This article first appeared in The Edge Malaysia Weekly on December 30, 2019 - January 5, 2020
THEY shunned media interviews and almost never appeared in public but Tan Sri Syed Mokhtar Albukhary and T Ananda Krishnan often found themselves in the spotlight, thanks to Corporate Malaysia’s keen interest in anything the elusive tycoons did.
Syed Mokhtar was particularly conspicuous in the last decade, filling a lot of column inches in the newspapers, owing to his involvement in almost every major industry in the country, from automotive and ports to telecommunications and broadcasting.
In the automotive industry, his DRB-Hicom group is among the largest motor vehicle producers in Malaysia, through its control of Proton Holdings Bhd and subsidiaries in the auto assembly and distribution of such marques as Volkswagen, Honda and Mercedes-Benz.
He also emerged as the owner of the largest port group with holdings in almost all the major ports in the peninsula, stretching from Penang and Port Klang all the way down to Port of Tanjung Pelepas and Pasir Gudang in Johor.
Nevertheless, it has not been plain sailing for Syed Mokhtar. The proposed sale of Sabah Ports Sdn Bhd to the group was scrapped by state investment holding company Suria Capital Holdings Bhd in April 2018.
A year earlier, DRB-Hicom had sold 49.9% of Proton to Zhejiang Geely Holding Group following continuous years of losses by the local automotive company, which has since turned around.
Meanwhile, Syed Mokhtar’s postal services company, POS Malaysia Bhd, continues to be in the red, hit by the public’s switch to online facilities.
Undoubtedly, the decade was tougher for Ananda, whose name was splashed across the front pages of India’s papers in July 2018 after the country’s Central Bureau of Investigation filed charges against him and his once-trusted ally Ralph Marshall over a corruption case that involved the award of telecommunications spectrum to Aircel Ltd.
At home, controversy surrounded the sale of his power company, Tanjong Energy Holdings Sdn Bhd, to 1Malaysia Development Bhd. In 2011, the so-called strategic development company acquired Tanjong Energy, which owned two gas-fired power plants, for RM8.5 billion cash.
Ananda’s satellite broadcasting company, Astro Malaysia Holdings Bhd, still has a monopoly in the local industry but is facing stiff competition from internet TV streaming services.
Telecoms company Maxis Bhd and Astro remain two of his most important units but the media-shy billionaire is also the largest shareholder of Bumi Armada Bhd, a large offshore support vessel company in the oil and gas industry.
The rise and rise of Syed Mokhtar
Tan Sri Syed Mokhtar Albukhary has interests in ports, power generation, plantations, media, construction, engineering, auto assembly, defence, banking, hotels, property development, sugar refining, postal services and logistics.
His more well-known outfits are MMC Corp Bhd, DRB-Hicom Bhd and Tradewinds Corp Bhd. While MMC and DRB are publicly traded, Tradewinds Corp and its group of companies, including Tradewinds (M) Bhd and Tradewinds Plantation Bhd, were privatised in 2009 at RM1.5 billion.
This is impressive considering his humble beginnings in Kampung Hutan Keriang in Alor Setar, Kedah. Equally impressive is the fact that he has maintained his presence at the top of the heap through three different prime ministers and four different governments, and has grown his empire substantially.
He surfaced in his flagship MMC Corp (then Malaysia Mining Corp) in October 2000 after buying a 19.9% stake for RM499.18 million, or RM3 per share, from Permodalan Nasional Bhd. In 2002, his unit, Restu Jerneh Sdn Bhd, acquired 32% of Tradewinds Corp (then Pernas International Holdings Bhd) for RM497 million, or RM2.10 per share and 64 sen per warrant, from Perbadanan Nasional (Pernas).
In December 2004, in a bidding war, Syed Mokhtar edged out the late Tan Sri SM Nasimuddin SM Amin of the Naza group for a controlling 15.8% stake in DRB-Hicom, held by the family of the late Tan Sri Yahya Ahmad. Syed Mokhtar then strengthened his grip on DRB-Hicom via the injection of Bank Muamalat Bhd.
DRB-Hicom acquired a 32.2% stake in Pos Malaysia Bhd for RM622.8 million from Khazanah Nasional Bhd in 2011. As for Proton Holdings, DRB-Hicom forked out some RM3 billion, or RM5.50 a share, to privatise the automaker via a tender process in 2012.
Syed Mokhtar’s private company, Puncak Semangat Sdn Bhd, was one of eight awarded the LTE (long term evolution) 2600MHz spectrum by the Malaysian Communications and Multimedia Commission to provide 4G services. A subsidiary of Puncak Semangat, Altel Communications Sdn Bhd, was said to have invested in excess of RM1 billion to deploy its 4G LTE network, but how well it has been performing is not known.
The latest company under his belt is Media Prima Bhd, where his Aurora Mulia Sdn Bhd has a 31.9% stake. Aurora Mulia commenced buying shares in Media Prima in July this year and is now its controlling shareholder.
What Syed Mokhtar will do with all his assets and how he will fare once current prime minister Tun Dr Mahathir Mohamad hands over the reins of the country is anybody’s guess. — By Jose Barrock
The fluctuating fortunes of Ananda Krishnan
Tan Sri T Ananda Krishnan remains one of Malaysia’s wealthiest businessmen through his private vehicle Usaha Tegas Sdn Bhd, which owns many major companies in the country as well as globally.
However, the 2010s turned out to be one of the worst decades for the media-shy tycoon owing to a combination of factors: plunging crude oil prices, changing consumer preferences and the complexity of doing business in India.
In 2010, Forbes put his wealth at US$9.9 billion, making him the second-richest man in Malaysia, eclipsed only by Robert Kuok of Kerry Group. Nine years later, his wealth has shrunk to an estimated US$6.2 billion, placing him behind Kuok, Tan Sri Quek Leng Chan of Guoco Group and Tan Sri Teh Hong Piow of Public Bank Bhd on the mega rich list.
That his coffers took a hit was underscored by the fact that the ringgit averaged 3.22 to the US dollar in 2010 and depreciated to about 4.15 in 2019.
Ananda’s investments in the decade to 2019 played a key part in the fluctuation in his fortunes.
In 2011, he decided to list Bumi Armada Bhd on the back of a strong rally in crude oil prices, believing that the largest offshore support vessel operator in Malaysia and one of the biggest floating production, storage and offloading vessel operators in the world would have little problem in securing contracts.
But his joy was short-lived as a boom in North America’s shale gas created a massive glut in oil and gas supply worldwide, prompting oil majors to slash their investment spending and triggering a huge reduction in exploration and production expenditure.
Subsequently, Bumi Armada’s share price crumbled from a peak of RM2.61 on April 19, 2012, to 15 sen on Dec 19, 2018, wiping out a whopping 94.3% of its market value. Ananda lost an estimated RM2.94 billion during the period, given that he owned 34.87% of the company.
At the beginning of the decade, in 2010, Ananda paid RM8.3 billion to take Astro All Asia Networks Ltd private. Two years later, he chose to only relist the domestic business, Astro Malaysia Holdings Bhd, for an impressive RM15.75 billion in an exercise that raised RM4.6 billion for him and Khazanah Nasional Bhd, his Astro partner.
However, at RM3 per share, or 24 times its earnings in its financial year ended Jan 31, 2012, Astro Malaysia was considered pricey — more so as the company itself had projected a decline in earnings in the following financial year.
In a sign of what was to come, Astro Malaysia’s share price closed some 26.4% lower on its first day of trading, and has not come close to its RM3 offer price. As at Dec 16, it was trading at RM1.35.
The stock’s lacklustre performance is attributed to the increased spending that the company has had to undertake to fight the trend of consumers switching to streaming services such as Netflix and Iflix in Malaysia.
Expanding into India’s telecoms sector added to Ananda’s financial woes. Caught in the country’s jurisdictional maze, he stands to gain nothing from investing in Aircel Ltd, formerly a big player in mobile telephony.
According to a March 2, 2018, Bloomberg article, Ananda may lose the entire US$7 billion he invested in Aircel after the telecommunications company filed for bankruptcy in February 2018. Ananda’s Maxis Communications Bhd owns 74% of Aircel.
In July 2018, Indian newspaper The Economic Times reported that Ananda was one of 18 people named in an Indian Central Bureau of Investigation (CBI) charge sheet over a corruption case involving the country’s former finance minister P Chidambaram.
Given the drama surrounding the insolvency of Aircel and the corruption case, will the 2020s be better for the 81-year-old? — By Kamarul Azhar
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