Nobody controlled IJM Corporation Bhd

IJM Corporation Bhd at one point of time one of the big three constrution company to watch. together with Gamuda and Road Builders Holdings Bhd. In fact, the largest market capitalise construction company on Bursa Malaysia is YTL Corporation Bhd.



Recently, Road Builders Holdings Bhd was acquired by IJM Corporation Bhd. This make IJM Corporation Bhd has an upper hand over Gamuda. Thus, the top two construction company might be YTL Corporation Bhd and IJM Corporation Bhd and Gamuda, one of the top three excluding governement link companies (GLC).



If IJM gain control of Kumpulan Europlus Bhd . IJM group control two public listed contruction company and two property development company. IJM,Kumpulan Europlus Bhd, RB Land Bhd and indirect associated company Talam. It become a giant company that you unable to ignore.



However, it seem nobody control IJM!



Who control IJM



IJM initially was part of the IGB Group. However, in order to raise capital for it Mid-Valley Megamall Project. IGB disposed off it stake in IJM to Zelan Holdings which ultimately control by Tan Sri Syed Mokhtar al-Bukhary.



However, Zelan Holdings’s shareholding in IJM shrank after IJM made a general offer to acquire Road Builder (M) Holdings Bhd last year via a share swap. This resulted in Zelan being unable to book in its share of IJM’s profits although it could still receive the dividends paid out by the latter.



Zelan is sitting on a cash pile of about RM280mil after disposing of part of its stake in construction-based IJM Corp Bhd. Its net cash per share rose to 99.7 sen after the share sale from 66.3 sen previously.



Zelan Chief executive officer Albert Chang confirmed that Zelan would continue to trim its interest in IJM, which currently stood at 9.67%.



This mean Tan Sri Syed Mokhtar al-Bukhary and Zelan has lost control over IJM.



Thus, IJM, such a large group of company, become a company that run by professional manager, it managing director Datuk Krishnan Tan with no controlling shareholder.



Control by Accountant, not Engineer

Other than previously bumiputra control contruction company like Renong's Halim Saad, who is Accountant by training. Contruction company control by chinese usually control by engineer.

Road Builder's Tan Sri Chua Hock Chin,Gamuda's Y Bhg Dato' Lin Yun Ling, YTL's Tan Sri Francis Yeoh, even smaller Mudajaya group was headed by engineer.

IJM, however, was one of the rare contruction company that lead by an accountant.

Managing Director Datuk Krishnan Tan qualified as a Certified Public Accountant in 1978 after graduating with a Bachelor of Economics (Honours) degree from University of Malaya in 1975, and holds a Master’s degree in Business Administration from Golden Gate University, San Francisco, USA. Prior to joining IJM, he was with Kumpulan Perangsang Selangor Berhad for seven (7) years, his last position was Group Financial Controller of the Group.

He joined IJM as Financial Controller in 1983 and joined the Board as Alternate Director on 12 June 1984, Director on 10 April 1990 and Deputy Managing Director on 1 November 1993. He assumed the post of Group Managing Director on 1 January 1997. He was redesignated Chief Executive Officer & Managing Director on 26 February 2004.

It is not easy for an accountant to grow a contruction company to such a size. So far, it seem no problem leading staff that was previously lead by engineer like staff he acquired from Road Builder Holdings (M) Bhd.

Potential takeover target

With no controlling shareholder in the company. IJM become a likely take over target. However, being one of the largest market capitalisation contruction group in the market. It is difficult for just anybody to swallow the group.

After spending so much for a company, the new controlling shareholder must be able to work with the current team or he must have the ability to manage such a large group if he intended to change the team.

If nobody acquired the company eventually. IJM might be the first company in Malaysia like company in US,that the company was invested by institutional shareholder and manage by professional manager with no controlling shareholder. In such instances, IJM must have a strong team of independent director on the board and must have good succession planning for managing director.

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