Friday, 26 March 2021

Are AmBank’s Minority Shareholders Taking a Hit?

 

AMMB Holdings has agreed to a RM2.83 billion global settlement in relation to the 1MBD matters. This is in addition to the paltry RM53.7 million penalty imposed by Bank Negara Malaysia and paid by the AmBank Group.

The Sarawak Report (Mar 17, 2021) suggested the whole thing is a “stitch-up” with counsels for Government and AmBank working together to conclude an agreed sum! If that is true who is representing the minority shareholders? The Minority Shareholders Watchdog? The SC? It doesn’t seem so for now.

Why did 7 members of AmBank’s senior management dispose their personal shares in the bank on 29/30th December 2020? Is this insider trading?


The date happened to coincide with a spike in prices after a poor year at the bank. Price, of course, plummeted after the announcement of the settlement.

ANZ, a key shareholder, has written down its equity interest of 24% in AmBank by AUD212 million. ANZ has been unsuccessful in trying to sell its stake. The carrying value of its stake is lowered to AUD850 million from AUD1.05 billion.

AmBank’s AMMB Holdings Bhd CEO, Datuk Sulaiman Mohd Tahir, recorded a huge jump in pay from RM6.64 million in 2020 compared to RM4.2 million in 2019, a 58% increase. However, the financial year for AmBank is April 2019 to March 31, 2020 and so it is not reflective of more recent developments --the effect of the pandemic and the settlement sum. Whatever the case, the minority shareholders are left with the consequences, drop in value and little say on proceedings.

 

Reference:

1.     Did AmBank's Minor Shareholders Just Get A Mugging From All Sides? 16 March 2021, Sarawak Report

2.     Ahmad Naqib Idris, SC says reviewing share disposal by Ambank senior execs, declines further comment, 18 March 2021, The Edge

3.     ANZ writes down AmBank stake after 1MDB settlement, 1 March 2021, The Star

4.     AMMB agrees to RM2.83bil global settlement over 1MDB, 26 Feb 2021, The Star

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