What’s up at Vastalux?Last week, oil and gas company Vastalux Energy Bhd’s top brass were quoted in a daily as saying that they had been approached by third-party investors to buy over the company or take a stake in it.
This strengthened its storyline that Vastalux was a takeover target.
Some of the quotes by the managing director and CEO clearly suggested that the company was aware of such plans for a third party to acquire a substantial stake, or something even more meaningful.
However, Vastalux, after a query by Bursa Malaysia, stated that it has “never engaged in any negotiation with any party to acquire Vastalux”.
This is intriguing as the clarification to Bursa came out on the same day as the news report was published. The clarification added that the denial was made after “due and diligent inquiry with all its directors, major shareholders and all such other persons reasonably familiar with the matter”.
The managing director and CEO of the company, according to Vastalux’s latest annual report, has 22.6% equity in the company. Should he not know what is going on in the company he helms?
In a nutshell, Vastalux should ensure that its announcements and the statements made by officials who are involved in the running of the company are in sync. There should not be any discord or else it will only cause confusion and result in investors not taking statements by company officials seriously.
Announcements by publicly traded companies have to be made after due consideration. What Vastalux and its officials have done paints an uncertain picture of the future of the company. Is there really an offer out there that has not been brought to the board?
It is also noteworthy that Vastalux cannot negotiate in its takeover. Discussions will be held between shareholders of Vastalux and potential buyers.
Perhaps Vastalux’s response should have been that it is unaware of any negotiations but even if there were any, it was being done at the shareholders’ level.
Something is not rightLast week, Goldman Sachs Group announced a blowout 2Q2009 profits of US$2.7 billion (RM9.5 billion) on record net revenue of US$13.8 billion, largely from its role as market maker for clients in the trading of bonds, currencies and commodities as competition dwindled and bid-ask spread expanded. Proprietary profits also soared as market sentiment turned.
The 2Q2009 profits were higher than those from a year ago and the previous quarter when Goldman recorded revenue of US$9.42 billion and US$9.43 billion. The bank is setting aside US$11.4 billion for compensation and benefits for 1H2009.
Not bad for an institution that barely a year ago needed the US government’s assistance to the tune of US$10 billion, following the failure of Lehman Brothers, near collapse of American International Group, firesale of Bear Sterns and takeover of Merrill Lynch. Goldman and Morgan Stanley also had to fast-track approvals to transform themselves into commercial banks, allowing them to shore up their financial positions.
No doubt, Goldman paid back the government’s bailout money — one of the first banks to do so — but as Goldman employees receive their bonuses, the rest of the world is still suffering from the financial and economic crisis that largely originated from the dicing and slicing of mortgages by financial institutions.
Certain members of the US Congress have expressed outrage at the bonuses to be paid to Goldman employees, and rightly so. Where is the justice? Certainly something is not right.
Get tough on graftSerious about killing corruption? Perhaps there is a point in what China is doing to deal with the corrupt. Just as Ponzi scheme operator Bernard Madoff begins his maximum jail sentence of 150 years in the US, China has handed down a suspended death sentence to the ex-chairman of Sinopec Corp, Chen Tonghai, for accepting US$28.6 million in bribes.
According to news reports, he was given a two-year reprieve because he “confessed and repented, provided tips about other people’s criminal acts and returned all the bribes”. Not too long ago, China handed down the death penalty to a former chief of the state-owned Capital Airports Holding Company for “having inflicted great economic loss on the country” by taking US$3.9 million in bribes and embezzling US$12.1 million for personal use.
In 2007, China executed a former chief of the food and drug safety watchdog for approving six fake medicines, including an antibiotic that caused the death of at least 10 people.
Some may deem capital punishment to be barbaric under any circumstances. But consider the evils that corruption and abuse of power breed. Giving an incompetent driver a licence, or letting a drunk driver off for a small bribe may seem harmless until that driver kills someone on the road. Even if nobody dies, is it less a crime when a person’s right is deprived just because some unscrupulous people paid money to circumvent the law?
While we do not advocate capital punishment, harsher penalties to combat graft may be needed as the current measures have not been effective. Corruption imposes a huge cost on society. But for any hope of a graft-free society to emerge, the will to eradicate this scourge must come from the very top.This article appeared in Corporate page of The Edge Malaysia, Issue 764, July 20-July 26, 2009