Major force: SMEs now number around 500,000 and despite the presence of huge conglomerates, SMEs still provide the most employment opportunities and keep the economic engine running.
Dear Tun Dr Mahathir Mohamad,
Since you are about to appoint members of your coalition government to the Cabinet, I would like to share a few grievances facing the entrepreneur community in Malaysia. Hopefully you will have a better perspective of the state of affairs currently faced by entrepreneurs so that your new team of ministers can formulate new strategies, correct dysfunctional current policies and create a new mentality among the huge civil service that you will inherit.
Saturday, 24 Mar 2018
SITTING at the Golfers Terrace outside the Main Lounge of Royal Selangor Golf Club (RSGC), one can get a spectacular view of the golf course. Amidst the tranquil ambience and scenic surroundings, one could hardly notice that just outside the gates of RSGC, the Tun Razak interchange is the most congested traffic road in Malaysia.
Celebrating its 125 years anniversary this year, RSGC is one of the oldest golf clubs in Asia, ranking alongside one golf club in India and one in Sri Lanka. All three golf clubs were built by the British where it was once a whites-only-club but since independence, the ownership and management of the clubs have been taken over by local residents.
Being a non-profit club, it is run strictly as a private member’s club, where members elect a committee among themselves to manage the affairs of the day. Club constitution and rules are strictly adhered to, hence the legacy of history is preserved and carried forward to the next generation of members.
Similarly, over the last 60 years or so, many successful Chinese emigrant businessmen in South-East Asia tend to pass their legacies and their businesses to their children. Many fathers distribute their shares in the companies to their sons only whereas the daughters will get cash and share of properties. Many a time, fathers will distribute equal shares to their sons in the name of fairplay not realising that such legacies could lead to potential conflicts that are difficult to mitigate.
I have a friend of some 30 years now having a problem with his brother over the ownership of the business that they have been managing together for the last 30 years. When their father passed away some years ago, he gave his two sons equal shares 50:50. Now that they can’t work together anymore, both brothers are in a deadlock as both refuse to sell their shares to each other. Their last resort will be to go to court for arbitration which will eventually lead to voluntary liquidation. In such cases, the court will appoint a liquidator to manage their company.
I have another friend who had a bigger legacy problem. Her grandfather gave equal shares to his four sons 25:25:25:25. After his passing, the third and fourth sons teamed up together to protest against the first and second son who were managing the family business. So it was a 50:50 deadlock situation and they decided to buy and sell the shareholdings among themselves. But they could not come to an agreement. In the midst of their disputes, the second son aligned with the third son whereas the first son aligned with the fourth. Again it is a 50:50 scenario.
So they went to court and a liquidator was appointed. More disputes followed as they could not come to a unanimous decision and they all did not agree with the way the liquidators worked. So for 25 years, their multiple lawyers and liquidators sued and counter sued and after wasting millions of ringgit in legal and liquidator fees, they manage to lift/suspend the liquidation order set by the courts.
So control of the family holding company finally came back to the family but the shareholdings among the four families remain the same, 25:25:25:25. Their only consolation is that the property assets (whatever is left) have appreciated many times in value.
My friend’s advice is not to go the legal and liquidator way unless you want to experience constant drain on your time and wallet. It is mentally too exhausting. Solve the family problems within. After all, you are still brothers in name and in blood.
After listening to both my friends’ sad stories, I might have to change my will. I have willed that upon my death, all the shares of my companies are to be divided and shared equally among my wife and three children which means 25:25:25:25. What will my children be like and how will they behave after they are married? What kind of influence will my daughter-in-law and son-in-law have over my children? Will my legacy decisions cause them distress in the future?
I will not have to worry about this problem if I am super rich like my namesake tycoon who has three wives and many children. I will assign one listed company to all the children of one wife and each child shall run his/her own company. Each child will have a little kingdom of their own to rule over. Success will be self achieved and failures will be self inflicted. Nobody blames nobody.
Sometimes, fathers have to make the tough decision of choosing one son from the brood to lead manage the family company. In the old days, fortune tends to favour the eldest son but successful entrepreneurs nowadays will choose the most capable of the sons or daughters to take the family into the next generation.
I have known of entrepreneurs who will give the majority shares to the chosen child so that he/she can manage the company effectively with trouble free opposition from his siblings.
It is not difficult to be fair when you distribute cash and properties but any decision on successor of holding companies should be based on merit and capabilities of the chosen child. It will be good if the shareholdings are structured accordingly to ease the smooth transfer of power to the next generation. A wise decision now will not cause legacy problems for the next generation.
Looks like I will have to will to my wife a bigger share so that the family company can proceed with a slight majority decision when necessary. A wise decision now will ensure that I will not get any WhatsApp messages from my wife while I am enjoying the tranquil ambience of a golf course during my afterlife.
MY Chinese New Year (CNY) celebration this year was no different from previous years. Same family reunion dinner on the eve of CNY, visits to the elders on the first day and for the following seven days, continuous lunch and dinner dates with families and friends.
The only difference was in the house decorations. The cute lovely Chinese chicken figurines were replaced by the cute lovely Chinese dog figurines. My dear wife had spent a good part of two weeks shopping for house decors and flowers to give our home a festive feel. She was also responsible for gathering both extended families for our reunion dinner.
Her good friend Thiat was extremely resourceful and managed to secure for me a copy of the elusive Robert Kuok Memoirs which I thoroughly enjoyed reading between heavy meals and many mandarin oranges. What stood out from his memoirs was how he worships his mother for her nurturing love and mentorship. If you had read Datuk Tan Chin Nam’s memoirs, he had a similar close relationship with his mother.
Both Robert and Chin Nam’s father emigrated from China in the early 1900s and became successful businessman in Malaya and Singapore. In that era, being successful and rich means they are entitled to having two or more wives. The responsibility of looking after the children rests with their respective wives and the fathers were generally poor parents to their children to the extent of neglect and instead were self-indulgent in the pleasures of life.
The Chinese emigrants to Malaya and Singapore brought with them their cultural beliefs and practices that has been passed on to present generations. The celebration of CNY started in ancient China more than 4,000 years ago. Legend has it that the first emperor of China, Emperor Huangdi invented the Chinese lunar calendar back in 2637 BC, more than 2000 years before the birth of Christianity and Islam. The Chinese lunar calendar is based on the exact astronomical observations of the longitude of the sun and the phases of the moon. How the 12 zodiac animals were picked is another mystical story.
Being Hokkien, my family (when my parents were still alive) celebrates the ninth day of Chinese New Year by offering thanks giving prayers to the Jade Emperor (Thien Kong) the Heaven God. This was based on the belief in history when the Hokkien people hid in a sugar plantation on the eigth and ninth day of the Chinese lunar new year to escape from a ruthless army and was thus saved by the Jade Emperor.
I remember my mother used to placed a table outside on the porch and offered thanks giving prayers and food to the moon/heaven on the eight night between 11pm and midnight. As a young boy, I would innocently ask my mother why she prayed to the moon when the Americans had landed on the moon and found no life forms there?
There are many beliefs and cultural practices to this present day based on historical events and mystical stories. Again legend has it that pork was widely consumed thousands of years ago in the Middle East and Europe until a swine fever epidemic struck the population and killed tens of thousands. To avoid the decimation of the army, instructions were given out to avoid eating pork as it was unclean.
As there were no cure and medical understanding of diseases at that time, the best action was to avoid consuming the main cause of the disease. Similar pandemonium happened when a rabies epidemic occurred. Dogs with rabies foam at the mouth and hence the people were advised to avoid dog saliva as it was unclean. Over the last few thousand years, many common sense solutions and practices for the early years have been passed on through the generations as cultural practices and in some cases as guidance in religious practices. These are snippets of wisdom from past history that has guided the human civilisation that is constantly evolving.
Many cultural practices are based on economic hardships and practical climate reasons. I remember accompanying my father back to his birthplace in Yongchun China in 1993. My cousin treated us to a dinner where all 10 dishes looked the same, braised in gravy and all tasted very salty. My cousin explained that during the Chinese revolution, there was food famine in the villages and they could only afford to cook one dish for lunch or dinner. So they throw everything into the pot and put a lot of soya sauce and salt.
The reason is each family member will only need to eat a piece of salted vegetable or meat accompanied by several mouthfuls of rice. Filling up the tummy was the priority. So over 30 years, their taste have changed to having salty foods.
The Koreans invented kimchi which is preserved cabbage as this was the only vegetable dish available during the harsh winter season. Large amount of kimchi was preserved in large earthen jars to last the whole winter. As there was no refrigeration in the early years, mankind store meat by smoking it so that it can be preserved and consumed over a period of time.
The Chinese have their preserved sausages (lup cheong) and salted ducks and the Italians have their racks of smoked ham and beef. Hence the practice of slicing pieces of meat off the rack when serving during a meal and the balance rack for following meals.
During festive seasons in Malaysia, most commercial entities jointly celebrate the festivities by running corporate advertising campaigns with relevant and appropriate gifts like ang pow packets. Who could forget the endearing Petronas festival TV commercials?
Yasmin Ahmad avoided religious and cultural sensitivities by focusing on ethnic family values like family reunions, filial peity and basic human kindness and love. Her little naughty act as a sign of friendship was in naming the orphan in one of the commercials after me. As an orphan, the boy had not experienced a family reunion before so Yasmin’s message to everyone was to be thankful that you have a lovely family to reunite with during such an auspicious festival.
To the young entrepreneurs, the recent faux paus in some of the advertisements are lessons to be learnt. Replacing the picture of a dog with either the cat or a cockerel in your advertisement might soothe the sensitivities of certain segments of society but it also causes discontentment among other people. It just makes no commercial sense.
If it was my company that placed such an advertisement, I would sack my marketing manager for wasting precious advertising budget on a campaign that delineates certain group of customers and for not knowing that such advertisements dilute my company brand image of which I have spent millions on advertising over the years. No commercial sense and no common sense.
I will also sack my not-so-clever advertising agency who thought they had such a clever idea. Any advertising campaign that does not contribute positive attributes to my brands means they do not have a clue on brand building and local cultures. I will advise them to watch the various telco and banking commercials that focus on positives like family values and heart warming reunion messages that resonates across all races and segments of society.
If you do not have a good advertisement, save your money rather than placing a bad advertisement that damages the brand.
With the upcoming general election, it is going to be silly advertising season again. My advice to the educated public is to ignore the politically motivated advertisements that tend to divide the harmonious fabric of our society. Have a good laugh at bigotry and hypocrisy.
In years time, I will be watching with interest the new corporate festival commercials and new ang pow packet designs. I am sure the next CNY reunion will be filled with laughter and lively discussions as we usher in the year of the zodiac swine.
Happy CNY to those who believe in the mystical folklore of Emperor Huangdi. May this zodiac year bring you a pack of prosperity and bark..ti..ful joy and laughter