Frankly Speaking

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Vanishing assets at MaxbizCould things get worse for the minority shareholders of fabric manufacturer Maxbiz Corp Bhd? After bleeding red ink for a good four years, the company’s prospects seem bleaker now.

Last week, it announced to Bursa Malaysia that it had lodged a police report after assets valued in excess of RM40 million, owned by its unit Mayford Garments Sdn Bhd, went missing.

Maxbiz added that the police had commenced investigations and “the board of directors of Maxbiz is offering full cooperation in this matter”.

To put things in perspective, the company’s share capital, as at at end-March 2009, was RM142.2 million while it had accumulated losses of RM103.3 million. Thus, its shareholders’ funds stood at RM38.9 million.

With some RM40 million in missing assets, does this mean shareholders’ funds are now in negative territory, which would make it more difficult for Maxbiz to return to the black?

It would seem the company’s fate hinges on the police finding the culprits and the missing assets. It also depends on the company getting a lifeline in the form of new investors willing to inject fresh capital. That goes without saying.

But the pertinent question is, how can assets valued at a massive RM40 million go missing? Considering the company’s mainstay is fabrics, it can be safely assumed that some of the assets that have vanished include machinery. That makes it even more perplexing. Assets such as machines cannot be carted away without someone noticing something is amiss. So, was it an inside job?

Maxbiz should state clearly what assets have gone missing, and what action it plans to take against those tasked with safeguarding its property. If no one was hired to do so, why not? Who will bear the brunt of the losses? Management should be made answerable.

Some clarity on the missing assets, and possibly the fate of the ailing company, would be welcome here rather than a statement that directors are offering full cooperation to the police. The fact that directors are cooperating with the police is a given. What’s more important is to get to the bottom of the matter for the sake of the shareholders.

Maxis relistingMaxis Communications Bhd must have been honoured last week. After being taken private two years ago, none other than Prime Minister Datuk Seri Najib Razak has requested that the company be relisted to improve liquidity on the stock exchange. He also said that he had spoken to its owners about it.

This came as a surprise to many as it is not often that the prime minister talks about companies on the stock exchange, let alone a privatised entity. Considering that Najib made the announcement after his visit to Saudi Arabia, it would not be far-fetched to assume that it had something to do with the fact that Saudi Telecom Co Ltd is a minority shareholder in Maxis.

After Usaha Tegas Sdn Bhd, through Bina­riang GSM Sdn Bhd, took Maxis private, a 25% block in the private entity was sold to Saudi Telecom for about RM10.5 billion (US$3.05 billion). Could the gentle nudge on relisting Maxis be related to Saudi Telecom’s investment in Binariang GSM?

There is no doubt that the listing of Maxis will add depth to Bursa Malaysia. But it certainly came as a surprise that it was the prime minister who raised the matter.

This sent a strong signal that Malaysia would like to see the relisting of more of its home-grown companies that were taken private a few years ago. But hopefully, it will be at the companies’ own initiative.

That way, whether a company decides to stay private or seek a listing will be driven purely by market forces.

More coherence, pleaseA couple of weeks ago, Deputy Prime Minister Tan Sri Muhyiddin Yassin announced that foreign workers in all categories, except maids, can work in Malaysia for a maximum of five years.

After that, they would have to submit a fresh application, which would be processed as such. This is part of efforts to tighten existing policies on these workers to minimise the country’s dependence on foreign labour.

Not long before that, the government also announced that Malaysia wanted to attract international talent for the financial services and capital markets industry to push the development of the country’s capital markets to new frontiers.

Towards this end, Bank Negara Malaysia and the Securities Commission were directed to review all visa applications for these two sectors.

Not surprisingly, the latest announcement on foreign workers has created some confusion.

The objective of getting Bank Negara and the SC to review visa applications is to attract international talent. One can infer that to be competitive, there will be minimal red tape.

Now, we are told that foreign workers will only be allowed to work for five years, after which fresh applications must be made.

Does this ruling also apply to the financial services and capital markets industry? If so, say industry observers, it will not make Malaysia competitive when it comes to attracting foreign talent. Renewing visas after five years is acceptable, but to have to make a fresh application is something foreign talent can do without.

So, how about more coherence in our policies?

This article appeared in Corporate page of The Edge Malaysia, Issue 765, July 27- Aug 2, 2009