More on ECM Libra Avenue Bhd and Tony Fernandez

Tune Air Sdn Bhd acquired 40 million shares in ECM Libra Avenue Bhd

( AirAsia Bhd's Datuk Tony Fernandez is a majority shareholder of Tune Air and Tune Money )

Tune Air Sdn Bhd acquired 40 million shares in ECM Libra Avenue Bhd, at 95 sen each in a married deal on April 13, sources say. It is believed that the block was acquired from Tan Sri Azman Hashim who emerged as the largest shareholder in ECM Libra Avenue in February, after acquiring blocks from the Ministry of Finance Inc.

Malaysia Blogger Personal Opinions/ Question?:
Why do MoF sales the equity blocks to Tan Sri Azman Hashim.

Why Do Tune Asia Sdn Bhd acquire share in ECM Libra Avenue?

It is not clear if Tune Air acquired the 4.8% block directly or through one of its units. Either way, sources say, this deal does not involve Tune Money Sdn Bhd, which is the Tune group's financial services arm. It is not yet clear what Tune Air's intentions are behind the acquisition, though sources say there are plans for it to increase its stake in ECM Libra Avenue in the future. According to industry sources, Tune Air's interest in ECM Libra Avenue is not new and is something that has been "on the burner" for some months. "Even before Azman entered the picture, there was already talk that Tune Air could have a place in ECM Libra Avenue in the future," says a source. Tune Money is a no-frills financial services company which will offer pre-paid credit cards, low-cost insurance and unit trust products. Its managing director is Tengku Ali Zafrul Abdul Aziz, who was the managing director of Avenue Capital Resources Bhd. On the other hand, ECM Libra Avenue is a full-service universal broker which has applied to become an investment bank. AirAsia Bhd's Datuk Tony Fernandez is a majority shareholder of Tune Air and Tune Money. The Edge was unable to reach him last Friday. Industry sources point to the difference between the two models and say they cannot understand the rationale behind Tune Air's move.
However, a source says, there is no link between Tune Money and ECM Libra Avenue right now. "One is a business venture of the Tune group, the other is an investment."

Meanwhile, when contacted by The Edge, T Jayaratnam, ECM Libra Avenue's deputy CEO, said he was unaware of any shareholding changes because these were moves at shareholder level. However, he added that there had been internal and operational changes within the group. "Bank Negara [Malaysia] is currently evaluating our application to become an investment bank," Jayaratnam said in a telephone interview last Friday. He said the group was being repositioned as a new player in the investment banking sector.

Chief among the changes is the return of Datuk Kalimullah Hassan as executive chairman and chief executive of ECM Libra Avenue. Lim Kian Onn will be the managing director. Kalimullah sold down his 6.75% stake in ECM Libra Avenue in August last year to 4.8% because he "was forced to take the step by the unwarranted focus on the company by politicians".

Malaysia Blogger : Point for Ponder?
Which Politicians forced him to take the steps to sold down his share? Why?

At the time, it looked like the ECM franchise created in 2002 by Kalimullah, Lim and David Chua had crumbled. Chua exited the group at the same time Kalimullah sold down his stake, leaving Lim at the helm of what looked like a sinking ship. Key employees left the group after the completion of the merger between ECM Libra Bhd and Avenue Capital, leaving a vacuum in what is a people-intensive and sensitive industry. Jayaratnam, an experienced merchant banker, was appointed in October 2006. "Since then, I have been looking at the whole group to facilitate our transformation into an investment bank. When the merger [between ECM Libra and Avenue] was first completed, there was some confusion on direction and people were affected. But, now after we have reassessed our strengths, we have brought new people on board. We are now more structured," Jayaratnam said. He said that in the first quarter of this year, ECM Libra Avenue topped the league tables for secondary placements with a total value of US$146 million (about RM499 million).

Asked about persistent rumours on capital repayments, Jayaratnam said: "We are looking at how to enhance shareholder value and how best to allocate capital to maximise value. To operate as an investment bank, we need capital and we have identified other areas where we can utilise our capital best. Like private equity, for example. You only pay back capital when you do not have any other opportunities to create value. But now this is really an equities environment and we are looking at all our options."

SOurce : Extracted from Theedgedaily.com
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_4fcf52d8-cb73c03a-18c8aea0-a6aee541