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From: AFP
Date: 03 May 1999
Time: 13:15:30
SINGAPORE, May 3 (AFP) - Singaporean and Malaysian regulators and officials reacted guardedly Monday to a company's unusual offer to buy at a discount billions of dollars worth of frozen Malaysian shares previously traded here. The offer, aimed at resolving an impasse over shares caught in limbo by the imposition of Malaysia's capital controls last September, has caused a stir in the market and triggered protests from the largely Singaporean shareholders.
Some 100 Malaysian counters were traded here over the counter under a system called Central Limit Order Book (CLOB) International.
As part of capital controls introduced in September last year, Kuala Lumpur moved to curb offshore trading of Malaysian stocks.
An estimated 170,000 CLOB shareholders were caught by the freeze, which has become a sensitive bilateral issue.
The Stock Exchange of Singapore (SES) said in a statement Monday that it was seeking "legal advice" on the offer by a Malaysia-based Singaporean businessman, Akbar Khan, to buy all CLOB shares at a discount.
"It will issue a statement as soon as possible," the statement said.
The Kuala Lumpur Stock Exchange (KLSE) has also stayed silent so far.
Akbar's company, called Effective Capital Sdn. Bhd., is putting up 5.8 billion Malaysian ringgit (1.52 billion US dollars) to buy back shares at discounts averaging 45 percent of their market price on September 15, 1998, which was the last day of trading of CLOB shares.
Malaysian Finance Minister Daim Zainuddin said Monday the government had yet to decide on the offer.
Akbar was previously reported to be close to high Malaysian officials, but Daim said others were also free to forward their proposals to the Singaporean authorities.
"What they have to do is to make an offer to the Singaporeans. If they accept, it's up to them. Since the shares are in Singapore, anyone can make on offer in Singapore," Daim said.
But he added that he did not know when the issue would be resolved.
Many CLOB stockholders and dealers had said the offer prices were way too low from what they had initially invested in.
Some discounts reached as high as 85 percent, infuriating investors, Singapore's Business Times said Monday.
But in an interview published by the daily, Akbar denied he would make a killing and said he himself was taking a risk in making the buy-back offer, which expires at noon on June 15.
"Look, unlike the individual investor who is rightly concerned about his stake, I am a bulk buyer and I'm running the risk of a long exposure to the market," he said. "No one is being compelled to sell."
The 58-year-old Singaporean national is a permanent resident of Malaysia.
"We are merely bringing to the table another option that until now was not available," he said. "No CLOB investor is in any way bound to accept these offers as they are purely commercial propositions."