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Low-profile
businessman Tan Sri Syed Mokhtar Al-Bukhary will finally show
his hands and make known his business interests via Malaysia
Mining Corp Bhd (MMC). The businessman whose business dealings
have always been the subject of speculation and intrigue is
expected to finally appear as a controlling shareholder in MMC,
which will then become his listed flagship.
His decision to come clean with his business interest followed
advice from senior government officials to resolve the
transparency issues relating to his business interests. "We
are handling the matter. I can't stay underground any more"
said Syed Mokhtar in an interview in the May 29 issue of the
Far Eastern Economic Review (FEER). MMC will be the company
through which he plans to manage his complex web of business
interests, which associates say boast a combined annual
revenue of RM12 billion and employ more than 32,000.
The businessman declined to comment on details of the planned
restructuring at MMC, which is expected to be announced as
early as the end of this month. Syed Mokhtar currently
controls almost 20 per cent of MMC through a private nominee
concern, Impian Teladan. The company paid RM3 a share for the
stake, beating two other bidders who were offering RM1.80 and
RM2.20 respectively. To gain control of MMC, he sold his
controlling interests in Port of Tanjung Pelepas (PTP) and a
lucrative power plant to MMC, which paid for those stakes
partly in cash and partly with new MMC shares.
The deals gave him a 19.9 per cent interest in the investment
holding company, and several bankers say that stake could rise
to 40 per cent once he sells his interest in a RM7 billion
port and power plant project in the north. Over the years,
Syed Mokhtar has assembled a formidable array of businesses
ranging from ports, power, mines, plantations to
manufacturing, healthcare and tourism, almost entirely from
behind the scenes.
For much of the 1990s, also from behind the scenes, he was
buying and selling assets, including stakes in numerous public
companies, to establish himself as a shrewd, if little-known,
corporate trader. Syed Mokhtar rode Malaysia's stock market
boom, acquiring stakes in listed companies before selling them
for a profit. Companies he invested in include Mulpha
International, Sriwani Holdings, Pilecon Engineering, Johor
Tenggara Oil Palm, Bina Puri and Daiman. When the Asian
financial crisis struck, hitting equity prices hard, Syed
Mokhtar was said to have had the net worth of his holdings
crash to RM600 million from a high of about RM3 billion. The
businessman declined to comment on the figure, but said, "I've
seen my wealth disappear". He says that he has resolved
"two-thirds" of his problems with his bankers over troubled
loans arising from stock purchases.
Syed Mokhtar never lends his name to his businesses. His
corporate headquarters is a three-storey building in a shabby
part of Kuala Lumpur. But now he wants to change this image.
Bankers close to the businessman say that his corporate coming
out marks a new phase for Malaysia Inc. By complying with
higher standards of disclosure, these financial executives
say, the businessman has come to appreciate the value of the
equity investor.
"He clearly see the benefits of funding his corporate plans
through equity markets rather than debt," said a senior banker
who has done business with him. There are also encouraging
signs that foreign fund managers are taking note. According to
Toh Hoon Chew of CIMB Research in Kuala Lumpur, MMC's foreign
shareholding has jumped to more than 9 per cent compared with
under 1 per cent a year ago.
His business interests include a joint venture with shipping
giant Maersk Sealand in the PTP in Johor, which is fast
emerging as a serious threat to neighbouring Singapore's port
operations. His companies are building and acquiring power
plants all over the country, moves which are set to turn Syed
Mokhtar into the country's single largest power generator
after national utility Tenaga Nasional Bhd. The businessman is
also taking a lead role in attracting money from Gulf states
into Malaysia.
He has formed a joint venture with Dubai-based businessman
Mohamed Ali Al-Abbar to build a US$2.5 billion (US$1 = RM3.80)
aluminium smelting plant in Sarawak. He rejects comparisons
with other Malaysian tycoons who feasted on Government-awarded
projects and licences during the 1990s economic boom before
collapsing in the mid-1997 regional crisis. "We've done
business for the last 30 years and it has been direct dealings
with the private sector. That gives us a strong foundation,"
he told FEER, adding that his group survived the last economic
crisis without bailouts from the Government.
Mohamed Sidek Shaik Osman, the chief executive of Syed
Mokhtar's port operations and one of his most trusted
lieutenants, said that the misconception about his boss is
because he insists "on keeping too low a profile". "Most
people only talk about MMC and the port, but there is much
more to his business empire." To supporters and associates,
Syed Mokhtar is a shrewd, self-made entrepreneur. He had a
tough childhood growing up in Kedah.
The son of a poor cattle trader, he helped his father with
simple bookkeeping for the family business, before venturing
out on his own in 1973 to start a transport business with two
Chinese businessmen, and then moving on to rice trading. "MMC
will be our flagship company and the whole group, our listed
and unlisted businesses, will be restructured. "We will expand
in Johor with our ports and other transportation business such
as air cargo. Gas distribution and energy will also be big
contributors. "There will be strong emphasis on social
obligations. We have big education and medical projects for
the poor and the Islamic Museum which the Bukhary Foundation
operates.
The corporate side will help out." On the possibility of a
sharp economic slowdown which could affect him and his group,
Syed Mokhtar said: "We have borrowings, but the loans are
backed by strong assets. We had debt problems after the 1997
crisis, but we have managed to resolve most of them. "The
difference with our group is that our business, more than 70
per cent, is with the private sector. Once our restructuring
(at MMC) is done, we will be in a stronger position."
Source: Business Times, Malaysia,
www.hoovers.com, 23 May
2003 |
