This article first appeared in The Edge Malaysia Weekly on June 15, 2020 - June 21, 2020
MANY would struggle to find opportunities, let alone synergies, during a pandemic, but Hong Kong-based Tricor Group has somehow managed to do so.
In April, Tricor completed its acquisition of Axcelasia Taxand Sdn Bhd — the Malaysian business of Singapore Exchange-listed Axcelasia Inc — for RM69.7 million. The acquisition also saw the inception of Tricor Axcelasia, the new strategic business advisory entity in Tricor.
Tricor Malaysia & Labuan CEO Yeap Kok Leong says while Tricor’s strength lies in corporate services — it has more than 7,500 clients in Malaysia — its acquisition of Axcelasia is the group’s first step towards building an integrated suite of governance, risk and compliance (GRC) services.
“Tricor Axcelasia’s tax advisory services and continuing membership of Taxand Global, a network of tax advisory firms in 50 countries, will significantly enhance our tax compliance services. In addition, Axcelasia’s corporate services and business support services have been merged into Tricor Malaysia & Labuan,” he tells The Edge.
Ranjit Singh has been appointed regional managing director of Tricor Axcelasia, while tax expert Dr Veerinderjeet Singh has been appointed non-executive chairman of Tricor Malaysia. Ranjit and Veerinderjeet were part of the leadership team at Axcelasia, which is now known as Axington Inc. Veerinderjeet still remains the non-executive chairman of Axington, which still holds the group’s non-core subsidiaries in Singapore, Vietnam and Laos , while Ranjit is a non-executive director.
The shareholdings of Ranjit, Veerinderjeet and Axington deputy executive chairman Datuk Peter Tang have been acquired by Dorr Global Healthcare Pte Ltd for S$22.3 million (RM68.5 million).
On Tricor Axcelasia, Ranjit says the synergy is a win-win for the business and clients.
“It represents the launch of a new regional GRC business focused on helping clients manage their increasingly complex regulatory and compliance responsibilities, while operating in the emerging and maturing economies of Asia-Pacific,” he says.
Opportunities in a crisis
Yeap says the fact that Tricor’s acquisition of Axcelasia’s Malaysian business was completed during the Movement Control Order (MCO) actually brought some business opportunities for the group.
“The acquisition proved to come at an opportune time, as business continuity management (BCM) is one of the core services offered by Axcelasia. Now, more than ever, businesses need integrated solutions of the highest standard to build resiliency and thrive despite the headwinds resulting from the Covid-19 outbreak.
“Tricor is introducing a new, specialised service called BCM Pandemic to our clients to help them deal with the unique challenges presented by the rapidly shifting business environment,” he adds.
When there is a change in ownership in companies, job cuts are usually something that is feared, and more so in current times with Malaysia’s unemployment rate hitting almost 4% in March. But Ranjit dismisses these concerns, saying the group plans to maintain Axcelasia’s existing workforce as it complements the services of Tricor Group.
“With the planned expansion of the GRC and internal audit business across Asean, we will further bolster our team with additional talent to support the future growth of the business.
“We [also] foresee acceleration in demand for tax advisory services considering the government’s new funding schemes aimed at assisting business growth, in addition to the taxation changes included in the stimulus packages. For clients seeking wage subsidy programme assistance, we can guide them through the application and submission process,” he says.
Despite the pandemic, Yeap notes that the group’s clients are still investing and expanding in the region.
“They require our support in their business expansion journey, [and] we do not see a significant slowdown in demand for our core services. In addition, owing to the shifting tides of the pandemic, we are observing rising demand for new services.
“In particular, clients are looking for more support in areas such as business resilience, business continuity and GRC — capabilities that have been expanded through Tricor Axcelasia’s synergies,” he says.
This, he explains, is due to the group’s resilient business model, as statutory compliance services will always be relevant, in both good and bad times.
“Thus, the business of corporate services, which is mainly company secretarial, business services such as payroll and accounting and investors’ services such as share registration, will remain stable.
“However, the issuing house is likely to be impacted by the uncertain initial public offering environment and share registration will have fewer corporate exercises. The payroll team will also be processing fewer pay slips as a result of retrenchments, restructuring and lay-offs. As such, we are also likely to see a spike in the number of ‘struck-off’ companies and liquidations.”
On another note, Yeap says the group has gained greater market share through the acquisition — an estimated 48% of the companies listed on Bursa Malaysia are its clients.
“We believe strengthening risk management and business continuity planning are critical steps for businesses to take to navigate and thrive during these uncertain times. Tricor is investing in the development of sophisticated, robust GRC software to meet the most pressing demands organisations face in today’s challenging environment.
“With the strategic combination of businesses and an expert understanding of the two leading GRC software programs, Q Radar and EMS, we are uniquely positioned to better cover the evolving needs of the market. As a local software provider that is well supported by a strong GRC consulting team, this acquisition positions us for exponential growth,” he notes.
The group will not be restricting its expansion plans to Malaysia. “As the GRC needs of the Asean market continue to evolve, we are expanding our GRC capabilities to serve the needs of clients in Singapore, Hong Kong and Vietnam,” says Yeap.
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