Tycoon Robert Kuok, in his new memoir, tells of the roles played by two prime ministers and events leading up to his release of the Malaysia International Shipping Corporation (MISC), an entity which he had pioneered.
Kuok said he twice complied with then prime minister Abdul Razak Hussein's request to issue new shares, after the latter complained he was under pressure over the issue of Malay participation, and said that it was the price of success.
Kuok was later also in conflict with an aide to Razak's successor Hussein Onn, who was placed on the MISC board, according to the memoir obtained by Malaysiakini.
Explaining the inception of MISC, Kuok (photo) said he had sought a shipping licence after getting word that the Blue Funnel Group, a major shipping conglomerate in the UK, was planning to set up shop in Malaysia in 1967.
"My interest was partly patriotism – a desire to help Malaysia to launch its own independent shipping line and not be tied to the apron strings of the ex-colonial government of Britain through Blue Funnel," he said.
However, Kuok said he had no experience in shipping and had sought to cooperate with Hong Kong's then International Maritime Carriers chairperson Frank WK Tsao.
Kuok said the Malaysian government eventually selected this partnership to start the national shipping line through MISC.
At its inception, MISC was 20 percent owned by Kuok Brothers, 15 percent by Tsao, while MCA and various Chinese associations took 20 to 30 percent.
Kuok's said MCA's shareholding was due to Japanese war reparations in the form of two ships paid to the party, which were placed under MISC.
MCA had advocated and won compensation from the Japanese for the suffering of the Chinese community during the Japanese occupation.
"So in the beginning, the holdings of Kuok Brothers, Tsao and the MCA group together were easily over 50 percent. We had a fairly united board in the beginning," said Kuok.
However, Kuok said he was summoned by Razak within a year of MISC commencing operations in the second half of 1969.
"Razak said: 'I want you to make a fresh issue of 20 percent of new shares. I'm under pressure because there is not a high enough Malay percentage of shareholding.'
"I said, 'Tun, are you quite serious about this request?' He answered 'Yes, Robert.' So I replied that I would do it.
"I went back and, with a little bit of arm-twisting, persuaded the board to pass a resolution waiving the rights of existing shareholders to a rights issue. Razak allocated all the new shares to government agencies," Kuok said in his memoir.
However, Kuok said he was yet again summoned by Razak, after a year or two.
"He said: 'I'm under a lot of pressure at cabinet meetings. You know, Robert, it's just the price of your success. MISC is doing well, people are getting envious. But now, instead of giving in to those factions, what I've decided is this: Issue another twenty percent, five percent to each of the four port cities in Malaysia.'
"This entails enlarging the capital base to 140 from the original 100, making the Malaysian government the largest single shareholder and relegating Kuok Brothers to second position. And he again wanted the shares issued at par - the original issue price.
"I said: Tun, I have always cooperated with you but it's getting very difficult. Three, four years have elapsed from formation but I am loathe to ask you for a premium since we are a growing company. So I will go back and ask the board again to issue shares at par to you.
"But Tun, can you please promise me that this is the last time?" Kuok related in the 376-page memoir.
He said Razak (photo) smiled gently to signify his agreement but did not say a word.
The tycoon said he and Tsao decided to take MISC public in 1987, and during this process had sold some shares at par value to deserving company workers, which benefitted them.
"Meanwhile, the ugly head of racism was rising in Malaysia. Razak died in early 1976 in London, and Hussein Onn became prime minister. The Malaysian government requested that a man called Datuk Saffian sits on the MISC board.
"Saffian was virtually head of the prime minister's secretariat, a young man who had both ears of the prime minister. He was an ordinary board member, but he was quite aggressive at meetings and became increasingly personal," Kuok said.
Kuok, who was MISC chairperson, said in one board meeting, Saffian targeted the company's managing director Leslie Eu, whom Kuok admitted had hastily put together the board's papers.
As the meeting became heated, Kuok said he told Saffian the latter could raise a motion to sack Eu.
"Saffian insisted that he wasn't suggesting that we get rid of the managing director. I demanded, 'Then what are you saying?'. He got up and we almost came to blows - tempers were so frayed.
"I thought to myself: 'My God, what is going to be the future of this company?' From then on, I realised how impossible it would be for me to run such a corporation.
"I felt that in future it would be very difficult to operate this business properly, as for a business to succeed there must always be unity and harmony.
"It was likely some people in the government thought that it was shameful for Chinese Malaysians to run the national shipping line.
"When I sensed that this was their attitude, it was time for me to call it a day. Kuok Brothers eventually sold all their MISC shares and pulled out of the national shipping company completely," he said.- Mkini
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