KUALA LUMPUR, April 2 — The judge in an E&O minority shareholder’s suit against the Securities Commission (SC) decided today not to recuse himself as sought by the regulator.
Judge Abang Iskandar Abang Hashim dismissed the SC’s application as there was no duty in this case for him to have disclosed his employment history which was already in the public domain, lawyer S. Sivaneindiren said.
Sivaneindiren was acting for E&O minority shareholder Michael Chow, who has challenged the SC’s decision to give Sime Darby a general offer waiver after the conglomerate bought a 30 per cent stake in the developer.
Abang Iskandar read out the grounds for his decision during a 30-minute closed-door hearing.
The judge pointed out that neither party in the suit were prejudiced against him because of his time at the SC, with Chow stating in a previous affidavit that he had known of Abang Iskandar’s employment history before leave was granted.
Abang Iskandar also noted that he had left the regulator in 2007, while the facts on which the case was based only arose last year, adding that he had no personal knowledge of matters that would render him prejudiced or biased.
He ordered the SC to pay Chow RM3,000 in costs and set next Monday for case management.
In November last year, Chow filed a suit against the SC for failing to compel Sime Darby Bhd to buy the remaining shares in E&O after purchasing the controlling stake in the developer for RM776 million.
Malaysia’s takeover rules stipulate that any party that acquires more than a 33 per cent stake or management control in a listed entity must make a general offer for the remaining shares.
Sime Darby purchased its controlling 30 per cent stake in E&O from three major shareholders, including Singapore’s GK Goh Holdings, at the end of August last year in a deal that valued the shares at RM2.30 each.
The purchase price represented a 60 per cent premium on the value of the shares in the property developer on the open market when the deal was announced.
Chow, a lawyer, maintains that the SC’s waiver was “irrational and one that no reasonable body would have reached”.
The SC had asked that Abang Iskandar be recused for failing to disclose that he had previously worked as the regulator’s enforcement director from May 2004 to October 2007 before hearing the suit.
Its lawyers had contended he was privy to “secret or confidential workings of the Securities Commission” and that he had a relationship with the regulator’s senior management and commissioners.
Chow, however, replied in two affidavits that the SC did not show that the judge had come into possession of knowledge or facts material to the suit when he was a director at the regulatory body.
The deal has triggered unease over the widely perceived coddling by the SC of large state-controlled companies at the expense of minority shareholders when exercising its authority on corporate takeovers.
It also put outgoing SC chairman Tan Sri Zarinah Anwar in a tight spot as her husband, Datuk Azizan Abdul Rahman, who is the E&O chairman, had raised his personal stock holdings in the company just weeks before Sime Darby announced its proposed acquisition.