S’wak govt, Armed Forces Fund Board to sign MoU believed to be in connection with Affin Bank

KUCHING (July 19): The Sarawak government and the Armed Forces Fund Board (LTAT) are set to sign a memorandum of understanding (MoU) in Kuala Lumpur today, which is believed to be in connection with Affin Bank.

Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg is now in Kuala Lumpur to witness the MoU at Menara Affin at 3pm.

Initially yesterday, state media organisations were invited by the Sarawak Public Communications Unit (Ukas) to a signing ceremony in regard to the “acquisition of shares”, however this was subsequently changed to the signing of an MoU.

The Edge reported today that the MoU is to “explore strategic investments between the two parties”.

According to the financial news organisation, the MoU comes as both parties delay the signing of a sale and purchase agreement (SPA) due to some technical hitches.

Quoting sources, The Edge said the SPA signing was postponed as the Sarawak government looks to “clarify some conditions” that Bank Negara Malaysia (BNM) had attached to the deal.

The planned SPA between Sarawak and LTAT – Affin Bank Bhd’s biggest shareholder – would have formalised the state’s plan to increase its stake in the lender to around 30 per cent from 4.8 per cent currently, The Edge reported.

On July 1, The Edge had cited sources as saying BNM had recently granted conditional approval to Sarawak for the deal.

The Edge also said it believed there are no issues with the state increasing its stake in Affin Bank to about 30 per cent, a move that would make it the largest shareholder.

Currently, LTAT has a 28.88 per cent stake in Affin Bank.

The Edge also said it is understood Sarawak is to acquire Boustead Holdings Bhd’s entire 20 per cent stake in Affin Bank, as well as part of LTAT’s stake.

Boustead, which is wholly-owned by LTAT, is currently the bank’s third-largest shareholder.

The bank’s second-largest shareholder is the Hong Kong-based Bank of East Asia Ltd, which holds a 23.93 per cent stake.

On July 5, Abang Johari had hinted that an official signing ceremony to acquire a majority stake in a bank was slated for today (July 19).

Although he did not name the bank, it was clear he was referring to Affin Bank.

The Premier had said Sarawak is set to take over a major financial block, positioning itself as a dominant player in Malaysia’s banking industry.

“There is no more secrecy. By then, we will officially sign to take over this major block, which includes substantial shares, soon, July 19,” he told the press during the Amanah Saham Sarawak (Assar) dividend announcement at Hikmah Exchange Event Centre here.

Abang Johari said the acquisition symbolised Sarawak reclaiming its former assets.

On March 7, Free Malaysia Today quoted Defence Minister Datuk Seri Khaled Nordin as saying LTAT would remain a major shareholder in Affin Bank even if the proposed sale of shares is realised.

In January, the portal quoted Abang Johari as saying negotiations with LTAT for the state government to acquire an additional stake in Affin Bank were in the final stage.