The so-called genius Azman Mokhtar and his board members covered up their screw-up and never disclosed their eye-popping losses in their annual report. But such reckless investment decision wasn’t the only one that they made. In August 2011, Malaysian Airline System (MAS) and rival AirAsia’s plan for a share swap raised eyebrows of irregularities.
Malaysia Airline System and Air Asia - Share Swap Plan
Under the grand plan, AirAsia’s parent Tune Air would receive 20.5% stake in MAS while Khazanah, which owned close to 70% of MAS, would take a 10% stake in AirAsia. The plan was hatched to improve synergies between the two carriers. However, all hell broke loose over allegations of insider tradingbetween MAS and AirAsia.
AirAsia stock climbed from RM2.50 in March to a record high of RM4.14 in late July while MAS was near its 10-year trough of below RM1.50. Khazanah lost tons of money as it was forced to buy super expensive AirAsia shares but sold its stake in MAS cheaply to Tony Fernandes and his partner Kamaruddin Meranun. The deal was called off eventually.
More importantly, the unfair share swap also enabled Fernandes and Meranun to be executive directors of MAS while none of MAS’ Board of Directors was elected as Air Asia’s director. As the result, AirAsia was able to learn about MAS’ entire business plans while MAS had zero clues about its rival AirAsia. It was not a merger but merely a so-called “shareholder alignment”.
Malaysia Airline System and Air Asia - Share Swap Signing Ceremony
The amusing part was when MAS was forced to pay RM18 million to Queens Park Rangers (QPR), a soccer team owned by Tony Fernandes, as part of advertising stunt to promote Malaysia Airline System. KNB’s chief Azman Mokhtar didn’t lift a finger over the shady deals. But how could he?LSG Sky Chefs Brahim Sdn Bhd was given a mind-boggling deal in flight catering business.
(extracted from tukar tiub)
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