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KINIBIZ When the rights of major shareholder the Employees Provident Fund (EPF) were denied in a major banking merger involving CIMB Group and RHB Capital, alarm bells were set off in Tiger’s brain, prompting it to promptly investigate.

On Aug 17, 2007, a special purpose acquisition vehicle called Synergy Drive was given the go ahead by their respective shareholders to acquire the assets of three major plantation groups - Sime Darby, Kumpulan Guthrie and Golden Hope - effectively merging them. (The overall merger also included some other companies.)

Among all three companies, there was one common ultimate shareholder, Permodalan Nasional Bhd or PNB, the operator of the national unit trust scheme and the single largest investor on the local bourse, even eclipsing the EPF.

And get this, there was NO ruling from regulator Bursa Malaysia that PNB should not vote its very substantial stakes in each of the three companies. PNB then owned quite close to 40 percent of Sime Darby while it had majority control of Kumpulan Guthrie and Golden Hope.

Bursa then seemed to be implicitly accepting arguments that this was a deal presented to PNB by the investment bankers, who ironically at that time was CIMB Investment Bank.

The deal was done before it even started because PNB, which is owned by Yayasan Pelaburan Bumiputra, and chaired by the prime minister of the day was allowed to vote its stake in all three companies. Besides PNB, other agencies owned by the government or close to it had significant stakes in all three plantation companies.

For the full story go to KiniBiz .

This article was written by P Gunasegaram.

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