What sound financial considerations?
Smart Fund ManagerPublished: Mar 23, 2001 8:55 AM | Updated: Jan 29, 2008 6:21 PM
EPF chairman Abdul Halim Ali said the fund has not taken up the unsubscribed portion of Time dotCom Bhd's initial public offering. EPF however ended with 81.6 million shares in Time dotCom on March 2 through debt conversion. EPF approved a short-term RM500 million loan to Time dotCom in 1996. The loan was secured by a corporate guarantee and an undertaking that part of the proceeds of the impending IPO was to be assigned to the EPF.
However, the regional financial crisis in 1997 affected the repayment schedule, whose tenure was 12 months or the IPO date, whichever was earlier. Following a corporate restructuring exercise, the agreement was reached to pay half the outstanding loan in cash and the other half as shares. The price transacted was RM3.30 a share and the stake will cost RM269.28 million. EPF now is a shareholder in Time dotCom Bhd with a 3.22 per cent stake.
The fact is, EPF has lost a whopping RM96,288,000, five days after Time dotCom got listed on KLSE, when it closed at RM 2.2 in KLSE on March 23. What make this different from daylight robbery? Don't treat the Malaysian public like idiots.
As a smart fund manager, Abdul Halim explained that EPF accepted the offer of conversion of part of the loan because it believed in the long-term potential of Time dotCom. He further said, "The decision of the EPF investment panel to accept these terms was based on sound financial considerations, which included the opportunity to make a strategic investment in the telecommunications industry while accepting the possibility that returns may not be immediate."
Come on! There are plenty of listed companies that are much better managed then Time dotCom, with proven track record to boot. It does not require a financial expert to see that. EPF, however, prefers to invest in a company with notorious track record. When did the Renong-UEM-Time group of company ever make a commendable performance despite enjoying all the unfair advantages?
However, the regional financial crisis in 1997 affected the repayment schedule, whose tenure was 12 months or the IPO date, whichever was earlier. Following a corporate restructuring exercise, the agreement was reached to pay half the outstanding loan in cash and the other half as shares. The price transacted was RM3.30 a share and the stake will cost RM269.28 million. EPF now is a shareholder in Time dotCom Bhd with a 3.22 per cent stake.
The fact is, EPF has lost a whopping RM96,288,000, five days after Time dotCom got listed on KLSE, when it closed at RM 2.2 in KLSE on March 23. What make this different from daylight robbery? Don't treat the Malaysian public like idiots.
As a smart fund manager, Abdul Halim explained that EPF accepted the offer of conversion of part of the loan because it believed in the long-term potential of Time dotCom. He further said, "The decision of the EPF investment panel to accept these terms was based on sound financial considerations, which included the opportunity to make a strategic investment in the telecommunications industry while accepting the possibility that returns may not be immediate."
Come on! There are plenty of listed companies that are much better managed then Time dotCom, with proven track record to boot. It does not require a financial expert to see that. EPF, however, prefers to invest in a company with notorious track record. When did the Renong-UEM-Time group of company ever make a commendable performance despite enjoying all the unfair advantages?
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