Despite there being green shoots of recovery in the aviation industry after three challenging years of the Covid-19 pandemic, MYAirline Sdn Bhd could not hold on long enough to survive.

The low-cost carrier halted its flight operations after only 10 months of flying.

On Oct 12, MYAirline announced the suspension of its flight operations citing "significant financial pressure", making it potentially the first Malaysian-based airline to collapse post-pandemic.

This has left 125,000 passengers stranded with RM22 million worth of tickets to nowhere. The airline had sold tickets with travel dates until March 2024.   

MYAirline interim accountable executive Datuk Seri Azharuddin Abdul Rahman was quoted by the media as saying that a combination of high overhead costs, falling capital, and an aggressive expansion plan were among the reasons for the carrier’s financial woes.

Its inaugural flight took off on Dec 1, 2022. The airline reached an average of 91% load factor, and had flown eight Airbus A320-200 till Oct 12.

MyAirline started with two aircraft, and within its 10 months of operation, it expanded its fleet to nine aircraft. Its 10th and 11th aircraft arrived at the point of its suspension.

The incident has raised questions about the two local aviation authorities that oversee the industry, namely the Civil Aviation Authority of Malaysia (CAAM) and the Malaysian Aviation Commission (Mavcom).

CAAM came under scrutiny for granting MYAirline a two-year extension of its air operator’s certificate (AOC) until 2025, just three days before the airline suspended its operations.

CAAM admitted that it was unaware that MYAirline was financially stressed when the extension was granted.

The shutdown of MyAirline is an indication of the cut-throat competition in the crowded industry resulting in razor thin margins, in addition to high fuel costs.

SKS Airways also made headlines on speculation of its financials as the airline, which was launched in January 2022, was also said to be seeking investors to raise equity capital.

The news came on the heels of an unsuccessful attempt by MYAirline to secure new investors to sustain its operations.

However, SKS Airways clarified that it has no financial problems and that its flights were halted due to the monsoon season. The airline also said the group has secured financing to fund its aircraft leases, engine maintenance, and working capital.

Within four months, between August and November, Sime Darby Bhd sealed two agreements.

In late August, the group announced that it is paying RM3.57 billion, or RM5 per share, to buy its parent Permodalan Nasional Bhd’s (PNB) 61.18% stake in UMW Holdings Bhd, which owns a 38% stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua), and subsequently to launch a mandatory general offer to take UMW private.

The other shareholders of Perodua are Daihatsu Motor Co holding a 25% stake, public-listed MBM Resources Bhd (20%), PNB (10%), and Mitsui & Co (7%).  

The takeover, which is dubbed as the country’s biggest automotive deal, will cost Sime Darby RM5.48 billion in total. It will be funded by internal funds and borrowings. As a result, Sime Darby's gearing is expected to rise sharply.

On Nov 10, Sime Darby together with its Aussie joint venture (JV) partner Ramsay Health Care Ltd entered into a sale and purchase agreement to sell Ramsay Sime Darby Health Care Sdn Bhd to Columbia Asia Healthcare Sdn Bhd for RM5.7 billion cash.

The divestment of a 50% stake in the healthcare JV is expected to help replenish Sime Darby’s cash coffer by RM2.75 billion. On top of that, the group will also recognise a net gain of RM2 billion.

A few days after the announcement of the healthcare business, shareholders at an extraordinary general meeting gave the green light for Sime Darby’s proposed takeover of UMW — a deal that will bolster Sime Darby’s position as the leading automotive player in Malaysia.

Sime Darby has regional distribution rights for several foreign marques, including BMW, Hyundai, Ford, Jaguar, Land Rover, Volvo, and Porsche.

With the disposal of its healthcare division and the acquisition of UMW, Sime Darby is poised to focus on its core businesses of industrial and motors, which accounted for 87% of its revenue and 95% of its profit before interest and tax in FY2023.

The aerotrain service at the Kuala Lumpur International Airport (KLIA) has been suspended for 10 months after breaking down in March.

All eyes are watching for whether Malaysia Airports Holdings Bhd (MAHB) will be able to have the first aerotrain commencing service in July 2024 — seven months from now, and two aerotrains serving KLIA passengers by end-2024.

Currently, the progress of the aerotrain replacement project has been halted for four months, if not longer, after MAHB terminated the contract that it awarded to Pestech International Bhd in August.

Pestech, in partnership with France’s Alstom, won the RM742.95 million tender from MAHB in December 2021 to develop a new Automated People Mover (APM) project.

The contract was for the design, supply, installation, testing, and commissioning of three new trains and related systems to replace the existing ones, which had been in service since 1998.

MAHB explained that the reason it decided to terminate Pestech as the contractor was because Pestech failed to meet the project deadline and committed several material breaches. Pestech disputed the termination, however, claiming that it had completed 37% of the project and procured all long lead time items.  

Following the termination of Pestech’s contract, MAHB issued a tender by invitation to four companies that had participated in the previous aerotrain project tender, adhering to procurement best practices.  

The four bidders included SMH Rail Sdn Bhd in a standalone bid; MMC Corp Bhd, partnered with China’s CRRC-MRT and Mobilus Sdn Bhd, under the leadership of Tan Sri Syed Mokhtar Albukhary; Malaysian Resources Corp Bhd (MRCB) in collaboration with South Korea’s Woojin Industrial Systems Co Ltd; and Hartasuma Sdn Bhd, partnered with Austrian company Doppelmayr Seilbahnen GmbH. Hartasuma later withdrew from the bid.

In an unexpected turn, IJM Corp Bhd, which is in the midst of acquiring a 44.83% stake in Pestech, expressed interest in bidding for the project.  

This caused discontent among the other four bidders in the closed tender.

MAHB stated that the current tender process is progressing as scheduled and declined to reveal details.

Time will tell if MAHB will be on time to meet the deadline or has to set a later deadline due to the delay.

Bursa Malaysia Securities Bhd has publicly reprimanded and fined RHB Investment Bank Bhd (RHB IB) RM350,000 for two breaches of the listing requirements related to an initial public offering (IPO) of an ACE Market applicant. 

In mid-September, Bursa Malaysia revealed that the first breach involving RHB IB’s failure to conduct proper due diligence as a sponsor and principal adviser for the applicant.  

The regulator found that RHB IB had failed to make all reasonable due diligence enquiries and consider all relevant matters to ensure that there was no misstatement or material omission in the submission and disclosures made in the initial listing application and draft prospectus which were submitted to Bursa Malaysia for the applicant.  

The second breach was over RHB IB's failure to immediately notify Bursa Malaysia of "material developments concerning the applicant's business, operations, future plans and prospects after the initial submission", the regulator said in a statement.

According to Bursa Malaysia, RHB IB had failed to inform the regulator of three material agreements, including an agreement with a related party entered by the applicant after the initial submission.

The breaches led to the rejection of the proposed IPO of the applicant, whose name was not disclosed by Bursa Malaysia.

Bursa Malaysia said it views the breaches seriously due to the primary and crucial role played by sponsors and advisers in the assessment of the suitability of an applicant for admission to the ACE Market, which is a ‘sponsor-driven’ market, aimed at ensuring quality, accurate and adequate disclosure in the IPO and prospectus for the proposed listing of an applicant.

In response to the rebuke, RHB IB said in a statement that it has taken immediate steps to strengthen its internal policies, processes and procedures relating to its role as an adviser and sponsor for submissions to Bursa Malaysia.

“RHB IB is committed to upholding the highest standards of integrity and professionalism in all its dealings and will continue to work closely with the regulators to ensure compliance with all applicable rules and regulations,” it said.

Pharmaniaga Bhd fell into Practice Note 17 (PN17) status after booking half a billion ringgit in impairments caused by unsold Covid-19 vaccines. The massive impairment pulled the generic drug maker into its biggest quarterly net loss of RM664.39 million in the financial quarter ended Dec 31, 2022 (4QFY2022).

The financial stress sparked panic selling of its shares in February. Its share price almost halved in a span of three days to 25 sen, from 44 sen. The counter closed at 36.5 sen on Thursday (Dec 28), valuing Pharmaniaga at RM526 million.

This was adding more to its parent company Boustead Holdings Bhd’s financial woes. Boustead, which was taken private by Lembaga Tabung Angkatan Tentera (LTAT) in June, owns a 47.12% stake in Pharmaniaga, while LTAT holds 7.83%.

Nonetheless, there is a light at the end of Pharmaniaga’s tunnel. The Ministry of Health (MOH) extended its concession to supply medical supplies and medicines to public hospitals by seven years, despite it being in financial trouble.

Pharmaniaga hogged the limelight again in November, when Deputy Health Minister Datuk Lukanisman Awang Sauni revealed in Parliament that the company had refused to comply with the letter of demand (LOD) issued by MOH regarding shortcomings in the procurement of faulty ventilators during the height of the Covid-19 pandemic in 2020.

This came after a Public Accounts Committee (PAC) report in October revealed that Pharmaniaga helped MOH acquire 136 ventilators for RM20.13 million, of which just 32 were working following repairs and replacements.

The PAC report also revealed there was no written agreement drawn up on the procurement of ventilators, resulting in no party being able to be held accountable for the malfunctioning ventilators.

Pharmaniaga has since denied that the group ignored the LOD and said it is committed to the ongoing process of finding amicable and fair resolutions for the defective ventilators issue with MOH.

The government in May lifted an 18-month ban on renewable energy (RE) exports, a much-anticipated move that experts said will energise the local RE sector by tapping into rising demand in Singapore.

The decision is part of the government's strategy to improve its RE policies, making sure Malaysia’s power sector will be supportive of the country’s new growth engines. Meanwhile, the government is restructuring the electricity tariff to address ballooning subsidy bills.

Also announced this year were additional quotas of 450MW for rooftop solar and large scale solar (LSS) programmes, and another 180MW for non-solar RE projects under a feed-in tariffs mechanism.

This is on top of plans to introduce new mechanisms to encourage more residential rooftop solar, currently hindered by the high costs of over RM20,000 at the minimum.  

The government also announced plans to develop large RE projects, including 500MW solar parks through Tenaga Nasional Bhd and another 1 gigawatt (GW) of hybrid solar plant integrated with an RE industrial park, led by UEM Group Bhd.

Additionally, the government intends to put RM2 billion into a seed fund to finance marginally bankable energy transition projects or those yielding below-market returns, such as electric-vehicle charging, hydrogen and carbon capture technologies.

These announcements, cemented in the National Energy Transition Roadmap (NETR), lifted stocks of RE-linked companies higher, from RE producers to engineering, procurement, construction and commissioning (EPCC) companies, and even energy traders.

This was in anticipation of faster project roll-outs compared with the pace seen in the last few years, amid hiccups in LSS project executions mainly attributable to shocks in solar panel prices when global demand boomed post-Covid.  

While the roadmap provided an assurance on government direction with regards to RE, industry players are now awaiting more clarity on how the government will approach new projects domestically, as well as how the export mechanism will work, which would be revealed only in late 2024 at the earliest.

The road to integrate and digitalise the country’s immigration system has never been smooth. The change of government did not help at all.

The project was halted again in 2023. The Ministry of Home Affairs terminated the RM1.16 billion National Integrated Immigration System (NIISe) contract that was awarded to Iris Corp Bhd in August.

The termination came as a surprise, as the ministry had in May extended the NIISe contract to Iris by 12 months from Sept 1, 2025 to Aug 31, 2026.

The contract was originally awarded to Iris by the Perikatan Nasional government in 2021.

Iris is challenging the termination and brought it to the Asian International Arbitration Centre (AIAC), having claimed the termination as “invalid and unlawful” in a letter to the ministry.

Home Affairs minister Datuk Seri Saifuddin Nasution Ismail had previously mentioned the potential replacement of the NIISe contractor if Iris’ wholly-owned subsidiary Iris Information Technology Systems Sdn Bhd (IITS) could not successfully carry out the project.

In November, Saifuddin told Parliament that the government had spent RM106.93 million on the NIISe contract before its termination. He pointed to a four-month delay in physical works, and failure by the company to complete its handovers within the prescribed remedy period.

An interesting twist was that Iris had wanted to sell an 80% stake in IITS, the unit that undertook the NIISe project.

NIISe is the second such project announced by the government in recent years. In 2019, the Pakatan Harapan government terminated a RM3.5 billion Sistem Kawalan Imigresen Negara (SKIN) project, which was awarded to Prestariang Bhd (now Awanbiru Technology Bhd) in 2017. Awanbiru is claiming over RM732 million from the government for works done on SKIN, and the trial is ongoing.

This is among the public contracts that have been halted. Naturally, lobbying is expected to emerge.

When Malaysia Aviation Group (MAG) ended its decades-old partnership with caterer Brahim’s Holdings Bhd in August, it took almost four months until November to fully restore its in-flight catering. This drew flak from the public. Business class passengers were being served pre-packaged meals in the absence of hot offerings during the early weeks of the transition.

MAG, parent of Malaysia Airlines Bhd (MAB), bit the bullet to split after a “thorough and prolonged” negotiation for a contract extension, which intensified in 1H2023 amid surging travel demand after more than two years of Covid-19-driven restrictions.

At the core of the dispute is Brahim’s disagreement over a clause which allows either MAG or Brahim’s to terminate the contract within a one-month period. The clause, Brahim’s has said, was a condition that had never been included in its agreements with its 35 airline customers, including the national carrier.

To make it even more complicated, the duo jointly own Brahim’s Food Services Sdn Bhd (BFS) — the catering unit. MAB has a 30% stake while Brahim’s controls a 70% stake. It was noted that the national carrier contributed to almost 50% of BFS’ revenue.

Now MAB offers its meal service through partnerships with nine different third-party meal suppliers, and the establishment of a temporary distribution centre — the MAG Catering Operations (MCAT).

While the new arrangement has resulted in an increase in its catering costs from 2% of its total operational cost during its partnership with Brahim’s to 2.5% currently, MAG group managing director Datuk Captain Izham Ismail, however, was quoted as maintaining that it is “worth the investment”.

In fact, MAG is looking into partnering with foreign in-flight catering companies to potentially set up its own catering unit. Meanwhile, Brahim’s service for its other airline customers here continues.

Some quarters say that taking Boustead Holdings Bhd private would make the restructuring process of the debt-laden conglomerate easier and quicker.

This wasn’t quite the case, as was evident in the scuttling of the partnership with Kuala Lumpur Kepong Bhd (KLK) to rejuvenate its plantation arm, Boustead Plantation Bhd (BPlant).

Under the proposal, KLK would first acquire a 33% stake plus one share in BPlant for RM1.15 billion cash from Boustead Holdings, which owns a 57.42% stake in BPlant. Subsequently, KLK and Boustead Holdings would jointly extend a takeover offer at RM1.55 per share to privatise BPlant.

Upon completion of the exercise, Boustead and LTAT would collectively retain a 35% equity interest in BPlant, while KLK as a joint venture partner would fund the annual replanting costs of RM150 million that BPlant desperately needs over the next few years.

The proposal would enable LTAT to unlock the value of BPlant by selling the 33% stake to KLK while having a strong partner to revive the latter’s plantation operation.

But, opposition MPs did not see the deal in a positive light. They claimed it did not fit with the government's aim of achieving the 30% Bumiputera corporate equity target by 2025.

If the deal had gone through, BHB could have received RM1.15 billion from KLK and been able to address some of its financing needs. BHB, which LTAT privatised in June, needed RM800 million by year-end to meet its debt obligations. As of October, the Boustead group had total debts amounting to RM6.8 billion.

With KLK out of the picture, LTAT forked out the RM1.15 billion cash that was paid to BHB in exchange for the 33% BPlant stake, which raised LTAT’s direct shareholding to 43.59%. LTAT also has to fork out an additional RM1.11 billion for the remaining 32% not owned by the fund and BHB.

To make it work, the government stepped in to issue a guarantee — that it defended as "not a bailout" — for LTAT to take up RM2 billion worth of bank loans to part-fund the entire Boustead restructuring.

LTAT's offer to take BPlant private turned unconditional last Friday, after it secured 90.26% of BPlant's issued shares. BPlant's shares will be suspended five days after the closing date of the privatisation offer, which has been extended from Dec 22 to Jan 5.

Not long after the Unity Government was formed in November last year, Prime Minister Datuk Seri Anwar Ibrahim said the government would rigorously review the national 5G network rollout under Digital Nasional Bhd (DNB), claiming the previous administration did not manage it in a transparent manner.

No wrongdoings were found after a five-month-long review. DNB undertook an open tender process in awarding the project’s development to Ericsson Malaysia, and it does not rely on government funding for the project.

Nevertheless, then Communications and Digital Minister Fahmi Fadzil announced in May that Malaysia would transition to a dual network model (DNM) once DNB's rollout reaches 80% coverage of populated areas by early 2024.

This was decided even as he lauded DNB's single wholesale network model (SWN) as helping accelerate the 5G rollout.

According to Fahmi, the transition was to prevent a single point of failure under the state monopoly SWN model — where having two networks is safer than having just one. Critics, however, argued that a similar monopolistic model worked just fine in the electricity sector.

It is also noted that the SWN roll-out is deemed effective, as Malaysia now ranks third in 5G speed globally despite DNB's "unconventional deployment strategy”, according to internet connectivity intelligence provider Ookla Research in a Dec 19 report.

Ahead of the second network rollout, five mobile network operators — CelcomDigi Bhd, Maxis Bhd, U Mobile Sdn Bhd, Telekom Malaysia Bhd and YTL Communications Sdn Bhd — finally sealed a deal that has been up in the air for more than a year, to each subscribe to a 14% stake in DNB in exchange for RM233 million.

An option is on the cards for Putrajaya to eventually divest its entire stake in DNB to the telcos, while retaining just its golden share in the company.

While the fate of a second wholesale network is still an uncertainty, MNOs are again in the spotlight as some have begun charging subscribers up to RM20 a month to get 5G service, despite the government's repeated "request" to waive such fees.

On Dec 19, Fahmi went as far as to say the government might take action against telcos charging customers an additional fee for 5G access.

The MNOs, however, argued that the 5G fees were justified because of their "commercial decision" to buy access to DNB's 5G network, even though getting the 5G network access from DNB had saved them capital expenditure and reduced their need to spend on capacity expansion on their existing 4G network. 

This year, Malaysia made progress in the years-long legal battle mounted by a group of self-proclaimed Sulu Sultanate’s heirs over a controversial US$14.92 billion award against the Malaysian government in relation to a colonial-era land deal in Sabah.

The decisive wins in the courts of Paris and The Hague quashed the controversial award, which saw the claimants attempting to seize the assets of Petronas in Luxembourg and the Netherlands, as well as Malaysian diplomatic assets in France.

The dispute originated from an alleged breach of an 1878 contract for the annual payment of RM5,300 to the Sulu Sultanate in exchange for perpetual sovereign rights over part of what is now known as Sabah.

On June 6, the Paris Court of Appeal had refused to recognise the "preliminary award" granted by Spanish arbitrator, Dr Gonzalo Stampa in May 2020 to the eight Philippine citizens claiming to be the Sultanate's heirs.

Another big win was on June 27, when The Hague Court of Appeal dismissed the Sulu group’s application to recognise and enforce the controversial final award — also granted by Stampa in 2022 — in the Netherlands.

The Hague court ruled that the original agreement did not have a clause which bound parties to arbitration. It also noted that an existing stay order by the French Court meant the claim was not enforceable in the Dutch jurisdiction.

Later on Nov 6, a Paris enforcement judge quashed an order of a statutory mortgage against three Malaysian diplomatic buildings in Paris. Three days later on Nov 9, the court recorded the claimants’ withdrawal from the attempted seizure of the three properties.

Welcoming these developments, Minister in the Prime Minister’s Department (Law and Institutional Reforms), Datuk Seri Azalina Othman Said said Malaysia was confident that it is only a matter of time before the controversial award is fully annulled by the Paris Court of Appeal.

Stampa himself was accused by the Spanish Public Prosecutor's office of suspected criminal offences and “unqualified professional practice” in relation to the controversial award. If found guilty, he faces a jail sentence and fine.

It has been an eventful 2023 for the Penang state government.

It had the state polls in August, in which the incumbent managed to retain power but lost its two-third majority for the first time in 15 years.

Politics aside, the state made two controversial moves during the year — the sale of 558.96 acres of land near Batu Kawan that sparked public outcry, and the scaling down of the Penang South Islands (PSI) reclamation project, a decision which its consortium member Gamuda Bhd described as showing a “scant regard for the rule of law”.

In late September, Penang Development Corp (PDC) signed a joint development agreement (JDA) with Umech Land Sdn Bhd to kickstart the development of Phase 2 of Batu Kawan Industrial Park.

Under the JDA, PDC, which owns the 558.96 acres of lands in Byram, Seberang Perai Selatan, will be entitled to RM646 million cash, which will be paid in instalments by Umech Land within 48 months.

Meanwhile, Umech Land as the master developer will bear all the costs and expenses to undertake the developments, including a bridge, access roads and supporting infrastructures. It will in turn earn all profits generated from the developments.

Such land owner-developer partnership model is quite common in the property industry. However, PDC's land deal raised questions on transparency and governance, mainly because the state did not conduct an open tender.

Umech Land's shareholders are Karen Cheng Pui Kwan (21%), Nathaniel Rajakumar (9%), and Sunway Bhd (70%). Sunway emerged as a majority shareholder two days before announcing the agreement.

Furthermore, it was later revealed that the company that was in talks with PDC was Umech Construction Sdn Bhd. However, the firm that signed the deal was Umech Land. The two companies have common shareholders, namely Cheng and Nathaniel.

According to Penang chief minister Chow Kon Yeow, PDC had been wanting to jointly develop an industrial park on site, but no one expressed any interest as the land was located next to the Pulau Burung landfill.

As criticism got louder, PDC, in mid-October, terminated the JDA, on grounds that the change in Umech Land’s shareholdings was done without informing PDC and without PDC’s approval. This “is a serious issue and cannot be accepted by the board of PDC”, it said at the time.

Nonetheless, the board of PDC maintained that the selection process that resulted in Umech Land’s appointment was transparent and in line with PDC policy.  

In May, prior to this controversial land deal, the state announced that it was scaling down the PSI reclamation project to one island instead of three. It said this was on request from Prime Minister Datuk Seri Anwar Ibrahim, who in turn promised federal funds for the George Town-Bayan Lepas LRT.

The rail project is part of the Penang Transport Master Plan (PTMP), which the Penang state government had planned to part-fund via the PSI reclamation project.

Before the federal government came into the picture, the state had roped in SRS Consortium Sdn Bhd for the PSI project back in 2015, and in turn, SRS Consortium was to fund the PTMP as its project delivery partner (PDP).

Gamuda Bhd, which holds a 60% stake in SRS Consortium, lamented the state government’s move. The other stakeholders are Penang-based Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd with 20% equity interest each.

That said, Gamuda was awarded the RM3.717 billion contract for Phase 1 of the reclamation works, which was kick-started on July 1.