While trying to find out who Low Taek Jo is in UBG Bhd (group advisor/non-executive director, as it turns out), I was puzzled by what I also came across.
According to Bursa Malaysia’s main market listing requirements, Chapter 3 on Admissions, Rule 3.06(1) and Chapter 8 on Continuing Listing Obligations, Rule 8.02(1,4):
3.06 Shareholding spread
(1) An applicant must have at least 25% of the total number of shares for which listing is sought in the hands of a minimum number of 1,000 public shareholders holding not less than 100 shares each.Updated
PART B –CONTINUING LISTING CRITERIA
8.02 Compliance with shareholding spread requirement
(1) A listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are in the hands of public shareholders. The Exchange may accept a percentage lower than 25% of the total number of listed shares (excluding treasury shares) if it is satisfied that such lower percentage is sufficient for a liquid market in such shares.(4) A listed issuer which fails to maintain the required shareholding spread referred to in subparagraph (1) above may request for an extension of time to rectify the situation in the manner as may be prescribed by the Exchange.
According to UBG’s Annual Report 2008, the firm had stakes of more than 75 per cent each in Putrajaya Perdana Bhd and in Loh & Loh Corporation Bhd.
… we then inked a deal that saw UBG acquiring a 49.21% stake in Putrajaya Perdana Berhad (“PPB”), a niche builder and a 37.56% equity interest in Loh & Loh Corporation Berhad (“LLCB”), a water infrastructure specialist. Following two mandatory general offers undertaken in respect of each of PPB and LLCB, our stakes in PPB and LLCB have increased to 85.85% and 80.32% respectively.
What about the 25 per cent public shareholding requirement for listed firms? Am I missing something here?
Note: For this particular post, only comments that shed more light on the subject will be allowed.
Update: I have phoned Bursa seeking clarification on the issue of the maximum time limit allowed before a firm must comply with the public shareholding spread – if there is no time limit, would that not nullify Rule 8.02(1)? A Bursa spokeswoman told me to email the query, which I have now done. Will keep you posted.
Update (25 Nov 2009): I made a follow-up phone call to Bursa. The person at Communications Dept said my email had been forwarded to the folks in the Regulations section and she would remind them to give me a reply.
Anil,
Good spotting! Normal citizens like us reading things in the news wouldnt have noticed something like this.
Thank you for the sharp eye and for pointing this 25% public holdings thing to us.
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This is what happen when bloggers gets overzealous and commentators rush into whacking people without proper sense.
For anilnetto and the commentators,
There is something call exemption and SC/Bursa will allow such exemption on a case-by-case basis. If you have done enough research, you will notice that certain companies will even, be given waiver from complying with Bumiputra shareholding requirement.
The likes of you are proving the government right that you are blogging without proper research just to inflame anti-government sentiments.
By posting without proper research, you are giving the perception that the rest of us are just the likes of you.
You have disgraced the rest of us bloggers and besmirching the very meaning of freedom of speech.
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I didn’t say they had actually flouted any rules. As someone not in the stock-broking industry, I was genuinely puzzled and wondered if I had missed anything.
I notice that Loh & Loh Corp have repeatedly applied for extensions to comply with the public spread requirement starting from 26 August 2008. In 16 October 2008, the firm announced that the Bursa had given them a six-month extension until 15 April 2009 to comply with the requirement. On 19 May 2009, the firm announced that the Bursa had given them another extension until 10 Oct 2009. And on 22 October 2009, it announced it had obtained a third six-month extension until 10 April 2010.
Okay, an exemption may be granted, but there is only one criterion and that is clearly spelt out in Rule 8.02(1) above.
In this particular case, Loh & Loh Corp has been given three extensions so far to comply with the public spread requirement.
Is there a limit to the number and duration of extensions allowed? I would be interested to know.
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Hey! we seek clarifications. It is nice you came out to clarify. Please post your documented evidences.
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Hi Anil
I’m sorry but I’m with Teck Sin Chee on this.
You have clearly misled the public into thinking that UBG is deliberately flaunting the rules. I’m not a fan of UBG but your comments are one-sided. UBG obviously have a good reason seeking extension(s) considering that they have acquired excess interests in PPB and LLCB through an MGO (which is required under law).
These extensions can range from months to years depending on a factual basis. As stated, I am not a fan of UBG, BUT Bursa Malaysia is, from experience, actively enforcing the LRs strictly as compared to other enforcement agencies. You should have asked people within the industry, as to the circumstances such extensions are justifiable.
If such an extension is rigidly limited to 1 or 2 terms, M’sia would no doubt be the place to avoid for investors seeking to take-over public companies and to maintain its listing status.
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Contrary to what you say, I don’t think I have misled the public.
Rather my post and subsequent comments, I would think, have helped to enlighten readers about the difference between an exemption and extensions (in order to comply with the rules).
At no time did I say any of these companies were flouting the rules. My post was aimed at inviting comments from people in the industry to clarify the issues involved e.g. how long such extensions can continue, is there is a limit to the number of extensions and duration?
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Quote from JoeJambo – “If such an extension is rigidly limited to 1 or 2 terms, M’sia would no doubt be the place to avoid for investors seeking to take-over public companies and to maintain its listing status.”
Don’t anyone think this is misleading and termed rubbish.
anilnetto, I support you. I hope you discover more and tell the people who are not that intelligent.
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Anil,
This is easily one of your better and more educational postings and we thank you for it.
As avid stockmarket investors, my friends and I have long been wondering the issues that you have raised which is whether there is any time frame for companies to comply especially in PN4, PN17 etc etc cases.
To Teck Sin Ghee,
Your disparaging remarks speak volume of the type of person that you are. Do not for a moment degrade everyone else to your level by saying ” the rest of us are just the likes of you “.
It is pretty obvious from Anil’s followed-up comments that you , like many of us, do not even understand the difference between an ” exemption ” and an ” extension “.
At least, the rest of us do not post stupid remarks spinning ” exemptions ” which as Anil has pointed out via the relevent sections of the rules, do not apply here.
So do not try to stifle a perfect valid discussion of the issues raised here in the name of free speech.
To JoeJambo,
My friends and I simply cannot understand which part of Anil’s posting constitute your comment that he has ” clearly mislead the public “.
Perhaps you will care to enlighten us on it.
There is nothing in Anil’s post that even suggest that UBG or any of the companies in the group are flouting the rules.
Please provide examples for your contention that these extensions ” can range ……..to years “.
Surely there must be time limits for the rules to be complied. Otherwise, Bursa Malaysia might as well consign their rule book to the dustbin.
Finally, Anil, keep up your good work and do not let these detractors whatever their motives are, from discouraging you from raising issues that are of public interests especially in the stockmarket where many of us have parked our hard earned money.
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Fully agree with Investors, the other two are only doing Anil bashing, wonder who they really are and what are their real motives.
I too found it to be an interesting piece, keep it up Anil, it is good to look into all these especially in todays day and date as there are a lot of backroom manipulations going on.
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Years of investing in the stockmarket and I did not even know the intricacies of these rules and now thanks to this blog, I do. Anil, my heartfelt thanks.
I share Investors’ sentiments above. Teck Sin Ghee and JoeJambo are obviously relics of a bygone era with agendas of their own.
After all, how can such an innocent question of asking if there are time limits involved be construed as ” misleading the public ” or even the more ludicrous Teck’s charge of “besmirching the very meaning of freedom of speech”?
Anil, keep it up, old boy!
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Investors,
You are an investor. Hence, it is not my job to give you examples or reasons. Find out yourselves. I’ve already mentioned that the non-compliance is likely due to the MGO (which has the force of law as compared to Bursa rules).
What I’m saying by Anil misleading the public is the implication of the writings. It might not directly mislead the public but there is strong implication by the choice of phrases and sentences used.
Instead of “UBG Puzzle” as the topic and the one sided writings, the title can simply be some sort of a “Someone enlightened me please on UBG?” or “Clarification needed on UBG’s Compliance with the Shareholding Spread”
I’m just giving my views. Hitting out on me again without doing your further research following Teck’s & my comments above just shows the kind of comment you giving.
When someone gives you a negative hint, you korek further yourself and then judge yourself from the results of your research. You dont go and hentam the one who tells you that something might be wrong. That sounds a lot like politicians.
Anil is not wrong highlighting the existence of any such events. It is the implication (through the choice of words)that does not seem ethical. The results of the implication is evident via all the comments above.
By the way, an extension is a temporary exemption. I do not understand why is it made an issue.
I will not provide any further replies to this post so as not to provoke any of you guys.
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Okay JoeJambo, I have changed the title if that helps to make the point that clarification on this issue would be welcome.
Thank you for the suggestion.
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Far from being misled, I was actually enlightened by the posting.
I too, would be interested to know if there are any time frames to shareholdings spreads, PN companies etc etc.
The only people who are likely to be misled are the ones who think that such basic questions constitute an abuse of the freedom of speech.
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As an unfortunate investor of a couple of ailing PN companies ( I think that’s what they call them ), I find it sickening that these companies should be given extension after extension after extension to restructure these companies with seemingly no end in sight.
People who equate the asking for time frames for such practices to misleading the public or linking them to the freedom of speech, are in serious need of psychiatric help.
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JoeJumbo assertion that these non-compliance can run for years implies that our SC and Bursa people must be sleeping on their jobs.
JoeJumbo should have the decency to back up what he says.
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