This article first appeared in Corporate, The Edge Malaysia Weekly, on April 18 - 24, 2016.
BACK in May 1997, when privately held Langkah Bahagia Sdn Bhd forked out RM190 million for a 51.8% stake in Hock Hua Bank (Sabah) Bhd, one of its directors, Datuk Mohd Nasir Ali, said at a news conference that he was holding the equity interest for former finance minister Tun Daim Zainuddin.
“[Daim] is an interested party in this deal. I’m a nominee for a portion of his shares in Langkah Bahagia,” Nasir is reported to have said without elaborating. He went on to say that Daim was not expected to hold any position in Hock Hua Bank, describing him as just an investor in the bank.
To cut a long story short, Hock Hua Bank morphed into International Bank Malaysia, which, in turn, merged with Bolton Finance, Amanah Merchant Bank, Bumiputra Merchant Bank, Sabah Bank, Sabah Finance and Multi-Purpose Bank, among others. The merged entity is today Alliance Bank Malaysia Bhd, a wholly-owned subsidiary of Alliance Financial Group Bhd (AFG).
Although this happened almost 20 years ago, many still link Langkah Bahagia to Daim.
So when Langkah Bahagia announced that Lutfiah Ismail had sold out of the private company that owned 29.06% of AFG, many viewed it as Daim selling out.
According to the Companies Commission of Malaysia (CCM), Lutfiah holds 99% of Langkah Bahagia while Nasir has 1%. The two have been directors of the company since October 1996.
To recap, Langkah Bahagia owns 51% of Vertical Theme Sdn Bhd, which, in turn, holds 29.06% of AFG. The remaining 49% in Vertical Theme is controlled by Singapore’s investment arm, Temasek Holdings.
Both Nasir and Lutfiah were directors of UCM Industrial Corp Bhd, another Daim outfit whose mainstay is the manufacture of air conditioners. UCM was restructured into brokerage firm Kuala Lumpur City Corp Bhd, which is today hotelier The Nomad Group Bhd — yet another Daim company that was delisted last year after being taken over by property firm Plenitude Bhd, also purportedly a Daim counter.
Nasir is the deputy chairman of Plenitude and was the chairman of The Nomad Group while Lutfiah was on the board of The Nomad Group for a year from 2008.
Daim is known to have good ties with Temasek Holdings, which could explain the background of the buyers of a block of shares in Langkah Bahagia two weeks ago (see story next page).
Two of the three Malaysian buyers — Ong Beng Seng, Ong Tiong Sin and Seow Lun Hoo — are known to be closely linked to Temasek Holdings.
There is also speculation that Daim is unwell but this is brushed aside by an aide, who says: “I’ve not dared to presume to ask him about his health but he is in the office every day, six days a week, and sometimes even on Sundays, and finishes late. He looks fine to me.”
Some corporate personalities, however, beg to differ, insisting that Daim is not in the best of health. Such speculation could have been spurred on by his sale of assets under his flagship ICB Financial Group Holdings.
When asked by a business news portal in February 2014 as to why he was winding down his interests in ICB, Daim said, “I’m old already.” But he did not elaborate.
Over the past few years, Daim has been paring down his stakes in several foreign banking outfits held by ICB.
Switzerland-based ICB was privatised and delisted from London’s Alternative Investment Market in November 2013 after a flotation exercise in 2007.
Back in 2012, ICB had banks in 14 countries, including Albania, Bangladesh, Gambia, Ghana, Indonesia, Laos, Malawi, Senegal, Sierra Leone, Tanzania, and Zambia, but now there are only a few of them left. This number could erode further with plans underway to sell some of the remaining banks in Albania and Bangladesh.
In September 2013, ICB sold its stakes in International Commercial Bank in Ghana, Gambia, Guinea, Senegal and Sierra Leone to First Bank of Nigeria’s parent FBN Holdings Plc but details such as the pricing of the sale are not available.
In June 2014, ICB sold its banking assets in Malawi, Mozambique and Zambia to Blantyre-based First Merchant Bank Malawi for US$11.5 million.
In late January 2014, ICB sold 24% of its 67% holding in Bank ICB Bumiputera Tbk PT to businessman and politician Hary Tanoesoedibjo’s PT MNC Kapital Indonesia Tbk. That August, it sold another 39.7% to Tanoesoedibjo. The Indonesian banking group is now known as PT Bank MNC Internasional Tbk.
ICB had commenced operations in 1994 after securing a licence to operate a bank in Hungary, after which the group expanded to operate banks in 13 countries on three continents. ICB began operations in Ghana, Africa, in 1996 and expanded to nine other countries on the continent.
But today, according to sources familiar with the former finance minister, ICB has only one bank in Bangladesh and a couple in Africa, and these too are understood to be up for grabs.
Last week, Daim’s wife Toh Puan Mahani Idris and his son Datuk Md Wira Dani Abdul Daim surfaced as substantial shareholders in Reliance Pacific Bhd as a result of their interests in Ibu Kota Developments Sdn Bhd.
Ibu Kota nudged up its holding in Reliance from 4.49% to 12.29% after buying 66.97 million shares in off-market transactions.
Reliance is involved in hotel and resort management, travel services and tours, and property development.
While Mahani recently surfaced in Reliance, Daim’s other wife Naimah Khalid is not known to have any interests in any listed companies.
Save by subscribing to us for your print and/or digital copy.
P/S: The Edge is also available on Apple's App Store and Android's Google Play.