Newsmakers of the year 2009

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Tan Sri Teh Hong PiowFounder & Chairman, Public Bank Bhd

When Tan Sri Teh Hong Piow was hospitalised in July this year for an operation, rumours swirled that he would want to take it easy and hence exit Public Bank Bhd, which he had founded 43 years ago.Indeed, the rumour mill has been working overtime since then, spewing out rumours that waiting in the wings to snap up Teh’s stake in Public Bank were none other than Tan Sri Quek Leng Chan of Hong Leong Group and CIMB Group’s Datuk Seri Nazir Razak.

Of course, all three stocks reacted to the rumours as punters took the opportunity to trade on a sexy story.

Still, people close to Teh, who is two years short of 80, say the doyen of the banking sector is not ready to call it a day yet because he is passionate about the bank.

It is Teh who built Public Bank into what it is today over the last 43 years. He is known in the industry as a very hands-on banker, sharp, conservative yet innovative and always keeping abreast of market developments.

He must be the only banker in town who gets a standing ovation from his shareholders at the company’s annual general meetings!

In early November this year, Public Bank issued a statement denying rumours that Teh may retire. It said Teh had recovered from his minor operation and was fully committed to the bank.

Teh began his banking career in Overseas Chinese Banking Corp (OCBC) in 1950 at the age of 20 as a clerk. He later joined Malayan Banking Bhd until 1966 when he left to establish Public Bank at only 35.

He has successfully put in place a professional management system in the bank, hence eliminating concerns that the bank will not be as well managed without him.

While he remains chairman of Public Bank, the banking group is ably run by managing director and CEO Tan Sri Tay Ah Lek and his team of lieutenants. — By Anna Taing

Tan Sri Lim Kok Thay Chairman and CEO, Genting group

It is show time for Genting Group in Singapore!

The S$6 billion Resorts World Sentosa (RWS) project, which is regarded as the brainchild of Genting Group’s boss Tan Sri Lim Kok Thay, will have its grand opening across the Causeway come January.

Some people say Lim, who took the helm of Genting in 2003, has yet to prove himself. Genting Highlands Resort, the group’s core income-earner that generates billions of cash each year, seems to be operating on autopilot. Lim’s  investments, like Star Cruises Ltd and a casino chain in the UK, have not yielded impressive returns. Thus, RWS will be a test of Lim’s capability after the demise of his father Tan Sri Lim Goh Tong.

Genting Group will have a head start when it commences operations ahead of rival Las Vegas Sands’ The Marina Bay Sands, which is scheduled to open in April next year.

Some investment analysts have bullish profit forecasts for RWS, using casino earnings in Macau as the benchmark. They expect the new casino to be able to capture visitors from within a flight time radius of three to five hours.

However, certain quarters say this is too optimistic. Already, gaming groups in Macau have agreed to slow down expansion amid fears of an oversupply of gambling tables.

On the home front, the over RM5 billion cash pile in Genting Malaysia Bhd (formerly Resorts World) will also be the focal point of the group.

The investing community has been expecting Genting Malaysia to spend its cash on acquisitions when asset prices collapsed. But to the disappointment of many, the group has yet to make any significant acquisition. — By Kathy Fong

Low Taek JhoGroup Adviser/non-independent non-executive director, UBG Group Bhd

The 28-year-old graduate of the Wharton School of Business, University of Pennsylvania, is better known as Jho Low and is said to be the conduit for investments into Malaysia from the Middle East.

Jho Low is said to have played a role in Abu Dhabi Commercial Bank taking up a 25% stake in RHB Capital Bhd and the US$1.2 billion investments by Abu Dhabi’s Mubhadala in Iskandar Malaysia. The investments were done in 2007.

Last year, Jho Low saw the completion of UBG Group’s takeover of Putrajaya Perdana and Loh & Loh Bhd. The makeover of UBG positioned the group as a major construction house with the ability to bid for projects in South Johor and water-related jobs.

In recent months, Jho Low’s efforts are said to have been in scouting for joint ventures for 1Malaysia Development Bhd, the fund set up by Prime Minister Datuk Seri Najib Razak to help attract foreign direct investment into projects with high economic impact.

In November, subsequent to Najib’s visit to Saudi Arabia, Petro Saudi International entered into a joint venture with 1MDB to set up a US$2.5 billion fund to enter into oil and gas projects in the region. 1MDB’s portion is US$1 billion.

Said to be well connected, Jho Low hogged the limelight in November for a spending spree in New York clubs, chalking up bills of more than US$150,000. A paper probing the spending spree of Arabs, reported that it was Jho Low who was settling the bills. However, he has denied the report, saying that the Arabs were behind the spending. — By M Shanmugam

Fang Chew HamManaging director/deputy executive chairman,Three-A Resources Bhd

Fang Chew Ham built Three-A Resources Bhd up from just a cottage industry.

Three-A, as it stands today, has been 32 years in the making. In its fledgling years, a bank took a chance on the then small enterprise by lending it RM2.5 million in 1995 and RM9.8 million in 1996.The company’s ability to expand its food processing capacity was further enhanced in 1999 when Permodalan Nasional Bhd acquired a 30% stake in it with an injection of RM5 million.

The company has come a long way since then — it was picked by the colossal Wilmar International Ltd, one of the world’s biggest food companies, as a partner to open a business processing food ingredients in China.

By piggybacking on Wilmar, Three-A could conceivably make an extraordinary expansion into the food sector in China where the Singapore-based company is already a leading distributor of staple food products.

Three-A produces ingredients such as glucose, caramel, vinegar and maltodextrine for the food-processing industry. The market for these products in China is obviously enormous, and with Wilmar, Three-A has a chance to gain a sizeable market share there.

It was not a difficult decision for Fang. A joint venture with Wilmar, the biggest staple food distributor in the world’s fastest-growing market, is a dream come true for him. It also paid off for shareholders. One of the year’s best-performing stocks, Three-A rose from the 40-sen level to a recent price of RM1.45, a gain of 260%.

Wilmar’s interest in Three-A is a testament to the fact that a small Malaysian company can develop enough efficiency and product quality to  attract the attention of a multinational corporation. 

Three-A is model for the corporates — be world-class and be a Malaysian winner. — By C S Tan

Datuk Zamzamzairani Mohd IsaGroup CEO, Telekom Malaysia Bhd ™The chances are Telekom Malaysia Bhd’s CEO chair has never been this hot. But if one were to judge Datuk Zamzamzairani Mohd Isa’s staying power from the way crowds come alive as he strums the opening riffs of, say, Deep Purple’s Smoke on the Water, the man can take the heat.

So, there will be plenty of action as TM rolls out its triple-play offering — broadband, IPTV and fixed line voice — in its bid to shore up declining fixed-line revenue, win market share amidst heightening competition for the broadband pie as well as create a new revenue stream from the RM11.3 billion high-speed broadband (HSBB) project, which Zamzamzairani calls TM’s “engine of growth”.

In the months leading up to TM’s triple-play bundle launch (by March 2010), rival broadband providers have been winning more new broadband users than TM. Dominant pay-TV provider Astro All Asia Networks plc too, on Dec 11, launched its next generation set-up box that can offer IPTV when the broadband infrastructure is available. Astro’s sister company Maxis Bhd has expressed intent to make use of its fixed line licence to wire up selected areas should that help it to better serve its customers.

With TM kicking off its HSBB service in the Klang Valley, the battle for the affluent subscriber base here looks inevitable, given that this is where some 40% of Maxis’ mobile phone subscribers as well as over one-third of Astro’s pay-TV homes are located — unless TM chooses to collaborate with Astro instead of launching its own service.

It is Zamzamzairani’s “fervent hope” that HSBB — which will cost TM some RM8.9 billion over 10 years — “will eventually help create a whole new way of ‘living online’ and allow Malaysians to make the most of what the Internet has to offer”. He wants TM’s value proposition to be one that can best address the growing needs of Malaysia’s growing pool of “digital generation” — like the teenagers he has at home — who are spending more and more time online. Can TM, under his lead, do all that and at the same time, have enough cash to maintain its RM700 million annual dividend promise? — By Fong Min Hun

C C PuanGroup Managing Director, Green Packet

C C Puan, in the last year, has re-engineered Green Packet and placed in on a firmer footing to compete in an industry that is changing very quickly. One of the things he did was to lay strong foundations for Green Packet’s WiMAX and communications business, not just domestically but internationally as well. But the question for Puan is, will Green Packet be able to execute its regional ambition and return to the black?

Green Packet has been on a major expansion drive that is expected to run over into next year. With agreements in place to provide WiMAX in Singapore and bagging several supply contracts to Europe, the company is quickly making a name for itself as a service and communications solutions provider.

Last year was also a watershed year for Green Packet’s domestic business, which saw its subsidiary Packet One Networks (M) Sdn Bhd (P1) celebrate the first year anniversary of its WiMAX network in August. The upstart broadband provider has picked up some 110,000 customers by broadening its distributor base and meeting its site rollout targets.

While far behind the 1.37 million estimated subscribers for Telekom Malaysia’s Streamyx service, P1 has posed a big enough threat, going by the series of back and forth ad campaigns carried out by TM and P1. The “potong” or “not to potong” ads, for example, have created quite a stir.

Currently providing coverage to about 25% of the nation, P1 is expected to up its coverage to 65% within the next 18 months.

The rapid expansion, however, comes at a price, namely heavy capital expenditure (capex), while the bottom line of the company has yet to return to the black. While turnover surged dramatically in its most recent financial quarter — 250% y-o-y — Green Packet is still in the red due to higher amortisation and depreciation costs. — By Fong Min Hun

Datuk Idrose MohamedGroup Managing Director, Syarikat Prasarana Negara Bhd

When asked their opinion of Datuk Idrose Mohamed, all his employees, past and present, say the same thing: “He is a very private person.”

The group managing director of Syarikat Prasarana Negara Bhd, the asset holder of the public transport system in the Klang Valley and Penang, is known to hold his cards very close to his chest. Idrose has only been in his position for over a year. His entry, however, was not without incident. He came into Pra­sarana in October 2008, following the abrupt resignation of its former steward Shaipudin Shah Harun in September.

Even so, Idrose came in on quiet feet, not making any public announcements concerning the two major public transport projects that had been in the government’s pipeline, namely the LRT extension project and the new LRT line.

He only revealed his hand this past September when Prasarana put the plans for the LRT extension for the existing Kelana Jaya and Ampang Line up for display. According to Idrose, Prasarana’s budget for the project could run up to RM7 billion and it has already raised some RM2 billion in Islamic bonds.

However, it has not been plain sailing. The release of the National Audit Report showed Prasarana making losses from RapidKL, which handles the day-to-day running of public transport. It sparked a fear that Prasarana would renege on its debt requirements. And improving the public transport system is a key promise of Datuk Seri Najib Razak after he took over as Prime Minister. This means ballot box pressure.

While there have been assurances that Pra­sarana is not in any danger of default, it undoubtedly leaves a sour taste in the mouths of the people who still see the current public transport system as being nowhere near up to scratch.

And while the pre-qualification for the LRT extension has started, doubts remain as to whether Idrose will meet his proposed deadline of three years. Hence, it will be interesting to see when the first brick is laid.

Despite his low-key persona, all of Idrose’s previous positions have dealt very much with public service. And given that next year will be the year things have to move onthe ground, it seems highly unlikely that Idrose can avoid being in the limelight for much longer. — By Nadia S Hassan

Tengku Datuk Tengku Azmil ZahruddinManaging director & CEO, Malaysian Airline System Bhd (MAS)

Tengku Datuk Tengku Azmil Zahruddin took the helm of MAS in August when Datuk Idris Jala had to leave to serve in Prime Minister Datuk Seri Najib Razak’s new Cabinet.

Azmil was already groomed to fill Jala’s shoes, big though these may be and even if his ascension came earlier than expected.

Prior to his appointment as the executive director/CFO of MAS in 2005, Azmil was the boss of Penerbangan Malaysia Bhd.

Azmil comes across as a very serious and down-to-earth person at first sight but his keen sense of humour and deep knowledge of the industry have made him a very approachable and likeable CEO among his employees and the media.

With Azmil in charge, MAS has not changed its mission to emerge as a five-star carrier by 2013. He will now head MAS’ Business Turnaround Plan 2 (BTP2), which is a Jala legacy. BTP2 states MAS’ objective as achieving economic profit, which means it will create positive returns for its shareholders even after factoring in the cost of capital.

Given the challenges in the airline industry, where many profitable carriers do not even earn their cost of capital, this will be a significant achievement for Azmil.

Under BTP2, MAS aims to post a profit of between RM1.5billion and RM3 billion per annum by 2012. Given the slow recovery, Azmil will be challenged to steer MAS towards these targets amdist all the uncertainties and legacy losses caused by a wrong bet on the direction of fuel price. — By Isabelle Francis

Datuk Seri Tony FernandesAirAsia Bhd group CEO Datuk Seri Tony Fernandes is one of the most admired executive-turned-entrepreneurs in Corporate Malaysia today. To some, he is Asia’s Richard Branson.

Almost everything about AirAsia is loud red but not its bottom line — the airline managed to post profits this year even as its peers flew into the red in a challenging operating environment.

Not surprisingly, Fernandes has been recognised as the champion of not only low-cost travel but also of the revolution in Asian air travel as a whole. He won several awards this year, including an induction into the Hall Of Fame of Brand Champions by The Edge and the Association of Accredited Advertising Agents of Malaysia.

The colourful Fernandes is also a darling of the media and he is not easy to miss with his flashy yet simple signature appearance and trademark Air­Asia red cap.

Fernandes is probably one of the more interesting persons to follow on Twitter as he is always on the move. The entrepreneur keeps himself occupied with motor sport — recently, he signed up as the team principal of the new Malaysian-backed Team Lotus for Formula One.

Fernandes is one of the great business success stories of the past decade. But his failure to get the government to allow him to build and operate his own low-cost carrier terminal shows he does not always get what he wants.AirAsia is now Asia’s largest budget carrier, covering more than 100 routes and having carried over 80 million passengers. It will be interesting to see where Fernandes pilots AirAsia from here. — By Isabelle Francis

Tan Sri Rozali Ismail,Executive chairman, Puncak Niaga Holdings Bhd

In a phone conversation with The Edge at the end of last year, Tan Sri Rozali Ismail, who helms water concessionaire Puncak Niaga Holdings Bhd, had said: “In 2009, a lot will happen. There will be a lot of challenges. Both me personally and my group [of companies] are prepared to face challenges in 2009… we are ready.”

Rozali was accurate on both counts — his flagship, Puncak, faced many challenges in 2009. Puncak controls 70% of water concessionaire Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and 87.5% of water treatment player Puncak Niaga (M) Sdn Bhd.

Both his water assets were the subjects of a takeover by the Selangor government, as part of a plan to consolidate the fragmented water sector in the state. How­ever, the politically connected Rozali managed to stave off these attempts.

More recently, Selangor state officials opposed a compensation payment of some RM36 million a month — due from January this year — to Syabas, for delaying a water tariff hike. As a result of the delay, Puncak’s cash flow was adversely affected, adding to Rozali’s woes.  The federal government stepped in to help with a RM300 million loan.

However, with Ministry of Finance-controlled Pengurusan Aset Air Bhd waiting to make an offer for Selangor’s water assets any time soon, Rozali could finally exit. But this will depend on the offer.

If accepted, this could leave Puncak with a strong war chest and capable of  acquiring new assets. The indications are  Rozali will make a foray into the oil and gas sector.

Puncak has a wholly-owned subsidiary, Puncak Oil & Gas Sdn Bhd, which was formed in March 2006, possibly to venture into this business. ­— By Jose Barrock

Tan Sri Azlan ZainolEPF CEO and RHB Bank chairman

With only 1½ years left in his tenure as CEO of the Employees Provident Fund (EPF), Tan Sri Azlan Zainol himself has said he is hopeful the next two years will be exciting for RHB Banking Group.

Azlan is also RHB Bank’s chairman as the provident fund became the bank’s largest shareholder in 2007. After a major corporate restructuring exercise, the EPF holds 57% of the banking group and is in the process of looking for a buyer to pare down its stake to 35%.

Under Azlan’s stewardship, RHB Banking Group launched a group-wide transformation programme and the results are showing in the group’s improving financials. The group also aims to be the top three Asean banks by 2020 via both organic and inorganic growth.

In October, RHB Capital Bhd said it was acquiring an 80% stake in PT Bank Mestika Dharma, a smallish Sumatra-based bank for RM1.16 billion. Though small, RHB Banking Group aims to strengthen and grow Bank Mestika’s position in Indonesia.

Given its 2020 goal, Azlan and the group will be closely watched as the path to the top three position in the region would mean displacing not only its domestic competitors but also those in the region.

Meanwhile, as CEO of the EPF, which has a total fund size of RM361.09 billion, Azlan is in an influential position as the provident fund increases its position in foreign investments. Also, the fund is set to venture into the real economy to jointly develop property with Malaysian Resources Corp Bhd (MRCB). 

An accountant by training and with close to 30 years of experience in the financial industry behind him, where will Azlan go after April 2011?

Azlan has said he will be switching to a slower pace after the EPF and focus on religion, travel and social work as well as spend time with his granddaughter. He has not ruled out accepting seats on the boards of listed companies. Aside from chairing the RHB Capital board, Azlan is also non-executive chairman of MRCB. — By Jenny Ng

Tan Sri Azman MokhtarManaging Director, Khazanah Nasional BhdFor Tan Sri Azman Mokhtar, 2009 has been a year of great challenges amid the economic crisis and changes at the very top of government. Be that as it may, Azman still managed to run the political gamut and remains at the helm of Khazanah Nasional.While the first half of the year saw Khazanah take a step back as the global financial crisis continued to unfold, Azman himself said the entity would switch tactics and go on the offensive in making investments.

This was after it was revealed that Khazanah’s total realisable asset value for the first half of 2008 rose over 27% to RM85 billion.

It has always been the case that Khazanah’s every move makes the market sit up and take notice. Indeed, Corporate Malaysia was all a-twitter when Khazanah placed out 5% in Malaysia Airports Holdings Bhd, with promises of more to come with the aim of reducing its holdings in government-linked companies.

Also making the news were the calls by various parties to privatise PLUS Expressways Bhd, in which Khazanah is a major shareholder. More recently, a private company, Asas Serba, raised eyebrows when it proposed to acquire PLUS along with other tolled roads for RM50 billion.

Now with the GLC transformation process having reached half time, it seems as if Azman’s “To Do List” has just become longer.

Sitting on top of the list is turning the potential of Iskandar Malaysia into ringgit and sen. — By Nadia S Hassan

Datuk Syed Zainal Abidin TahirManaging director, Proton

After a four-year stint, Datuk Syed Zainal Abidin Tahir’s position at the helm of national carmaker Proton Holdings Bhd looks much firmer, despite earlier speculation that he might leave due to political reasons and rumours of a takeover of Proton by other local parties.The trained engineer who was formerly with Petronas and Perodua did not bow out of the national carmaker. Instead, he launched Proton’s popular MPV— the Exora — in April and beat off an attempt by local parties to take over the carmaker in the middle of the year.

He also provided the government strong input to come up with a revised national automotive policy (NAP) that is slanted towards  Proton while at the same time, would draw foreign direct investment.

It would appear that the longer Syed Zainal is with Proton, the more results he delivers to back his position at the national car company. For instance, despite a challenging economic climate, Proton managed to report an operating profit of RM63.8 million for the quarter ended Sept 30, up from RM36.8 million in the preceding quarter and RM7.2 million a year ago. This was achieved on the back of higher sales and improved efficiencies.

Syed Zainal will be busy next year. Proton is scheduled to start manufacturing the Mitsubishi Lancer sedan to replace the outgoing Waja model.

Proton’s new car programme will also intensify as Syed Zainal hopes to roll out a more sophisticated “global car” model in 2010, which will come with “Italian styling” and be equipped with a more powerful engine.

On Syed Zainal’s checklist are wrapping up a manufacturing-partnership deal in India and signing up a foreign strategic partner to strengthen Proton’s technical capability.

Nevertheless, the challenges for Proton are only expected to increase. Next year is crucial for Syed Zainal — he has to pair Proton with a strategic partner and firm up the future direction of the national car company with a more sustainable business model. — By Siow Chen Ming

This article appeared in Corporate page of The Edge Malaysia, Issue 787, Dec 28, 2009 - Jan 10, 2010.