Monday, July 16, 2012

E&O dated July 2012

The question of whether the former should have done a MGO still lingers in the background. And it looks it will remain there for a while more.
The is because the SC has appealed against High Court Judge Abang iskandar Abang Hashim’s decision not to recuse himself from hearing a legal challenge mounted by E&O minority shareholder Michael Chow against the regulator.
The appeal will be heard on July 24, 2012.
To recap in Dec 2011, Chow had filed for the application for a judicial review in a bid to challenge the SC’s ruling that Sime Darby’s purchase of the 30% stake in E&O from its three major shareholders did not trigger an MGO obligation.
No doubt if the court rules that Sime Darby must undertake an MGO, it would mean it would have to cough up another rm1.8 billion to buy the remaining E&O shares it does not own. If so there would be an impact on its share price though Sime Darby can afford the amount but would eat into its planned capex.
Meanwhile for E&O, the delay in resolving the legal issues leaves it in a unenviable position. This is because Sime Darby, with its 29.77% interest must be seen to be in control of E&O’s board and management.
Of the substantial shareholder include Grand Mission Intl Ltd (6.95%), ECM Libra Investment Bank Bhd (5.21%), Tham (5.04%) and GK Goh (5.59%). GK Goh has been adding E&) shares since mid May 2012.

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