Enter The Dragon

Fear, great fear in the corporate sector!

When the dragon enters the fray, it devours the target.

History will repeat itself. It has not failed so far, and it is unlikely to fail. The business news frontpage:

Chua Ma Yu enters the fray in SBB bid

The last time, he surfaced was in Bandaraya Bhd, the company controlled by Tan Sri Lim Thean Keat. Bandaraya controlled Multi-purpose bank (now Alliance Bank). It also controlled Magnum 4-D, and owns a property development outfit (Bandaraya Development Bhd). Then came Chua Ma Yu, the corporate raider. He took over the plc and then in a short time, disposed it to someone else for a profit. He also played a part in the departure of Rashid Hussein of RHB, and to an extent, MRCB.

In 2004, when Temasek Holdings was making an attempt to buy a stake in Malaysian Plantations Bhd (MPlant), the holding company of Alliance Bank. He was also involved in the tussle between Amin Shah and Bolton Finance.

Now he is back ... and the family of SBB chief executive office Tan Sri Tan Teong Hean has cause for concern.

The corporate world knew that Chua MY has strong backers, and often is a proxy fighter for someone within the regimented coterie. He is more of a financial consultant (front-man) to aspiring owners. He gets paid to act as the "intellectual raider" to front the invisible king-maker. He gets handsome profit for the job done.

Chua Ma Yu has surfaced as the buyer of a sizeable block of Killinghall Bhd shares that was traded off-market on Wednesday. 32 million Killinghall shares changed hands off-market at RM4 each. The buyers and sellers were unknown at the time. Chua announced in Bursa Malaysia that he bought 28.2 million Killinghall shares. This block forms a stake of 14.1% in the company. The shares would cost him RM112.8mil cash.

Following Chua's disclosure, it remains a mystery as to who bought the rest of the 3.8 million Killinghall shares traded that day. In addition, 45.7 million irredeemable convertible unsecured loan stocks (ICULS) in Killinghall were also traded off-market on Wednesday. The buyer of the ICULS is also unknown. Altogether, the shares and ICULS amount to 21.27% of Killinghall's equity. Killinghall is the largest shareholder of Southern Bank Bhd (SBB), which is the target of a takeover bid by the CIMB group.

Chua said in a brief interview that he bought the Killinghall shares as an investment. “I hope this investment will produce a good return for me.”

The sellers of the 32 million Killinghall shares is believed to be The Straits Trading Co Ltd and other units of the OCBC banking group, as well as the bank itself.

Killinghall holds the key to a takeover of SBB. If and when CIMB makes a general offer for all SBB shares, Killinghall will have to call an EGM to consider and vote on a resolution as to whether it should accept the offer. There is, however, a stalemate in Ramuda Sdn Bhd, the largest shareholder of Killinghall. It is understood there are only two directors on Ramuda's board – one representing Selangor's Sultan Sharafuddin Idris Shah and the other, the family of SBB chief executive office Tan Sri Tan Teong Hean. The Sultan is reportedly in favour of selling Killinghall's SBB stake to CIMB while Tan is not in favour of it. But, with only two directors – one in favour and the other against – a decision can't be reached at the Ramuda level. If Ramuda can't arrive at a decision, it may be up to Killinghall's minority shareholders to tilt the balance, and Chua has just become the largest minority shareholder. Hence, Chua is in a position to make or break the merger proposal.

Some market observers say Chua is close to CIMB. They also observed that Chua's Killinghall shares are registered under Cimsec Nominees (Tempatan) Sdn Bhd, a nominee services subsidiary of the CIMB group.