Wednesday 24 Apr 2024
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KUALA LUMPUR (Dec 27): Berjaya Corp Bhd's (BCorp) founder and major shareholder Tan Sri Vincent Tan Chee Yioun intends to pare his stake to 19.6% from 26%, paving the way for the diversified group's potential acquisition of a 51% stake in a financial services company.

In a statement, BCorp, in which Tan is chairman, said it is in the midst of evaluating a potential acquisition involving a licensed entity governed by Bank Negara Malaysia (BNM) under the Financial Services Act 2013 (FSA).

Apart from banks, other businesses governed by BNM under the FSA include insurance broking, money-broking, financial advisory and digital banks.

The announcement also cast the limelight on foreign insurance companies that have yet to meet BNM's 70% shareholding cap. These companies include UK-based Prudential plc and Tokio Marine Holdings Inc.

BCorp is not new to the financial services business. It is currently involved in provision of insurance via its 30% stake in Berjaya Sompo Insurance Bhd. Sompo Holdings (Asia) Pte Ltd owns the remaining 70% stake.

The group also wholly owns a stockbroking arm — Inter-Pacific Securities Sdn Bhd.

The tycoon has already started trimming his stake in BCorp. Tan sold 400 million shares via direct business transaction last Thursday (Dec 22). He owns a 12.95% direct interest and a 13.29% indirect interest after the share sales.

Meanwhile, Kossan Rubber Industries Bhd's founder and managing director Tan Sri Lim Kuang Sia emerged as a substantial shareholder of BCorp.

Lim bought 400 million shares or a 7.16% stake, of which 120 million shares or 2.15% are direct interest and 280 million shares or 5.01% were acquired through Kossan Holdings (M) Sdn Bhd.

BCorp said Tan's stake reduction was "to facilitate the potential acquisition of a 51% equity stake in the licensed entity", without disclosing the name of the acquisition target.

"In view of this, [Tan] has been carrying out several share disposals to reduce his stake in BCorp to not more than 19.6% which will result in his effective interest in shares of the licensed entity to be not more than 10% if the potential acquisition materialises," the group said in a stock exchange filing on Tuesday (Dec 27).

"The board of BCorp proposes to expand and grow its financial services segment and expects the contribution from this potential acquisition to contribute significantly to the earnings and net assets of BCorp group," it added.

Under FSA, individuals are allowed to own no more than a 10% stake in a financial institution. Meanwhile, companies that are involved in the gaming business are not permitted to hold equity stakes in banks.

There was a "grandfathering rule" within the financial services sector which referred to an exemption given to certain individuals who own more than a 10% stake in a financial institution prior to the FSA.

The rule has recently been widely discussed following the passing of Public Bank Bhd's founder Tan Sri Dr Teh Hong Piow, who owned a 23.41% stake in Public Bank through 0.64% direct shareholdings and 22.77% indirect ownerships.

Apart from Public Bank, the other two local banks whose shareholders have yet to reduce their individual shareholdings to meet the FSA threshold are Hong Leong Bank Bhd and AMMB Holdings Bhd.

Hong Leong Bank's chairman Tan Sri Quek Leng Chan owns over 64% stake via Hong Leong Financial Group Bhd. Australia and New Zealand Banking Group Ltd owns 21.64% shareholdings in AMMB, while Tan Sri Azman Hashim has a 11.81% stake in the banking group.

Shares of BCorp gained one sen to close at 29.5 sen on Tuesday, giving it a market capitalisation of RM1.76 billion.

Kossan shares, on the other hand, were up two sen or 1.77% at RM1.15, valuing it at RM2.94 billion.

Edited ByLam Jian Wyn & Kathy Fong
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