MAS non-executive directors decline fees in highly charged AGM
BY B.K. SIDHU
Md Nor (left) and Ahmad Jauhari the press conference.
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SUBANG: There was high drama at Malaysia Airlines (MAS) annual general meeting (AGM) with minority shareholders voting against a resolution on the remuneration for directors by show of hands.
Although the resolution eventually went through after a poll, the non-executive directors decided to decline the RM396,000 in fees that was accrued to them for the financial year ended December 31, 2013.
“It was a gesture that they were not serving on the board for the money,” said an official close to the airline.
Some minorities had also called for the resignation of the entire board and management team at MAS as they expressed their frustrations against the airline that remained in dire straits for several years.
The situation was exacerbated by the disappearance of MH370 in March this year that sent the airline into a tailspin.
To reconstruct the airline, MAS group chief executive officer Ahmad Jauhari Yahyasaid yesterday that it had to take radical or sweeping changes going forward.
However he declined to elaborate on the details.
It was a long drawn and fiery AGM which lasted more than four hours with some minorities bombarding the board with questions on the disappearance of MH370 and its poor financial performance.
MAS chairman Tan Sri Md Nor Yusof described the calls for the resignation of the board and management as only natural.
“It is only natural for the shareholders to be angry considering how events have unfolded. However, we have tried to explain to the shareholders that MAS has been facing chronic difficulties over the past 15 years,’’ he said.
The calls, he said, was only made by a few shareholders and did not represent the sentiment of all minorities.
Earlier, the resolution for payment for directors fees amounting to RM396,000 per annum for nine directors for financial year 2013 was shot down by show of hands.
It only got approved when the resolutions along with others were put up for voting by way of poll.
But by then, the nine non-executive directors unanimously agreed to return the fees paid to them by the company.
“The minorities may not be aware that some MAS directors are entrenched in the turnaround of MAS and they are not there just for the fees,’’ said someone in the know.
On the radical plan, Ahmad Jauhari refused to rule out drastic measures such as bankruptcy, selling off assets, and even job cuts to turn MAS around.
He touched on a total review of the fleet, network, cost, employees, and work processes and said that his team was still working on it.
“We are looking at all options. I am not here to discuss the final decision, but we are narrowing down to a select few,” Ahmad Jauhari told a packed room of reporters after the AGM.
Asked if bankruptcy and job cuts was on the cards, Ahmad Jauhari said “we are not saying ‘yes’ or ‘no’. We are looking at all possibilities.’’
MAS reported a net loss of RM443mil for the first quarter ended March 31, 2014 and MAS’ share price has seen a huge drop. It closed at 19.5 sen yesterday.
Both Md Nor and Ahmad Jauhari could not say when the new radical plan will be ready, but those in the know claim it could take two more months.
Ahmad Jauhari said that in working out the new plan, MAS needed to unlock and unleash the full value of its assets which are its product, services, engineering capabilities and safety track record.
For sometime now there has been speculation that MAS may divest its MAS MRO (engineering, repair and overhaul) unit, but Md Nor dismissed such a notion.
“We have to leverage on the good assets ... not sell the silver spoon,’’ he said.
There are worries that MAS may deplete its cash hoard of RM3.1bil in a few months’ time as it is not generating enough cash to sustain its operations, but Md Nor does not think it was a cause of concern for now unless nothing is done to revive the airline.
Asked who called the shots post-MH370 at MAS, Ahmad Jauhari said, “We have to work in consultation with our shareholders and the Government, which holds the golden share (via Minister of Finance Inc).’’
He also denied that MAS was abandoning plans to buy new aircraft, but any fleet replenishment plan will have to be weighed against its network requirements.
Though MAS has plans to retire its entire B777 aircraft in three years, it is still exploring if it could add more seats to be more efficient as the cost to do that was small and can be done by October.
