This article first appeared in The Edge Malaysia Weekly on November 11, 2024 - November 17, 2024

Owning or chartering a corporate jet is not something alien to companies with international operations.

However, some shareholders of global company DXN Holdings Bhd (KL:DXN), which is involved in the sale of health and wellness products through a multi-level marketing scheme, may not view its chartering of a private jet from its major shareholder too kindly.

In this case, the lease is on a 12-month basis for US$6.15 million (RM26.96 million). And in relation to the charter, the company has also hired two pilots for the aircraft.

DXN will charter the jet from Luxaviation San Marino Srl and Execujet Asia Pte Ltd. Luxaviation is the world’s largest private aviation company offering aircraft management and charter services while Execujet is part of the Luxaviation group.

The aircraft is owned by LSJ Logistics Ltd, a wholly-owned subsidiary of LSJ Global Sdn Bhd, a private company that is substantially owned by Datuk Lim Siow Jin and his spouse, Datin Leong Bee Ling. Lim is also the executive chairman and major shareholder of DXN.

It is worth noting that LSJ Global had acquired the corporate jet, which can fly long distance to South America with just one stop, in April this year for US$24.5 million (RM107.4 million).

The rationale offered by DXN is that it is a global company with 11 of its 13 manufacturing facilities located outside Malaysia. The Latin American market contributed 57.9% to the group’s total gross sales for the financial year ended Feb 28, 2024, followed by the Asian market.

The charter, DXN said, would lead to more convenient and flexible connectivity when travelling and improved overall productivity. According to the company, the executive jet will also be used by key management and high-performing members of the group who have achieved “Crown Ambassador” status.

Based on its announcement, if DXN had chartered the aircraft in the financial year ended Feb 28, 2024, its net profit would have been RM279 million, or RM32 million less or about 11% of total profit — this is something  some shareholders may take issue with.

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.