Ralph Marshall and Ananda Krishnan (AK) part company

October 8, 2016


Ralph Marshall and Ananda Krishnan (AK) part company, says Asiasentinel


Image result for Ralph Marshall

Augustus Ralph Marshall parts company with Ananda Krishnan

by Asiasentinel correspondent

Augustus Ralph Marshall, the trusted key aide to T. Ananda Krishnan – Malaysia’s second-richest man – has left all posts in the sprawling cross-media empire as of end September, several sources told the Asia Sentinel.

Marshall has been under investigation in the past few years in India and Indonesia over joint ventures by Malaysia’s dominant satellite television provider Astro and cellular provider Maxis, both part of Ananda Krishnan’s business empire.

Swiss prosecutors have also asked for information on one of the companies Marshall sits in – Tanjong PLC – over money missing in the USD11 billion 1MDB scandal.

Company insiders and those in business circles say Marshall’s exit from Ananda Krishnan’s companies is anything but amicable. “It is a terribly acrimonious break,” said an executive who has worked with Marshall.

Image result for Ananda Krishnan warrant of arrest

Corporate Malaysia heard rumors of the impending departure from Ananda Krishnan’s empire in the past month but are awaiting announcements to be made in Bursa Malaysia, the local stock bourse, when it opens after the October 3 public holiday to celebrate the Muslim New Year.

“He is leaving AK, and not in the best of ways,” according to a businessman who is close to Marshall. AK is the moniker for Ananda Krishnan, who first made his fortune in the oil and gas boom of late 1970s before entering the telecommunications and satellite television industries.

Ananda Krishnan’s key aide

Forbes has listed Ananda Krishnan as the 158th wealthiest person in the world with US$7.3 billion and second wealthiest Malaysian in March 2016. He was 129th wealthiest in 2015 with a personal fortune of US$9.7 billion but his wealth tanked due falling Maxis share prices.

With nearly 40 years of experience in financial and general management, Marshall has been with Ananda Krishnan when the reclusive tycoon was given a cellular communications license and an exclusive 21-year concession to run Malaysia’s first and only satellite television provider. That license expires next year.

Image result for usaha tegas logo

The brilliant Malaysian Born and Harvard Business School Educated Entrepreneur in trouble with Law in India

The 64-year-old  Marshall was last the executive director of Ananda Krishnan’s private vehicle Usaha Tegas Sdn Bhd and also in ASTRO ALL ASIA NETWORKS plc, where he is also the deputy chairman, apart from being group chief executive officer of Tanjong Public Limited Company, where Usaha Tegas has a significant interest.

Marshall resigned in July 2015 as non-independent executive director of Maxis Bhd, the cellular provider which is partially owned by Saudi Arabia’s dominant provider Saudi Telecom Co, Usaha Tegas also has a significant stake in Maxis.

Marshall, who is regularly cited in the business media in Ananda Krishnan’s corporate deals, found himself in the other sections of regional newspapers in 2014 when police in India filed corruption charges against Dayanidhi Maran, who was India’s telecommunications minister between 2004 and 2007; and his brother billionaire Kalanithi Maran.

Both Ananda Krishnan and Marshall were named in the charge sheet with India requesting extradition but Malaysian police have said the request has not been made officially. Both Ananda Krishnan and Marshall have not discussed the matter publicly.

Reuters reported that India’s Central Bureau of Investigation (CBI) started investigating the Maran brothers and Ananda Krishnan in 2011 after allegations that the telecoms minister had forced the sale of mobile carrier Aircel, allowing Maxis to acquire a controlling stake in 2006.

Maxis Communications Bhd has denied any wrongdoing and said it would vigorously pursue all available legal remedies to defend itself and Marshall, the Reuters news agency said.

In 2012, Marshall was also named a suspect in a case that involved illegal use of operational funds in a company in Indonesia.

The Jakarta Globe reported the Indonesian police were in the process of requesting Interpol to issue a Red Notice against Marshall, who was then group chief executive officer of Astro All Asia Networks. The matter has since been resolved.

1MDB link

In January this year, Ananda Krishnan’s company Tanjong PLC, where Marshall is a top executive, was named in the Switzerland Attorney-General investigations into the 1MDB scandal, the biggest in Malaysia’s history, which has tarred Prime Minister Najib Razak.

The Swiss Attorney-General asked Malaysia’s assistance in its investigations into alleged misappropriation of US$4 billion linked to 1MDB – the first time that a foreign-government investigator has openly waded into the financial scandal.

The Switzerland’s Office of the Attorney-General (OAG) said funds were transferred to Swiss accounts belonging to former Malaysian public officials and were seeking information on 1MDB and its former subsidiary SRC International apart from Malaysian conglomerates Genting and Tanjong said to be connected to the money missing from government companies.

The OAG said four cases involve allegations of criminal conduct – bribery of foreign public officials, misconduct in public office, money laundering and criminal mismanagement. It said these occurred between 2009 and 2013 relating to PetroSaudi, Genting and Tanjong, SRC and Abu Dhabi Malaysia Investment Company (ADMIC), with the cases “each involving a systematic course of action carried out by means of complex financial structures”.

“So far, it has been ascertained that a small portion of the money was transferred to accounts held in Switzerland by various former Malaysian public officials and both former and current public officials from the United Arab Emirates,” the OAG said of the probe it opened in August last year.

Private Saudi energy firm PetroSaudi was involved in a plan in 2009 to jointly develop an oil field with 1MDB but the venture was aborted, with questions raised over the return of 1MDB’s initial investments.

Genting and Tanjong sold power plants to 1MDB at what were considered inflated prices in 2012. ADMIC was a joint venture between Abu Dhabi’s state fund Aabar Investments and 1MDB to jointly develop the Tun Razak Exchange financial hub in Kuala Lumpur.

Outside the tycoon’s ventures, Marshall has interests in the food-and-beverage sector in capital city Kuala Lumpur that ranges from upscale European restaurants to a cricket bar.

12 thoughts on “Ralph Marshall and Ananda Krishnan (AK) part company

  1. Let us hope AK who I first met when he was a young and smart executive in Guthrie Corporation in 1968 can get out this legal mess with the Indian authorities. It is always sad that to see that this brilliant entrepreneur and philanthropist and a friend who always had time for me is facing this personal challenge at a rather late stage of his life. I have always admired his business acumen and hope he will be exonerated. I wish him all the best. I also know Ralph Marshall. –Din Merican

  2. Let us hope that the Indian Internal security apparatus and Judiciary can provide a fair chance for the accused to defend themselves and not follow the lawlessness of certain criminal regimes.

  3. Dino Beano, while AK is a friend to you, I don’t think he’s a friend to the Malaysian public with his cutthroat policies at Astro. You may call this good business acumen but I think it’s a rippoff. He can do it as he has a monopoly, granted to him by the evil doctor. In other countries where he does not have a monopoly he tries to get his way via unscrupulous ways which is why he got into trouble. The proof of the pudding will be when his Astro license expires next year, will there be competition and how will he fare in a level playing field. His venture into oil and gas via Usaha Tegas failed miserably.
    He is a friend going back decades. I never mix business and friendship. Furthermore, business decisions are made by Directors and at his age, he is not directly involved. As long as his businesses produce market rates of return, he will not interfere in the running of his companies. Your views noted.

    I am sure the people in Astro and Maxis will note your comments. Go google and visit Din Merican on Astro which mirrows this blog. You can also write to them directly or discontinue their service and go to Digi or Celcom and Watch TV3 and national TV.–Din Merican

  4. This is why for decades, no one wanted to invest in India. You had to get things done but their own people got in the way. When you ” fixed” the problem, their problem, someone else do not care it’s an Indian problem to begin with. The likes of GE has to go extraordinary steps to fix their problems and issues just to do business they want. As improved India is to business, investment, it’s a society still struggling with conflicts of Capitalism, industry, free markets. They behave as over-entitled to most difficult of problems everyone struggles with everywhere.

  5. Quote:- “Furthermore, business decisions are made by Directors and at his age, he is not directly involved. As long as his businesses produce market rates of return, he will not interfere in the running of his companies”

    How do you know. He told you?

  6. Conyism and ruthlessness together with a good leg-up in the business world by mahathir is the model that made this man another of bolehland’s CEOs that milked the Malaysian public. There was and is no competition in the Malaysian corporate world and that, together with a cosy relationship with the overseeing government bodies, helped these companies fleece consumers in almost every sector. Rates and costs in neighboring for those services are almost a tenth of what is foisted on bolehlanders.
    So, coming back to AK, is that why his son decided not to be a part of his father’s wheeling and dealing and cut himself off completely?
    What the Indians are doing is going by the book, and i think the chickens have come home to roost for this man ‘in his advanced age’. As in MDB1, it’ll take foreigners to rein in such crooked behavior.

  7. Hi Din, I have discontinued my Astro service long ago and I do not subscribe to Maxis. I use the competition instead. I put my money where the mouth is. But for a long while there was NO competition.
    That is the right thing to do. The consumer is always sovereign. Business which ignores consumers do that at their own peril. Take care, Steven Wong.–Din Merican

  8. Why is it that we the people are always told to not to watch CNN if we do not like it? Frankly, such a retort only has credibility if we have access to TV statins that are not in the same mode as CNN.

  9. ” Part Company ” or parting of ways, are benign words for people who have amassed wealth , albeit hiding their treasures don’t know where……here, there and everywhere …….so we can see the symptoms of running to off-shore destinations, and getting into problems with authorities overseas like India, S’pore , US , HK or Taiwan…… ?

    This Air-Asia tycoon had ‘invested ‘ in a football Club in the UK……what was that , 400 million MR or pound sterling …..? – will they ultimately turn fugitives…..?

  10. The three links below provide good proof why anyone with a Harvard MBA in hand will do very well in life. With help from friendly lawmakers and with equally business-friendly laws operating, success is a cinch. Only one other person, a much younger one at that, has proved that a Harvard MBA is not necessarily the only gateway to fabulous wealth — the Wharton MBA too has shown the way.

    First link: MAXIS Privatization – What They Said & You Should Say [5 MAY 2007]

    Second link: Deja vu – Astro going private: Saturday, 20 March 2010

    Third link: Astro’s Major Shareholders Stand To Win Big : Business Published on 05 October 2012 Written by FARAH HARITH

    And now for my favourite exposé of unethical practice when companies go private. It’s an article by U.S. attorney Benjamin J Stein which I had laboriously copied from the Fortune Issue of 11 November 1985:

    Managers buying up their own companies are violating fiduciary duties and trading on inside information.

    The great genius of the system of public corporation is the ability to raise vast sums for economic development. Its great curse, from bubble to watered stock to Ponzi schemes, has been the temptation it offers managers and other insiders to abuse the trust of stockholders and steal from them in a seemingly endless variety of ways.

    A particularly troublesome form of insider abuse has developed in the past decade without anything approaching full public discussion of its ethics or legality. Known as insider leverage buyout, management buyouts, and going private, deals of this type have totaled billions of dollars and involved major investment banks and law firms. On their face, independent of the specifics of each deal, they seem to me to raise the most basic questions of whether stockholders are getting the legal and ethical protection they need and by law should have.

    I have been on the short end of several of these deals as a very small stockholder. Seen up close, as I have seen one lately, they work like this: a group of insiders – officers and directors – works with an investment banker and a law firm to carefully analyze the assets of the company. If the insiders perceive a large difference between the going stock price and what they can get by breaking up the company, liquidating it, or redeploying the assets, they cook up an offer to buy back the company from the stockholders and “take it private.” Their offer is more than the stock market price. But it is – by definition – substantially below what the insiders believe the value of the company will be once they have it as a private fief.

    The insiders send out a prospectus offering cash or a combination of cash and notes for the outstanding shares. The prospectus usually cites the burden of regulations on a public company and the market’s lack of appreciation for the company and includes a pious assertion by an investment bank (hired by the insiders) to the effect that the price offered the shareholders is fair and adequate.

    As far as I have been able to tell, no insiders have ever put these words, or words to this effect, in a prospectus: “Notice: we the management and our pals in the investment community believe we can put up a small amount of our own money, take all the cash out of your company, borrow the rest, and rapidly make many times the amount we put in. It is altogether likely that our return on investment will be exponentially greater than yours. That dear stockholders, is the only reason we would do such a deal.

    Though these words never appear in a going-private prospectus, they (or their equivalent in legalese) should. By any business or economic definition, an insider buyout can make sense if, and only if, the insiders are confident they can rearrange the assets of the company for their own large benefit and make those assets worth more than they paid for them. Therein lie at least three, and possibly more, very large rubs:

    Managers and directors are, by law and custom, fiduciaries for the stockholders. Fiduciary care, as a matter of unvarying law from the Middle Ages to the present, requires that the fiduciary place the interests of the stockholders ahead of, prior to, and superior to his own interests at all times and in all cases.

    Query (as we used to say in law school): How can an insider conceivably be exercising his fiduciary care to a stockholder if he plans to buy that stockholder out at a low price and then resell or hold the stockholder’s former assets at a high price? If the insider knows a way to realign corporate assets to realize more value, is he not legally and ethically bound to do that for the benefit of his cestuis, his wards, the stockholders? How can he justify buying from the stockholders something cheap he knows is worth more, often far more, than he paid for it? Returns to insiders in some leveraged buyout have been 40 to 1 and better, while stockholders got a few percent on their money. How can fiduciaries do that?

    Under the Securities and Exchange Commission’s Rule 10b-5, as elaborated in the 1968 case against Texas Gulf Sulphur, it is a violation of federal securities law for insiders to make money on a transaction motivated even in part by inside information not known to shareholders generally. This was the recent downfall of former Deputy Defense Secretary Paul Thayer and several of his close friends.

    Query: When insiders do a leverage buyout, are they not inevitably acting on inside information? Won’t they always, in every case, know the true value of this real estate or that invention or this pending contract or that competitor’s problems far better than the stockholder to whom they make their leveraged-buyout offer? If that is so, as it inevitably is, are not the insiders just as inevitably acting for profit on inside information? Why is this allowed?

    Under the SEC’s Rule 14a-9, as well as many state laws, any proxy solicitation material must involve full disclosure of every material fact by the moving parties – in this case the insiders and their buddies. Under the most recent Supreme Court on this rule, there must be full disclosure of any fact “if there is a substantial likelihood that a reasonable stockholder would consider it important in deciding how to vote.”

    But insiders never disclose the crucial fact that they plan to make vastly more from the corporate assets than they pay the stockholders for them. I am a stockholder in a few companies in a small way, and I hope I am reasonable. I consider it extremely interesting if management plans to make $50 from something it paid me $1 for, and it would assuredly make a difference in how I voted.

    Query: Why are insiders not required to disclose – under Rule14a-9 or under Rule 13e-3, the going-private rule, which also requires full disclosure – the very basic fact that they plan to make far more out of the corporation’s assets than they are paying stockholder for them?

    To lump all of this into one mound of legal and ethical sorrow: How, under fiduciary standards, insider trading restrictions, and full-disclosure requirements, can insiders get away with transactions that unavoidably call for the insiders to treat themselves vastly better than their ward-stockholders, on insider information, without full disclosure?

    I HAVE ASKED this question of the SEC, and lawyers there say the point has not been fully addressed. I have asked it of lawyers for well-known companies doing insider leverage buyouts, and they hem and haw and say the issue has not been decided in court. I even asked a federal court of appeals judge, and he agreed that it is a question that has to be answered soon.

    We might ask the investment bankers a few questions as well. Investment bankers are required to certify in all going-private deals that the purchase price is fair. But the same investment banker or a closely connected firm may already be at work reselling the corporate assets and may know that the stockholder is receiving far less the insiders will get. How then can the “outsiders’ price” possibly be fair? How, for that matter, can the investment bankers possibly represent the stockholders as a large, anonymous mob while their very large fees are paid by the insiders, whose interest by definition are substantially divergent from the stockholders’? Aren’t they also fiduciaries?

    Something is wrong on Wall Street. The faceless stockholder pays full price for admission to the show and then gets kicked out after the first act with only his stub as a memento. A whole new class of deals, whose attraction is the opportunity for insiders to loot the assets of the outsiders, is taking place virtually without challenge. This is not the way to have a healthy public securities market. It is not the way for equal protection to be afforded to all classes of corporate citizens. Insider leverage buyouts are the newest in the endless efforts of promoters and entrepreneurs to misuse the system of public corporations. It is time for them to be ironed out.

    [Benjamin J Stein is a lawyer and economist who writes on cultural and economic subjects from Los Angeles]

    Do we shed a tear for Ananda and Ralph?

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