TA ... Nov10

TA Enterprise Bhd (TAE) was the country’s leading stockbroking firm with an entrenched retail franchise in the 1990s before the Asian financial crisis struck in 1997.

Back then the group, co-founded by Datuk Tony Tiah Thee Kian and his wife Datin Alicia Tiah, used to own stakes in securities firms and commercial banks as far as in South Africa and the Philippines, and stockbroking businesses in Hong Kong, Indonesia and Australia.

Tiah is the executive chairman and major shareholder of TAE, while Alicia who has been running the group in the past 10 years, is the group’s managing director and CEO.

When the Asian financial crisis hit Malaysia, TAE sold its assets abroad to concentrate on its home operations that needed the financial resources for mergers to obtain the universal broker (UB) licence in the early 2000s.

But until now (Nov 2010), TAE has yet to obtain its UB licence. Neither is it an investment bank although it had met the merger requirements set by the Securities Commission (SC).

According to filings with Bursa Malaysia, the SC has imposed several conditions on TAE and its major shareholders to obtain the UB status, including Tiah to declare his effective shareholding in the group and assign voting rights of shares in excess of 20% of his collective stake to independent trustees. Also, Tiah had to trim his shareholding to 20% or below.

It is worth noting that in May 2002, Tiah was fined RM3 million after he pleaded guilty to a charge of allowing a false report to be furnished to the Kuala Lumpur Stock Exchange in relation to the Omega Securities fraud case. The group decided not to apply for an investment banking licence. The reason for this was due to the fact that the domestic investment banking landscape is today (2010) dominated by several big players, and the market was not as vibrant as before.

The fact that TAE did not expand its domestic branch network aggressively unlike its peers, such as OSK Holdings Bhd and Hwang-DBS (M) Bhd, could be evident that the couple’s interest in stockbroking has waned.

Indeed, the TA group appears more interested in property than stockbroking. It is the biggest land owner in the KLCC area. These assets are now held under its property arm, TA Global Bhd, which was listed last year. Tiah is also the single largest shareholder in TA Global owning a 26.8% stake.

Some industry players reckon the group’s lack of expansion in the stockbroking business — and the shift in focus towards property — may possibly be a prelude to the divestment of the former.

In February 2004, TAE had indeed wanted to hive off its stockbroking business to CIMB Bhd for RM400 million in exchange for shares in the latter. Apparently, the deal fell through. 

Although TA is no longer the largest stockbroker in Malaysia, it continues to be a formidable force in retail stockbroking, with over 400 remisiers.