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Sakmongkol ak 47

Tuesday 18 October 2011

The UEM Land-Sunrise deal- revisited.

What has happened to the UEM land buy-in into Sunrise? The value of the buy in was RM 1.4 billion. You bozos don’t think we have forgotten do you?

From the beginning the public did not understand the rationale of UEM land, a member of the UEM group, with its large land bank would want to buy into Sunrise. It’s got Nusajaya with its 3400 hectares of land and all that.

What has Sunrise got? It’s much touted award winning skills which the UEM boys are so smitten with but think they cannot learn or acquire somewhere else. Its resident architect in chief- Saiful Anuar Abdul Ghani found himself so overwhelmed by Sunrise’s magic? Also, it’s got the Tong Kooi Ong- formerly boss of Phileo Allied. And UEM Land has only got Wan Abdullah Wan Ibrahim. Wan Abdullah who? Pales in comparison to the myth-making Thong of Phileo , the financial wunderkind.

Hence UEM land justified its buy-in of Sunrise being founded on:
    * Leveraging on Sunrise Group's robust financial strengths and prospects
    * Accelerate UEM Land's own business expansion
    * To secure new development projects
    * And, to create another Capital Land (Singapore state-own company which is one of Asia's biggest property developers)

The deal would result in:-
    * UEM Group's shareholding in UEM Land will fall to around 60%
    * Major shareholder of Sunrise will have stake of around 9% in UEM Land
    * Creating an enlarged group with combined asset base of over RM5bn

Sunrise has reached its end already. With no more land bank, the only way it can grow further was to entice another suitor to take over. They found one in the able and willing UEM land.  

UEM doesn’t have the expertise in luxury development and they don’t have the marketing skills.Are these admissions of incompetence or inverted humility employed to get support?

The deal was founded and justified on the assumption that by buying into Sunrise, UEM land would leverage on the special skills represented by Sunrise. What are those pray tell.  Acquiring the art of survival known only to Tong Kooi Ong? Getting the secrets of building high end condominiums?  And it accomplishes this by issuing shares worth RM 1.4 billion and by volunteering to reduce UEM’s share in UEM land by at least 40%?

You had the analysts singing praises for the deal- the public was induced into believing  that the acquisition would complement UEM Land's lack of expertise in high-rise, high-end property development. This was the rationale that was most perplexing; UEM land can build highways and other award-winnable buildings at KL Sentral, it needs the special skills that could only be found in Sunrise?  The skills at Sunrise are not learnable?

The building skills of Sunrise were so unknowable and un-learnable such that, that deficiency can only be resolved by buying over Sunrise for RM 1.4 billion? Why would Sunrise with its award winning constructions principally at Bukit Kiara wants to be gobbled up? Because it can leverage on the large land bank that UEM land has. It knows it can get its hands on EPF money. It also know it can get government backing. And also, because Tong Kooi Ong wants to shed his buddy to Anwar image. Because it knows since it has the skills, it can dominate the new organizational structure of UEM Land-Sunrise by controlling the strategic and key components of the revised corporate entity. Tong will control the development side of the business. I hear he is revising whatever UEM Land has planned thus far. So how does UEM land learn the skills from Tong if they are not in the driver’s seat?

Tong will feature prominently in the deal through his  Casa Unggul Sdn Bhd being  its single largest shareholder with a 24.41% stake. The Employees Provident Fund Board has 12.61% voting shares in Sunrise.

Since then, did the people in UEM Land and UEM expand their knowledge about to how to construct high end condominiums? Can we ever imagine- a conglomerate and a business entity with so many fingers in so many pies ( they have actually run out of fingers by the way) claiming pubescent innocence that they don’t how to do what Sunrise has been doing? Yet they can build impressive looking buildings, highways and so forth.  You mean we have been paying humongous remuneration packages to bozos running UEM and UEM land?

Wasn’t this the big rationale when the public asked why must UEM land park their assets in Sunrise? They said they wanted to learn the trick in building up market properties like Sunrise does at their Kiara complexes.

Now, I ask you, if we want to learn the insides of the business which have made Sunrise a topnotch name, were do we start? We will start at the operations right? At the marketing department right?  Because these are the two things UEM Land says it doesn’t have.
Does UEM Land have its people there? Its COO is Lum Tuck Ming. Its boss of Strategic Marketing is Edward Sutton. Didn’t UEM say it doesn’t have the operational skills and marketing expertise? Instead at UEM Land we have so many despondent executives resigned in their beliefs, they are inferior that people at Sunrise.

So, can we ask UEM land, have they placed their people in the operations department and marketing departments? Or are they contented at having their people placed as supporting casts in the support service’s department- accounts and bean counting and other clerical functions.

If they haven’t, then their much publicized declaration that they are injecting UEM Land assets into Sunrise as a means to cultivate and develop technical knowledge was all bull manure. They were probably at it, because some people at UEM made tons of money for supporting the decision to inject UEM land assets into Sunrise. Sunrise hasn’t got any land bank left baby- you are giving them an extended lease. UEM could have partnered another government linked company such as Sime Darby or anyone else. Sime Darby can build high end condominiums too right.

So if it were not a crime, I would pull all those responsible for maneuvering the entry of UEM land into Sunrise ,  line them up and have them shot one by one.  Perhaps with an elephant gun.


Anonymous,  18 October 2011 at 10:05  

sebagai warga kerja UEM Land, saya kecewa dengan komen ini. Jika tidak pasti dan tidak paham jangan buat serkap jarang aja. segala transeksi yang telah dibuat melalui semakan, kajian sebelum dilakukan.
kepakaran sunrise dalam pembangunan pencakar langit di perlukan bagi memajukan projek2 pencakar langit di Nusajaya.

Anonymous,  18 October 2011 at 11:48  


This pet rant of yrs has been skewed by yr blind loath in the putra-b4-bumi take!

Let’s step back about yr take of learnable skills.

40+ yrs of blue-eyed preferences has not produced any significant professionalism among yr kindred, in almost every major fields of endeavors. Surprise?

The earlier yrs of NEP did capture many talented Malay M’sians & promoted them to excellence in the fields of choice. They were the drop in the bucket.

Unfortunately that process has been distorted subsequently by a Royal Professor who mastered the quantification of degree holders of dubious standard, by giving markah bonus.

Ever since then, that art has been upgraded & been perfected by the nincompoops who has themselves been promoted by the same system. To hold on to their periuk nasik, & to hold on to the ‘thought’ of AlifBaTa, they perpetuate the same system .

Thus, the subsequent degree-holders r just paper-mill prints. Some Masters & PhDs r also coming out of spurious source! Heard of any horrible graduate interview stories lately?

To learn, one must has some basic understanding of the trade. Then, add a strong dose of passion. Put one's nose to the grindstone, until a true skill is mastered.

Does that trace exist in 90% of yr kindred that suppose to up-hold the maruah of the bangsa?

The truth is zilch.

The most obvious reason been these key-holders r, 1st of sub-standard background, 2nd of been big-headed, been put into a position of power due to kulification, know-who, abang-adikism & cronyism, 3rd entitlement mentality, thus least likely to do thing himself, rather than delegating.

So, we had consolidated the world’s biggest tin mining company, & yet that company is now a land asset play. What happens to the experience/skill, accumulated over the yrs of tin mining operation? Forgotten &/or been gone oversea! The only things left r the depleting money & landbank. What’s more valuable – cash in hand or experience?

So we r the first in the world to establish The Multimedia Super Corridor (MSC) program. There was hope to built a corner stone in IT industries. Instead, MSC has once again evolved into a property play over the yrs. Cyperjaya is famed for MNC backroom of paper-pushing, bcoz we can’t produce skilled personnel that can further any IT R&D!

Ha, just check how far deviated Iskandar Regional Development Authority has from its list of objectives. Once again Iskandar Malaysia has become a property play just like Cyberjaya. Hello, how could u move property deal when dealers of the world r just sitting across the channel? U r just child play!

Now, SimeDarby & very soon PNB too. So what’s The UEM Land-Sunrise deal?

Property is seem like the only life-lines that these companies r relying on. Thus the frenzy in tasking-over well-evolved & managed property companies listed on the Bursa.

Now back to the theme of yr write-up – any wonder, why those skills r non-learnable by yr kindreds?

Anonymous,  18 October 2011 at 12:03  

Beautifully said. I agree 100%. I would go further to ask, why should we a GLC that is totally incompetent. Might as well sell it off.

Anonymous,  18 October 2011 at 12:06  

Salam Dato',
TOTALLY agree with you, especially the last para! Maybe we should be doing that for the MAS-AA deal as well!?


bruno,  18 October 2011 at 15:19  

Dato,UEM Land had abundance land bank,wheareas Sunrise has depleted land bank.Yet,they bought into Sunrise,all because of the brand name,or their so called expertise that very well paid professionals at UEM Land do not process.It is like putting a picture of a face of a young prostitute over the face of an old whore.This is the same as the MAS-AA share swap.

If a congomerate like UEM land cannot have the means to acquired skilled proffesionals in the open market,that they have to buy over a company to do so,then their top notch management must have been recruited at the garbage dump site.When big deals are done at the coporate sectors that doesn't make sense,it is because some bigwigs pockets are bursting at the seams.

Moo..,  18 October 2011 at 18:36  

Dear Dato,

Please also write about Sime darby and E & O deal.

Anonymous,  18 October 2011 at 19:08  

Shot one by one? If it is that straight forward, you will have no UMNO left except you LOL.

Melayu Baru,  18 October 2011 at 19:50  

Assalamualaikum Dato' Sak,

Everyday, as each citizens of Malaysia conduct their daily lives, the signs of them being effed over are all over the place - but they are immune to it.

Switch on the light - there goes subsidies from the cronies company. Water? If you live in KL - Syabas. Travelling - by road? Toll. By Air? MAS/AA. Watch TV - Astro. Make calls - big telcos. Buy car? APs. Rice? Bernas. SUgar? Felda. Sweetheart deal (UEM-Sunrise/1MDB/Iskandar/FRIM/(insert your own)) - same playerlah.

Common denominator? UMNO elites, and their lackeys.

Common result? Uncompetitive environment, losses to taxpayers, wasted resources, distorted economics.

Do the ruling elites care about how competitive the country is? Are they concerned the country is mismanaged?

What are they afraid of? All apparatus of the states are in their hand. Police? AG? Army? Separation of power - raped long time ago.

Now we reap what we sow.

It is akin to the Matrix. The masses dont know that they are being used. It felt good living in it - subsidi minyak, subsidi air, dapat duit bonus etc.

If you take the right pill and got out of the matrix, you know the truth. But you have one heck of a fight.

To all the fighters outside the Matrix - I salute you. Let's work hard to get rid of this scourge. We owe it to the future generations.

Melayu Baru

Anonymous,  18 October 2011 at 23:41  

if ur consistently criticized as being dumb..eventually u will believe u r so.Thats where Bumis are now...acceptance phase.

So,its thanks to UMNO leadership.

bruno,  19 October 2011 at 01:41  

Quite Despair,

One thing is for sure.Never say good things about a politician,even if they are sincerely good.Just look at your man KJ.One minute we were saying how smart a budak he is.The next second he is returning us the compliments.By attacking LGE's school going teenage son.

If KJ is of leadership calibre,he would never have sunk so low as to attack LGE's son.Why not go after the father.The father is a politician.Politicians can absorbed heat,whether good or bad,true or untrues,because politicians have thick hides,and they deserved to be critised or have garbage thrown at them.But always leave their families out.Now let us wait and see whether KJ is a jantan,have bolas and batang.We will know for sure when he will or will not appologised for his childish actions.

Ariff Sabri 19 October 2011 at 07:18  

anon 11:48

this is dangerous thinking! as soon as we r sufficiently intelligent and can articulate about the game being played here, our criticisms are dismissed as per rants. by that term, i suppose the intention is to let this rant be treated lightly.
as an overkill, you launch into the now stereotypical hypothesis, that Malays are incapable of learning the trade. because they are incapable, they re therefore always consigned to playing a subservient role to the inherently superior ethnic group. do we detect a master and chosen race argument here?

anon 10:05
i feel sorry for you. if you care to reveal ur identity, i will be glad to supply with a memo written by ur Dato Wan Abdullah in sep 2011 outlining the organizational structure that's put in place wef now. i don't see you in the operations and marketing outfit.
if uem needs sunrise to develop its nusajaya, then appoint sunrise as principal subcon.

Quiet Despair,  19 October 2011 at 07:56  

Dear buddy Bruno

Wow, you sounded like Din and friends who ignore the story when it was first exposed by Malaysia Kini. (The story then went viral on pro-UMNO blogs but not carried by MSM).
And Din and cronies started castigating KJ for attacking GE's son.
It is karma pal. GE and dad so smugly attacked UMNO leaders, their sons and wives for all sins under the sun. God is great. It is proven that LKS dynasty is not that perfect after all.
KJ is a politician who plays GE and dad's game. Fair game, fair play for any smart politician.
So GE and son are untouchables. They see no evil, do no evil, hear no evil. They are angels treading this earth.
Now Rahim Thamby Chik is laughing from his Bangsar home.
It's not so much about the molesting case. It's about RM200,000 to shut the girl's mouth.
SO GE is not so clean and graft-free after all, yah.
And the laughable thing is GE's wife Betty (ex-Utusan reporter) who replied, when asked: "Ask the CM."
Hey if it is my son (god forbid) I will state categorically my son did not do it.
My parting shot: Ladies, Penang is not safe to visit. A VIP's son is on the loose. Visit JB instead like what the Singaporkeans do.

Anonymous,  19 October 2011 at 09:04  


'..stereotypical hypothesis..'?

Very convenient excuse. Just like when a GLC goes under, fingers r pointing everywhere, except itself!

Perhaps, we all need to polish the mirror that’s been long hanging within the hall way & takes a new reflection. Or is that mirror has long been ‘cold-storaged’ due to the hairline cracks every time we take a refection upon it?

1st, I've not pointed out all the currently 'well-oiled' Malay M’sian ‘entrepreneurs’ are incapable of learning the trade. I said 90%. Wasn’t u the one who has been ‘ranting’ about the putra-b4-bumi syndrome? & what’s that ill that befalls the bumi, again?

2nd, ‘.. because they are incapable, they re therefore always consigned to playing a subservient role to the inherently superior ethnic group.’ Said that to the face of Hassan Merican. Now who is he been humba-ed to? The S'porean? The Yanks?

This ‘master and chosen race argument’ is just coming out of yr inferiority complex. The only good thing, unlike many of yr kindred, yr's showing is more subdue & subconscious. Give it a re-read, & see where’s that superiority lies.

Anonymous,  19 October 2011 at 09:58  

Quiet despair 7.56

You ait'nt that bright man! you fell for that oldest trick! Are you sure 200 k changed hand? YOU saw money change hands? Are you really sure on what you write? Are you sure LGE and father attacked umno and BN FOR THE WRONG REASONS? So what Betty used to work for Utasan ? Must she answer differently so what your beef?
If idiots like you can believe Papagomo or that Roc shit stirrer 100 % then we too can believe you are jerking in the corner! You get the drift....?

Yaz,  19 October 2011 at 10:00  

I noted this article with sardonic amusement.

Firstly let's get something clear. The vast majority of GLCs/Umno firms are not run efficiently barring a few such as CIMB.

If not for scale (Maybank), these GLCs rely on government contracts to survive.

How many for instance would consider KUB a top notch firm? If they fought purely in the private sector their (aggravated) losses over the years would be much much higher.

On the construction side, let's talk about efficiency. I work in the industry.

Ask any subcontractor who has done work for Sunrise and you'll probably be met with praises.

Why? Because they are prompt with payments! They've got a well organised legal/documentation department who review claims. As long as you've got your paperwork in order, they will pay you on time. If it says 30 days, it MEANS 30 days.

How many (construction) firms actually do that? UEM Land is not renowned for efficiency in this sense.

And if we go further and talk about bumiputra run firms well...
the only one that probably comes to mind is the original Peremba. Why do you think Daim was so well regarded back then? Because he made sure to pay all his suppliers and subcontractors on time.

I am somewhat more familiar with the further details of the UEM Land-Sunrise merger. You talk about skills and expertise. Suffice to say UEM Land isn't that efficient a firm.

When they brought Tong in, he went to review IDR. (This was in fact one of the key points why they wanted him) He was stunned at the costing of the developments that they had done with much of it being outrageously high (in some cases double).

The reason? You should _not_ get investment bankers to become contrctors.

Investment bankers are just that, good at numbers when it comes to the actual financial world, but crappy as hell when they look at other industries.

Also, just look at the financial results of Sunrise versus UEM Land before the merger.

UEM Land has a huge land bank, massive. But profits pale in comparison. Calculate the RoE and RoA and see. Everyone keeps hyping up IDR as the future, but it seems to be very, very far in the future.

As you the writer seem to view this merger negatively - especially since it's for bringing over a skill, experience and knowledge transfer from Sunrise, which you say UEM Land should be able to get on their own - consider this.

The top appointees in GLCs. If they bugger up in their jobs, what happens to them?

Nothing. If it's an exceptionally bad bugger up, they'll be transferred horizontally to another GLC (once their contract is up). Their pay will remain at the least, the same if not more.

Our culture in GLCs doesn't really encourage exceptional entepreneurship amongst the top appointees. Screw up, still get rewarded.

Whereas if you get someone who has a large vested interest (Tong, his shareholding) to get it right, he will - come rain or hell - get it right because let's face it, it's HIS money at risk here. Not some manager who will still get rewarded if he buggers up.

I wonder, if this merger has been UEM Land and SP Setia, would you the writer still be unhappy about the whole situation?

Oh and for the record, I am a bumiputra. One who is wholeheartedly sick of how incompetent my many bumiputra peers are, who get where they are through cronyism and connections. Not ability...

Anonymous,  19 October 2011 at 10:13  


When he is too ambitious to become PM by the age of 40 and believing himself to be the messiah for the corrupt UMNO, the proverbial the ends justify the means will be his signage. He will seize any opportunity, no matter how dreadful it is, to exploit so long as it fits into his scheme of things.

He is no better that a vagabond living in the ghettos, every minute of the day sifting through all the shits and rubbish looking for something edible to ensure that he lives another day.

If this is the kind of character and leadership he will inhibit when he is PM,I'll feel very sorry for my beloved country MALAYSIA.

saji 19 October 2011 at 11:46  

Sdr Anon 2011 10:05

Kalau sdr kata,sunrise mempunyai kepakaran dalam pembangunan pencakar langit di Nusajaya, apa jenis kepakaran yang dimiliki oleh UEM?

Quiet Despair,  19 October 2011 at 12:19  

Anon 09.58

Who's talking about smart here, you smart-ass.
You are among the DAP species who are ventilating because your latter-day saint's off-spring is not saintly yeah.
Even Sak's side-kick is also castigating KJ just like the old-fart Din.
Don't bother defending KJ there because comments will be deleted as happened to two of my pals.
It must be the songs fault, yeah, not the singer. SO KJ has become the perpetrator and the molestor got scott-free.
Thank god we are not living in America where the slighest rumour will bring down a leader.
I dread if it is Najib's son. There won't be such considerations as gutter politics or making children a victim.
You all be jumping with joy.
Now we hear excuses, excuses and more excuses.
What is new yeah when broke-back mountain actor is also not guilty of sodomizing. He's innocent ma. He cannot even lift his brief-case.
Yeahlah this GE kid did no such things. Such sins only come from UMNO leaders and their family.
Yeah man, broke-back mountain man and demi-god Guan Ying are given passports by Nik Aziz to enter heaven.

OneMalaysian,  19 October 2011 at 18:06  

Dear Sakmongkol

That UEM Land- Sunrise deal was not as dumb and one-sided as it might seem. Let me put a different complexion to it.

Why might UEM and Khazanah (ultimate shareholder) want to do the deal? Getting the well-regarded Sunrise management team was one motivation, but not the only one. UEM/Khazanah are not so dumb to believe that Tong Kooi Ong and partners will stay in UEM Land for the long term. What they want instead is to “bulk up” UEM Land’s balance sheet by issuing new shares (at RM2.10) at a very hefty premium over net asset value (in books at RM0.67, not revalued from 1993 costs. On a revalued basis, after taking into consideration the merged entity the NAV is estimated at RM1.60).

Besides this bulking up, and signaling to the market that UEML shares are really worth much more than NAV, UEM Land is eyeing 2 very big land deals – part of the Sungei Besi airbase land and part of the Rubber Research Institute land in Sungei Buloh. Now to get part of the action UEM Land must demonstrate to the government that it has the expertise to develop those properties into exciting new cities. So here is where the Sunrise team CV comes in. Since the deals are likely to materialize within months rather than years, UEM Land has no time developing an in-house team that can impress the government in a “beauty contest” with other well-connected bidders. In the meantime, the Sunrise team can help with improving the existing Nusa Jaya structure plans and in project and marketing plans.

As for Tong and friends, they got good value for their Sunrise shares. It was trading at RM1.80 – 2.00 in the months prior to the merger announcement against a NAV of RM2.00. UEM Land offered RM2.80 when the shares were trading at RM2.20, a premium over market of 27%. So UEM was paying premium by issuing shares at a premium. But there was a sweetener for Tong. They did not take the UEM shares, but the alternative Redeemable Convertible Preference Shares (RCSP). These RCSP are really a sort of option shares that can be converted into UEML ordinary shares at RM2.30 (premium of RM0.20) during the 2 years after merger. If they are not converted (i.e. option is not exercised) then UEML will redeem them at RM1.00 each (i.e. at issue price). In other words, if UEML shares go through the roof say to RM4.00 or RM5.00 during the 2 years, the RCSP holders will convert (by paying UEML cash of RM1.30 each plus surrendering 1 RCSP) and make a killing. If the UEML shares tank, they get their RM1.00 back. So essentially Tong and friends got a guaranteed, can’t lose deal. So it is in their interest in 2011 and 2012 to see that the 2 big land deals come about, and that they can make some “sexy” changes to the Nusa Jaya plans to excite the investing public.

Who got the better deal? It's too early to say, and everyone is entitled to his opinion.

bruno,  19 October 2011 at 19:47  

Quite Despair,

Hi buddy,long time no hear from you.As usual,a diehard supporter of Umno jumping to the defence of Umnoputras.

First of all,I would like to let you know,that the accusations of LGE's son is the fantasies of pro Umno bloggers.In fact,it is the fantasies of fantasies of wet dreams of these bloggers to have the best organysm in their lifetime.

About LGE's son,I for one will take the accusations as such,and will give the boy the benefit of doubt,unless proven otherwise.Like Khairy too,unless he has hard facts to back his attacks on LGE's son,he should have the guts to appologised like a man.Khairy's going after the boy is because he is the son of LGE.

A man of Khairy's political stature,the national leader of Umno youth,going after a schoolkid speaks wonders of him.It is like pitting Muhamad Ali vs Lindsay Lohan in a boxing ring.For your information,Thamby Chik can be laughing from his house in Bangsar,is because he is one of the lucky few,to be able to have Dr Mahathir as his guardian angel 24/7.

CYC,  20 October 2011 at 13:27  

So, what is left with our GLCs? All the praises showered on their so called Enterprising and Talented CEOS actually are just shiok sendiri syndrome.

Skills cannot be acquired via corporate deal. It comes through hard learning.

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