This article first appeared in Forum, The Edge Malaysia Weekly on December 9, 2024 - December 15, 2024
In one of his rare interviews in January 1996, the late T Ananda Krishnan said his passion was to go into the business of the future. At that time, hardly anybody in Malaysia knew how technology and the ensuing disruption were going to change our lives.
But Ananda, who was then 57, knew what satellite and mobile cellular phone technology would mean for the broadcasting, entertainment and communications sectors. He was well ahead of the curve when he launched the Malaysia East Asia Satellite (Measat) system in 1996.
By then, he had already got out of a massive property development project in which he built the Twin Towers. Petroliam Nasional Bhd (Petronas) had come in as a partner and buyer of one of the two towers in a deal that could not go wrong.
While it is common knowledge that the low-profile tycoon’s business empire was built on the disruptive technologies of the 1990s, the shareholding of his companies, which were linked to entities incorporated overseas, was always the subject of speculation.
There are four primary vehicles directly held by the Krishnan Family Trust, which was incorporated in the family office-friendly Channel Islands in the 1990s. They are PanOcean Management Ltd, Pacific States Investment Ltd (PSIL), Excorp Holdings NV and Pexco Holdings (US).
PanOcean Management holds 100% of Excorp, which in turn controls PSIL. PanOcean is a discretionary trust in which the beneficiaries are members of Ananda’s family and foundations, including charitable trusts. Pexco used to be the company that holds the family’s interest in the US.
PSIL controls Usaha Tegas Sdn Bhd, which is the Malaysian company that holds 62.3% equity interest in Maxis Bhd (KL:MAXIS), 34.6% in Bumi Armada Bhd (KL:ARMADA) and 41.3% in Astro Malaysia Holdings Bhd (KL:ASTRO). Apart from Usaha Tegas, the other company that holds Ananda’s private assets is MAI Holdings Sdn Bhd.
The shareholdings of the listed companies involve several layers of locally incorporated and offshore companies. Nobody really knows Ananda’s actual interest in these companies and whether there are others who are also shareholders in these offshore entities.
After his passing on Nov 28, the obscure shareholding of his listed companies and the absence of a clear successor leaves much of the current operations, which are now deemed “businesses of the past”, in an uncertain state.
The last corporate deal that Ananda saw was a proposed merger between Armada and MISC Bhd’s (KL:MISC) offshore business. The proposed merger, which would be an all-share deal, was announced just two weeks before he passed away in Switzerland.
But early this year, he was said to be working on a merger between Astro and Maxis. Maxis has not decided on its 5G strategy yet while Astro’s business was disrupted by the advance of OTT (over-the-top) platforms such as Netflix.
It is learnt that Ananda was also working on a huge property development in the heart of London estimated at more than £1 billion (RM5.5 billion).
“He stayed in Switzerland to seek treatment. He was supposed to go back to London for the property project but it did not happen,” says an executive familiar with Ananda’s businesses.
Ananda’s strength was his ability to command the respect and ear of people like Tengku Razaleigh Hamzah and Tun Dr Mahathir Mohamad. But the advantage of having the attention of these powerful Umno leaders then was also the source of his biggest fear — that he would somehow be a target in any political fight within Umno. That was why he opted to stay out of the fray in the 2018 general election when Mahathir went up against former prime minister Datuk Seri Najib Razak.
A former civil servant close to Mahathir said the former prime minister wanted a private jet to go to Langkawi to file his nomination papers before the 2018 general election. He approached three people, including Ananda. But none of them lent him a private jet because they did not want to be caught in the crossfire of Umno politics.
The executive says Ananda’s deep conviction that he had to stay under the radar was the primary reason why he rarely emerged in public, spent a lot of time outside the country and kept his philanthropy work under wraps.
“He could have easily set up a trust or fund in his name to help all and sundry. But he stayed away from the limelight. Going forward, his three children, who have no interest in the business, may do that,” says a former executive at Usaha Tegas.
He says that even the interview in 1996 was prompted by Mahathir. At that time, Ananda was going to launch Malaysia’s first satellite and the heat was on him, being a non-bumiputera, and he was seen as getting special treatment from the then prime minister.
By then, Ananda had already built the Petronas Twin Towers and launched Maxis, which remains the dominant cellular mobile service provider.
According to people close to the group, Ananda’s satellite venture ruffled feathers in Umno, hence the matter was brought up at the party’s Supreme Council meeting then. Some in the party questioned why such privileges were accorded to “one person” who was not even a bumiputera and whom not many knew about.
It is said that Mahathir, who was then Umno president and a close associate of Ananda’s, put down the opposition in the party by stressing that Ananda could deliver what many could not. Following the pushback from the Supreme Council, the interview was arranged with a newspaper owned by Umno.
“Without some cajoling from the country’s top leadership, Ananda would not have granted the interview. He stayed close with the leaders of the day but never wanted to be seen with them in public. He is unlike the other tycoons who would jump at the opportunity to be with the prime minister,” says the former executive at Usaha Tegas.
The year 2014 was the turning point for Ananda’s empire. His troubles started when there was a change in leadership in India.
By then, Ananda’s private interest in telecommunications and the satellite business had already spread their wings to India. They went to that country a few years before 2014 when Congress party leaders were in charge.
A year after Modi came to power, Ananda’s business interest in India was under investigation. He also faced issues in Indonesia following a falling out with a partner in that country.
Fortunately, his problems outside Malaysia did not have any impact on the operations of locally listed Maxis and Astro, which were by then restructured to manage only local operations.
As for Bumi Armada, oil prices started to go downhill from mid-2014, impacting its operations severely. On top of low oil prices, the company also had disputes with its clients on the delivery and commissioning of two floating, production, storage and offloading (FPSO) vessels.
Since 2015, Bumi Armada’s balance sheet has strengthened immensely, with debts at less than RM2 billion now. That is why it was an easy target for a corporate exercise.
As for Maxis and Astro, there is still some work to be done to create value. Hence, there was a need for a person like Ananda to drive the changes and value creation.
Without him at the helm, it is left to be seen who will drive the group in and outside of Malaysia. Ananda’s wealth outside the country is said to be much more than what is in Malaysia.
It would be naive to assume that the man who always had an eye on future businesses did not plan for an environment without him at the helm of the group. He set up the family trust companies overseas way back in the 1990s to face any eventualities.
He probably had a plan on how to unwind the group. How it is done will only be known in the years to come.
M Shanmugam ([email protected]) is a contributing editor at The Edge
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