The ancient Chinese sage Lao Tzu said that the best kind of leadership is getting people to change by letting them think that they themselves want to change. A wise plan, but will it work on Malaysia’s powerful tycoons, who have a history of trampling on the rights of minority shareholders?
Yusof Abu Othman dearly hopes so. The 50-year-old former investment banker for MIDF Sisma Securities has been put in charge of Malaysia’s newly formed Minority Shareholder Watchdog Group. “We may have to tell very powerful people that some of the things they do are not in conformance with investor expectations,” he says.
Yusof, however, prefers gentle persuasion, à la Lao Tzu, to heavy-handed regulation. For instance, he’s arranged for regular commentaries extolling shareholder rights to run in Malaysia’s leading newspapers.
Still, he insists that the watchdog group won’t flinch from taking action against companies - whether government-linked or not - that abuse minority shareholders, and he doesn’t rule out legal recourse against egregious abusers. The ultimate aim, Yusof points out, is to “put Kuala Lumpur back on international fund managers’ radar screen.”
And if his watchdog group is an anomaly by Western standards of independent shareholder activism, it is not without clout: An initiative of the country’s Ministry of Finance - which happens to be headed by Prime Minister Mahathir Mohamad - the group is funded by five of Malaysia’s top institutional investors.
