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Malaysian Reserve
5 days ago
- Business
- Malaysian Reserve
MMC Ports IPO signals Malaysia's market shift
The relisting puts Malaysia's largest port operator in the spotlight and could shape the direction of Bursa Malaysia by RUPINDER SINGH AFTER years of subdued sentiment and a flurry of small-cap listings, MMC Port Holdings Bhd is preparing to relist in what could become Malaysia's most significant IPO in over a decade. The listing, which market observers are closely watching, may be the catalyst Bursa Malaysia needs to reset market expectations and revive institutional interest. The country's largest and most integrated port operator, is set to offer up to 4.27 billion existing shares, equivalent to 30% of its total issued shares. The shares will be sold by MMC Corp Bhd. The offering will be split between 3.99 billion shares allocated for institutional investors and 286.1 million shares for retail investors. Notably, the company will not be issuing new shares and therefore, will not receive any proceeds from the IPO. All funds raised, estimated at between RM6 billion and RM8.4 billion depending on pricing, will go directly to the selling shareholder. In its draft prospectus, MMC Ports said it does not currently require additional equity funding, adding that it has sufficient working capital to operate sustainably over the next 12 months. The company expects to list as early as September 2025, subject to market conditions and regulatory approvals. Footprint The group operates a comprehensive portfolio of strategic port assets across Malaysia. Its footprint includes the Port of Tanjung Pelepas in Johor, a leading transhipment hub; Johor Port, which supports gateway cargo operations; Northport and Southpoint in Port Klang, Selangor; Penang Port in the north; Tanjung Bruas Port in Melaka; and Andaman Port in Kedah, where ship-to-ship transfer activities are handled. It also operates three cruise terminals that support Malaysia's tourism and passenger sectors. The government, through the Ministry of Finance Inc, holds one special share in four of these key subsidiaries, granting it the right to appoint a board member in each company. This highlights the strategic national importance of MMC Port's operations. Financially, MMC Port remains solid, if not spectacular. For the year ended Dec 31, 2024 (FY24), the company posted a net profit of RM636.6 million, a decline of 9.2% from the RM701.1 million it recorded in 2023. Revenue, however, rose by nearly 10% to RM4.36 billion in 2024. The dip in net profit was attributed to increased operational costs and a more challenging trade environment. Nonetheless, the company generated over RM2 billion in operating cash flow and management is confident in its liquidity position, supported by bank balances and undrawn facilities. Market Impact What distinguishes this IPO from the dozens that have come before it in recent years is its scale, profile and potential market impact. If it achieves the targetted valuation of up to US$7 billion, or approximately RM33 billion, MMC Port could be a strong candidate for inclusion in the FBM KLCI, the benchmark index of Bursa Malaysia. That alone would elevate the listing above the flood of small-cap offerings that have dominated the ACE and LEAP Markets over the past five years. Hence, the impending listing could inject new life into Bursa Malaysia. 'If the IPO performs well, we believe it could help lift sentiment on Bursa Malaysia to some extent,' said Tradeview Capital portfolio manager Neoh Jia Man. 'Given its size and profile, the listing is likely to attract significant investor attention and trading interest, particularly as MMC Port is expected to be a strong candidate for KLCI inclusion.' Indeed, Malaysia's equity market has suffered from a lack of large, investable IPOs in recent years. While the number of new listings remains healthy — with over 60 expected this year alone — the market has been criticised for offering low-float, low-liquidity IPOs that do not meet the needs of institutional investors. Bursa Malaysia's total market capitalisation stood at around RM1.88 trillion in April 2025, and foreign participation — which remained structurally depressed at around 19.6% of the market — is still lagging regional peers, despite some recent inflows. However, valuation remains a key question. Westports Holdings Bhd, MMC Port's closest listed peer, is currently trading at a forward price-to-earnings (P/E) ratio of around 20 times, buoyed by optimism following a recent tariff hike. Market watchers say MMC Port is targetting a valuation that implies a forward P/E of more than 25 times, which some investors may find rich. 'We expect MMC Port to be floated at a valuation of over RM28 billion, implying a forward P/E of more than 25 times. 'This may not be particularly appealing to investors, especially when compared to Westports. Furthermore, investor appetite could be dampened by the uncertain global trade outlook, particularly due to lingering concerns over US tariff policies,' said Neoh. Long Term Appeal Still, MMC Port offers stability and long-term appeal. Its diversified income base, entrenched market position and strategic locations along the Strait of Malacca make it an attractive infrastructure play. The company also benefits from strong relationships with major shipping lines, integrated access to industrial zones and long-term port concessions that reduce earnings volatility. In line with global best practices, MMC Port will be seeking cornerstone investors to provide price stability and credibility ahead of the listing. It will also include a 4.5% overallotment option to meet additional demand. The deal is led by CIMB Investment Bank Bhd as principal advisor and sole managing underwriter, with CIMB and HSBC (S) Ltd acting as joint global coordinators and bookrunners. Legal counsel is provided by Lee Choon Wan & Co, Kadir Andri & Partners, and international firms Latham & Watkins and Baker McKenzie Wong & Leow. MMC Corp, which controls MMC Port, was previously listed on Bursa Malaysia in 1977 before being privatised in December 2021 at a market value of RM6.1 billion. The relisting of its flagship port assets at a potentially fivefold valuation is a strong statement of the group's value creation efforts and confidence in public markets. Still, analysts caution against assuming a domino effect. 'We do not expect it to trigger a wave of large-scale IPOs unless its performance is exceptionally strong,' Neoh noted. 'Likewise, we do not believe this listing alone will be sufficient to spark a broad-based rerating of the Malaysian equity market.' Nonetheless, MMC Port could set an important precedent. A successful listing may encourage other conglomerates or government-linked companies (GLCs) to consider unlocking value through spin-offs and listings of mature assets. This approach, already common in Singapore and Thailand, could help deepen Malaysia's capital markets and enhance its appeal to long-term investors. For now, MMC Port is a litmus test. Its size, sector and strategic relevance give it the potential to reignite confidence in Bursa Malaysia. In a market that has been starved for high-quality, large-scale listings, MMC Port offers a rare opportunity to steer the narrative back toward growth, depth and institutional strength. Whether it marks the beginning of a new chapter or remains a one-off success will depend not only on its listing day performance, but also on its ability to deliver steady returns and inspire follow-through action across the market. This article first appeared in The Malaysian Reserve weekly print edition
Malaysian Reserve
5 days ago
- Business
- Malaysian Reserve
BNM lowers OPR amid trade, demand risks
Move seen as early buffer, not start of easing cycle — analysts split on further cuts by RUPINDER SINGH IN A move that had been anticipated by a narrow majority of analysts, but still marked a significant shift in tone, Bank Negara Malaysia (BNM) reduced the Overnight Policy Rate (OPR) by 25 basis points (bps) to 2.75% on July 9. This is the central bank's first rate cut since July 2020, and comes amid growing external uncertainties, including the looming implementation of US tariffs and fragile global demand conditions. The decision signals a clear shift toward a more accommodative monetary stance, driven by the need to preemptively support growth while keeping inflationary pressures in check. In its Monetary Policy Statement (MPS), BNM said the rate cut was a 'preemptive step to safeguard the domestic growth trajectory amid contained inflationary pressures'. The Statutory Reserve Requirement (SRR) was left unchanged at 1%, following a 100bps reduction in May that injected about RM19 billion into the banking system. BNM now emphasises the SRR as a liquidity tool, not a signalling mechanism. Since the SRR cut, the 3-month Kuala Lumpur Interbank Offered Rate (KLIBOR) has eased from 3.7% to 3.5%, signalling improved interbank funding conditions. Why the Cut Now? The move comes against a backdrop of increasing downside risks to Malaysia's growth. The Ministry of Investment, Trade and Industry (MITI) is currently in negotiations with US officials to forestall a 25% tariff imposition on Malaysian exports — a deadline now extended to Aug 1. BNM's MPS flagged that the balance of risks remains tilted to the downside, particularly due to 'slower global trade, weaker sentiment, and lower-than-expected commodity production.' Public Investment Bank Bhd (PublicInvest Research) noted that while the July MPS retained a cautious tone, the language was 'toned down slightly' from earlier statements, replacing more alarming references to a 'deeper economic slowdown' with a cleaner framing of persistent, but not catastrophic, risks. UOB Global Economics added that although domestic growth has been relatively resilient, 'the eventual tariff landing remains fluid, reflecting ongoing uncertainties in the negotiation process'. This introduces a great deal of ambiguity in Malaysia's export outlook, particularly for sectors such as electrical and electronics (E&E) and semiconductors. At the same time, external trade data has started to show signs of deceleration. Exports are expected to grow by just 3.5% this year, down from 5.7% in 2024. A combination of slowing global demand and anticipated restrictions on artificial intelligence (AI) chip shipments to Malaysia and Thailand by the US could further weigh on sentiment and performance in key export industries. On the domestic front, although labour markets have held up and household consumption remains stable, growth momentum has become increasingly reliant on domestic investments and policy-driven spending. According to PublicInvest Research, 'Growth is expected to be supported by resilient domestic demand, with employment and wage growth, particularly within domestic-oriented sectors, alongside income-related policy measures, continuing to support household spending.' BNM appears to be using the current window — before the global slowdown becomes more entrenched or policy uncertainty in the US crystallises into real economic fallout — to build buffers. As UOB noted, 'Taken together, we think incoming data (particularly GDP and external trade), developments of global tariff policy and geopolitical events are key determinants for the future rate path.' This backdrop has opened up space for BNM to make a measured cut without triggering volatility in capital flows or compromising financial stability. The central bank still maintains a positive real-interest rate environment, suggesting that it retains further room to ease if needed, without falling behind the curve on inflation or currency risk. Implications for the Banking Sector According to Hong Leong Investment Bank (HLIB Research), the OPR cut will exert near-term pressure on banks' net interest margins (NIMs), given that loan repricing tends to occur faster than deposit repricing. Banks with a higher proportion of floating-rate loans such as Affin Bank Group Bhd and Bank Islam Malaysia Bhd (BIMB) are expected to be more adversely affected. Conversely, AMMB Holdings Bhd and CIMB Group Holdings Bhd, with more balanced deposit structures and loan books, are likely to weather the rate cut with minimal disruption to margins. HLIB Research estimates that the 25bps cut will result in a sector-wide NIM compression of 3bps-4bps and a corresponding 2%-3% decline in profit forecasts, barring any mitigating factors. However, banks had already begun adjusting fixed-deposit rates downwards by 5bps-20bps since April, effectively preempting part of the OPR move. This proactive stance may soften the immediate earnings impact. Moreover, HLIB Research sees three mitigating factors cushioning the sector from a more significant drag: (i) The recent SRR cut has injected approximately RM19 billion in fresh liquidity into the system, giving banks more room to manage funding cost pressures. (ii) The easing of deposit competition is expected to lower funding costs further. As promotional fixed-deposit rates normalise, banks will likely benefit from a more stable deposit base. (iii) The banking sector has pivoted to a more disciplined approach in loan expansion and funding strategies, improving asset-liability matching and capital efficiency. Importantly, the sector's resilience is underpinned by healthy capital buffers and ample preventive provisioning. With common equity tier 1 (CET1) ratios for major banks well above regulatory minimums, and loan loss coverage remaining elevated, the system is adequately cushioned against near-term earnings volatility. Historical patterns also suggest that NIM compression after an OPR cut tends to be short-lived. Following the last rate cut in July 2020, sector NIMs actually expanded in the quarters that followed, due to the lagged repricing of deposits and improved bond portfolio valuations amid falling yields. Public Bank and Malayan Banking Bhd (Maybank), which traditionally maintain a conservative asset profile, may experience less earnings volatility compared to high-beta plays like CIMB Bank or RHB Bank Bhd. That said, CIMB Bank and AMMB are viewed as attractive rebound proxies due to their higher operating leverage and more cyclical loan books. Looking ahead, HLIB Research maintains its 'Overweight' stance on the banking sector. 'We view the OPR cut in early second half of 2025 (2H25) as a positive development, as it helps to remove one of the key share price overhangs,' it said. CIMB, AMMB and RHB Bank are its top picks, offering a mix of cyclical upside and defensible balance sheets. The broader sector is also supported by a 5.4% average dividend yield, which offers a valuation cushion in a volatile market. Nonetheless, risks remain. A sharper-than-expected economic slowdown, prolonged deposit pricing pressure, or an escalation in global trade tensions could temper the sector's resilience. Investors will be closely monitoring the upcoming earnings season to assess how individual banks are managing margin pressure and loan growth in the new rate environment. What's Next for Policy? Economists remain divided on whether BNM's latest move marks the beginning of a broader easing cycle, or a one-off recalibration to address rising uncertainties. While the July policy decision reaffirms BNM's readiness to act preemptively, the central bank also signalled that future decisions will be data-dependent rather than part of a pre-set path. PublicInvest Research expects the current 2.75% OPR level to be maintained through year-end. 'We assess BNM's policy bias as conditionally accommodative, with any further adjustment contingent on a marked deterioration in global conditions or more pronounced domestic weakness,' it said. 'With real policy rates still in positive territory and inflation expectations well anchored, the move appears intended to provide an early buffer rather than mark the start of a full easing cycle.' UOB, however, continues to forecast one additional cut. 'The current risk assessment and economic landscape still support our view for an additional 25bps cut in the OPR to 2.50% by end-fourth quarter of 2025 (4Q25),' it noted. Two more Monetary Policy Committee (MPC) meetings remain, scheduled to run over two-days, starting on Sept 3 and Nov 5. Analysts say the 2Q GDP release on July 18, the government's updated growth forecast later this month, and the tabling of the 13th Malaysia Plan (13MP) on July 28 will be key inputs into BNM's next decisions. Developments in US trade negotiations and potential tariff actions will also be closely watched. BNM has noted that there is still policy space should the need arise. Analysts interpret this as room for a further rate cut if growth falters or global volatility intensifies. Until then, BNM is expected to remain in wait-and-see mode, guided by data and external developments. Market watchers will also be parsing BNM's upcoming quarterly Economic and Financial Developments report for deeper insight into the central bank's internal projections. Till then, investors can expect BNM to stay in a data-driven wait-and-see mode, with monetary tools calibrated to balance resilience and responsiveness. Markets, Growth and Broader Outlook Malaysia's economic growth trajectory remains intact, though downside risks have become more pronounced. PublicInvest Research maintains its 2025 GDP forecast at 4.2%, down from 5.1% in 2024, reflecting a moderation driven largely by external headwinds. UOB, meanwhile, anticipated 2Q GDP to ease to 3.8% year-on-year (YoY) from 4.4% in the 1Q, citing a slowdown in exports and manufacturing output. Despite these external drags, domestic fundamentals remain resilient. Employment levels continue to improve, with the unemployment rate forecast to dip further to 3.2% this year. Wage growth, particularly in the domestic-oriented sectors, is expected to support private consumption alongside targeted government fiscal measures. 'Growth is expected to be supported by resilient domestic demand, with employment and wage growth continuing to support household spending,' noted PublicInvest Research. On the investment front, both private and public sector activity is underpinned by multi-year project pipelines and rising realisation rates of previously approved investments. Infrastructure rollouts under the 12MP and catalytic projects tied to the upcoming 13MP are also likely to lend support to construction and services segments in the 2H. That said, much hinges on policy clarity and investor confidence. The tabling of the 13MP in Parliament on July 28 is expected to offer a strategic roadmap for medium-term development, fiscal consolidation and industrial trans- formation. Investors will be scrutinising the plan for details on infrastructure priorities, digital economy integration and green transition funding mechanisms. Externally, the picture remains clouded by geopolitical tensions, volatile commodity markets and uncertainty over US trade policy. The 90-day pause on reciprocal tariffs by the US, which expired on July 9, has been extended to Aug 1. According to PublicInvest Research, a letter from the White House dated July 7 reaffirmed the deadline, though the door remains open for further negotiations. BNM has acknowledged these uncertainties but continues to believe that structural reforms and ongoing fiscal consolidation efforts will anchor market confidence. Meanwhile, Malaysia's broad money supply (M3) rose 2.7% YoY in May, indicating adequate liquidity in the system. Core inflation eased to 1.8% YoY in May, down from 2% in April, supporting BNM's view that inflationary pressures remain contained. Despite subsidy rationalisation and Sales and Service Tax (SST) expansion, second-round effects remain limited. In capital markets, the FTSE Bursa Malaysia KLCI has remained range-bound in recent weeks, reflecting a wait-and-see stance by investors. The financial sector, buoyed by attractive valuations and strong dividend yields, remains a key pillar of support, while defensive sectors like utilities and healthcare have outperformed amid broader risk aversion. Currency-wise, the ringgit's year-to-date (YTD) appreciation of over 5% against the US dollar reflects improving investor sentiment, bolstered by a narrowing policy rate differential with the US Federal Reserve and positive trade balances. Analysts expect the ringgit to trade within the 4.10-4.25 range through year-end, barring major external shocks. Looking forward, Malaysia's economic narrative for the rest of 2025 will be defined by its ability to sustain domestic demand, maintain policy credibility, and navigate external risks. 'We expect domestic activity to remain supported by ongoing reforms and investment execution,' said UOB. 'However, the external environment will remain fluid, and Malaysia's exposure to global trade and capital flows means the outlook could shift quickly.' In sum, while the OPR cut sends a clear message of growth support, it also sets the stage for a careful recalibration of macro policy amid persistent volatility. The weeks ahead, marked by economic data releases, policy announcements, and international developments, will be pivotal in shaping market sentiment and policy trajectories. This article first appeared in The Malaysian Reserve weekly print edition
Malaysian Reserve
12-05-2025
- Business
- Malaysian Reserve
Ringgit poised for further gains in 2025
HLIB Research predicts further ringgit gains in 2025, supported by global recovery by RUPINDER SINGH THE ringgit's rally appears to have staying power, with Hong Leong Investment Bank Bhd (HLIB Research) expecting further strengthening this year amid a weaker US dollar, improved global sentiment, and renewed foreign capital inflows. In its latest report, the research house maintained its forecast for the ringgit to average RM4.35 against the dollar in 2025, strengthening from RM4.57 in 2024. By year-end, HLIB Research expects the local note to appreciate further to RM4.10. 'Ringgit has appreciated 6.5% year-to-date (YTD), largely benefitting from a shift in global sentiment following the perceived reduction in macro headwinds,' the report stated. A key turning point, according to HLIB Research, was April 22 — dubbed Liberation Day — when global markets began to recover in earnest, as inflation fears subsided and investors started reallocating capital from US assets to emerging markets (EMs). 'We believe the technical bottom of RM4.80/US dollar is likely in,' said HLIB, pointing to the confluence of macro improvements and policy clarity that support a stronger ringgit going forward. While a firmer ringgit bodes well for companies with high import content or US dollar liabilities, HLIB Research cautioned that it may compress margins for exporters due to adverse currency translation effects. The strengthening of the ringgit is also part of a broader trend across the region. 'With the US dollar being the primary source of weakness, regional currencies have rallied in tandem,' HLIB Research noted. However, it pointed out that this foreign exchange shift has yet to significantly lift Malaysian equities, suggesting the recent rally may be more liquidity-driven than driven by foreign flows. 'Despite the equity rebound, the US dollar has lagged since 'Liberation Day,' indicating US recovery is driven by domes- tic liquidity rather than foreign inflows,' the report observed. Still, Malaysia appears to be attracting renewed foreign interest. HLIB Research highlighted that foreign investors were net buyers of Malaysian equities over the past two weeks, with net inflows of RM1.4 billion. The local bond market also saw RM2.8 billion in foreign inflows in March, while foreign holdings of Malaysian Goverment Securities (MGS) and Government Investment Issue (GII) rose to 21.1% in March — recovering from a 13-year low of 20.2% in January. The research house believes these trends, alongside improving fiscal discipline and structural reforms under Ekonomi MADANI, could underpin a more sustained re-rating of the ringgit and broader Malaysian assets. 'Malaysia not only has a growth story to tell but also a policy narrative to share,' HLIB Research said. Still, risks loom on the horizon. Chief among them is the second Donald Trump presidency, which could revive protectionist trade policies. 'Trump tariffs 2.0 pose a key risk to macro, sectoral and corporate outlooks,' HLIB Research warned. Trade-dependent economies like Malaysia may be exposed to collateral damage if broad-based US tariffs return, stalling global growth and commodity demand. Geopolitical tensions also remain a source of uncertainty. On the domestic front, HLIB Research-views Malaysia's macroeconomic fundamentals as sound. However, it did not rule out the possibility of monetary easing if downside risks materialise. The research house reiterated its 'tactically constructive' stance on Malaysian equities, maintaining its FTSE Bursa Malaysia KLCI (FBM KLCI) year-end target of 1,690. It recommends a 'sell on strength' strategy in the near term, advocating a barbell approach that balances defensive sectors with laggards poised for catch-up. It maintains a preference for banks, construction and utilities, while remaining cautious on export-heavy and commodity-linked sectors. This article first appeared in The Malaysian Reserve weekly print edition
Malaysian Reserve
07-05-2025
- Business
- Malaysian Reserve
Malaysia launches chip fund to boost IPO-ready firms
BSIF I aims to future-proof Malaysia's high-tech manufacturing sector by RUPINDER SINGH IN A landmark move to fortify Malaysia's semiconductor ecosystem and accelerate the growth of IPOs-ready companies, the Malaysian Investment Development Authority (MIDA), Federation of Malaysian Manufacturers (FMM) and Bintang Capital Partners have launched the Bintang Semiconductor Impact Fund I (BSIF I) — a pioneering initiative that blends financial support with sustainability and social impact. The tripartite collaboration was formalised through a memorandum of understanding (MOU) signed on April 16, 2025. The fund aims to future-proof Malaysia's high-tech manufacturing sector by building resilience in the domestic semiconductor value chain, enhancing environmental and social performance, and preparing companies for eventual public listing. MIDA CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid hailed the partnership as a turning point for the country's semiconductor ambitions. 'This transformative partnership marks a pivotal moment in Malaysia's semiconductor journey. By combining MIDA's strategic oversight, FMM's extensive industry network and Bintang Capital's financial expertise, we're creating a powerful ecosystem that will elevate local companies to global standards,' added Sikh Shamsul. 'Our focus is to develop world-class capabilities, attract premium investments and establish Malaysia as a trusted global semiconductor hub. This collaboration provides the perfect platform to nurture innovation, drive sustainable practices and create lasting economic impact for our nation,' he added. The launch of BSIF I aligns with the objectives of Malaysia's National Semiconductor Strategy (NSS), a multi-pronged roadmap aimed at building up domestic capabilities and capturing greater value across the semiconductor supply chain. The fund is designed to target investments in companies within and adjacent to the semiconductor space, particularly those engaged in high-tech manufacturing, advanced automation, and IR4.0 solutions. FMM president Tan Sri Soh Thian Lai described the initiative as a critical enabler for small and medium enterprises (SMEs), which make up the backbone of Malaysia's manufacturing base. 'As the voice of the manufacturing sector, FMM is pleased to support this initiative, which will enable local businesses to enhance their capabilities, tap into funding opportunities and adopt best practices in governance and sustainability. 'At the same time, it aligns with FMM's ambitious aspiration to cultivate 100 IPO-ready companies within five years. Helping companies become IPO-ready and granting them access to financing are crucial steps in enabling their growth. By supporting these promising enterprises, FMM aims to strengthen Malaysia's manufacturing landscape, driving innovation and competitiveness across the region,' Soh added. The fund also incorporates a strong environmental, social and governance (ESG) framework. BSIF I will support businesses that are committed to carbon transition goals and promote women's empowerment through workforce development. Portfolio companies will be expected to pursue B Corp certification, which signifies high standards in governance, environmental sustainability and social impact. Bintang Capital CEO Johan Rozali-Wathooth described the collaboration as a holistic model that integrates financial capital with values-based investing. 'As the saying goes, it takes a village to raise a child — the collaboration between Bintang Capital, MIDA and FMM brings together three critical elements needed to 'raise' a vibrant and sustainable high-technology manufacturing industry. 'The collaboration combines Bintang Capital's investment and impact track record, MIDA's deep policy expertise, and FMM's extensive networks within Malaysia's manufacturing sector,' he said. 'On the impact front, Bintang Capital is a passionate advocate for building compa- nies which represent the very best ideals of responsible capitalism: Companies which meet the highest standards of governance and ethicality as represented by B Corp Certification, that also promote and support the empowerment of women, and who also champion environmental sustainability.' BSIF I will serve as a catalytic platform to accelerate Malaysia's positioning in the global semiconductor supply chain at a time when geopolitical shifts and digitalisation are reshaping the sector. By focusing on sustainable development and IPO-readiness, the fund aims not only to create financial returns but also to build a new generation of globally competitive, socially responsible Malaysian enterprises.
Malaysian Reserve
24-04-2025
- Business
- Malaysian Reserve
Mayu Global redesignates Tan Kim Hee amid money laundering probe
by RUPINDER SINGH MAYU Global Group Bhd has announced the redesignation of Tan Kim Hee to non-executive director from executive director, effective May 2, 2025, as part of wider corporate measures taken in response to an ongoing police investigation under Malaysia's anti-money laundering laws. The board's decision, made by mutual consent and without prejudice, follows recommendations by its nomination and remuneration committee and was formalised during a board meeting on April 23. Tan abstained from the deliberations and vote, it told the bourse in a filing today. The company stated that the change 'serves as a precautionary measure to uphold good corporate governance, preserve the integrity of the investigation process and prevent any potential conflict of interest during the course of the investigation.' Tan will no longer be involved in the day-to-day management of the group or its subsidiaries, particularly in matters involving monetary transactions. Leadership of operations will remain with executive directors Goh Chin Heng, Tan Qian Hui, and Chow Choon Hoong, supported by the senior management team. The redesignation follows disclosures made by the group previously, including the freezing of banking accounts of Mayu and its subsidiaries – amounting to RM10.67 million – under Section 44 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA). The freezing orders, issued on April 10, are valid for 90 days. In a filing dated April 15, the company revealed that Tan, who is a substantial shareholder holding 11.095% of Mayu Global, was detained by Bukit Aman police on April 2 and released on April 7 without charges. He is also reported to be the brother-in-law of MBI Group founder Tedy Teow Wooi Huat. To safeguard its interests, MAYU has appointed legal counsel to handle all aspects of the ongoing investigation. According to the company, the legal team has 'initiated engagements with PDRM and is providing full cooperation, including the submission of any requested documentation to safeguard the Group's operations and assets.' In addition to legal representation, the company has tightened internal controls. 'Controls over payments, procurement processes, and banking transactions have been tightened,' the board said. Internal monitoring has been intensified, especially for transactions that may trigger red flags under AMLA, and the finance team is providing regular updates to assess operational impact and maintain continuity. A comprehensive third-party internal audit is also underway. Mayu has engaged Baker Tilly Monteiro Heng PLT to conduct a review of Sunrise Manner Sdn Bhd – an 80%-owned subsidiary since October 10, 2018 – focusing on cash flow and financial transactions. The audit will emphasise identifying the source of funds related to the company's operations. The company further stated that 'an Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) policy will be adopted in due course' to enhance compliance across the group.
