SC must explain approval to breach RAM’s shareholding threshold

 

Editorial

Newly installed Securities Commission (SC) chairman Awang Adek Hussin must publicly disclose the basis upon which the regulatory body approved CTOS Digital Bhd’s acquisition of a majority stake in RAM Holdings Bhd.

According to the SC’s letter dated April 28, CTOS Digital was given permission to increase its shareholding in the ratings agency to more than 51%. In the same letter, the SC also waived the requirement for the company to secure further approval for any subsequent cumulative increase of 10% or more.

The approval was disclosed in CTOS Digital’s letter dated May 12 which was circulated together with the notice of RAM Holdings’ annual general meeting (AGM).

In the letter CTOS Digital, which is presently already raising its stake in RAM Holdings to 19.225%, requisitioned the latter’s board of directors be allowed to move and vote on a special resolution to amend Clause 12.1 of its constitution.

The resolution, which requires the support of at least 75% of those present and voting, is scheduled to be moved at the AGM, which will be held at KL Eco City at 11am today.

If passed, the amendment will allow a member of the company to hold more than 20% of its paid-up capital provided that prior approval of the SC has been obtained.

As it presently stands, Clause 12.1 of the ratings agency‘s constitution prohibits any member from holding stock in excess of the 20% threshold.

Apart from CTOS Digital, two shareholders are on the brink of that threshold. Oscar Matrix Sdn Bhd, which is wholly owned by Brahmal Vasudevan’s Creador IV holds 19.9%, while S&P Global Asian Holdings Pte Ltd is owner of a 19.2% stake.

The next biggest stake — 15.6% — belongs to Tunku Ali Redhauddin Tuanku Muhriz’s vehicle, Dragonline Solutions.

In particular, industry watchers will be keen to know how the SC treated the relationship between Oscar Matrix and CTOS Digital, in which Vasudevan’s Creador owns 31%.

The business fraternity will also want to see the impact the resultant change in shareholding may have on the perception of the rating agency’s independence both in the domestic and regional markets.

Awang Adek, a former assistant governor of Bank Negara Malaysia and deputy finance minister, took over as executive chairman of the regulatory body on June 1.

His predecessor Syed Zaid Albar’s resignation was announced on April 28. - FMT