Capital flows needed to spur recovery

 

21 August 2001

International accounting and business advisory firm, Grant Thornton says that the one commodity in short supply for business enterprises in Malaysia is capital for liquidity, investment and operations. According to Grant Thornton Partner Ian Pascoe, it is essential that strategies be implemented to remove the blockages and obstacles in the Malaysian financial system to allow capital to circulate.

In this context, Mr Pascoe welcomed the appointment of Datuk Azman Yahya as the new Chairman for CDRC. The new approach will definitely speed up the process of clearing the outstanding RM29 billion non-performing debts issue and clear the way for capital flows.

Focusing on the issue of capital and the need for Malaysian companies to form strategic alliances with compatible companies, both locally and internationally based, were the important issues on the agenda at a week-long international conference hosted by Grant Thornton for the region last week. Altogether 30 senior advisors from Grant Thornton offices in 14 countries from Asia, Europe and the Americas attended.

The Conference follows on the success achieved by Grant Thornton in the globally recognized and respected Thomson Financial Securities Data International League Table for financial advisory firms. According to the League Table, Grant Thornton ranked 3rd over­all – and 2nd amongst accountancy firms – in the up to US $ 50 million range for financial advisory services. The League Table reports performance for the first six months of 2001. Overall, Grant Thornton ranked 4th amongst all accounting firms in providing financial advisory and transactional related services advising on a total of 57 deals valued at US $ 2116.7 million.

Commenting on the results, Ian Pascoe who is the Grant Thornton Partner responsible for financing advisory services for the Asia Pacific region, said that “the office in Malaysia has also had considerable success and this was reflected in the consistent number of enquiries from clients for services in this area. Clearly the recent economic difficulties have focused our clients' attention and the Malaysian office has been very pleased – as have our clients – with the results that have so far been achieved”.

“International business is very much a cross-border activity both from a capital, technology and export - import perspective. The Conference we convened is the first in a series of three - the other two being located in Europe and the United States later this year. Our objective is to examine alternative financing techniques and different solutions which have been applied in other jurisdictions to see what would be appropriate to be used here. Alternative financing structures implemented by other Grant Thornton offices including venture capital, mezzanine debt, etc. may be appropriate here,” said Mr. Pascoe.

“In regional terms the Grant Thornton Asia Pacific offices were involved with some 250 corporate finance transactions valued in excess of US $ 5 billion in the year 2000.”

“The reason we have convened this workshop is to focus attention on the needs of Asia Pacific enterprises and how we can make a meaningful response. We cannot consider Malaysia in isolation but part of a global market place for solutions.

“We will also address the unique Grant Thornton service product, PRIMA. This is a strategic approach that addresses the special circumstances which arise in family owned and / or controlled business. Such family dominated businesses are very typical of Asia in general and Malaysia in particular. Our methodology is very concerned with eliminating as far as possible the family trauma and disaffection and at the same time improving market competitiveness. Often this also requires significant financing contributions and the development of mutually beneficial global alliances,” said Mr. Pascoe.

“Our whole philosophy is based on understanding the fundamental entrepreneurial strengths of Malaysian enterprise and extending that understanding into a new level of competitive business operations.”