This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025
These corporate old-timers continued to make headlines
Tan Sri Lim Kok Thay
Chairman and chief executive of Genting Group
The group, which started as a “one-hill wonder” in Genting Highlands, Pahang, before becoming a global casino-cum-entertainment resort owner and operator, had to suffer the ignominy of being dropped from the benchmark Bursa Malaysia index in December 2024.
Both Genting Bhd (KL:GENTING) and Genting Malaysia Bhd (KL:GENM) were left out of the list of the top 30 most valuable stocks on the benchmark index as their overseas operations, particularly in North America, are facing headwinds.
Under Lim’s leadership, the group grew its operations far beyond Genting Highlands. Its expansion to Singapore in December 2006 paid off as Resorts World Sentosa is now the biggest contributor to Genting’s bottom line.
In 2021, Genting completed the construction of Resorts World Las Vegas as a cost of US$4.3 billion, making it the most expensive casino and resort on the Strip then. The construction caused Genting’s long-term borrowings to balloon from RM29 billion in 2019 to RM36 billion by end-2023.
The jump in borrowings is costing Genting close to RM1.9 billion a year in finance costs.
Lim’s plan has always been to spin off the North America operations on the New York Stock Exchange and use the proceeds to reduce its debts. However, the path to that has not been smooth.
In early December, Resorts World Las Vegas appointed several new members to its board to improve governance and strengthen management. The changes came after a complaint was made in August to the Nevada Gaming Control Board that Resorts World Las Vegas had allegedly failed to bar criminals and illegal bookmakers from gambling on the premises.
Meanwhile, GenM — which manages resorts and gaming facilities — has yet to secure a commercial casino licence in downtown New York. To make matters worse, the company is embroiled in a legal suit filed by its minority partner for its Bahamas resort-cum-casino. In the suit filed in October, which GenM describes as baseless, the partner is seeking US$600 million (RM2.7 billion) in damages.
Genting’s Singapore casino is also experiencing some issues. In November, the authorities renewed its licence for two years instead of the normal three years because of unsatisfactory performance in meeting market demands and industry standards as a compelling tourism destination.
Lim, 73, is responsible for the group growing into a global player. However, he has his work cut out to ensure that the expansion into North America pays off. — By M Shanmugam
Tan Sri Surin Upatkoon
Chairman of MPHB Capital Bhd
The market has never priced the asset value of MPHB Capital Bhd (KL:MPHBCAP) for various reasons, including its management not sweating the company’s assets. As such, its major shareholder Tan Sri Surin Upatkoon launched a bid to take it private in May 2024.
However, his offer to mop up the rest of the shares at RM1.70 each was grossly below its revalued asset value of RM3.27 per share as at June 2024. Surin already controlled 37% of MPHB and the cost to mop up the rest of the company’s shares at RM1.70 each would cost him RM748 million.
As the company itself has RM658 million in cash, Surin would be getting much of MPHB’s assets, which are largely buildings and land, for almost free.
The 76-year-old opted to take the company private via a Selective Capital Repayment (SCR) scheme, which requires a higher threshold of approval from shareholders but offers certainty of being taken private, if approved.
Shareholders approved the scheme in September, leaving only the legal procedures to be fulfilled before the exercise is completed.
In most cases of taking a company private, it would have been a formality. But that was not the case for MPHB.
A minority joint venture partner in several of MPHB’s subsidiaries filed an intervening suit to stop the SCR on the grounds that it would affect its rights in an ongoing shareholding dispute that was before the Federal Court. However, the application was dismissed by the court on Dec 18 and the exercise to take MPHB private is likely to proceed.
Once it is completed, Surin will only have gaming company Magnum Bhd (KL:MAGNUM) listed on Bursa Malaysia.
Surin is also an investor in U-Mobile Sdn Bhd and a shareholder of WCE Holdings Bhd (KL:WCEHB), companies in which he first invested several years ago when they were unprofitable.
The value in WCE has emerged as the market recognises it as the concessionaire of the country’s second longest highway. As for U-Mobile, its shareholders are poised for a windfall after it was unexpectedly awarded the country’s second 5G licence in November. — By M Shanmugam
Tan Sri Vincent Tan Chee Yioun
Founder and adviser of Berjaya Corp Bhd
It has been an eventful 2024 for Tan Sri Vincent Tan Chee Yioun, who made headlines on both sides of the Causeway when dark horse U Mobile Sdn Bhd was selected to lead Malaysia’s second 5G network over its two larger rivals on Nov 1.
Soon after the win, the 72-year-old took out full-page advertisements in several newspapers to say U Mobile “is on par” with CelcomDigi Bhd (KL:CDB) and Maxis Bhd (KL:MAXIS). Tan also announced that the mobile network operator’s foreign shareholding would be “significantly lower than its peers”, with Singapore Technologies Telemedia Pte Ltd (STT) agreeing to reduce its “foreign majority stake to just 20%”.
The choice of words raised eyebrows, given that filings show STT’s Straits Mobile Investments Pte Ltd only had a 48.25% stake (below the 50% plus 1 share to have a majority in the strictest sense). Interest was again piqued when STT told the Singapore Exchange on Dec 4 that it was selling a “majority stake” in U Mobile to Mawar Setia Sdn Bhd, a private vehicle 70:30 owned by Tan and Johor princess Tunku Tun Aminah, chairman of Berjaya Corp Bhd (KL:BJCORP) since March 2023, and the only daughter of His Majesty Sultan Ibrahim, the King of Malaysia.
If indeed STT is selling a majority 51% stake to Mawar Setia while retaining 20% interest in U Mobile, Tan stands to emerge as U Mobile’s new, effective largest shareholder, perhaps filling the void left by the recent passing of Malaysia’s telecoms czar T Ananda Krishnan, who owned Maxis.
The 5G win reignited talk of industry consolidation, despite Tan telling Bloomberg in July that U Mobile, which had been eyeing an initial public offering for some time, was “rejecting Maxis’ [buyout] offer” and would instead be “submitting for an IPO at the end of July”. An enlarged U Mobile would mark a second wind of sorts in the telecom scene for Tan, who made a tidy sum selling out of Digi Swisscom Bhd in 1999 to Norwegian Telenor ASA.
Developments on the telecoms front will be keenly watched in 2025 as would sales figures at Berjaya Food Bhd’s (KL:BJFOOD) flagship coffee chain franchise Starbucks Malaysia, which was hit by ongoing boycotts over purported links to Israel and rivals seizing the chance to grab market share. Tellingly, Tan appealed to fellow Malaysians to end the boycott while breaking ground on the US$1.12 billion Four Seasons resort in Okinawa, Japan, in March.
There is also the ongoing legal action by Cekap Urus Sdn Bhd — a 51:29:20 venture between Tan’s Berjaya Corp, Naza Corp Holdings Sdn Bhd and Tunku Tun Aminah — against Spanco Sdn Bhd and the government over a terminated fleet car contract. The High Court will be hearing the merits of a judicial review for this case in March 2025.
In July 2024, Tan came one step closer to a share of dividends amounting to at least RM1.3 billion accrued during a disputed period to Detik Ria Sdn Bhd, which owns 49% of Prudential Assurance Malaysia Bhd through Sri Han Suria Sdn Bhd. This was after the Federal Court ruled that Detik Ria — which is jointly owned by 10 parties, including Berjaya Corp’s wholly-owned Berjaya Capital Bhd — had no obligation to sell its 49% stake in Sri Han Suria to Prudential Corp Holdings Ltd, which sought to wholly own the insurance business in Malaysia.
If Tan, who started out as a bank clerk and life insurance agent before bagging the McDonald’s franchise for Malaysia in 1980, emerges victorious on all three fronts in the coming year, his flagship Berjaya Group (“successful group”) would be living up to the name he chose for it. — By Cindy Yeap
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