. According to the investment bank, the deal would only commence once an anti-trust analysis has been completed in compliance with all applicable anti-trust laws.” in HERE.
Based on the above report, we can safely assume that Dato’ Sri Nazir Razak, CIMB CEO, was fully appraised of the provisions of the said Act and must have advised Tan Sri Azman Mokhtar, En Mohamed Rashdan Yusof aka Danny (Tan Sri Mokhtar’s former business partner in BinaFikir Sdn Bhd), Tan Sri Tony Fernandes (AirAsia), Datuk Kamarudin Meranun (AirAsia), Tan Sri Md Nor Md Yusuf (Chairman 0f MAS) and Tun Abdullah Badawi, who was and still is the Advisor of MAS, of the what constituted an offence under Section 42 of the said Act and the seriousness of the offence.
Further, MAS has Dr Wafi Nazrin Tan Sri Abdul Hamid, who was the then Head of Legal Department of MAS and claimed to be an expert in Competition Laws. He has been appointed as an Advisor to MyCC! He had also sent out email to inform MAS staff about the Competition Law and that both AirAsia and MAS had jointly appointed legal consultant Bain & Co to advise MAS and AirAsia on the Competition Law. Rumour has it that Bain & Co is one of a favourite consulting firms of Khazanah. Therefore, the culprits has no excuse to run away from liabilities as the anti-trust offence was committed with their eyes wide opened.
We cannot be faulted to assume that at the material time Dr Wafi had briefed all the key peoples in MAS namely, Tan Sri Md Nor Md Yusof (Chairman and Chairman of EXCO), En Ahmad Jauhari Yahya (AJ), En Mohamad Rashdan Yusof Khazanah’s nominee and a former business partner of Tan Sri Azman Mokhtar in BinaFikir (Executive Director & EXCO), Tan Sri Tony Fernandes of AirAsia (Director & EXCO), Datuk Kamarudin Meranun (Director & EXCO), Tan Sri Azman Yahya of SCOMI fame (Director of both AirAsia & MAS & Chairman of Joint Collaboration Committee [JCC] – did not seek re-election during AGM June 2012) , Tan Sri Krishnan Tan Boon Seng of IJM (Director), Tan Sri Wan Azmi Wan Hamzah of E&O (Director – resigned during AGM in June 2012 ), Datuk Rohana Rozhan of ASTRO (Director – resigned), Mr David Lau Nai Pek of AXIATA, Tun Abdullah Badawi (the Advisor of MAS and Chairman of Advisory Panel for the implementation of the share swap) and a few others.
The Advisory Panel under the chairmanship of Tun Abdullah Badawi was to ensure that “all parties involved in the CCF, would operate in the interests of the public and reflects the aspirations of all consumers”. Don’t tell us that the members of the Advisory Panel consists of En Mohamed Rashdan Yusof, Tan Sri Tony Fernandes, Datuk Kamarudin Meranun!
Perhaps it might be an opportune moment to ask Tun Abdullah: Did you advise the culprits that share share swap and what they were doing after the share swap did not “operate in the interest of the public and reflect the aspirations of the ultimate consumers”?
Dr Wafi’s advice to the employees of MAS in HERE.
Dr Wafi has been quoted to have said in the press:
“There were three provisions under the Competition Act 2010; prohibition against anti-competitive agreement which prohibited any horizontal or vertical agreement which had the object or effect of significantly preventing, restricting or distorting competition in Malaysia.” in HERE & HERE.
Yours truly would like to publish in full the email of 10-10-2011 from then Secretary of Mesa, En Matdiah Mohamad, who had expressed concerned that the share swap may breach of the provision of the Competition Act, to Dr Wafi and Dr Wafi’s reply.
En Matdiah’s email of 10-10-2011:
Salaam Dear Doctor, cpy rest
Thank you for pointing out the strategic intent of the Share Swap and Collaboration agreements and the fact that these were drafted and cleared by external lawyers; and that the personalities had, by law, acquired the legal rights to such information.
Whilst I agree that they have the fiduciary duty to act in the best interests of MAS, I do feel that it will be a very, very tall order and insurmountable task to convince our fellow employees to believe that mere mortals could keep their personal and professional interests apart.
Already there are murmurs and rumblings on the ground, internally and externally, questioning the wisdom of the “matrimony”. I will be lying if I am to claim that as union leaders, we are in position to compel members and fellow employees to believe otherwise.
Matdiah Bin Mohammad
Dr Wafi’s email reply of 12-10-2011:
Salaam sejahtera en. Matdiah. Referring to your email and query, I would point out as follows –
1. The strategic intent of MAS and AK/AKX to collaborate are embodied in the Share Swap and Collaboration agreements. Both were drafted and cleared by external lawyers.
2. Through the shareswap TF and KM now hold shares and directorships in MAS. As directors and by law, they have certain rights and obligations, including the right to MAS’s information whilst acting as a MAS director. In particular, they are under a legal fiduciary duty to act in the best interests of MAS, and not for any other purpose. Further, a substantial part of their wealth is now in MAS.
3. Apart from TF and KM as in para 2 above, the external lawyers have further advised us to provide clarity to MAS staff as regards antitrust law and the exchange of information with staff of competitors. Hence, that is why we issued the guidelines as per the UVoice Circular dated 10.
For full detail read HERE.
On 12-10-2011 yours truly had asked: “Dr Wafi: MAS – AirAsia share swap contravened Competition Act?” in HERE.
In view of the above, we can conclude that Tan Sri Azman Mokhtar, En Mohamad Rashdan Yusof, Tan Sri Tony Fernandes, Datuk Kamarudin Meranun, Tan Sri Md Nor Yusuf, other directors of MAS, Advisor of MAS and Dato’ Sri Nazir Razak of CIMB were fully appraised of the Competition Act.
Therefore, it follow suit that MAS and AirAsia should demand that Tan Sri Azman Mokhtar, En Mohamad Rashdan Yusof, Tan Sri Tony Fernandes, Datuk Kamarudin Meranun and Tan Sri Md Nor Yusuf should be responsible for the fine of RM20 million as they have shoved the share swap down the throats of AirAsia and MAS.
Please take note that there was no AGMs held by MAS and AirAsia to discuss and approve the share swap. The then Board of Director of MAS has no clue of the share swap until the day the share swap was announced.
There was no transparency and governance in the way in which the share swap was hatched, decided and implemented. The planning of the share swap was shrouded with utmost secrecy and done in a clandestine manner.
Under the circumstances, these famous good Tan Sris, Datuk and the Khazanah’s whiz kid and former business partner of Tan Sri Azman mokhtar all of whom are believed to be in beautiful suit (nothing less than Broni), Bally shoes, Hermes ties and other branded accessories on their bodies during meetings should now step forward like gentlemen with honour and accept responsibilities for their thoughtless acts and make an offer to pay the RM20 million fine on behalf of MAS and AirAsia.
If one were to divide RM20 million by five, each of the culprits will have to pay ONLY a mere RM4 million each, which is peanut to them but big money to the shareholders, staffs of MAS and AirAsia and the Rakyat. If AJ joins in then the share will be just RM3.33 million each. If the MAS Directors appointed after the share swap (Tan Sri Mohamad Azman Yahya of SCOMI fame, Tan Sri Krishnan Tan of IJM, Tan Sri Wan Azmi Wan Hamzah of E&O, Datuk Rohana Rozhan of Astro were to chip in then the contribution to pay the fine will be mere pittance.
The nation awaits your respective respond, Tan Sris, Datuk and the Khazanah’s whiz kid.
Of course, AJ is hardly free from blame because he was the executioner/implementer of the hidden “INTENT” of the share swap.
In Part 2 we will examine the chronology of events that happened after the share swap and after AJ resumed the high office of Group CEO of MAS. Stay tune.