From Straits Times, Singapore - 31st January 2000

Malaysia-based bumiputra company says it informed, consulted and sought approval from the stock exchange on the Clob issue By RAVI VELLOOR

SAYING its own detailed proposals were handed in before the deadline, Bintang Melewar yesterday attacked the Kuala Lumpur Stock Exchange's (KLSE) endorsement of Effective Capital's bid for the frozen Clob shares as the only proposal that complied with KLSE rules.

"It is not true that Effective Capital's was the only proposal submitted in December 1999 that had complied with the rules and regulations. At every stage, Bintang Melewar was informing, consulting and even seeking KLSE's approval. "We would have appreciated receiving KLSE's input as our proposal complied with its rules and regulations," the Kuala Lumpur-based bumiputra company said in a statement faxed to the media.

Bintang Melewar (BM) reiterated that it had given the KLSE a comprehensive proposal with three options of custodial service, managed portfolio and investment-linked insurance policy.

On Dec 1, a comprehensive proposal was submitted to the KLSE by its coordinating merchant bank, MIMB.

On Dec 8, BM met the KLSE together with a full team of professionals representing the services and products offered in its three proposals.
"The details provided were akin to preparation for an initial public offering," BM said firmly, noting "with sadness that KLSE has chosen to dismiss our comprehensive proposal as incomplete and that it was not submitted before Dec 31".

Its statement went on to point out that the KLSE had extended the deadline on Dec 31, opening up the opportunity for further revision to meet the demands of Clob investors.

Also, it said, the KLSE had indicated in discussions that the proposals should seek the approval of the Singapore Exchange and Clob investors.

Following the extension, both BM and Effective Capital made revisions and submitted proposals to both authorities this month.

"We are therefore saddened that KLSE, while not responding to our proposal directly to us, should choose now to make a public statement dismissing the Bintang Melewar proposal.

"However, we do look forward to the KLSE's guidance on this matter," it said.

Last Friday, KLSE said only Effective Capital's Clob proposal complied fully with its relevant rules and procedures, and Clob investors should focus on it "without delay".

In a four-page statement, the KLSE also said Clob investors should follow up immediately with the Singapore authorities "to ensure that they are not deprived of any information or documents that would assist them to make a decision to accept the private-sector offer".

"As stated by the Finance Minister, in the interest of time, it is best for Clob investors to focus on existing proposals which have been confirmed to have complied with the KLSE and Malaysian Central Depository rules and procedures and are ready to be implemented," the exchange said.

Only Effective Capital's 18-month share migration proposal had complied fully to date, it said, with other private proposals including Bintang Melewar's not having submitted sufficient details to confirm compliance.

The KLSE statement came on the same day that the Securities Investors Association (Singapore) (SIAS) said Bintang Melewar's 14-month share migration proposal was the "most favourable" private offer. The SIAS had praised features of the scheme, including:
Its lower fee; Shorter waiting period; and Relative simplicity.

"We now have a good solution on the table, which any Clob investor with common sense would not reject," SIAS president David Gerald had declared.

But he stopped short of endorsing formally Bintang's offer, as the firm had not yet submitted the offer for official approval by the KLSE.

Some RM17 billion (S$7.59 billion) in Malaysian shares traded formerly on Singapore's Clob have been frozen since September 1998 when Malaysia introduced capital controls.