KUALA LUMPUR (Aug 12): The legacy rule that allows certain banks’ individual shareholders to own a stake larger than 10% under the Financial Services Act (FSA) will not be extended to anyone else, said Bank Negara Malaysia (BNM) governor Tan Sri Nor Shamsiah Mohd Yunus.
“Whatever approvals were given under Bafia (the Banking and Financial Institutions Act) for any individuals to exceed 10%, it is very specific to a group of shareholders who already own shares in excess of the 10% [limit] before the FSA came into force [in 2013],” she told reporters at the second-quarter gross domestic product briefing on Friday (Aug 12).
The governor was asked earlier whether this grandfathering rule would be passed on to other individual shareholders.
“Any future acquisitions by individuals would need to comply with the 10% [limit],” she added.
According to Section 92 of the FSA, the prohibition on individuals owning more than 10% of shares in a financial institution does not apply to individuals whose shareholdings have exceeded this level before June 30, 2013, where they have obtained prior to hold the stakes under Bafia in the case of a licensed bank or licensed investment bank, or where they were not required to obtain such approval under Bafia or the Insurance Act 1996.
Hong Leong Bank Bhd's 80-year-old chairman Tan Sri Quek Leng Chan was recently reported to be weighing options to reduce his controlling stake in the bank.
Quek controls 62% of Hong Leong Bank via Hong Leong Financial Group Bhd, which far exceeds the 10% limit on individual shareholdings in financial institutions.
Apart from Hong Leong Bank, there are two other local banks whose major shareholders have yet to reduce their individual shareholdings to comply with the FSA threshold, namely Public Bank Bhd and AMMB Holdings Bhd.
In Public Bank, founder Tan Sri Teh Hong Piow owns a 23.41% stake, of which 22.77% is held indirectly. As for AMMB, former non-independent non-executive chairman Tan Sri Azman Hashim holds 11.81%, being the second largest shareholder after Australia and New Zealand Banking Group Ltd, which owns 21.64%.
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