Barjoyai said the Malaysian Anti-Corruption Commission’s (MACC) investigations into the matter also raised issues surrounding the structure of the offer and the timing of its implementation.
According to Barjoyai, Sunway’s proposed conditional voluntary takeover (VTO) of IJM at RM3.15 per share was considered unattractive by several research firms, including Kenanga Research, which described the valuation as unfavourable.
“This is in comparison to IJM’s intrinsic value (based on Kenanga’s target of RM3.40), with an implied value to IJM shareholders of around RM2.69 if normalised to Sunway’s target price of RM4.73.
“This shows a value exchange imbalance between IJM’s and Sunway’s shareholders,” the Al-Madinah International University economist told FMT.
Barjoyai also urged a postponement or restructuring of the process until a fair investigation and assessment is ascertained, to preserve market trust and national interests.
On Jan 12, Sunway proposed a conditional VTO offer to purchase a total of 3.51 billion of IJM Corp Bhd shares at an offer price of RM3.15 per share.
Interested IJM shareholders have until 5pm on Apr 6 to take up the offer.
The Malay Businessmen and Industrialists Association of Malaysia previously rejected the proposal, saying the transaction would be detrimental to national interests.
The transaction has also been overshadowed by a MACC investigation into alleged corporate governance irregularities and overseas assets worth approximately RM2.5 billion, as well as potential money laundering activities.
Barjoyai said the sentiment was understandable as IJM was a strategic asset even though it was not officially classified as such, unlike Petronas or Tenaga Nasional Bhd.
He said share holdings by institutions such as the EPF and Permodalan Nasional Bhd (PNB) made IJM an instrument of public interest, not just a private entity.
“IJM’s is also critical in the public transport sector (Penang’s LRT Mutiara), a strategic port in Kuantan as well as energy facilities, rail roads and public-scale data centres,” he said.
Barjoyai also called for transactions involving Sunway-IJM to be monitored by the Securities Commission Malaysia (SC), which has a clear mandate under the Capital Markets and Services Act, among others, to ensure fair transactions, transparency in valuations and assess conflicts of interest.
“This move comes at a time when prices are considered low by key researchers, and amid biased exchange structures and unusual market sentiment.
“The in-depth review by the SC is a normal governance practice, not political interference,” he said.
Meanwhile, the Malay Consultative Council’s (MPM) PuTERA35 secretariat head Syed Zikri Shahabudin called for changes in the ownership structure to be thoroughly scrutinised, transparent and based on the public interest.
“The proposed large-scale takeover comes at a time when IJM has a direct and indirect interest in the country’s strategic infrastructure projects and involves holdings by key institutions such as PNB, EPF, Retirement Trust Fund and Tabung Haji,” he said.
On reports of alleged impropriety in the transaction, Syed Zikri said an independent review by the authorities and market regulators was important to ensure there were no elements of conflict of interest, abuse of power or market manipulation.
“MPM takes the position that all corporate transactions of a national scale must be in line with the principles of good governance and the interests of the people, and not erode the role of Bumiputera institutions and the interests of the Malay economy in the longer term,” he added.
The issue of transparency in Sunway’s proposed acquisition of IJM shares was also raised by Machang MP Wan Ahmad Fayhsal Wan Ahmad Kamal.
One of the issues raised was that the deal would only benefit one party, as there appeared to be no open process.
“Is this a closed negotiation? Is this a pre-package negotiation? More importantly, who is the beneficiary?” he said, urging SC to monitor the deal.