WHEN YOU HAVE A BOARD OF CHAIRMEN, NOTHING MOVES
1982
This was exactly what happened to Highlands & Lowlands
Berhad in the early 80s.
High & Low, as it was known to its fans[1],
must have been one of the most envied companies then. It had a paid-up capital
of about RM150 million, a big one during those days. But what made High &
Low very exceptional were its formidable cash hordes and its highly visible
landbank in the Klang
Valley
Ten of High & Low’s twenty estates were in Selangor.
Some of these were right in the Klang
Valley Klang
Valley estates: Sungei Renggam, Bukit
Jelutong/Rasak and Midlands . So were Kuala Lumpur ’s Subang
Airport
High & Low sold some of the land also. An example is the
1,500-or-so-acre property at the junction of Jalan Damansara and Jalan Kepong,
once known as Edinburgh Estate. Today the township that has taken shape there
is called Taman Maluri.
In spite of all these, High & Low was and still is the
biggest owner of land with real estate potential in the Klang Valley Highlands
(now Bukit Tinggi), Vallambrosa (now Kapar) and Elmina are High & Low’s and
if you know where they are, you will agree with me that they are real-estate
gold mines.
With its resources, High & Low could have taken over a
bank or two if it had wanted to. (There was no ownership restriction then.
Moreover, you could count with the fingers in your hands the number of local
banks that had bigger net worth than High & Low’s at that time.) There were
indeed many take-over opportunities: many listed companies were on the block;
prime properties across the Causeway were also not expensive; many estates were
being sold cheaply because of depressed commodity prices, etc. But all High
& Low could manage was the acquisition of a small 1,000-acre oil palm
estate in a very remote corner of Perak before the company was itself taken
over by Guthrie in 1985.
Why was it so?
High & Low had a board of chairmen, not directors!
* * * * *
I was High & Low’s manager of corporate planning. It was essentially a one-man show, discounting my secretary and driver.
The first task I set for myself was the preparation of a
corporate diversification plan, and thinking that property development would be
an obvious starting point, I mapped out a framework with which High & Low
could systematically realize the real estate potential of its vast landbank in
the Klang Valley
I also approached merchant bankers, stock brokers,
investment authorities, venture capital companies, overseas manufacturers and
friends for business leads and possible joint ventures. Initially we were
deluged with offers, but soon people saw through us. We were just wasting their
time.
Decision-making in High & Low was a mind-boggling
process. The board comprised Dr Syed Mahmood, who was the chairman, the late
Tun Ismail Mohd Ali, the late Tun Tan Siew Sin, Raja Tan Sri M Alias, the late
Tan Sri Lee Loy Seng, Tunku Shariman, Datuk Syed Kechik, Charles Letts, Tengku
Robert Hamzah and the late Yeoh Chin Hin. Every one of them was a company
chairman in his own right.
On day-to-day operational matters, there were two general
managers – one looking after Plantations and the other, Finance and
Administration. There was no chief executive. The general managers had little
authority and most matters were referred to the directors. But few at that
level had time for High & Low. What the board did was to entrust the
authority to an executive committee made up of Dr Syed Mahmood, the late Tun
Ismail, the late Tan Sri Lee and Raja Tan Sri M Alias which would meet once in
about two months. All proposals and decisions required of the executive
committee had to be formally prepared in a prescribed format and submitted to
the company secretary a week or so before the committee met. It was the
prerogative of the executive committee either to make a decision or to refer
the recommendation to the board.
A proposal could win approval one day and had it withdrawn
the following day. Very frustrating indeed!
When you had a board of chairmen, meetings were usually a
free-for-all affair. At their level, it was natural that everybody had a big
ego. Some were quite petty also. I should not forget to mention their
prejudices too – you have to believe me!
I had the opportunity to “defend” my papers in the executive
committee meetings. I was, however, rarely given a chance to do so at the board
level. Our kind Cik Halimatus, High & Low’s company secretary, would come
to see me after each board meeting. “Hard work down the drain, I suppose?” I
would ask. If there was good news, she would give me a big smile. Otherwise,
she would always console me by saying, “Mr. Lim, I don’t know why they are
always like that…” The reason could be anything, ranging from patronizing
reservations voiced by one of the directors out of his personal prejudices to a
typographical error in your paper, or to outright proxy intrigues between the
different interest groups in the boardroom (none of High & Low’s big
shareholders, namely Permodalan Nasional Berhad, Felda (Federal Land
Development Authority), Kuala Lumpur-Kepong, and PERNAS was in a position to
exercise full control of the board) or to, guess what, the unfavourable mood of
the late Tun Ismail, who was really the first amongst equals there. But what
was particularly frustrating was the fact that one had to live with the type of
ignorance displayed by some of the leading captains of the corporate world of
the day.
Maybe I was naive; the stakes were too big for me to
understand. Maybe they were just play-acting?
* * * * *
YOUNG MAN, I AM SPEAKING FROM MY EXPERIENCE, YOU KNOW!
High & Low’s Midlands Estate sat visibly along the Kuala Lumpur-Klang Highway Klang Valley Federal Highway Midlands
remained vulnerable.
Sometime in 1980, High & Low received a land acquisition
notice from the state government of Selangor. A piece of land in Midlands had been identified for some public purpose. The land, measuring
about 84 acres, is a developer’s dream. Its southern front is close to the Federal Highway
The public purpose the state
government had in mind turned out to be the extension of the adjacent Shah Alam
municipality. High & Low was renting two floors at Wisma Budiman for its
head-office use. When it was known that the land was intended for the extension
of the municipality, the board decided that the company should approach the
government to rescind the acquisition order. After all, High & Low had the
resources to help develop Shah Alam.
A team, comprising the chairman
of the company Dr Syed Mahmood and two directors - the late Tun Ismail and
Tengku Robert Hamzah - was duly dispatched to see the Menteri Besar, who was
Dato’ Rafei Hormat then. The Menteri Besar saw the merit of the proposal. He
was glad to leave the development of the land to High & Low.
Tengku Robert, who is also an
architect, was given the task of coming up with a comprehensive development
plan for the area. Besides the head-office building, he was told to look into
having a hypermarket, a private school, a private hospital, etc. Someone
suggested that part of the land could be turned into a High & Low “village”
– a kind of residential complex for the executives and staff. The board was
agreeable to this. I was told to organize the development. Obviously the first
thing to do was to draw up an implementation schedule. I also saw the need for
the early appointment of a project manager. To me, you cannot leave the project
to the consultants alone. Although they are professionally accountable to the
client for their designs and the progress and quality at site, their priorities
are different. Moreover, with due respect, few of them are good managers. My
experience in handling the construction of the Bank Pertanian building at Lebuh
Pasar Besar taught me an important lesson in project management: You have to be
fair to the contractors. Consultants tend to wield their big sticks and
contractors, on the other hand, will find every excuse to claim VOs, or
variation orders – works that are originally not in the contract but
commissioned out of site or other necessities. Their approach to issues is
always confrontational or “we-versus-they” in both form and substance.
Priorities are lost and projects invariably get delayed.
In one of the executive committee
meetings, I argued my case for the recruitment of a suitable candidate for this
position. The late Tun disagreed with the job specifications outlined in my
paper.
His concept of a project
manager was someone who would diligently check the materials and construction
practices at site. We were far from starting the construction work yet. I knew
I had been misunderstood.
As I was trying to explain to
the late Tun the difference between the two roles, he cut me out and said,
“Young man, I know what I am talking, you know! I am talking from my
experience…”
You couldn’t argue with the
late Tun.
* * * * *
The late Tun had strong likes
and dislikes. He did not forgive easily, I was told.
I have no means to verify the
following story, but I believe there is some truth in it.
The story went this way:
There was this senior economist
in the Central Bank who was asked to prepare an analysis for the late Tun, who
was the governor then.
His day was ruined after he got
the report back from Tun.
In one of the pages, Tun had
made a circle around a term, drawn a line all the way to the bottom of the page
and written, “Is there such a term?”
The term that was circled by
Tun was NEGATIVE RETURNS. This term
is commonly used by those in financial circles to describe a loss-making
situation. But sure if you examine the term closely, you will realise that Tun
was absolutely right. Returns are always positive. How can one have negative returns? Think about that.
I was told this senior
economist did not stay with the bank. Apparently, it was also a blessing in
disguise for him. He is now someone big in the corporate world.
* * * * *
My colleague Khairil was asked
to coordinate the preparation of the chairman’s statement for High & Low’s
annual report. He was supposed to edit all the inputs and add coherency to the
text.
The draft was presented to the
board for approval.
Tun’s annoyance was immediately
noticed.
What was this term “add value”?
“Who wrote this?”
“Khairil.”
“Is he local?”
“Yes, Tun.”
“No wonder!”
Khairil was not in the meeting.
I do not know how he would have reacted if he had been there.
Tun did not go to Harvard Business School
Khairil’s MBA was from Harvard.
* * * * *
My experience with the late Tun
on the use of English was no happier either.
High & Low’s landbank in
the Klang Valley
He turned to me, “Why can’t you
say land with development potential instead?”
I had no answer.
* * * * *
Tun was however tolerant to
some.
I was told his right hand man
at PNB was quite casual with his use of English and yet the late Tun did not
mind.
But how can you compare
yourself with Datuk Khalid whose scope of responsibilities is so vast that his
misuse of English is excusable.
* * * * *
COKE, PLEASE
It was sometime in 1984.
There was this big dinner to
raise funds for the Tun
Hussein Onn
Eye Hospital
Dr Syed Mahmood was to be the
host of the table, since he was the chairman of the company. It was supposed to
be an “all-directors” function.
Once it was confirmed that the
late Tun and the late Toh Puan would be able to make it, the other directors
began to send their RSVP regrets to Dr Syed, although some had earlier
indicated their willingness to grace the occasion. Excuse? – Last-minute urgent
matters to attend to lah! All very
coincidental!
You cannot leave the table
half-empty, can you?
The two general managers had
naturally to oblige. They should bring along their spouses too. There were two
more places to be filled. The “privilege” fell on yours faithfully and his
madam.
* * * * *
The dinner was a grand event,
virtually every who’s who in town was there. But the mood of our table was a
subdued one. Except for a few occasions when the witty Toh Puan would take aim
at Tun and make us misbehave ourselves in front of Tun, it was just food, food,
and food.
When Tun was on your table, you
could be sure few would bother to approach you.
I remember a Datuk Somebody
that night. When he spotted Sayed Mohamed, one of High & Low’s two general
managers, from afar, he decided to waltz his way through the crowd to greet an
old friend. As soon as the familiar bald patch surfaced before him than he froze
and stammered, “Tun”, took a 360-degree turn and marched back. I cannot recall
if he had said hello to his old friend Sayed Mohamed.
“Sir, may I have your order please?” After the waiter had completed taking
the ladies’ orders, I was the first to be given the honour.
“Vodka lime.” I suddenly realised everyone was looking scornfully at me.
How indiscreet of me. “The Korean 747 has just been shot down over the Sakhalin Peninsula
Next was the late Aziz (the other High & Low GM)’s turn. “Coke.”
What? Coke for this occasion? I thought he liked something else.
Tuan Sayed, how about you? Can’t be Coke I suppose.
“Coke, please.” Coming from Sayed’s mouth, it was unbelievable.
Had I committed an unforgivable sin in front of Tun and Dr Syed?
Everyone knows Dr Syed does not drink. It did not surprise me when he
asked for water.
When it was the late Tun’s turn, he asked for what he desired, no more, no
less. And I know it was no fruit juice.
* * * * *
I was comparing notes on the late Tun with someone the other day.
He updated me with this story:
There was this board meeting. Tun had excused himself to go
to the loo.
Without him, no major decision could be made. Everybody was
happy as they could stretch themselves a little. Soon the boardroom was full of
life.
Ten minutes passed, no sign of Tun, good! We can continue
talking or do some catching up.
Half an hour later, still no sign of Tun. Maybe Tun has a
bad stomach.
One hour later, how come ah? Something must be wrong
A search and rescue team was promptly dispatched to the
executive restroom.
No trace of Tun either.
Quick, call the house.
“Yes, Tun is in.”
Apparently, after easing himself, Tun headed for home
straight. He had forgotten that the board meeting had yet to be adjourned!
* * * * *
ACCOUNTANT – DOESN’T THE WORD SOUND
LIKE “I-COUNT-TEN”?
High & Low owned 26,400 shares in H&C Latex, a very
small holding indeed, compared to Harrisons Malaysia (now Golden Hope)’s how-many-million
shares.
Why so good a price? Wasn’t the investment carried in the
books of High & Low as RM29,370.35 or RM1.11 per share only?
I went back to the records.
The answer was there.
When High & Low was “Malaysianised”, values in Pound
Sterling had to be converted into Ringgit. Someone in the accountant’s office
forgot to multiply the figure by 7.5, which was the exchange rate then.
But it meant a difference of RM1,652,573.65.
Peanuts to High & Low, but it was hell of a substantial
oversight by any standard.
* * * * *
[1] High
& Low’s shares were traded in KL and London
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