Tan’s entry cost into GBH is believed to be low. Assuming it is RM1, his current shareholding of 33.1% would cost him some RM20.5 million. If his mandatory general offer (MGO) receives acceptance, he would have to fork out an additional RM51.7 million.

If there is a higher offer than the RM1.25, say, RM1.50 per share, Tan could sell his stake for RM30.7 million and make a clean profit of about RM10.2 million.

If he succeeds in the takeover, he will have at his disposal attractive parcels of land that could fetch billions of ringgit in development value. So, either way, Tan stands to gain in this intricate corporate tussle.

The reclusive Tan first emerged in GBH in December 2006 with a 10.8% stake, or about 6.7 million shares, acquired in an off-market deal. He might have bought the stake from privately held Ceramtec Sdn Bhd, which had a 34.4% stake in GBH in 2005.

Tan upped his shareholding to 30.4% in January 2008. In July last year, he and long-time associate, Anderson Thor Por Seng, were appointed to the board of GBH as non-independent, non-executive directors.

Sources say he and parties working in concert with him have accumulated about 20.5 million shares, or 33% of GBH’s 61.9 million share capital, which leaves him in a comfortable position.

Tan makes a killing
Tan made an offer of RM1.25 a share to take over the remaining 41.4 million shares he did not own at end-June. However, this offer is likely to hit a brick wall as GBH’s net asset per share as at end-March this year stood at RM2.50, or double the offer price. According to insiders, Tan’s holding cost for the stake in GBH is less than RM1 a share.

GBH has seen its share price surge, with the counter closing at RM1.29 last Friday, as the market sensed a shareholder tussle in the offing. Considering that Tan controls 33% of the company, he can command a premium as his is the controlling block of shares.

The other substantial shareholders of the company are Lembaga Tabung Angkatan Tentera (LTAT), with an 18.2% equity interest, and Ceramtec, which has a 15.9% stake. Ceramtec is the holding company of the Goh family that was seen as firmly in control of GBH until Tan made his move.
It seems as if the Goh family is in a corner and even if they succeed in eliciting support from LTAT, they will end up forking out a substantial amount of money to oust Tan and those friendly to him.

“He is a shrewd businessman and has managed to pull off a caper on GBH’s long-time shareholders. He is entrenched in the company and will be hard to remove,” says an observer.

But then again, Tan is no ordinary businessman. His business ventures have been ongoing since the 1980s, and he has been known to have political clout. As a matter of fact, the current saga pales in comparison with some of his other feats.

Tan has always preferred to keep his activities low key. The first significant mention of Tan in the press was back in July 1992, when he was questioned by the Anti-Corruption Agency about a sale of nine million Telekom Malaysia Bhd shares to MIC’s Maika Holdings Sdn Bhd.

Some nine months later, he was mentioned again, but this time as a member of a 16-man delegation looking to invest in the Philippines. Interestingly, the person who headed the delegation was former finance minister Tun Daim Zainuddin.

Other names in the Philippines venture were the late Tan Sri Ling Beng Siew, chairman of Hock Hua Bank Bhd; Renong Bhd supremo Tan Sri Halim Saad; Tan Sri Ting Pek Khiing, boss of Ekran Bhd, which has since been delisted; MAI Sdn Bhd chairman T Ananda Krishnan (of Maxis and Astro fame); Asie Sdn Bhd chairman Datuk Khalil Akasah; the former Celcom Bhd chairman Tan Sri Tajudin Ramli; Tan Sri Hassan Merican (of oil major Petroliam Nasional Bhd); Land and General Bhd director Razif Abdullah; and Metroplex Bhd managing director Dick Chan Teik Huat, among others.

This high-power entourage was the backbone of many deals made locally in the years to come. Many of Tan’s deals involved Ting and Daim.

The early days
Tan who hails from Muar, Johor, emerged in Corporate Malaysia as a substantial shareholder of Nova Atlantic Sdn Bhd, a privately held shell company that was used to take over Pacific Chemicals Bhd. Later, Ting emerged as a shareholder in Pacific Chemicals via the injection of Usama Industries Bhd.

The two, Tan and Ting, had other ventures. In 1994, Tan and partners Abdul Rasip Haron and Mohd Noordin Daud injected FCW Industries Bhd (formerly Federal Cables, Wires and Metal Manufacturing Bhd) into Bata (M) Bhd for slightly over RM200 million after buying it at the same price from Ting.

Ting sold FCW to Tan after a heated tussle with Leader Universal and Sapura Holdings in 1993, and many questioned his motives for selling it to Tan after fighting so hard for FCW.

In 1993, Tan’s Jasa Kita Bhd — which manufactures electric motors — was listed on Bursa Malaysia. The company is known as his flagship company.
Marco Corp Bhd, the sole distributor of Casio watches and calculators in the 1970s, took over the listing status of ailing biscuit maker Khong Guan Holdings Bhd via a back-door listing in 1999.

Since then, he has listed several companies and has minor stakes in a number of them. Besides Jasa Kita, Marco Holdings and FCW, the companies in which he is a substantial shareholder include shipping outfit PDZ Holdings Bhd; GPA Holdings Bhd, the main business of which is the manufacture of automotive batteries; Keladi Maju Bhd, which is in property development and cultivates oil palm; and Malaysia Aica Bhd, which manufactures prefabricated doors and knocked-down furniture, among others.

Insiders also say Tan controls Kilang Sawit Muar Bhd, an oil palm plantation and a mill in Muar, his hometown. Of all his forays, Tan’s business dealings with several companies linked to Daim are the most interesting.

Ties with Daim   
Tan’s ties with Daim date back to the early 1990s. In 1992, one Robert H C Tan (as stated by the Czech Republic’s then Central Bank governor Josef Tosovsky) was announced to have set up a bank in the Czech Republic called IC Bank, with a capital of US$13 million. This bank is now part of Daim’s International Commercial Bank (ICB) Financial Group, which is listed on the Alternative Investment Market, a sub-market of the London Stock Exchange.
This was not Tan’s first foray into the banking business, having had a 21.3% stake in Malta-based Lombard Bank. He then appointed one Lee Chen Chong, the then executive director of French-Malaysia Bank Bhd, to helm Lombard Bank.

French-Malaysia Bank was the forerunner of Indo-Suez Bank, which was taken over by Daim in 1981. French president Francois Mitterrand nationalised all French banks, and since Malaysian banking regulations did not allow foreign government-owned banks to operate here, Daim snapped it up from the French government. 

Daim later injected his equity in French-Malaysia Bank for a smaller stake in United Malayan Banking Corp Bhd, which was taken over by Sime Darby Bhd and renamed Sime Bank Bhd. Sime Bank was hived off in 1999 after incurring mounting losses the year before.

Tan’s Malaysia Aica had proposed to take over Sime Securities Sdn Bhd in 2000 but this plan was rejected by the government. Tan’s UCM Industrial Corp Bhd (which became Kuala Lumpur City Corp Bhd) controlled stockbroking outfit KL City Securities Sdn Bhd, which has since been swallowed by Alliance Bank Bhd.

KL City Securities CEO in 2000 was one Mohd Nasir Ali, who was on the board of International Bank (formerly Hock Hua Bank Bhd), by virtue of him controlling Langkah Bahagia Sdn Bhd, a private company supposedly linked to Daim.

Langkah Bahagia had a 15.4% stake in Malaysian Plantations Bhd (MPlant) that controlled Alliance Bank. According to Alliance Financial Group Bhd, lawyer Lutfiah Ismail is said to have a 29% equity interest in Alliance Financial Group via Langkah Bahagia, which was floated by MPlant a few years ago.

In 1997, when Langkah Bahagia acquired Hock Hua Bank, Nasir — according to news reports — publicly stated that he was acquiring the East Malaysian bank on behalf of Daim. At that time, Daim was an economic adviser to the Malaysian government.

The Spanco deal
Perhaps Tan is most known as one of the shareholders of Spanco Sdn Bhd, which has the mandate to manage the government’s fleet of cars for 25 years, starting in 1994. His partners in the business are his close associates Datuk Osman Mohd Zain and Abdul Rasip Haron. Other shareholders are his son Tan Han Chuan and daughter Tan Ching Ching.

Spanco was given the contract to lease and maintain vehicles for the government for 25 years as part of the government’s privatisation exercise. This was deemed a good deal as many government departments, such as the police force, had thousands of cars, and leasing and maintenance was not exactly Spanco’s core business. 

However in 2004, Spanco’s deal was reviewed by the Ministry of Finance, which ordered a review by Coopers & Lybrand in the belief that the government had paid too much. It was reported in The Malay Mail that the contract sum was reduced to RM80 million per annum from RM100 million previously.

Interestingly, the decision to renegotiate the Spanco contract came after the then deputy prime minister Datuk Seri Najib Razak said that the government would look into lopsided concessions. He added that the Malaysian government would learn from its mistakes to ensure that it did not get the short end of the stick when negotiating deals with the private sector.

Tan is no pushover. The price of GBH is above his MGO price, but that does not in anyway mean that it is the end game for him.   

This article appeared in Corporate page of The Edge Malaysia, Issue 762, July 6-July 12, 2009