Sunday, April 20, 2014

UEM's three times stupid (Part 1)


On June 8th, 2009, this blog posted an article entitled Is the de-listing of UEM Group a cover-up for a major loss? prior to the appointment of Dato Izzadin as UEM Group new CEO.

That first article was explosive because it revealed a failed Salwa Road project in Qatar. It attracted 34 comment, mostly from within UEM Group and sent "tremors" up to Mercu UEM.

This blog went on a hot pursuit for a month and comments on certain postings reached more than 100. It may have made management nervous that a meeting was arranged with UEM Chairman Tan Sri Tajuddin Ali. In the meeting, Tajuddin promised to solve the Qatar road problem in two years. He promised to hand hold the new CEO, Dato Izzaddin Idris.

Ample time have been given. Tajuddin Ali did not deliver his promise. The last check with Izzadin, the Qatar matter was still left unresolved. Just like what happen at Sime Darby, it is time for Tajuddin Ali, the Board of Directors and management of UEM and Khazanah to answer to the public.

And, we do not see him guiding Izzadin in the right path. UEM was in the limelight for it's dispute with another Khazanah company, MAHB with regard to "delayed" construction of KLIA2.

However, the bigger issue on UEM this time is the takeover of Sunrise and it has raised many eye brows.

Khazanah Operational Failures

UEM will always be on our radar because Proton, MAS and UEM were the three companies Khazanah was supposed to turnaround. The incompetent and no deliverable CEO Tan Sri Azman Mokhtar promised publicly in many public forums during Tun Abdullah reign.

They failed to do all three. Not only that, Khazanah failed in all start-up ventures of strategic value for the country. 

The reason behind their failures to turnaround companies and start-ups is that as Analyst/Fund Manager (CEO), Bankers, and Accountants, they only how to tinker financial numbers and shuffle papers but never capable at operations level to make projects viable and generate profitability in the long term.

National agenda and nation building is merely a clique these days.

In their turnaround efforts, Proton was subtly being planned for closure by then MD Dato Azlan and eventually after much pressure, Khazanah washed their hands by first rigging the price in the market up then off-load it to Tan Sri Syed Mokhtar at an inflated premium.

Yet Syed Mokhtar is being villified for monopolising businesses but kept quiet on the monopoly by the Kuok, Yeoh, Cheng, Lim, Tan, etc. 

MAS has not only not turnaround but Bina Fikir, Penerbangan Malaysia Berhad under Khazanah themselves and Tun Abdullah's family seemed to be helping themselves as part of ensuring it's demise.

The status of UEM is not known with UEM World or now UEM Group delisted thus the true picture of the group is only known to Khazanah.

Only the crown jewel, UEM Land was kept listed because Nusajaya is profitable. As the CEO used to say, HDB flats are sold at RM1 million, thus no reason the prospect for UEM Land not to be good.

All M&A plans would usually come to and get approved by Khazanah first, thus why the need to takeover Sunrise?

UEM Sunrise merger

On many occassions, Izzadin repeatedly said that the merger with Sunrise was about securing expertise in developing high rise luxury building.

Although raised into believing "Melayu boleh" and GLC was about building Bumiputera human capital, we can't argue with that. The reason and intention seemed reasonable on the surface. And perhaps it was the changing times.

The vogue then seems to be of GLCs taking over property companies but let the vendors or previous owners run the show. It happened in the Sime Darby takeover of P&O, PNB takeover of SP Setia, etc.

To the more seasoned corporate players, it raised eye brow because UEM has Faber as subsidiary, Sime Darby had Sime UEP and PNB had lots of property companies to rely on for expertise. If they only want the milk, why buy the whole cow?

The Sunrise that they tookover was not under the control of Dato Alan Tong, the entrepreneur who build the company to where it is. It has since been led by Anwar Ibrahim's crony, Dato Tong Kooi Ong.

Tong holds 25% and the rest of the 40% controlling block in Sunrise were held by DAP Penang friendly, Dato Danny Tan and Dato Allan Lim. Quite sure at least 10% + 1 shares of Sunrise are held by proxies.


The November merger was unravelled in November 2010 with glowing praises by The Star. It marked Izzadin's presence in UEM but the suspicion is that it was Khazanah orchestrated. Judging by CIMB Research equally glowing recommendation, it is fair to suspect CIMB had their cut in it.

Conveniently, the PKR-friendly, The Edge highlighted the strength from the combined asset of over RM5 billion.

Khazanah media machinery promoted the deal as New Economic Model-compliant and in line with the vision of then new Prime Minister Dato Seri Najib. The Bernama report can be found on Iskandar Malaysia website here.

Most media highlighted the merger as a merging of brands. Read here.

Who Took Over Who?

By February 2012, The Star columnist Angie Ng hinted here that the merger is not as seamless as it seemed to be.

The integration and transition for the merger of a GLC and township developer with a company known for luxurious high rise condo and high rise integrated project had it's problems.

Subsequently, UEM Land changed name to UEM Sunrise on June 17, 2013 [read Star Property here] and that gave away bad vibes. Instead of a takeover and UEM dictating the merged entity, it was becoming clear that Tong was dictating the show.

Tong made money from his personal equity in the merged entity. Although the former Chairman of Sunrise resigned as Director of UEM Land, his team seemed to run the show operationally at UEM Sunrise.


Lum Tuck Meng
As of November 2013, Tong's people dominate operations and business development with Lum Tuck Meng as COO and Raymond Cheah as COO for Commercial or in other words, Business Development.

When the merger took place, Raymond Cheah was merely a Senior Manager, but rose four steps to COO to replace Zakir Omar who was formerly the long time CFO from the days of Ahmad Pasdas.

Zakir seen with the late CEO
Talk within UEM was that the true blue UEM man Zakir was set-up to be kicked by reassigning from CFO of UEM Land to COO Business Development.

Was it Izzaddin that set him up? Not sure.

Zakir was quite prudent and cautious. He rejected projects of only 60:40 confidence level, thus may have rejected Sunrise's projects.

He was in the way of Tong and he may have assigned a representative of Sunrise on the Board of Directors by the name of Oh Kim Sum as assassin to discredit Zakir. Every other proposals papers were cut to pieces and eventually, Zakir was asked to resign within 24 hours notice.

Raymond Cheah
Under Raymond, UEM Sunrise seemed to be undertaking lots of strange businesses and international projects undertaken earlier by Sunrise. Quite sure Oh Kim Sum did not see any more problems.

More on that in the subsequent Part 2.

Zakir's position was replaced by the current CFO Mohd Azhar Osman, an outsider from Proton. Yes, someone with the expertise in managing the financial affair of a carmaker now manage the financial affair of a property company.

The Chief Marketing Officer, Siti Mariam Mohd Desa was also an outsider from DRB Hicom.

Unless the CEO of Cahaya Jauhar, Mohd Auzir is from within UEM, management of UEM Sunrise are made up of outsiders and Sunrise people. When the Qatar project hit a major snag, UEM had to do a purge but not the good people too. 

In addition to the two COOs, Sunrise people are placed at all the important and strategic positions in UEM Sunrise. One of the three Project Directors, and head divisions in charged of Construction, Procurement and Contract, Finance and assisting the CFO, and Facilities Management are all from Sunrise.

Ang Kee Ping
The latest heard is the Project Director for Central, Ang Kee Ping was promoted to be another COO, Development, thus all the three COOs are from Sunrise and making Tong the hidden hand to control UEM Sunrise operations.

CEO, Dato Wan Abdullah passed away recently at the end of February and the position still remain vacant. Will it be filled up by one of Tong's COOs?

By the look of it, Khazanah Nasional had made UEM look three times stupid.

They bought a company and the shareholders of the acquired company made money. The management of the acquired company remained in management. The way they are positioned, the management team of the acquired company would eventually control the company.

Dato' Tong Kooi Ong
Tong is suspected of milking UEM Land. Do not be surprise that the deals brought to and projects pumped into UEM Sunrise are partly to finance Dato Seri Anwar Ibrahim.

His resignation from the Board could be just a show. His comment that Sunrise has no problem with UEM taking control was also a show. Behind the scene, he is the mastermind and in charge.

Logically, does it mean Tong will continue to make money at expense of GLC UEM? In Part 2 tomorrow, it will be about worms UEM swallowed from the cow bought for it's milk.


* Edited 21/4 8:30 AM

18 comments:

Anonymous said...

Do not waste time. This will go on until the money runs out.

Anonymous said...

17thn dulu aku kerja kat sana....seme kebon sawit tu aku masok .....gelang patah... lima kedai...perling... jadi mainan aku jaa...

Kawan2 lama masih ramaii....disana...

Tapi masa merger dgn sunrise..... sebelom cantum seme cina dah naikkan org2 dia....

Yg uem land masih di takuk lama...

Bila cantum.... uem land tuan tanah tukar jadi kuli cina jaaa....

Org baru masok pulak yg terus jd tuann....

Anonymous said...

UEM was an exemplary Group led by hardworking, brilliant and honest anak Melayu under TS hakim Saad.

Give us any task and we will deliver it within timeframe, of highest quality and lowest cost.

Once Khazanah moved in, now it is filled with the greatest pretenders that Melayu could have ever produced!! They canteven get thier costing, project management and execution right.....

sesejuk mata memandang said...

Malaysian management don't practice 'harakiri' method like Japenese, most GLC company should applied that kind of system.Majority GLC head is a Malay, if we feel the current head fails like Dato Azman Mokhtar ; he must be replace bu another malays, why not so many capable malays around, the Government must listen to people not only listen to few advisor surrounding.

By giving not more than 2 years in position and to renewed if the persons shows something extra ordinary jobs otherwise these people should be replace , don't care who they are but the high and bottom line is ' money' loss or profit.

Please and please , rakyat sudah muak di permainkan

Anonymous said...

Pada pandangan mata penulis blog ini semua yg dibuat oleh UEM dan khazanah semuanya salah dan tak betol langsung melainkan penulis sahaja yang betul sebetul-betulnya seolah penulis ini seorang yang mahabijak sana dan sini...nak tanya skitlah pada penulis blog ini kamu pernah jadi ceo ke ? eh org bankrap boleh jadi ceo ke ?

:)

Anonymous said...

Salam sejahtera & selamat pagi.

Who read your articles, and comments and the information below. Anyway, I hope someone or many readers bother to check the facts and provide the information to the person/s that matter:

1. A friend who joined Blue Archipelago, first degree holder and left our company due to performance and say management pressure, told me his too fat monthly salary. I was shocked but he said you would be surprise if you hear Khazanah MD, Azman Mohktar, monthly salary. It is so huge that there is no reason for him to be doing his business. Can the blog owner/insiders post the actual monthly salary? Is RM170,000pm is far too low from actual?.

3.The grey hair guy from CIMB, son of Mokzani?, have joined Blue Archipelago. No experience and cow sense for aqua culture or agric for that matter is given the leading role. Fat fat salary for not doing well udang business in Karpan and Setiu, Terengganu.

4. Khazanah and all companies related to Khazanah are populated by MCKK guys.

5. In fact MAS restructuring exercise was made by a bunch of MCKK guys. Separating assets from Operations. What good has they and Idris Jalal made to MAS then that could support its going concern.

6. How CAN a big corporation realise its purpose of existence when almost all important positions were given to friends from MCKK. We have worked with some, whom were given title of Senior GM at a tender age of 30-35, but do not have thorough knowledge of business at all.

7. These "MCKK guys" are emotionally attached to Anwar Ibrahim. So we can expect companies align to Anwar konco konco can cut deal with Kazanah controlled company, e.g, sunrise case.

8. Who is that guy, x Minister in Prime Minister Dept in charge of Finance, the Talent Corp CEO uncle, all Penang mari. Mohd Noor? Is he still the Deputy Chairman of Khazanah. Kadir Jasin penned he that x Minister (younger day) bet in Money Market and Malaysia lost billions, RM12-RM16 billions. Refer to A Kadir Jasin THots.

9. Tell Najib, I will find my way too, for Khazanah to fulfil its purpose of existence, the Management composition must be shaked up NOW. You can't make it like a colony of MCKK guys, afterall we have worked with many of them n(Joke a bit MC gay gay). The management must be people from various (formative years)schools, elite or just ordinary schools. It should be NO MORE for all MCKK affairs.

10. When can we see the Govt declare Azman Khazanah MD pay. When can we expect a mixture of good people from various schools ( formative years)to make up Khazanah Management and the companies under Khazanah.

Anonymous said...

Can you share this link and more from the link on the same Company, different perspectives and information

http://malayrights.blogspot.com/2013/11/mimos-renovation-for-life-terus.html

See more...it is real...arsing from Pak Lah Era

Anonymous said...

Dari Khazanah, uem, sampailah ke anak2 syarikatnya uem, melayu atas 'bunuh' melayu bawah, orang2 lama diterajang keluar, masuk orang baru mcm bagus, tapi mcm haram.

Bangsat sangat ke anak melayu nie smpai habis orang asingpun diletak? Kualiti Alam dari dijaga anak tempatan, sekarang siapa yang jaga?

Izadin masuk uem, lagi cacar merba syarikat glc uem dibuatnya. Takde projek, kalau ada projek pun hancur. Mane tk hancur, sume orang dibuangnya. Dia niepun mane ada bckground entrepenuer.

Kazanah pulak nmpk dh jadi semakin bangang dan bengap.

Kasi tukarlah sume nie. Takde sape bole beat mcm halim saad lead th company lar. Offer dia balik lagi bagus lar.

A Voice said...

9:02 AM

For heaven sake, criticise me but please not use such old school and poyo argument.

Hardly shakes the tree. :)

Anonymous said...

The company used to be like a katak bawah tempurung, and it only experienced massive growth after it merged. Why should we be unhappy with a positive thing like this?

Reading this blog, it seems as though the blogger is only attacking the company due to racial factors of its top management. Please realise that the majority working with the company are Malays and they are indeed being trained to take on the leadership of the company someday. Think positive! Don't see everything with a racial eye. It's for everyone's benefit lah!

Anonymous said...

These past few years Izzaddin has been seeing many of UEM Managing Directors exit from UEM. Adnan Mohamed from Faber, Azmanuddin Haq from Environment, Dato Che Halin from CIMA, Suhaimi Halim etc etc. Some of these companies are making money i.e. profitable yet the boss is shown the way out. If true they are not making money, shouldn't the Board of Directors also be replaced. In any of the Board members for each company, Izzaddin surely is one of them. Yet, the Chairman (normally those above 70 years of age)and the Board of Directors remained.

Apart from those in the Top Management being asked to leave, Senior Management post were also asked to leave. The human capital team of UEM Group are mostly female General Managers if not Senior General Managers. They have replaced quite an alarming number of experienced male HR guys who were once with top notch MNC's Shell, Philip Morris, Digi, Uniten, TPM, MBSB, Ann Joo Bhd, EON Bhd, Goodyear, Linatex, John Hancock, Texas, NCR/AT&T, Astro, General Electric, Philips, Fujitsu , Hitachi, Samsung etc. Errman Zuhady, Zainal Mat Aini, Sulaiman Ahmad, Kamal Ithnin, Syed Jalil, Hassan Sahalan and Adam Abdullah has already left either being asked to or simply was not good enough for contract extension.

A lot is being swept under the carpet, newly introduced interventions and programs being brought upon yet they have never been able to produce better results despite paying hefty sum of contract to external consultants. The management will deploy external consultants to carry out forensic audits by paying them million ringgits of money just to get rid of the hated one although the findings is non substantial and without loss of dollars and cents.

UEM is a "silver spoon deal company" with a top management who doesn't know the real in and out of its operations. They'll come up with quick solutions without really knowing the root of its problem. Qatar issue is as simple as "the Arabs were conman" although in actual, UEM experts were unable to do a proper study in the beginning.

When those in power are those who knows how to cook the books, they'll be able to justify their actions till the new people replaces them. That is if the new people are not their chosen successors or everything will remain intact.

With the power maneuvering at the top by Izzaddin and fully carried out by Rasidah Kasim without any interference by the old time unproductive Chairmans and Board of Directors, UEM will see RED soon enough. Get a real Audit to dig and you'll get a true report in all areas, not just the manipulated figures.

Anonymous said...

I think the contributor to this blog entry has some personal vengeance kut...Qatar case ni lama basi dah but wait a minute, this topic is the bloggers' darlings kan 3-4 years ago? Why ungkit again?

Melayu ke cina ke at the end of the day we are Malaysians...we need people to transfer their knowledge/technologies to us. Salah ke? Suddenly so pro-Perkasa, takutzzz....larikkkk

A Voice said...

12.41

Racial focus is merely coincident because sunrise are racially bias for chinese

Sang Kancil said...

Well, we did have Tan Sri Hassan Marican. And look where he is now. Chairman of Pavilion Energy and Sembcorp Marine in Singapore. Both incidentally are Temasek-linked companies.

Why wasn't Hassan Marican asked to remain in Malaysia after his stint at Petronas? He would have been an ideal person to take charge of MAS and whip into shape, unions and racist agendas be damned.

But, no, that would have been too easy, wouldn't it?

I have no problems with the staffing of Sunrise, IJM, Public Bank or the Kuok a Group. Since when did being good business people depend on the color of your skin or your religion?

Unless, of course, you espouse the notion that the "dignity of race and religion" supersedes everything else, including sound business sense and good corporate governance.

Anonymous said...

UEM ok dah tu. Sikit-sikit percaturan politik tu biasalah. Cuma tengok-tengokkan lah kontrak-kontrak tu, jangan asyik bagi pada kontraktor/supplier sama je.

Tolong lah bantu mereka ni membangun dan berdikari sendiri. Bawa mereka pergi overseas buat projek besar-besar. Bagi peluang usahawan baru pulak nak naik tangga.

Sama lah pada TM, TNB, KTMB, Pantai, KPJ dan lain-lain GLC yang kerajaan masih pegang tu.

Kita tak perlukan Syed Mokhtar seorang je yang kaya. Ramai lagi Melayu yang berpotensi untuk meningkat naik boleh dibantu.

A Voice said...

2:35 PM

Benda lama dah basi?

Does that means problems are to be swept under the carpet?

Personal vengence accusation whenever an issue raised is another poyo argument that is best left in the pages of history.

Another poyo argument that delivering a promise is not umportant.

WHat happen to deliverable?

A Voice said...

Sang Kancil

Thanks for answering 12:41

Surely everyone can read that the issue is not about meritocrasy or race.

It s also not about bashing the CEO Dato Izzadin cause M&A are determined at Khazanah and BOD are merely rubber stampt.

Do get back to the crux of the issue of who is taking over who.

Why is the acquiror giving management control to the acquiree?

Mgmt Student said...

Hmmm. Thank you A Voice. Finally someone brought the issue up.

IMHO, it is a clear indicator of differences between Entrepreneurs Vs. Portfolio Managers.

Naming a few:
TS Halim Saad, TS Syed Mokhtar, TS Lim, TS V. Tan, TS Ananda K, TS Tony F, Dato' are all entrepreneurs in my book. No doubt. They start a company from scratch and build on their companies and turning them into empires. That command admiration and respect from me personally.

Naming a few:
TS Azman Mokhtar, Dato' Izzadin, etc are Portfolio Managers. Nothing more.

Entrepreneur creates value by building them, Portfolio managers do not create value, they flip values. Big difference.

Entrepreneur sees and brings out values in people, Portfolio managers don't.

The brainwave and the dynamism between an entrepreneur and a portfolio manager is different.

That is the BIG PROBLEM WITH GLCs TODAY.. THEY STOP CREATING VALUES! Simply because the portfolio managers are not entrepreneurial minded. GLCs will forever be in their "current" status quo for as long as they are run by portfolio manager minded people.

Irregardless of what people say about TS Halim Saad, personally i think UEM Group is in better shape, more dynamic and gives more value during his tenure.

Cannot compare an entrepreneur to a portfolio manager. Not in the same league.

Just my thoughts.

My Say