Editorial
Securities Commission Must Explain Approval to Breach RAM’s Shareholding Threshold
Newly installed Securities Commission (SC) chairman Awang Adek Hussin must publicly disclose the basis upon which the regulatory body approved CTOS Digital Bhd’s acquisition of a majority stake in RAM Holdings Bhd.
The Approval
According to the SC’s letter dated April 28, CTOS Digital was given permission to increase its shareholding in the ratings agency to more than 51%. In the same letter, the SC also waived the requirement for the company to secure further approval for any subsequent cumulative increase of 10% or more.
The Current Stakeholders
The current largest shareholder of RAM Holdings is CTOS Digital, which is presently increasing its stake to 19.225%. Oscar Matrix Sdn Bhd, a company wholly owned by Brahmal Vasudevan’s Creador IV, holds 19.9%, while S&P Global Asian Holdings Pte Ltd owns a 19.2% stake. Tunku Ali Redhauddin Tuanku Muhriz’s vehicle, Dragonline Solutions, owns 15.6%.
The Controversy
The industry waterfront is keen to know how the SC treated the relationship between Oscar Matrix and CTOS Digital, given that Creador owns 31% of the former. There is also concern about the impact the resultant change in shareholding may have on the perception of the rating agency’s independence in the domestic and regional markets.
The SC’s Responsibilities
As the regulator, the SC has a crucial role in ensuring the stability and integrity of the capital market. It is essential that the SC provides transparency in its decision-making process and provides a clear justification for its approval of CTOS Digital’s acquisition. This will help to maintain public trust in the regulatory body and the financial markets.
Conclusion
The Securities Commission must be transparent in its decision-making process and provide a clear basis for its approval of CTOS Digital’s acquisition of a majority stake in RAM Holdings. The market expects nothing but transparency and accountability from the regulator, and it is essential that the SC meets these expectations.
Frequently Asked Questions
- What is the significance of the threshold of 20% shareholding in RAM Holdings?
The threshold is a critical factor in determining the independence of the rating agency. - What is the impact of CTOS Digital’s acquisition of a majority stake in RAM Holdings on the perception of the rating agency’s independence?
The increased stake may raise concerns about the agency’s independence, which can affect its credibility and reputation. - Why is transparency in the SC’s decision-making process crucial?
Transparency ensures public trust and accountability in the regulatory body and the financial markets.