Transmile, Nasioncom: Good Or Bad For KLSE
One word, good. Two words, pretty good. I am not talking about the transgressions here. I am talking of the effects and perceptions. Institutional funds know that corporate shennanigans are ever-present when you have listed firms, stock markets and lotsa cash. Hence corporate shocks such as these two should never be regarded as shocks but as natural rotten apples in a barrel. You will have one or two bad ones in a barrel, we cannot be so naive as to think we can keep it totally clean. Corporate scandals are part and parcel of ALL markets. The effects and perceptions by investors are much more important.
If this was played out a few years ago, especially in the 90s, I can bet you that these events would have died a natural death after a while. Chances are nobody will be prosecuted. The swiftness in action by SC on Nasioncom is highly commendable, and a marked improvement in the rising professionalism in our regulatory bodies. The long drawn out affairs with Soh Chee Wen and Repco Lau, which resulted in xxxx-all are symptomatic of how corporate shennanigans are treated way back then.
The handling of Transmile could have been better by the SC and the Bursa, but still not too bad. The allowed trading period for Transmile during days when there is no concrete information was not good at all. Billions were wagered, won and lost based on hearsay, rumours and pure speculation. However, if the big guys were to stop trading for a very long time, some might question the validity of a long suspension - investors need to move in and out. Its a difficult balance but I'd rather the Bursa and SC suspend the stock, even for 2 or 3 weeks pending the results of the new audit, that would have been better, because we are talking about a material matter.
Despite all that, the transparency and openess, and SC being on top of matters over Transmile, constant urgings and finally the leadership to force the issue for the company to come out with even preliminary findings - was on balance good. Foreign investors would see these developments as a sign of better market regulation, better openess and transparency.