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Tutorial Director

This document provides information about BMS Malaysia Holdings Berhad (BMS Malaysia), a public company in Malaysia. It details the company's history and ownership structure. Tan Sri Dato’ Dr Razali Zainol is the founder and largest shareholder, owning 35% of shares. Other major shareholders include government institutions. The document then lists the members of BMS Malaysia's board of directors and audit committee, noting several potential issues or weaknesses in the structures. These include many directors being related to or close friends of the CEO, lack of rotation of directors, and ages of some directors raising compliance questions. The document poses several questions requiring analysis of these details in the context of Malaysian corporate governance best practices and regulations.

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Logeswaran Rajan
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202 views

Tutorial Director

This document provides information about BMS Malaysia Holdings Berhad (BMS Malaysia), a public company in Malaysia. It details the company's history and ownership structure. Tan Sri Dato’ Dr Razali Zainol is the founder and largest shareholder, owning 35% of shares. Other major shareholders include government institutions. The document then lists the members of BMS Malaysia's board of directors and audit committee, noting several potential issues or weaknesses in the structures. These include many directors being related to or close friends of the CEO, lack of rotation of directors, and ages of some directors raising compliance questions. The document poses several questions requiring analysis of these details in the context of Malaysian corporate governance best practices and regulations.

Uploaded by

Logeswaran Rajan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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0QUESTION 1

Bendang Mas Seri Sdn Bhd, a private company limited by shares was incorporated on 7 May
1990 under the Companies Act 1965. The company was initially wholly-owned by Bin Zainol
family. Upon conversion into a public company in 1999, its name was changed to BMS Bhd
(1999 - 2012), and subsequently BMS Malaysia Holdings Berhad (BMS Malaysia).
BMS Malaysia is headed by Tan Sri Dato Dr Razali Zainol, the Chairman and Chief Executive,
who is the founder of the company and owns about 35% (direct and indirect shareholding) of the
issued capital. Another 25% of the shares are owned by few local based institutional groups such
as Lembaga Tabung Angkatan Tentera, Koperasi Polis, Amanah Saham Nasional Berhad and
other mutual funds. The rest of the shareholdings are owned by retailed individual investors. The
group has over 20 years of experience in property development in Malaysia and Indonesia and in
the last 5 years, it has also involved actively in trading especially with the government
departments. Recently, the company was awarded a lucrative contract of supplying 44 jets fighter
for the Royal Malaysian Air Force.
BMS Malaysia has been voted as Malaysia's leading corporation and one of the ASEAN's most
profitable companies. The company has several directors comprising of the following:
No
.
1.

Ag
e
69

Date of
Appointment
15/10/2011

71

21/11/2012

67
47

21/11/2012
18/10/2010

Independent Non-Executive
Deputy Chairman
Executive Director
Executive Director

45

15/10/2011

Executive Director

65

21/11/2012

66

18/10/2010

Mr Shakir Tan Sri Dato Dr 40


Razali
9.
Ms Suzana Bohari
43
Note: * Audit Committee members

21/11/2012

Independent Non-Executive
Director
Independent Non-Executive
Director
Alternate Director

21/11/2012

Associate Director

2.
3.
4.
5.
6.
7.
8.

Name
YBhg. Tan Sri Dato Dr
Razali Zainol
Tun Omar Merican
Tuan Haji Bohari Zainol
Dr Farhana Tan Sri Dato Dr
Razali
Mr Shukor Tan Sri Dato Dr
Razali*
General (R) Tan Sri Suhaimi
Begum*
Tan Sri Fadhil Siraj*

Designation
Executive Chairman

All of the non-executive directors are retired government servants who happen to be Tan Sri
Dato Dr Razalis golf buddies and all of the executive directors are related to the Executive
Chairman. One of the directors, Mr Shukor, is a chartered accountant while Mr Shakir (who is
Shukors twin brother) is his alternate director.
REQUIRED:
(a)

State how many directors are actually effectively responsible for the monitoring of BMS
Malaysia at any particular time?

(b)

Determine the institutional shareholders in the context of BMS Malaysia.

(c)

Differentiate between an alternate director and an associate director.

(d)

Explain TWO (2) main characteristics of an independent director.

(e)

Identify and discuss THREE (3) weaknesses (if any) in the board and audit committee structures
of BMS Malaysia based on the Malaysian Code on Corporate Governances best practice.

(f)

State who amongst the directors of BMS Malaysia that should be retired by rotation.

(g)

Analyse the provision in Section 129 of the Companies Act 1965 with regards to the directors
age and identify the director(s) of BMS Malaysia that is/are subject to this provision in this
respect.

(h)

Discuss why a company that is weak in term of corporate governance may be able to perform
excellently in terms of financial achievement.

QUESTION 2
Omega Bhds Board of Director is made up of nine members with diverse experiences and skills.
The Board is chaired by an executive director, Tan Sri Aminuddin Yahya who is also the founder
and CEO of the company. He has over 25 years of experience in the real property business. He
owns several real property companies including Yaya Construction Sdn Bhd and Bistari Maju
Development Sdn Bhd. Of the four non-executive directors of Omega Bhd, two are independent
directors, whose status was reviewed annually by the Boards nominating committee. The
remaining four executive directors hold key management positions. In the Board Charter, it is
stated that corporate governance is vital and important to the success of Omega Bhd as a public
listed company.
Throughout last year, only two Board meetings were held. In the last Board meeting, the Board
has agreed to appoint Dato Wahid Arifin as a new director. Dato Wahid is holding a position as
a managing director of Yaya Construction Sdn Bhd. The Board has also agreed to involve in new

development project which include the construction of offices, industrial premises, retail shops
and residential houses. The cost of developing is estimating about RM260 millions. The Board
members have decided to appoint an independent property expert as they aware that property
development is a risky business in the current economic situation.
After joining the company for two months, Dato Wahid realized that Tan Sri Aminuddin,
without reasonable cause, has directed the Finance Officer of Omega Bhd to make a payment to
Yaya Construction Sdn Bhd for the construction of LaJoy Apartment in Petaling Jaya without the
knowledge of the Board.
REQUIRED:
(a) Discuss the procedures for the appointment of Dato Wahid as a new director in Omega
Bhd.
(b) Provide the consequences of the instruction by Tan Sri Aminuddin to make the payment
for the construction of LaJoy Apartment as per provision in the Companies Act 1965.
(c) Discuss the duties and liabilities of directors of Omega Bhd in regard to the following
statement:
Decision to involve in new property development project may go wrong and cause
loss to the company.
(d) Advise whether the Board can rely on the advice and information provided by the
independent property expert in exercising its duties.
(e) Suggest THREE (3) changes for Omega Bhd to improve its corporate governance
practices. Justify your suggestions.

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