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  • Writer's pictureFree Malaysia Today

Not too late to act in RAM Holdings saga, MP tells MoF

By Nicholas Chung, Free Malaysia Today (16 June 2022) PETALING JAYA: It is not too late for the finance ministry to intervene in the controversy surrounding CTOS Digital Bhd’s efforts to increase its shareholding in RAM Holdings Bhd, says PKR MP Wong Chen. This comes after the Securities Commission Malaysia (SC) approved an application by CTOS Digital to acquire more than a 51% stake in RAM Holdings, one of the two credit rating agencies in Malaysia registered with the SC. Wong Chen, the Subang MP, said RAM Holdings’ credibility would be “on the chopping board” if CTOS Digital’s takeover of a majority stake was allowed to complete. “The deal will allow CTOS Digital and its shareholders to potentially exert undue influence over any ratings given. This, in turn, will hurt the SC’s credibility, which has recently taken a battering from the Azam Baki share case and Serba Dinamik case. “It is not too late for the finance ministry to act as it can summon the SC to explain the approval. (The finance ministry) should immediately withhold consent to the deal until a satisfactory justification is given,” he told FMT.

Wong Chen said the SC has failed to provide a satisfactory explanation for approving the deal so far, adding that if this was not forthcoming, the Malaysian Anti-Corruption Commission (MACC) should be roped in to investigate possible abuses of power.

He also warned that investor confidence in Malaysia will take a further hit if the SC loses its credibility, while foreign investors fleeing the country would cause the value of the ringgit to drop. “So, this matter of the takeover of RAM Holdings by CTOS Digital is not so simple and has much wider negative repercussions,” he said.

On June 10, the SC said it had on several occasions approved applications for parties to hold stakes in excess of 20% in ratings agencies. The statement, however, fell short of setting out the basis on which CTOS Digital’s application was approved.

Meanwhile, Transparency International Malaysia (TI-M) urged the SC to be open over why it approved CTOS Digital’s application, acknowledging that there could be “good justification” for it. TI-M president Muhammad Mohan also urged Bank Negara Malaysia (BNM) and the finance ministry to wade into the issue, particularly since the central bank was the one that set up RAM Holdings in the 1990s.

“The SC should explain and be transparent. With a single shareholder dominating RAM Holdings, the business community will start doubting its independence as a ratings agency.

“RAM Holdings is known and respected for being independent and able to provide views and credit ratings both in the domestic and regional markets. So, there is a reason why (shareholding) was capped at 20%,” he told FMT.

Mohan said it was too early to state whether CTOS Digital’s acquisition of a majority stake in RAM Holdings was good or bad for Malaysia, maintaining that it boiled down to issues relating to governance, independence, transparency and the competence of the board.

“Only time will tell whether the new majority shareholders can take RAM Holdings to greater heights and give investors greater confidence,” he said.


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