The sad end to my professional career

I started AS Toh & Rakan Rakan, a sole proprietary consulting engineering firm, when I left JRR in 1971. The jobs I did were mainly the design of building structures and infrastructural works for housing developers in Klang Valley. I was not able to get jobs from JKR Headquarters because I had no Bumi-partners. In 1974, I formed Bina Runding with two Bumi-partners i.e. En. Rashid and Dato Ahmad. At the end of 1994, the company was incorporated under The Company Art 1965 with an authorised capital of $100,000.00. The paid up capital was also $100,000.00 with the senior Bumi-partner, En Rashid holding 40% and the balanced shared equally between the other Bumi partner and me. From then on Bina Runding Sdn Bhd (BR) started to get projects from the Federal and State Governments and GLCs. And from second half of 1980s BR was able to secure projects funded by the World Bank and Asian Development Bank.

BR started its operation in a two-storey shop house in SEA Park, Petaing Jaya which was owned by me. Due to its expansion, we soon moved to a three-storey corner shop-house located in SS2/24, Petaling Jaya which was also owned by me. In the second half of 1980s, due to short of space, BR bought a three-storey shop house located at the other corner of the block. During this period BR had also established branch offices in Johor and Terengganu.

In 1974 (BR) had only a dozen staff comprising of three directors, two engineers, two administration staff and five draughtsmen. In its heyday in 1992, it had nearly 130 employees with over forty professionals, twenty administrative staff, over thirty clerk-of-works/technicians and about forty draughtsmen. In early 1986, the most senior engineer Mr. Khor H K was promoted as a company director and allotted five percent equity in the company acquired from En Rashid.

In its first year of operation as a private limited company, the total revenue from professional fees and other services was about $200,000. In 1992, its total revenue was over $7.5 million!

However, all good things must come to an end.

BR was performing well all these years even during the Malaysia’s economic recession in the 1980s. According to the Audited Accounts for the year ending 31 Dec 1990, 1991 and 1992 my contribution (mainly from water supply projects) to the total income from fees received and other reimbursements is shown below. 

From the above Table it is evident that the holders of the 70% of BR were doing nothing slowly and enjoying the benefits provided by BR.

Since the mid 1980s the offices of BR were located in two separate 3-storey shop houses in SS2/24. This arrangement was not ideal in terms of staff and manpower utilization, optimizing use of facilities and services and staff integration. Realising these shortcomings, I was looking for a bigger office which could comfortably accommodate all staff.

In Nov 1992, there was an offer for sale of three adjacent units of 4-storey office buildings at SS22/25, Damansara Jaya. The buildings were well renovated and would be vacant for our occupation by March 1993. The offer price for the three buildings was RM2.3 million. I thought it would be good for BR to acquire the buildings as we would occupy all the upper floors and the ground floors could be rented out to give BR a better financial return.

Financially, BR would be able to purchase the new premises provided that it disposed off the No 44 shoplot it occupied and obtained additional overdraft facilities from the bank. However, my personal opinion was that BR should not be involved too deeply into property investment. Furthermore, having extensive assets would make it difficult and expensive for new directors to acquire share and for retiring directors to dispose off their shares in BR.  It was therefore more appropriate to make available good opportunity of investment to all staff of BR.

My proposal was well received by BR staff but was totally rejected by the other shareholders of BR. The deal for the purchase of the office block was finally aborted.

My support from the staff did not go down well with the other shareholders, in particular the smallest shareholder, Khor. He was scheming behind my back with all the staff and the other two sleeping shareholders to discredit me. But his scheme failed. On 31.12.1992, I received a MEMO from the staff pledging their undivided support for me to manage BR (See attached below).

That was not the end of the episode. In 1993, though there were no significant disputes or disagreements amongst the shareholders, employees were leaving the company due to low morale and uncertainty of the future. Also due to the ingrained complacency of the majority of the shareholders, BR had not been able to get projects even though Malaysia then was in the midst of an economic boom. I too was not very optimistic that under the complacent management, there would be a miraculous turnaround that would prevent the final sad scenario from happening – close shop!

To overcome the problem, I suggested to the other shareholders to let the firm be taken over (lock, stock and barrel) by an interested party. They agreed and I approached a couple of engineering consulting firms in Kuala Lumpur, including one from the UK to negotiate for the takeover. But nothing succeeded.

Out of the blue, in late 1993 I was taken aback when one day I saw a stranger in the conference room examining the firm’s bank statement of accounts. When questioned, he told me that En. Rashid had appointed him to study whether there were discrepancies between actual receipts and payments accounts of the firm and the audited accounts! I was not informed by En. Rashid of the appointment, but I was not worried about it because there were no hanky-panky in all BR’s financial accounts under my care all these years.

The surprised appointment was supposed to be personal between En. Rashid and the accountant and the findings were not made known to me. However, I managed to get copy and I was shocked to see how stupid for the investigations to be carried out! Below is an extract for year 1992.

To me, only nincompoops will not know that receipts into bank accounts will never be equal to the turnovers in audited accounts. Similarly payments in bank account will never be equal to expenses in audited accounts.

The “Accountant” even advised En. Rashid that if he was not informed about the discrepancies, it was a “Criminal Breach of Trust” by his partners and told him to seek compensation! Of course no action was taken by En. Rashid.

When I became aware of the above investigation, I knew there was an immense distrust between me and the other shareholders. The only thing to get it over was either for me to sell off my equity (30%) in the firm or to take over all their equities (70%).

All directors agreed to my proposal and Arthur Andersen was appointed to carry out a due diligence review and share valuation of the firm. The report was completed only in Feb 1994.

The Net Tangible Assets based on Capitalisation of Maintainable Earnings (CME) Method was estimated between RM24.36 and RM32.48 per share in BR. We all agreed the price of RM24.00 per share and I put up my proposal to purchase all their shares as follows:

(a) Refundable Earnest Money (2%)                                                     RM33,600-00

(b) On execution of Sale Agreement within one                                 

      week from the acceptance of Earnest Money (20%)                        RM336,000-00

(c ) Within one week from the execution of Sale Agreement (78%)                          RM1,319,400-00  

                                                                                      Total   RM1,680,000-00

However, all the three shareholders disagreed with my proposed method of payment and insisted that I had to pay in full upon signing the Sale Agreement. I was totally disgusted with their sudden change of decision as we had earlier agreed to the method of payment.

Upon my refusal to pay in full upon signing the Sale Agreement, they proposed to buy my 30% share of the company at RM24.00 per share and pay in full upon the signing of the Sale Agreement.

All necessary documents were prepared and on 24 June, 1994, Dato Ahmad paid in full (RM720,000-00) for the purchase of my shares in BR. And on the same date I resigned as a director of BR.

My sudden exit from BR was a total disappointment to most staff of BR. They started to quit and as anticipated by me, BR closed shop less than five years after I left.

My exit from BR was indeed the saddest turning point of my life. However, I’m very grateful to all those staff who had supported me. Some of them and their spouses still attended Chinese New Year and also my birthday diners, the latest was my 72 birthday. Thanks to Wendy Cheah for organizing all the dinners and ex-BR staff and their spouses for their attendance.

Though it was a sad ending of my professional career, it gave me a good opportunity to indulge in activities that I wanted to do; namely, travelling, mountain trekking and scuba diving. I also started to write to the media on issues I was concerned about, like water supply in the Klang Valley.

Gathering of some ex-BR staff & their spouses for my 72 birthday diner