Irina Laifa Putri-224967

QUESTION 1
Bendang Mas Seri SdnBhd, 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 LembagaTabungAngkatanTentera, Koperasi Polis, AmanahSaham 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

MrShakirTan Sri Dato Dr 40

Razali
9.
MsSuzanaBohari
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
MrShukorTan 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,MrShukor, is a chartered accountant while MrShakir (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?
Seven directors
YBhg. Tan Sri Dato Dr Razali Zainol
Tun Omar Merican
Tuan Haji Bohari Zainol
Dr Farhana Tan Sri Dato Dr Razali
MrShukorTan Sri Dato Dr Razali*
General (R) Tan Sri Suhaimi Begum*
Tan Sri Fadhil Siraj*

(b)

Determine the institutional shareholders in the context of BMS Malaysia.

Lembaga Tabung
Angkatan Tentera
Koperasi Polis
Amanah Saham Nasional Berhad
and other mutual funds

(c)

Differentiate between an alternate director and an associate director.

Alternate director :
A company director may appoint a person to substitute and act on behalf should
be approved in writing and signed by the appointor, the person that appointed may
act and speak during the absence or incapacity of director.
The appointment should be tabled on board meeting
Need to lodge form 48A before appointment
Not entitle to get remuneration but not limited to appointor payment to alternate
director
Associate director :
The board may appoint an associate director
The appointment and termination done by the board of directors.
No need to lodge form 48A
Powers, duties and remuneration made by BOD

Not required to attend or vote unless invited

(d)

ExplainTWO (2) main characteristics of an independent director.

According to MCCG every listed company should
Not an officer of the company, independent of management
Not related to the officers or involving in personal interest

(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.
Board Duality position, it might open the opportunity to do fraud for personal
interest of Tan Sri Dato Razali
Tan Sri Dato Razali had lower shareholdings percentage than other boards which
dont reflect his ownership

(f)

State who amongst the directors of BMS Malaysia that should be retired by rotation.
Dr Farhana binti Tan Sri Dato Dr Razali
Date of appointment 18/10/2010 age 47
Tan Sri Fadhil Siraj
Date of appointment 18/10/2010 age 66

(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.
Under section 129 (1) stated that Subject to this section but notwithstanding anything in
the memorandum or articles of the company no person of or over the age of seventy years
shall be appointed or act as a director of a public company or of a subsidiary of a public
company.
Tun Omar Merican is the director need to be retired, he still be able to be appointed with
the majority of 75% of members present and vote for him. In the next AGM meeting he
should be reappointed if the company wants to retain him.

(h)

Discuss why a company that is weak in term of corporate governance may be able to perform
excellently in terms of financial achievement.
There might be two possibilities, they do it in positive way or negative way.
In positive way the structure of corporate governance may be weak but they already
comfortable with each other whereby can share ideas comfortably which can obtain good
performance to the company especially in financial achievement. In negative way the
structure may be made to do something illegal because it opens the opportunity by having
weak corporate governance to do fraud whether for company in illegal way or for
personal interest.