phd 2009 cg listed companies.pdf

7/23/2019 PhD 2009 CG LISTED COMPANIES.pdf

http://slidepdf.com/reader/full/phd-2009-cg-listed-companiespdf 1/107

Corporate Governance and Financial Performance

(A Study of Malaysian Listed Companies)

Amir Ranjbar

CGA070054

Supervisor:

Dr. Cyril Hilaris Ponnu

University Malaya

03/05/2009

Submitted to the Graduate School of Business Faculty of Business

and Accountancy University of Malaya, in partial fulfillment of the

requirements for the degree of Master of Business Administration



Acknowledgement

To my best friend and wife who always was, is, and would

be my best support.

To my parents who always encourage and influence me in

all aspects of my life.

I am also very grateful to my supervisor and lecturer who

have provided clues, reviews as well as critical comments

and suggestions to improve my work.



Table of Contents

Acknowledgement ............................................................................................................. 2

List of Tables .................................................................................................................... 6

List of Figures ................................................................................................................... 7

Abstract ............................................................................................................................. 8

1. Introduction................................................................................................................. 10

1.1. Background of the Problem ................................................................................. 11

1.2. Problem Statement ............................................................................................... 13

1.3. Objectives of the Study ........................................................................................ 13

1.4. Summary and Organization of the Remaining Chapters ..................................... 15

2. Literature Review ....................................................................................................... 18

2.1. Corporate Governance in Malaysia ..................................................................... 18

2.2. The Malaysian Legal, Regulatory and Institutional Structure ............................. 18

2.3. Formation of New Governing Bodies .................................................................. 25

2.4. Corporate Governance, Ownership and Performance ......................................... 26

2.5. Corporate Ownership and Control in Malaysia ................................................... 28



2.8. Does Firm Performance Affect Board Composition? ......................................... 34

2.9. Why Board Composition Has Become a Hot Issue in Malaysia? ....................... 35

2.10. CEO–Chairman Duality ..................................................................................... 37

3. Methodology ............................................................................................................... 38

3.1. Determinants of Financial Status of Companies ................................................. 38

3.2. Determinants of Corporate Governance .............................................................. 40

3.2.1. TDI Board Sub-Index’s Notes ...................................................................... 43

3.2.2. TDI Disclosure Sub-Index’s Notes ............................................................... 44

3.2.3. TDI Shareholder Sub-Index’s Notes ............................................................ 49

3.3. Controlling Variables ........................................................................................... 51

3.4. Sources of Data .................................................................................................... 53

3.5. Theoretical Framework and Main Research Hypotheses .................................... 55

3.6. Scope of the Study ............................................................................................... 57

4. Data Analysis and Results .......................................................................................... 59

4.1. Descriptive Analysis ............................................................................................ 59

4.2. Correlation between Independent Variables ........................................................ 62



6. References................................................................................................................... 78

Appendix A: Financial Status of Companies (Dependent Variables) ............................ 81

Appendix B: Financial Status of Company (Independent Variables) ............................ 87

Appendix C: Management and Ownership of Company ................................................ 93

Appendix D: TDI, TDI-Board, TDI-Disclosure, and TDI-Shareholders ..................... 100



List of Tables

Table 1: Descriptions of La Porta's Factors .................................................................... 20

Table 2: Comparison of Legal Protection and Accounting Standards in various

Countries. ........................................................................................................................ 24

Table 3: Structure of the Transparency and Disclosure Index (TDI). ............................ 41

Table 4: Estimation of effect of Independent Variables on Dependent Variables ......... 57

Table 5: Descriptive Data for Management and Ownership Data .................................. 59

Table 6: Dependent Variables Descriptive Analysis ...................................................... 61

Table 7: Corporate Governance and Ownership Correlation Matrix ............................. 62

Table 8: ROA as Dependent Variable ............................................................................ 63

Table 9: Tobin’s as Dependent Variable ........................................................................ 64

Table 10: Dividend/Earning as Dependent Variable ...................................................... 65

Table 11: Dividend/Sales as Dependent Variable .......................................................... 66

Table 12: Altman's Z-Score as Dependent Variable....................................................... 67

Table 13: Dept/Assets as Dependent Variable ............................................................... 68

Table 14: Debt/Equity as Dependent Variable ............................................................... 68

Table 15: ROA as Dependent Variable .......................................................................... 70

Table 16: Tobin's Q as Dependent Variable ................................................................... 71

Table 17: Dividend /Earning as Dependent Variable ..................................................... 71



Table 21: Debt / Equity as Dependent Variable ............................................................. 73

Table 22: Regression Summary ...................................................................................... 74

List of Figures

Figure 1: Theoretical Framework ................................................................................... 56



Abstract

The existing studies often find statistically controversial effects of corporate

governance and ownership on firm financial performance in developed countries.

Unfortunately, there are rare empirical studies on emerging markets while they often

show wider variations in corporate governance practices, which may have an impact

on firm performance and dividend policy.

A good example in this field is Malaysia. After independence in 1957, Malaysia has

faced many challenges such as riots in 1969 and financial crises in 1997. These

factors caused many reforms in corporate ownership and governance rules in this

country. This study wants to find out how corporate governance and ownership can

affect performance of Malaysian listed companies. This study is important and new in

two ways. First, Malaysia is a fast developing country and in order to accelerate their

progress and avoid any interruption, they tried to accept best practices in corporate

governance during last decade. We want to examine the effect of these changes on

reality and on the performance of Malaysian listed companies. Second, there is no

similar research in Malaysia in this area. The result of this research can help to see the

real effect of Bursa Malaysia policies to regulate market and since this research is

quantitative, its results can illustrate to what degree corporate governance rules and



The data used in this research are secondary data gathered from listed companies in

main and second Bursa Malaysia boards. By regression analysis, we tried to find out

to what extent corporate governance is acting successfully.

The results of this study reveal that corporate governance has a positive effect on

Tobin’s Q, Dividend/Sales, Debt/Assets, and Debt/Equity of company. Also a

narrower bound of corporate governance like TDI Disclosure or Shareholders have

positive effect on Return on Assets (ROA) or TDI disclosure can increase Altman’s

Z-Score which means by increasing the transparency of board activities, firms can

reduce their risks.

Keywords: Corporate Governance, Financial Performance, Board Independence, CEO

duality, Board Balance, and Ownership.



1. Introduction

Among Asian companies, corporate governance is often regarded as a weak link to

performance. The board of directors is amongst the internal governance mechanisms

intended to ensure that the interests of managers are in line with shareholders interest,

and to discipline or remove ineffective management teams. Most studies have tackled

the issues of corporate governance separately. There are many researches which

targeted the effect of CEO duality, Board Size, Board Balance, Ownership, and Board

Dedication on Firm’s Performance. Unfortunately, most empirical researches on these

issues have been restricted to US data. The generalizability of such findings may not

extend across national boundaries due to different regulatory and economic

environments, cultural differences, the size of capital markets and the effectiveness of

governance mechanisms.

This study tries to observe the effect of corporate governance and ownership of 100

Malaysian listed companies on their financial performance in 2007. Malaysia has one

of the most developed stock markets in the ASEAN region. This study includes 100

public listed companies in Bursa Malaysia from FTSE BM 30, FTSE BM 70, FTSE

BM Small Cap Index, FTSE BM Second Board, and FTSE BM MESDAQ which

almost covers one seventh of all listed companies in Bursa Malaysia. The extracted



This study hypothesizes that well-defined policies and regulations which is defined as

listing requirement in Bursa Malaysia can increase the performance of companies.

The results of this study support the above hypothesis and illustrate that there is a

positive relationship between well-management and transparency on one hand, and

high financial performance on the other hand.

1.1. Background of the Problem

The failure of organizations which were previously thought to be infallible such as

Enron and WorldCom in the USA, Ansett, OneTel and HIH in Australia have had

investors and other stakeholders demanding better corporate governance, especially

by means of “cleaning up” the boardroom (Cheng, 2003; Houle, 1990; Park and Shin,

2003). Malaysian Code of Corporate Governance stipulates that at least one third of

the board of directors must consist of independent directors. The code was adopted in

response to the East Asian financial crisis, calling for among others, greater

transparency and good governance.

The positive effect of the crisis then, in improving corporate governance practices was

also seen by the Second Finance Minister, Mustapa Mohamad. In his own words:



process in place. This process includes sound regulation of markets, including good

corporate governance practices which will aid to bring about greater depth and

resilience to the Malaysian economy. What I would classify as a positive feature of

the crisis, is the sense of urgency with which issues of corporate governance are

being addressed. Throughout the world, corporate governance reforms have arisen

from local crises. East Asia is no different (Treasury, 199).”

Mustapa was also quick not to conclude that better corporate governance practices as

the silver bullet, while at the same acknowledged its importance.

Malaysia passed many reforms in corporate ownership and governance rules.

Financial Sector Master Plan (FSMP) which provided by ministry of Finance in 2001,

Capital Market Master Plan by securities commissions in 2001, or recommendations

by Finance Committee on Good Governance (FCGG) which are the reaction to 1997

crises are just some samples of these reforms.

Now, it is important to quantitatively inspecting the results of all these reforms on the

performance of firms. By this mean, it is possible to make sure that the efforts in this

field were necessary and they have done in the correct way.



1.2. Problem Statement

Although Ministry of Finance, securities commissions and all other related

organizations have tried to adopt best practices of corporate governance and

ownership in Malaysia, there is no practical study to observe the real relationship

between these two items. Each country has its own specific culture and it is difficult

to say that best practices in other countries, which have proven, will result in the same

way in other countries. The result of a quantitative study can reveal that to what extent

these efforts were successful or on the other hand were unnecessary or unrelated. It

also can show the required changes or improvements in policies and regulations.

1.3. Objectives of the Study

The goal of this research is twofold. First, it gathers, for the first time, quantitative

measures of the quality of the corporate governance and the ownership structure of

100 non-financial listed companies in Malaysia with information for 2007. A wide

array of official and private sources was used for this research. In a nutshell,

companies seem to be following international practices and code of corporate

governance. In turn, ownership appears to be quite concentrated at the level of the

largest ultimate shareholder, with pyramiding being the main mechanism for creating

such a wedge Second we test the predictions of recent theories linking those



This study can show the strengths and weaknesses of rules and regulations in financial

market in Malaysia. To measure the financial status of the companies, this study

divides them into the following categories:

• Profitability which is measured by:

o

Return on Assets (ROA)

o Tobin’s Q

o Dividend to Earning

o Dividend to Sales

• Risk is measured by:

o Altman’s Z-score

• Capital Structure which is measured by:

o Debt to Assets

o Debt to Equities

To gauge the strength of corporate governance practices, this study employs

Transparency Disclosure Index (TDI) in listed companies. The TDI is based on public

information and reflects the norms of transparency and disclosure in a company. The

TDI is composed of 25 binary items, which cover a broad range of corporate

governance topics. The binary item equals one if a company follows one of the



• Board which measures the structure, procedures and compensation of board

and top management members.

• Disclosure which measures the degree to which the company reports relevant

corporate facts to the outside stakeholders.

•

Shareholders which measures the quality of information regarding

compensation to minority shareholders.

To consider the ownership and other related factors, the following controls items also

added to the final regression:

• Size of the companies as total capital market

• Ownership factor (it is 0 if the company is widely held otherwise 1)

• CEO Duality (whether CEO and Chairman of the board are the same person)

• Sector dummy variable

1.4. Summary and Organization of the Remaining Chapters

This study examines the relation between corporate governance practices measured by

the Transparency Disclosure Index (TDI) and corporate performance among

Malaysian listed companies. This empirical approach lies in constructing measures of

h li f h f 100 fi i l d ili



The result of this research finds evidence that better TDI grades leads to an increase in

the Tobin’s Q, Dividend/Sales, and leverage of company. Also higher ranks in TDI

sub-indices such as Disclosure and Shareholders have positive effect on ROA and

Altman’s Z-score.

The next chapter is a complete literature review about corporate governance

especially in Malaysia and its relation to financial status and performance of

company. This chapter covers this issue from different angles such as Regulations,

Institutional Structure, Governing Bodies, and Ownership and its relation to

Performance. Also this chapter looks at the effect of Corporate Governance, Board

Composition and CEO Duality on Dividend Payment and other Financial

Performance of firms.

Chapter 3 describes the analysis methodology, structure of data sample and the ways

and sources from which the data were gathered. This chapter briefly explains the

meaning of each variable and why they have been chosen as a variable in the data set.

In chapter 4, shows the Regression analysis and its results. At first section of this

chapter, there three tables which show the descriptive analysis and the correlation



last there is a table which gathered all the results of all fourteen regression equations.

Chapter 5 is the conclusion and has some points for further studies. And the last

chapter includes the references we use in this research.

There four appendices which show Dependent Variable, Independent Variable and

Management and Ownership data which are used in analysis.



2. Literature Review

2.1. Corporate Governance in Malaysia

Before 1997/1998 Asian financial crisis, corporate governance practices in Malaysia

were not important and a matter of concern according to many international bodies, in

particular when the World Bank concluded that East Asian countries had the basics

right in terms of economic management, and effective public institutions and

governance (refer to World Bank, 1993). After 1997/1998 economic crisis in most

East Asian countries, especially South Korea, Thailand, Malaysia and Indonesia, this

view changed rapidly. Corporate governance came to be seen as a problem with a

range of international agencies such as the World Bank, International Monetary Fund

(IMF), Asian Development Bank (ADB) and the Malaysian government tried to do

reforms in corporate governance practices as a way of managing the financial crisis.

2.2. The Malaysian Legal, Regulatory and Institutional Structure

So many regulations, laws, non-legal requirements and codes of conduct have been

introduced over the past four decades in Malaysia as guidance for company directors

in the performance of their duties and responsibilities. The three main acts that govern

the Malaysian nonfinancial corporate sector activities today are:



• Securities Commission Act (SCA) 1993

The CA 1965 deals with the pre-incorporation, incorporation, operations and duties of

companies and their directors, as well as the rights and obligations of shareholders

and directors.

The Policies and Guidelines on Issue/Offer of Securities Commission (SC) and the

listing requirements of the Malaysian stock exchange also play an important role in

regulating directors, investors, brokers and issuers.

The SIA 1983 and SCA 1993 make up the legislative and regulatory framework of

Malaysia’s capital markets, under the authority of the Ministry of Finance. Under

Malaysian law, company directors are primarily responsible for the governance of

their companies, and the shareholders’ role in governance is to appoint the directors

and external auditors in order to satisfy themselves, among other things, that an

appropriate governance structure is in place. The shareholders have access to regular

information, can call for emergency shareholder meetings and make proposals at

shareholder meetings. The law protects shareholders by:

1. Stipulating regulations governing the duties of company directors



3. Prohibiting loans to directors or director-related parties, unless they are

subsidiaries

4. Disclosing and requiring shareholders’ approval on substantial transactions in

any non-cash assets involving directors or persons connected with directors

5. Disclosing substantial shareholdings to the company and the Malaysian stock

exchange

Based on the data provided by La Porta et al. (1998), it is evident that Malaysia has

acceptable level of shareholder and creditor rights in comparison to other neighbors or

developed countries. But there are some gaps in Rule of Law, Corruption, and Risk of

Expropriation which governors in Malaysia should try to close them by adding more

precision in Corporate Law.

The following table describes the factors La Porta et al. (1998) used in their research.

Table 1: Descriptions of La Porta's Factors

Factor Description

One-Share One-

Vote

Equals one if the company law or commercial code of the

country requires the ordinary share carry one vote per share, and



requirement to deposit shares before Annual General meeting 3.

Allowance of cumulative or proportional voting 4. Availability

of oppressed minorities’ mechanism 5. The minimum 10% of

total equity requirement to attend extraordinary shareholder

meeting 6. Shareholders have preemptive rights that can only be

waived by a shareholders vote.

Creditors Right An index aggregating creditor’s right. It measures four powers

of secured lenders in bankruptcy. The first measure is whether

secured creditors are able to seize their collateral once a

reorganization petition is approved, in other words, whether the

court imposes an “automatic stay” on assets. The second

measure is whether restrictions such as creditor consent must be

observed when a borrower files for reorganization, as opposed to

debtors seeking unilateral protection from creditors’ claims by

filing for rehabilitation. The third measure is whether secured

creditors are paid first out of the proceeds of liquidating a

bankrupt firm or if third-party claims take priority. The final

measure is whether creditors or an administrator is responsible

for running the business during reorganization, rather than



Judicial System environment as it affects business, particularly foreign firms”

produced by the country risk rating agency, International

Country Risk (ICR).

Rule of Law This is an index of the law and order tradition of the country and

is scaled from zero to ten with higher scores for countries with

stronger traditions for law and order. The rule of law index

“reflects the degree to which the citizens of a country are willing

to accept the established institutions to make and implement

laws and adjudicate disputes.” Higher scores indicate “sound

political institutions, a strong court system, and provisions for an

orderly succession of power.” Lower scores indicate “depending

on physical force or illegal means to settle scores.” Upon

changes in government, new leaders may be less likely to accept

the obligations of the previous regime.

Corruption ICR’s assessment on the corruption of the government. Lower

scores indicate that “high government officials are likely to

demand special payments” and “illegal payments are generally

expected throughout lower levels of government” in the form of

“bribes connected with import and export licenses, exchange



corruption.

Risk of

expropriation

ICR’s assessment of the risk of “outright confiscation” or

“forced nationalization”. Scale zero to ten, with lower scores for

higher risks.

Accounting

Standards

Index created by examining and rating companies’ 1990 annual

reports on their inclusion or omission of 90 items. These items

fall into seven categories (general information, income

statements, balance sheets, fund flow statement, account

standards, stock data, and special items).



Table 2 shows a comparison of Efficiency of Judicial System, Rule of Law,

Corruption, Risk of Expropriation, Accounting Rating, Creditor’s Right, One-share

One-Vote, and Anti-director Right between Malaysia and ten other countries.

Table 2: Comparison of Legal Protection and Accounting Standards in various Countries.

Countries E f f i c i e n

c y o f J u d i c i a l S y s t e m

R u l e o f

L a w

C o r r u p

t i o n

R i s k o f

E x p r o p r i a t i o n

A c c o u n

t i n g R a t i n g

C r e d i t o

r ’ s R i g h t

O n e S h

a r e O n e V o t e

A n t i - d i r e c t o r R i g h t

Australia 10.00 10.00 8.52 9.27 75 1 0 4

Canada 9.25 10.00 10.00 9.67 74 1 0 5

Hong Kong 10.00 10.00 10.00 9.67 69 4 0 5

India 8.00 4.17 4.58 7.75 57 4 0 5

Indonesia 2.50 3.98 2.15 7.16 Na 4 0 2

Malaysia 9.00 6.78 7.38 7.95 76 4 1 4

Singapore 10.00 8.57 8.22 9.30 78 4 1 4

Taiwan 6.75 8.52 6.85 9.12 65 2 0 3

Thailand 3.25 6.25 5.18 7.42 64 3 0 2

United

Ki d

10.00 8.57 9.10 9.71 78 4 0 5



2.3. Formation of New Governing Bodies

With regarding of anticipation of the implementation of a code of corporate

governance in Malaysia, the Malaysian Institute of Corporate Governance (MICG)

was incorporated under the CA1965 in March 1998. The founder members of the

MICG were the Federation of Public Listed Companies (FPLC), Malaysian Institute

of Accountants (MIA), Malaysian Institute of Directors (MID), Malaysian

Association of The Institute of Chartered Secretaries and Administrators (MAICSA)

and Malaysian Institute of Certified Public Accountants (MICPA). The MICG ran a

“crusade of better governance” (Shankar, 1999) to improve the corporate governance

system for the nation. Its objective was to represent, express and give effect to

opinions of members of MICG on issues relating to corporate governance

(management of the business and affairs of corporations) in Malaysia and promote

awareness of corporate governance principles among corporate participants, the

investing public and corporations, stressing the importance of good governance in

enhancing long-term shareholder value and the financial viability of business.

At the same time, the government set up the High Level Finance Committee on

Corporate Governance (HLFC) to establish a framework for corporate governance

and set best practices in Malaysia. The HLFC was a partnership effort between the



Additionally, in recognition of the need to protect minority shareholders, a monitoring

body on corporate governance was set up by the Employees Provident Fund (EPF),

the Minority Shareholders Watchdog Group (MSWG) in 2001, as a voice for minority

shareholders and to provide an avenue for minority shareholders to institute

proceedings against listed issuers who fail to comply with the principles and practices

of good corporate governance.

2.4. Corporate Governance, Ownership and Performance

During last two decades a great deal of attention has been given to finding how

corporate governance and ownership structures affect firm’s performance. Corporate

governance can influence a firm’s performance in two ways:

• Whenever a conflict of interest arises between management and shareholders

• Whenever a conflict of interest arises between controlling and minority

shareholders

In the management-shareholder conflict, the agency problem manifests itself in

management’s low effort and unproductive investments, usually known as perquisites.

In the controlling-minority shareholder conflict, controlling shareholders use their

power to benefit themselves at the expense of the minority shareholders in what is



The root of both conflicts is the fact that the manager in the first case, and the

controlling shareholders in the second case, receive only a portion of the firm’s net

revenue, while they fully appropriate the resources diverted. Thus, it is conceivable

that, in light of this incentive structure, insiders will maximize their utility even when

the firm as a whole will not.

Of course, the ability to fulfill these goals is conditioned on the power which insiders

have in the company’s decision-making process. Managers will enjoy more power as

they are part of the board or act in connivance with the board and the controlling

shareholders. In turn, the power of controlling shareholders relies in how effectively

they can manipulate board decisions by way of voting majorities and other means;

distortionary policies will then increase as the ratio of voting to cash flow rights is

higher (see La Porta et al., 1999, and Claessens et al., 1999). Outsiders have two main

instruments to counterbalance this power: the enforcement of adequate corporate

governance standards and the quality of the regulatory and legal environment, which

should discourage detrimental actions by insiders and, once committed, allow affected

stakeholders to challenge them through corporate and judicial channels.

While a wedge between control and cash flow rights is likely to harm minority



performance and valuation (the so-called “incentive effect”) in that higher cash flows

rights in the hands of a few shareholders tends to reduce the free riding problem

associated with dispersed ownership when it comes to monitoring and punishing

opportunistic managers; on the other hand, the negative effect (the “entrenchment

effect”) above mentioned may take place whenever there is high concentration of

control rights and/or separation between control and cash flow rights.

2.5. Corporate Ownership and Control in Malaysia

This mechanism is needed to explain the corporate control of certain firms at different

levels. Ownership can be elaborated by type of ownership and the ownership

concentration. The type of ownership can be further explained by individual,

institution, state, foreign, and managerial ownership. The importance of ownership

concentration was recommended by Schleifer and Vishny (1997) as one of the key

determinants of corporate governance. Large shareholders often referred as block

shareholders can benefit the minority shareholders because of their power and

incentive to prevent expropriation (Mitton, 2002).

However the controlling shareholders may follow objectives that are not aligned with

those of minority shareholders (Morck et al 2000 and Bebchuk et al 2000) Mitton



price return of an average of 2.6% for every increase of 10% in the ownership of the

largest shareholders.

2.6. Corporate Governance and Dividend Policies

As a pioneer, Black (1976) found no convincing explanation why companies pay cash

dividends to their shareholders. Since that introduction of the ‘dividend puzzle’, a

voluminous amount of research has offered alternative and appealing approaches to

solve it.

Most of them are rooted in information asymmetries between firm insiders and

outsiders, and suggest that firms may indicate their future profitability by paying

dividends. Grossman and Hart (1980) pointed out that dividend payouts can mitigate

agency conflicts by reducing the amount of free cash flow available to managers, who

do not necessarily act in the best interest of shareholders. Similarly, Jensen (1986)

argues that a company with substantial free cash flows is inclined to adopt investment

projects with negative net present values. If managers increase the amount of

dividends, they also reduce the amount of free cash flows, and mitigate the free cash

flow problem. Thus, dividend payouts may help control agency problems by getting

rid of the excess cash that otherwise could be spent on unprofitable projects La Porta



• First, the outcome model suggests that dividends are paid because minority

shareholders pressure corporate insiders to disgorge cash.

• Second, the substitution model predicts that firms with weak shareholder

rights need to establish a reputation for not exploiting shareholders.

Hence these companies pay dividends more generously than do firms with strong

shareholder rights. In other words, dividends substitute for minority shareholder

rights. The empirical results of La Porta et al. (2000) on a cross-section study of 4000

companies from 33 countries with different levels of minority shareholder rights

support the outcome agency model of dividends. Accordingly, it is reasonable that

outside minority shareholders prefer dividends over retained earnings. In accordance

with that, Bebczuk (2005) argues that the testable prediction of this theoretical body is

that dividend disbursements will be higher the better are the corporate governance

practices in the company. In this case, corporate governance reflects the power of

shareholders in the company.

The influence of shareholders’ monitoring upon dividend payouts has been

recognized in the literature. The severity of agency costs appears likely to be inversely

related to the strength of shareholder rights (Gompers et al. 2003). Companies



2.7. Does Board Composition Affect The Firm Performance?

Studies of the effect of board composition on firm performance generally adopt one of

two approaches. The first approach involves studying how board composition affects

the board’s behavior on discrete tasks, such as replacing the CEO, or acquiring

another firm and the like whereas, the second approach directly examines the

relationship between board composition and firm performance in which in our study

has been one of the major concerns. Overall correlation between board composition

and firm performance involves studying whether board composition affects overall

firm performance. This approach allows us to examine the “bottom line” of firm

performance but involves much less traceable data. Firm performance must be

measured over a long periods which means that performance measures are noisy and

perhaps mis-specified.

Prior research does not support a clear correlation between board independence and

firm performance. For example, early work by Vance reports a positive correlation

between the proportion of inside directors and a number of performance measures.

Baysinger and Butler (1985), Hermalin and Weisbach (1988), and MacAvoy and

coauthors (1983) all report no significant same year correlation between board



proportion of outside directors in 2005 and ratio of market value to book value in

2006. An early expectation to these non-results come from Baysinger and Butler, who

report that the proportion of the independent directors in 1970 correlates with 1980

industry-adjusted return on equity. However, their ten-year lag period is very long for

any effects of board composition on performance to persist. Studies in Australia,

Singapore, and the United Kingdom also find no correlation between board

composition and firm performance.

A few studies offer hints that firms with a high percentage of independent directors

may perform worse. Yermack (1997) reports a significant negative correlation

between the proportion of independent directors and contemporaneous Tobin’s q

(ratio of the market value of a firm’s asset to the book value of its assets), but no

significant correlation for several other performance variables (sales/assets; operating

income/assets; operating income/sales). Agrawal and knoeber (1996) report a negative

correlation between the proportion of outside directors and Tobin’s q. Klein (2002)

reports a significant negative correlation between a measure of change in market

value of equity and proportion of independent directors, but insignificant results for

return on assets and stock market returns. Fosberg reports that majority-outside boards

have a significantly lower sales/assets ratio, but finds insignificant (although generally



Even studies by Rosenstein and Wyatt (1990) find that stock prices increase by about

0.2% on average when a company appoints an additional outside director. This

increase, while statistically significant, is economically small and could reflect

signaling effects. Appointing and additional outside director could signal that a

company plans to address its business problem, even if board composition doesn’t

affect the company’s ability to address these problems. Moreover, Rosenstein and

Wyatt (1990) find a stronger price reaction for outside directors who work for

financial institutions than for directors whose principal job is with another unrelated

non-financial corporation. Yet outside directors who work for financial institutions

are usually treated as affiliated outside directors rather than independent directors,

because their own firm may be interested in business dealings with the firm on whose

board they sit. Rosenstein and Wyatt (1990) find that stock prices neither increase nor

decrease on average when an insider is added to the board.

Composition of board committees Klein (2002) finds that inside director

representation on a board’s investment committee correlates with improved firm

performance. She finds little evidence that the “monitoring” committees that are

usually dominated by independent directors_ the audit, compensation, and monitoring

committees-affect performance, regardless of how they are staffed.



2.8. Does Firm Performance Affect Board Composition?

An important issue in studying the correlation between board composition and firm

performance is the direction of causation. Board composition could affect firm

performance, but firm performance can also cause the firm to change its board

composition. Prior researchers have found limited evidence of an endogenous

relationship between firm performance and board composition in which performance

affects board composition.

Hermalin and Weisbach (1991), (using the same data set), report that the proportion

of independent directors on large firm boards increase when company has performed

poorly. This effect is statically significant but numerically small. Weisbach concludes

from this evidence that since the change in board composition following poor

performance is relatively small, and board composition changes very slowly over time

it is unlikely that the potential endogeneity of the board composition is a serious

problem.

In contrast to Hermalin and Weisbach (1991), Klein (2002) finds no evidence that

performance affects board composition. In her sample, firms in the bottom quintile for

1991 stock price returns are no more likely to add independent directors in 1992 and



composition for a group of firm changes slowly over time and that board composition

tends to regress to the mean, with firms that have a high (low) proportion of

independent directors reducing (increasing) this percentage over time.

2.9. Why Board Composition Has Become a Hot Issue in Malaysia?

The year 1997 witnessed the worst financial crisis to hit the developing world since

the 1982 Latin American debt crisis. What started out as a localized currency crisis in

Thailand, rapidly turned into a financial and economic crisis in the East Asian

countries. From being one of the best performing regions in the world, even up to as

late as May 1997, the region became one that required the largest financial rescue in

history. The speed at which the crisis spread and the severity of the contagion effects

were never experienced before. There is still no international consensus on the causes

surrounding the financial crisis. The economies of the East Asian countries contracted

in 1998 as a result of the crisis. Adverse developments unfurled. Economic outlook

was changed from positive to very negative. The expectations of both foreign and

domestic investors changed abruptly. The region was perceived as one beset with high

risks which prompted a massive reversal of capital flows from the region. This

resulted in the financial panic, investors behavior became irrational and overreacted to

the changed economic and financial situation



Malaysia was not spared from the crisis. The Malaysian Ringgit experienced waves of

speculative pressure. It depreciated 40% against the US Dollar by the end of August

1998 from its level in June 1997. The Kuala Lumpur Stock Exchange (KLSE)

Composite Index fell by 79% from a high of 1,271 points in February 1997 to 262

points in September 1998.2 The vicious cycle of massive withdrawal of funds from

the domestic financial markets to safer offshore havens started. The effects then

spread through the banking and corporate sector. High interest rates and marked drop

in domestic demand crippled the financial performance of the corporate sector.

Companies borrowed heavily from banks to finance their rapid expansion during the

good times, sometimes expansion to areas of non-core business. This made them very

vulnerable to interest rates fluctuations. With the high interest rates and the economic

contraction the debt servicing capacity of these companies were greatly affected. This

in turn created large number of non-performing loans for the banking sector. As a

result banks began overly cautious in extending new loans even to viable businesses.

The financial crisis brought to the foreground the weak corporate governance

practices: the weak financial structure of many companies; over-leveraging by

companies; lack of transparency, disclosure and accountability; existence of a

complex system of family control companies; little or no effective laws to ensure that



few”3; lack of transparency and ambiguity in the regulatory processes; and

weaknesses in the credit evaluation processes by the banks. Weak corporate

governance practices by these companies, though did not cause the financial crisis,

but certainly contributed to the economic crisis. Against this backdrop, the Malaysian

Code of Corporate Governance (the Code) was introduced in 2000, after detailed

study and recommendations made by the high level Finance Committee which was

formed in 1998 with the objective of improving the corporate governance practices by

the corporate sector.

2.10. CEO–Chairman Duality

CEO–Chairman duality as governance and controlling mechanisms safeguards

shareholder’s interest their own interests. From the perspective of the controlling

shareholder, efficiency in monitoring management could be enhanced through CEO–

Chairman duality (Haniffa and Cooke, 2000) because less contracting is needed and

information asymmetry is reduced. By being a member of the board, often the

Chairman and/or CEO, IND could concentrate management control and align

company objectives with their own interests. By participating directly in managing

firms, IND could internalize transaction costs and improve firm performance through



3. Methodology

3.1. Determinants of Financial Status of Companies

Now it is turn to specify the determinants of corporate performance. The data

extracted for analysis belong to 2006-2007 accounting period. The reason for relying

on data before 2008 is the March stock market shocks after parliamentary election in

Malaysia. This research considers data for previous period because it was concerned

about this event’s effect on the behavior and performance of firms.

This study follows the way of previous studies to measure performance of companies

by taking the return on assets (ROA) and Tobin’s q as indicators of performance. The

return on assets is an accounting measure of profitability and efficiency, while

Tobin’s q captures market expectations about future earnings. Companies’ demand

for funds for further investment is represented by a high Tobin’s q value, which

should have a negative impact on dividends. Even though one would expect some

correlation between them, this may not be always the case—as a matter of fact, the

simple correlation in our sample is positive but not significant. Also the implications

are radically different in each case: while the ROA-corporate governance link reflects

a tangible, balance-sheet effect, the q-corporate governance nexus has more to do with

k t ti b t th l f t



The expectation is that an increase in the TDI or its sub-indices leads to an increase in

the dividend to Earning or Sales. This research has focused on an agency-related

rationale for paying dividends. It is based on the idea that dividends may mitigate

agency costs by distributing free cash flows that otherwise would be spent on

unprofitable projects or as useless perks for managers. Dividends expose firms to

more frequent inspections by the capital markets as dividend payouts increase the

likelihood of new common stock issues. However, this scrutiny helps alleviate

opportunistic management behavior and thus agency costs, which, in turn, are related

to the strength of shareholder rights and corporate governance. In addition,

shareholders may prefer dividends, particularly when they fear expropriation by

insiders. As a consequence, we advance a hypothesis that dividend payouts are

determined by the strength of corporate governance.

Altman’s Z-score routinely used by stockbrokers trying to determine if a company is a

good investment, bankers to determine loan risk, and internally, by anyone who wants

to take close look at his or her own company's financial health. This score calculated

by five ratios:

1. Return on total assets

2. Sales to total assets



These ratios are then multiplied by a predetermined weight factor, and the results are

added together. The final number (the Z-score) yields a number between -4 and +22.

Financially-sound companies show Z-scores above 2.99, while those scoring below

1.81 are in fiscal danger, maybe even heading toward bankruptcy. Scores that fall

between these ends indicate potential trouble.

This research expects that higher ranks in corporate governance factors have a

positive relationship with Altman’s Z-score.

The leverage ratio (debt to assets and debt to equities) shows the capital structure and

bankruptcy risk of company. The high value of leverage ratio shows that management

could not obtain shareholder interest for new projects and had to launch them by loans

from creditors. High leverage and the implied financial risk should be associated with

lower dividend payout as it discourages both paying out dividends and taking further

loans.

3.2. Determinants of Corporate Governance

TDI is used in this study to determine the strength of corporate governance practices



binary item equals one if a company follows one of the corporate governance

standards and zero otherwise.

The TDI consists of three sub-indices: Board, Disclosure and Shareholders.

• The sub-index Board measures the structure, procedures and compensation of

board and top management members.

• The sub-index Disclosure measures the degree to which the company reports

relevant corporate facts to the outside stakeholders.

• The shareholders, measures the quality of information regarding compensation

to minority shareholders.

Table 3 shows the percentage of positive entries for the TDI and its three sub-indices.

Table 3: Structure of the Transparency and Disclosure Index (TDI).

Board structure and procedures (TDI–Board) – 8 Items

% of firms with public

information

on each item

1- Years in office of present directors 100%

2- Code of conduct for directors 100%

3- Manager and director fees 8%



5- Information on whether manager and director fees are

performance-based58%

6- Shareholdings of managers and directors 100%

7- Composition of the different board committees 85%

8- Details on activities of the different board committees 100%

Disclosure (TDI–Disclosure) – 13 Items

9- Bio of main company officers 100%

10- Bio of directors 100%

11- Calendar of future events 14%

12- English-translated corporate website 100%

13- Financial indicators for the last five years 81%

14- Strategic plan and projections for the following years 53%

15- Publication of board meeting resolutions 0%

16- Publication of shareholders meeting resolutions 100%

17- Details on the appointment process of new directors 32%

18- Details on attendance of minority and controlling

shareholders at shareholders meetings 0%

19- Reports on issues raised by dissident shareholders 0%

20 Y f hi i f th t l dit 0%



22- Details of corporate ownership (principal shareholders) 100%

23- Type and amount of outstanding shares 100%

24- Dividend policy in the past five years 54%

25- Projected dividend policy for the following years 70%

In the second column of Table 3 you can find % of firms with public information on

each item. These percentages reveal useful information about transparency of

companies in Bursa Malaysia and show to what extent listing rules and regulations

can force companies to reveal required information for shareholders.

3.2.1. TDI Board Sub-Index’s Notes

One of the most important notes in this sub-index is related to item number three

which is related to managers and directors fee. As data reveals only 8% of listed

companies in Malaysia announce the exact amount their managers and directors’ fee.

One main reason which companies avoid to reveal these data is CEO’s high salary.

Also in most cases there is a huge gap between executive managers’ fee and other

directors’ fee especially independent directors.



whether these payments are related to their performance. This means many companies

are reluctant to specify directors’ remuneration.

Other items show that because of listing requirement almost 100% of companies

deliver complete information about board committees and their activities.

The last point is that according to the listing requirement all companies adopted code

of conduct for their board members and announce it every year through their Annual

Reports.

3.2.2. TDI Disclosure Sub-Index’s Notes

Items 9 and 10 disclose lots of information about directors in board. Most of the

companies manifest lots of information about their directors including:

• Age

• Race

• Education background

• The year they join to the company

• Previous responsibilities in company



Based on the above data, shareholders or other stakeholders can gain useful

information about board ability and diversity.

Item 11 in Table 3 shows the lack of information about future events of companies.

Based on the gathered data, only 14% of companies have a calendar of events for next

year about their future projects and plans. Even many of companies do not have any

segment in their annual reports or websites to reflect the summary of important events

for last year. This calendar of events can briefly give an idea about activities of

company to shareholders and other stakeholders. It can include future or previous

projects, contracts, and exhibitions.

Item 12 in Table 3 shows an important fact about Malaysian companies. All

Malaysian companies have English translated website and annual reports. Even many

of these companies try to have better communication with their investors through a

multi-language website or annual report. This is also an important potential to attract

foreigner investors.

Item 14 on Table 3 reveals one of Malaysian companies’ weaknesses. Only 53% of

Malaysian listed companies following a strategic plan or list announce that they are



Item 15 on Table 3 illustrate that all board meeting resolutions are 100% confidential

and only board members and major shareholders who have a seat in board can have

access to those data.

Based on our research, only 13% of Malaysian listed companies are widely held. It

means, the rest of companies have at least one major shareholder with more than 20%

of share directly or indirectly. This major shareholder can be Family, Government

linked company, or a financial institute. In a country with concentrated type of

ownership, 100% confidential board resolution may lead to some kind of insider

training which may lead to restricting minority shareholders.

Item 17 in Table 3 illustrates another lack in corporate board activity. Only 32% of

firms have a specific and manifest procedure for board member nomination. Others

just mention some ambiguous information about this process or do not mention any

thing. In some companies, they have specific nomination board committee which

majority of them are independent directors which their main responsibilities are as

follows:

• Identify and recommend candidates for Board directorship

• Recommend directors to fill the seats on Board Committee;



Items 18 and 19 also reveal that companies in Malaysia and Bursa Malaysia do not

consider any space for dissident or minority shareholders. Item 18 shows that the

companies does not keep any information about attendance in Annual General

Meeting (AGM). It is obvious that major shareholders or their proxy attend AGM and

it is not important for companies to show their minority shareholders also participate

in AGM.

Item 19 in Table 3 also reveals that even if dissident minority shareholders have

ability to raise their questions, companies do not consider any mechanism to inform

other shareholders about those issues. It is obvious that majority shareholders not

even are possible to raise any issue; they can influence board in any way because they

have some seats and nominees in board which present their opinion in board

meetings. They have this ability because they are holding more than 20% of the

company’s share in their hand and every time in AGM voting for new board members

they can influence votes.

On the other hand, it is very difficult for minority shareholders to even transfer their

opinions to the board members. In this study, we look at the ways investors can



or voting process about predefined resolutions. It is not even possible for minority

shareholders to raise their resolution in AGM.

In some companies the situation is better and there some or all the following ways to

raise your problems and issues through communicating with board members or their

nominee. The following items show some of the ways which companies use for

communication which unfortunately some of them are not bidirectional and just are

used as a way to inform shareholders or other stakeholders about companies’ status.

• The Annual Report

• The various disclosures and announcements made to the Bursa Malaysia

Securities Berhad including the Quarterly Results and Annual Results

• During the year, the Managing Director and/or key management personnel also

hold discussions with the press and analysts when necessary, to provide

information on the group’s or company’s strategy, performance and major

developments.

• Press briefing which is held after each Annual General Meeting.

•

Company’s website at www.XYZ.com.my.

• Sending query through website of the company.

• Only a few companies introduces a specific person as investor relation which all



Items 20 and 21 in Table 3 also illustrate one disadvantage and one advantage of

listing requirement rules for company disclosure.

Item 21 shows that according to the rules all companies should put their auditor’s

report in Annual Report. This is very helpful for shareholders and other stakeholders.

It shows that all the announced results and all the accounting data of company are

audited by a separate auditor and they are reliable which it is a positive point.

On the other hand, Item 20 in Table 3 shows that there is no information available

about the year of hiring of the external auditor. It seems to be a negative point since a

long relationship between firms and their auditors can influence the strictness of

auditors. A long relationship may cause auditors to behave more leniently to their

customers since firms are their long term customers and on the other hand they do not

want to lose them.

3.2.3. TDI Shareholder Sub-Index’s Notes

Based on listing requirement for Malaysian companies, they should reveal data related

to their shares and major shareholders. As Items 22 and 23 in Table 3 show 100% of

Malaysian listed companies follow this rule.



This section consists of following parts:

• Share Capital

o Number of authorized shares

o Share in use

o Issued and paid up

o Nominal Value

o Voting right for example 1 vote per each ordinary share

• Size and distribution of shareholding and corresponding percentage

• Location and country of shareholding

• Category of shareholding and their corresponding percentage

o Individual

o Banks/Finance Companies

o Investment Trusts/Foundations/Charities

o Government Agencies/Institutions

o Nominees

• List of 30 Largest Shareholders which shows numbers of shares and percent

of issued shares

• Substantial share holders

o Direct interest



Also if they have any subsidiary or any other kinds of shares such as warrant they

should reveal it in the Annual Report.

Beside the above information, all Malaysian listed companies reveal Director’s

Interest. They show how many shares and percentages of shares are owned directly or

indirectly by board members.

Items 24 and 25 reveal dividend policy of firms. Item 24 shows that only 54% of

Malaysian listed has a part to show their dividend policy in the past five years and

Item 25 illustrates that 70% of firms announce in advance about their next period

dividend policy. Revealing more data about dividend policy can increase investors’

confidence and persuade them for more investment.

3.3. Controlling Variables

To increase the confidence of the results, there are set of controls variables which are

included in the regressions. The study expects firm size may have a negative effect if

size is correlated with the exhaustion of growth opportunities, but may contrarily have

a positive impact whenever size is correlated with more diversification, greater

economies of scale and scope more professionalized management and less severe



Sales growth is a proxy for the product demand faced by the firm and its productivity.

Additionally, firms are classified into three broad sectors (production, services, and

others) that vary in productive technology and international tradability.

• Production: Industrial, Construction, Technology

• Service: Trading/Service, Consumer, Properties, Hotels

• Others: Plantation,

The percentage of independent board members also is important. On one hand, higher

percentage of independent board members can improve performance of company,

because they are not hired by managers and play supervisory role on behalf of

shareholders. On the other hand, because they are not full time, or they are chosen

from other fields, they can only consider as free riders who only attend meeting and

do not have any positive effect on performance and financial status of company.

Another factor we thought maybe is important in the ownership structure of company.

We call a company widely held when the major share holder has more than 20% of

the shares directly or indirectly. We thought this factor should have positive effect on

ROA, Tobin’s Q, Altman’s Z-score, and leverage ratios’ of company. Since the

company ownership is concentrated, the owner can employ his management team and



Because concentrated owner prefer to work with remaining cash flow from retained

earning instead of dividing it between minority shareholders.

At last but not the least is CEO duality. Some say this factor can increase performance

of factory because management team and board of directors are guided by one person

and CEO has more freedom to apply his plans. But others say that lack of supervision

on CEO from Chairman can increase the risk of misbehavior from CEO. In this

situation CEO may enter into some deals which only secure his benefits not

stakeholders’ opinion.

3.4. Sources of Data

The required data are exploited from many different sources. To find the list of

companies in Bursa Malaysia we refer to FTSE Indices. We have chosen our

companies among the following companies:

• FTSE Bursa Malaysia Large 30 Index: This tradable index comprises the 30

largest companies in the FTSE Bursa Malaysia (FBM) EMAS index by market

capitalization.

• FTSE Bursa Malaysia Mid 70 Index: Comprises the next 70 companies in the

FTSE Bursa Malaysia EMAS Index by full market capitalization



• FTSE Bursa Malaysia Small Cap Index: Comprises those eligible companies

within the top 98% of the Bursa Malaysia Main Board excluding constituents

of the FTSE Bursa Malaysia 100 Index.

• FTSE Bursa Malaysia Second Board Index: The FTSE Bursa Malaysia Second

Board Index comprises all eligible companies listed on the Second Board. No

liquidity screening is applied.

• FTSE Bursa Malaysia MESDAQ Index: The FTSE Bursa Malaysia MESDAQ

Index comprises all eligible companies listed on the MESDAQ Market. No

liquidity screening is applied.

All companies selected randomly. We exclude Banks and Finance companies from

our list because of their specific rules and regulations. Also, eliminate all utility and

affiliates of foreign firms.

To obtain required data, we used Bursa Malaysia official website, and Stock

Performance Guide (Malaysia) book published by Dynaquest SDN BHD, edition

March 2008. Beside two above sources of data, we extracted all 25 governance items

from companies’ 2006-2007 annual reports. For some specific data which we couldn’t

find them we used Business Week official website.



3.5. Theoretical Framework and Main Research Hypotheses

The final analysis has done by the following formulas:

Formula 1:

Formula 2:

Y is one of the 7 financial statuses of the companies.

Formula 1 shows the relationship between performance indicators and TDI sub-

indices. At this formula all the sub-indices including Board, Disclosure, and

Shareholding are used beside Control items.

In Formula 2 TDI is used as a whole number beside other controlling items.

The controlling factors are Size or Capital Market, Board Balance, Corporate

Ownership, and CEO Duality.

Figure 1 shows the theoretical framework and the relationship between 7 Independent



Ind

V

TD

TDI

B

C

pe

ria

DI - B

- Disc

- Share

Size

ard Ba

wners

EO Du

Figure 1:

de

les

ard

osure

holders

ance

ip

lity

heoretical Fra

t

mework

De

V

Divid

Divi

Alt

De

De

en

riab

ROA

obin's

end / E

dend /

an's Z-

bt / Ass

t / Equ

ent

les

rning

ales

core

ets

ties



Based on the hypothesis each of these transparency and disclosure indexes predicted

to have the following relationships on dependent variables:

Table 4: Estimation of effect of Independent Variables on Dependent Variables

Dependent Variable T D I

T D I ( B o a r d )

T D I ( D i s c l o s u r e )

T D I ( S h a r e h

o l d e r s )

B o a r d I n d e p

e n d e n c e

S i z e

O w n e r s h i p

C E O

D u a l i t y

ROA /- - /-

Tobin’s Q /- - /-

Dividend / Earning - -

Dividend / Sales - -

Altman’s Z Score

Debt / Assets - - - - - - -

Debt / Equity - - - - - - -

3.6. Scope of the Study

The 100 selected companies for this study, all are firms from first and second boards

in Bursa Malaysia which are selected randomly To come up with more exact



50 percent of its votes are directly controlled by a single foreign corporate owner.

Further, we banks and utilities were excluded from the sample, to prevent the

domination of this sample by these two industries.

All the collected data are related to 2007 financial year.



4. Data Analysis and Results

4.1. Descriptive Analysis

Table 5 shows number of observations, mean, median, standard deviation, maximum,

and minimum for corporate governance factors.

Table 5: Descriptive Data for Management and Ownership Data

TDI TDI1 TDI2 TDI3 BOARDIND LNSIZE WIDE CEO

Mean 16.19 6.15 6.80 3.24 46% 5.75 13% 15%

Median 16.00 6.00 7.00 3.00 43% 5.46 0.00 0.00

Maximum 21.00 8.00 9.00 4.00 89% 10.09 1.00 1.00

Minimum 11.00 4.00 5.00 2.00 27% 2.83 0.00 0.00

Std. Dev. 2.32 1.00 1.16 0.77 14% 1.53 0.34 0.36

Skewness -0.04 -0.31 0.08 -0.44 1.04 0.79 2.18 1.94

Kurtosis 2.26 2.54 2.15 1.82 3.55 3.13 5.77 4.78

Some important notes of Table 5:



• CEO duality in Malaysia does not have a high rate (15%)

• Rules and Regulations are not enough to force companies to reveal all

required data for transparency. The gap between companies in TDI factor and

its sub-Indices is high.

o TDI Max = 21 while TDI Min = 11

o TDI Board Max = 8 while TDI Board Min = 4

o TDI Disclosure Max = 9 while TDI Disclosure Min = 2

o TDI Shareholders Max = 4 while TDI Shareholder Min = 2



Table 6 shows descriptive information for Dependent Variables.

Table 6: Dependent Variables Descriptive Analysis

ROA TOBIN DIV/EARNING DIV/SALE ZSCORE DEBT/ASSET DEBT/EQUITY

Mean 6% 4.52 159% 5% 4.16 37% 80%

Median 6% 1.75 29% 2% 3.14 39% 64%

Maximum 52% 85.50 12317% 53% 20.12 83% 475%

Minimum -30% 0.17 -172% 0% 0.65 5% 5%

Std. Dev. 10% 11.34 1229% 9% 3.37 19% 75%

Skewness 0.73 5.47 9.83 3.64 2.20 0.16 2.19

Kurtosis 10.57 35.29 97.71 18.30 8.34 2.01 10.30



4.2. Correlation between Independent Variables

Table 8 shows Corporate Governance and Ownership Correlation Matrix which

shows significant at 5% with bold.

Table 7: Corporate Governance and Ownership Correlation Matrix

TDI TDI1 TDI2 TDI3 BOARDIND LNSIZE WIDE CEO

TDI 1.0000

TDI1 0.7909 1.0000

TDI2 0.8615 0.5084 1.0000

TDI3 0.6772 0.3083 0.4205 1.0000

BOARDIND -0.0050 -0.0501 0.0069 0.0396 1.0000

LNSIZE 0.5064 0.3066 0.5695 0.2647 -0.0373 1.0000

WIDE -0.0843 0.0009 -0.0356 -0.2010 0.0244 -0.0757 1.0000

CEO -0.0841 -0.0641 -0.1213 0.0134 -0.0522 0.0006 0.0025 1.0000

T bl 7 ill t t th t t hi h l ti b t TDI d TDI B d (



between Independent Variables. These two relations also do not cause any problem

because they are used separately in regressions.

4.3. Regression Analysis

Tables 8 to 14 show the regression of ROA, Tobin’s Q, Dividend on Earning,

Dividend on Sales, Altman’s Z-Score, Debt on Assets, and Debts on Equities, against

the TDI sub-indices with controlling variable.

Table 8: ROA as Dependent Variable

Method: Least Squares

Variable Coefficient Std. Error t-Statistic Prob.

TDI1 -0.003249 0.009013 -0.360433 0.7193

TDI2 0.018352 0.010194 -1.800338 0.0751

TDI3 0.024882 0.012605 1.973960 0.0514

BOARDIND -0.047127 0.056134 -0.839544 0.4033

LNSIZE 0.027769 0.006913 4.016946 0.0001

WIDE -0.038316 0.026001 -1.473630 0.1440

CEO -0.017854 0.024062 -0.741985 0.4600

R-squared 0.259946 Mean dependent var 0.063342

Adjusted R-squared 0.211681 S.D. dependent var 0.096274

S.E. of regression 0.085479 Akaike info criterion -2.013006

Sum squared resid 0.672215 Schwarz criterion -1.829512

Log likelihood 106.6438 Durbin-Watson stat 2.081316

Table 8 illustrates that TDI-Disclosure and TDI-Shareholders have significant

T bl 9 T bi ’ D d V i bl



Table 9: Tobin’s as Dependent Variable



TDI1 -1.478181 1.032954 -1.431023 0.1558

TDI2 -0.165463 1.168299 -0.141627 0.8877

TDI3 -0.749238 1.444665 -0.518624 0.6053

BOARDIND -10.70727 6.433408 -1.664323 0.0995

LNSIZE 3.878258 0.792272 4.895112 0.0000WIDE -2.686535 2.979937 -0.901541 0.3697

CEO 3.486965 2.757753 1.264423 0.2093



S.E. of regression 9.796631 Akaike info criterion 7.470037

Sum squared resid 8829.607 Schwarz criterion 7.653530

Log likelihood -362.7668 Durbin-Watson stat 2.087302

Table 9 illustrates that Board Independence (significant at 10%) and Size (significant

at 5%) have a negative effect on Tobin’s Q which are on contrast with the first

hypothesis. Increase in Board Independence means directors from other fields which

may have less experience or interest in company. This increase can reduce the

performance of board of directors which has a negative effect on Tobin’s Q.

Also Size shows again a positive effect on performance of company. This means

bigger companies in Malaysia have better performance in comparison with their

smaller counter parts.

T bl 10 Di id d/E i D d t V i bl



Table 10: Dividend/Earning as Dependent Variable



TDI1 -1.880107 1.327632 -1.416136 0.1601

TDI2 1.537754 1.501588 1.024085 0.3085

TDI3 1.028724 1.856794 0.554032 0.5809

BOARDIND 3.820185 8.268707 0.462005 0.6452

LNSIZE -0.424548 1.018288 -0.416923 0.6777WIDE -0.634703 3.830042 -0.165717 0.8687

CEO -0.852145 3.544474 -0.240415 0.8105


Adjusted R-squared -0.039201 S.D. dependent var 12.35161




Table 10 reveals that none of corporate governance and ownership factors do not have

significant effect on Dividend/Equity.

Table 11: Dividend/Sales as Dependent Variable



Table 11: Dividend/Sales as Dependent Variable



TDI1 -0.005626 0.008773 -0.641367 0.5229

TDI2 -0.016329 0.009922 -1.645698 0.1032

TDI3 0.011712 0.012269 0.954597 0.3423

BOARDIND 0.024991 0.054637 0.457402 0.6485

LNSIZE 0.026624 0.006728 3.956933 0.0001WIDE -0.015314 0.025308 -0.605121 0.5466

CEO -0.021197 0.023421 -0.905037 0.3678






Table 11 illustrates that size is again has a significant positive effect on Dividend /

Sales (Significant at 10%). This reveals the fact that mature companies instead of

keeping their free cash flow as retained earnings for further investing and growth,

prefer to pay it to their shareholders as dividend.



Table 12: Altman's Z-Score as Dependent Variable



TDI1 0.189712 0.340287 0.557506 0.5785

TDI2 0.705485 0.384874 -1.833027 0.0700

TDI3 0.465310 0.475918 0.977712 0.3308

BOARDIND 4.221937 2.119365 1.992077 0.0493

LNSIZE 0.730739 0.260999 2.799778 0.0062

WIDE 0.697329 0.981684 0.710339 0.4793

CEO 0.582988 0.908490 0.641711 0.5227




Sum squared resid 958.2320 Schwarz criterion 5.432755Log likelihood -252.8384 Durbin-Watson stat 1.792441

Table 12 shows that TDI-Disclosure, Board Independence, and Size have cause

reduction of the risk of companies. Those factors can cause increase in Altman’s Z-

Score which shows the reduction in risk.

Also Size can reduce the risk of a firm. Bigger Size shows more stable business and

higher Working Capital and easier access to other kinds of funds which can reduce the

risk.

Table 13: Dept/Assets as Dependent Variable



p p



TDI1 0.029063 0.020824 1.395697 0.1662

TDI2 0.034701 0.023552 1.473373 0.1441

TDI3 -0.016711 0.029123 -0.573802 0.5675

BOARDIND -0.015253 0.129693 -0.117606 0.9066

LNSIZE 0.001942 0.015972 0.121579 0.9035WIDE 0.028370 0.060073 0.472253 0.6379

CEO 0.014697 0.055594 0.264370 0.7921






Table 14: Debt/Equity as Dependent Variable



TDI1 0.093622 0.080771 1.159112 0.2494

TDI2 0.033090 0.091354 0.362213 0.7180

TDI3 -0.016360 0.112964 -0.144823 0.8852

BOARDIND -0.163052 0.503053 -0.324124 0.7466

LNSIZE 0.020930 0.061951 0.337847 0.7362

WIDE 0.058155 0.233013 0.249578 0.8035

CEO -0.008705 0.215639 -0.040367 0.9679




Sum squared resid 53 98670 Schwarz criterion 2 556402



Table 13 and 14 reveals that TDI sub-indices and other controlling factors do not have

any significant effect on Capital Structure of company.

The overall assessment is that the TDI has a positive and significant effect on ROA,

Tobin’s Q, Dividend/Earning, Dividend/Sales, but not for Altman’s Z-score and

Leverage of company.

Tables 15 to 21 show the regression of ROA, Tobin’s Q, Dividend on Earning,



g , Q, g,

Dividend on Sales, Altman’s Z-Score, Debt on Assets, and Debts on Equities, against

the whole TDI with controlling variable.

Table 15: ROA as Dependent Variable



TDI -0.002635 0.002933 -0.898657 0.3711

BOARDIND -0.044884 0.057162 -0.785208 0.4343

LNSIZE 0.023988 0.006688 3.586810 0.0005

WIDE -0.050441 0.025857 -1.950798 0.0541

CEO -0.010895 0.024289 -0.448549 0.6548






Table 16: Tobin's Q as Dependent Variable





TDI 0.829854 0.327231 -2.535989 0.0129

BOARDIND -10.63602 6.378543 -1.667469 0.0987

LNSIZE 4.017654 0.746269 5.383657 0.0000

WIDE -2.771222 2.885266 -0.960474 0.3393

CEO 3.334074 2.710365 1.230120 0.2217






Table 17: Dividend /Earning as Dependent Variable



TDI 0.031387 0.424749 0.073896 0.9412

BOARDIND 4.090458 8.279423 0.494051 0.6224

LNSIZE -0.121869 0.968665 -0.125811 0.9002

WIDE -1.217842 3.745109 -0.325182 0.7458

CEO -1.106273 3.518085 -0.314453 0.7539

R-squared -0.000078 Mean dependent var 1.601336

Adjusted R-squared -0.042634 S.D. dependent var 12.35161S.E. of regression 12.61216 Akaike info criterion 7.956386



Table 18: Dividend / Sale as Dependent Variable





TDI -0.005765 0.002808 -2.052945 0.0429

BOARDIND 0.026362 0.054742 0.481574 0.6312

LNSIZE 0.024100 0.006405 3.762900 0.0003

WIDE -0.022975 0.024762 -0.927849 0.3559

CEO -0.016635 0.023261 -0.715150 0.4763






Table 19: Altman's Z-Score as Dependent Variable



TDI -0.081596 0.109331 -0.746322 0.4573

BOARDIND 4.238145 2.131127 1.988687 0.0496LNSIZE 0.589619 0.249335 2.364769 0.0201

WIDE 0.477894 0.963992 0.495745 0.6212

CEO 0.797276 0.905556 0.880427 0.3809




Sum squared resid 990.6618 Schwarz criterion 5.373207Log likelihood -254.4860 Durbin-Watson stat 1.716506

Table 20: Debt / Assets as Dependent Variable





TDI 0.021037 0.006643 3.166687 0.0021

BOARDIND -0.019048 0.129491 -0.147096 0.8834

LNSIZE 0.005456 0.015150 0.360108 0.7196

WIDE 0.045550 0.058574 0.777645 0.4387

CEO 0.007077 0.055023 0.128622 0.8979

R-squared -0.011109 Mean dependent var 0.374748





Table 21: Debt / Equity as Dependent Variable



TDI 0.046844 0.025596 1.830161 0.0704

BOARDIND -0.172741 0.498922 -0.346228 0.7299

LNSIZE 0.019054 0.058372 0.326427 0.7448

WIDE 0.089456 0.225682 0.396379 0.6927

CEO -0.012529 0.212001 -0.059098 0.9530

R-squared 0.013626 Mean dependent var 0.804052 Adjusted R-squared -0.028347 S.D. dependent var 0.749466




4.4. Regression Results



Table 22 sums up the whole results in one table.

Positive sign () is used when there is a significant positive effect on Dependent

Variable.

Negative sign (-) is used when there is a significant negative effect on Dependent

Variable.

Cross sign () is used to show that there is no significant relationship.

Table 22: Regression Summary

Dependent Variable T D I

T D I ( B o a r d )

T D I ( D i s c l o s u r e )

T D I ( S h a r e h o l d e r s )

B o a r d I n d e p e n d e n c e

S i z e

O w n e r s h i p

C E O

D u a l i t y

ROA

Tobin’s Q -

Dividend / Earning

Dividend / Sales

Altman’s Z Score

Debt / Assets

5. Conclusion



Two goals were followed in this research. First, it gathers, a comprehensive

quantitative measures on the quality of the corporate governance and the ownership

structure in 100 non-financial listed companies in Malaysia with information for

financial year 2007 which are available in Appendices A to D. To do it, a wide array

of official and private sources was used. In summary, companies in Malaysia seem to

follow Code of Corporate Governance. In turn, ownership appears to be quite

concentrated at the level of the largest ultimate shareholder which our data showed

that only 13% of companies are widely held and 87% of remaining are on the hand of

major shareholders directly or through pyramiding. Second, this study tests the

predictions of recent theories linking those measures with corporate performance and

dividend policy in 2007.

The results of this study show a significant positive effect of TDI and its sub-indices

on all performance indicators except Dividend / Earning. Size also has a significant

positive effect on performance and dividend payment of company. While Board

Independence can decrease the Tobin’s Q of a company by reducing the efficiency of

board of directors, it can increase the Altman’s Z-score which causes a reduction in

liquidation of company. It means diversity of board members and supervision of

Any policy recommendation emerging from this research should take into account



that improving corporate governance entails the consideration of both the private and

the public interest. Controlling shareholders will not be inclined to cooperate with

such change unless the incremental benefits (acting as regular shareholders) outweigh

the loss of their private benefits of control. The evidence reported here on the ROA-

governance nexus will hopefully be taken into account by insiders. Less apparent are

the benefits from higher Tobin’s Q.

But corporate governance is, at the same time, a public policy issue in that

uninformed minority shareholders should be legally protected against expropriation.

Raising awareness among investors and businesses about improving corporate

governance is a first, obvious step that should be taken by the authorities to stimulate

a cultural change in this area. Likewise, our average TDI scores suggest that

disclosure requirements frequently found in other emerging and developed markets

should be put in place.

In addition, a compulsory, full-fledged regime of strict governance provisions may be

self-defeating as long as some companies may ultimately decide to delist, and

delisting is another chronic problem of the Malaysian stock exchange that forms part

between the adequate protection of minority shareholders and the incentive structure



of controlling shareholders should be attained in designing corporate governance

reforms.

The other areas which are open to see their results in performance and risk of

company are as follows:

• Board and executive remuneration program

• The effect of options and other incentives to motivate board members for

better performance

• Board dedication which means busy board members which are working in

several companies do have any effect on performance of firm

• The industry which can play a dummy role in controlling variables

6. References



Anderson, R. C. and Reeb, D. M. (2002) Founding family Ownership, CorporateDiversification, and Firm Leverage, http://www.cba.ua.edu/

~dreeb/Fam_diversification_Aug07_2002.pdf

Baysinger, B., and H. Butler, 1985, Corporate governance and the board of directors:

performance effects of changes in board composition, Journal of Law, Economics,

and Organization 1, 101–124.

Black, F., (1976) The dividend puzzle, Journal of portfolio management, 2, 5–8.

Bebczuk, R., (2005) Corporate governance and ownership: measurement and impact

on corporate performance and dividend policies in Argentina. Center for Financial

Stability working paper.

Cheng, S. (2003) Time to Revamp Insider Boards, National Real Estate Investor, 45,

72.

Claessens, S., Djankov, S. and Lang, L. H. P. (2000) The Separation of Ownership

and Control in East Asian Corporations, Journal of Financial Economics, 58, 81–112.

Coles, J.W., Mc Williams, V.B. and Sen, N. (2001) “An Examination Of The

Relationship Of Governance Mechanisms To Performance”, Journal of Management,

Volume 27, pp. 23-50.

Demsetz, H. and Villalonga, B. (2001) Ownership Structure and Corporate

Performance, Journal of Corporate Finance, 7, 209–233.

Denis, David, and Diane Denis, 1994,Majority owner-managers and organizational

efficiency, Journal of Corporate Finance 1, 91,118.

Ferris, S., N. Sen, and H. Yui, 2006, God save the queen and her dividends: Corporate

payouts in the United Kingdom, Journal of Business 70, 1149-1173.

Gompers, P., Ishii, J.L. and Metrick, A., (2003) Corporate governance and equity

prices. Quarterly journal of economics, 118, 107–155.

Haniffa, R. and Cooke, T. (2000) Culture, Corporate Governance and Disclosure in

Malaysian Corporations. Paper presented at the Asian AAA World Conference,



y p p p ,

Singapore, 28–30 August.

Hermalin, B. E. and M. S. Weisbach, “The Effects of Board Composition and Direct

Incentives on Firm Performance,” Financial Management 20 (1991), pp. 101–112.

Houle, C. O. (1990) Who Should be on your Board?, Nonprofit World, 8, 33–35.

Jensen, Michael, and William Meckling, 1976, Theory of the firm: Managerial

behavior, agency costs, and ownership structure. Journal of Financial Economics 3,305-360.

Klein, A. (2002) Economic Determinants of Audit Committee Independence, The

Accounting Review, 77, 2, 435–452.

La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R. (1998) Law and

Finance, Journal of Political Economy, 106(6), 1113–1155.

La Porta, et al. (1999) Agency Problems and Dividend Policies Around the World,

Cambridge, United States: Harvard University.

La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R., (2000), Investor protection and corporate governance. Journal of financial economics, 58 (1–2), 3–27.

La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R., (2002), Agency problems and dividend policies around the world. Journal of finance, 55 (1), 1–33.

Lim, M. H. (1981) Ownership and Control of the One Hundred Largest Corporations

in Malaysia. Kuala Lumpur: Oxford University Press.

Lins, K. V. (2003) Equity Ownership and Firm Value in Emerging Markets, Journal

of Financial and Quantitative Analysis, 38, 159–184.

MacAvoy, P., S. Cantor, J. Dana, and S. Peck. 1983. “ALI Proposals for Increased

Control of the Corporation by the Board of Directors: An Econometric Analysis.”

Statement of the Business Roundtable on the American Law Institute’s proposed

Principles of Corporate Governance and Structure: Restatement and

Malaysia, The Central Bank and the Financial System in Malaysia- A Decade of

Change(1999): Bank Negara Malaysia.



g ( ) g y

McConaughy, D. L. (2000) Family CEOs vs. Nonfamily CEOs in the Family-

Controlled Firm: an examination of the level and sensitivity of pay to performance,

Family Business Review, 13, 121–131.

Mehran, Hamid. 1995. “Executive Compensation Structure, Ownership, and Firm

Performance.” Journal of Financial Economics 38(2). 163-184.

Mitton, T., 2002, A cross-firm analysis of the impact of corporate governance on theEast Asian financial crisis, Journal of Financial Economics 64, 215-241.

Nagar, V., Petroni, K. and Wolfenzon, D. (2000) Ownership Structure and Firm

Performance in Closely-Held Corporations, University Chicago.

Park, Y. W. and Shin, H. H. (2003) Board Composition and Earnings Management in

Canada, Journal of Corporate Finance, 185, 1–27.

Redding, S. G. (1996) Weak Organizations and Strong Linkages: managerial Ideology

and Chinese family networks. In G. G. Hamilton (ed.) Asian Business Networks.

Berlin: Walter de Gruyter.

Rosenstein, Stuart, and Jeffrey G. Wyatt. 1990. “Outside Directors, Board

Independence, and Shareholder Wealth.” Journal of Financial Economics 26(2). 175-

191.

Shankar, S. J. (1999) Crusade for Better Governance, New Strait Times, 4 May, 13.

Suto, M. (2003) Capital Structure and Investment Behaviour of Malaysian Firms in

the 1990s: a study of corporate governance before the crisis, Corporate Governance,11, 25–39.

Wiwattanakantang, Y. (2001) Controlling Shareholders and Corporate Value:evidence from Thailand, Pacific-Basin Finance Journal, 9, 323–362.

Yermack, David, 1997, Good timing: CEO stock option awards and company news

announcements Journal of Finance 52 449 476



Appendix A: Financial Status of Companies (Dependent Variables)

Company ROA Tobin's Q

Dividend /

Earning

Dividend /

Sales

Z score

Debt /

Assets

Debt /

Equities

A & M REALTY BHD 9.86% 1.40 5.78% 3.44% 3.16 63.42% 173.38%

ALUMINIUM COMPANY OF MALAYSIA BHD 5.66% 1.03 52.25% 1.87% 5.99 14.12% 16.45%

AMWAY (M) HOLDINGS BHD 29.69% 6.45 75.17% 11.31% 13.71 23.69% 31.05%

APOLLO FOOD HOLDINGS BHD 13.00% 2.65 59.63% 9.49% 9.92 9.59% 10.61%

ASTINO BHD 7.83% 1.24 28.63% 1.65% 3.01 46.97% 88.57%

ATIS CORPORATION BHD 5.54% 2.62 0.00% 0.00% 2.54 54.23% 118.48%

BINA PURI HOLDINGS BHD 1.43% 0.80 43.51% 0.50% 1.36 82.60% 474.70%

BOLTON BHD 7.82% 0.89 9.33% 1.78% 1.83 51.51% 106.21%

BRITISH AMERICAN TOBACCO (M) BHD 51.72% 85.50 128.34% 24.52% 12.52 75.56% 309.16%

CARLSBERG BREWERY MALAYSIA BHD 13.29% 8.24 105.18% 9.20% 10.91 20.18% 25.28%

CHIN WELL HOLDINGS BHD 3.13% 1.90 47.18% 2.10% 2.21 47.72% 91.29%

CYCLE & CARRIAGE BINTANG BHD 1.71% 2.10 109.77% 1.17% 4.25 26.76% 36.55%

CYMAO HOLDINGS BHD -3.26% 0.60 -66.25% 2.09% 4.83 11.58% 13.10%

DAIMAN DEVELOPMENT BHD 4.32% 1.65 36.01% 15.73% 4.48 8.30% 9.05%

DK LEATHER CORPORATION BHD -12.55% 2.45 0.00% 0.00% 3.22 38.94% 63.77%

DOMINANT ENTERPRISE BHD 8.72% 1.04 27.66% 1.35% 3.49 45.76% 84.35%


Dividend /

Earning

Dividend /

Sales

Z score

Debt /

Assets

Debt /

Equities



g q

EASTERN PACIFIC INDUSTRIAL CORP. BHD 8.40% 1.72 39.66% 6.90% 5 19.13% 23.66%

ENG KAH CORPORATION BHD 11.49% 2.83 110.45% 19.35% 12.71 12.32% 14.06%

ENG TEKNOLOGI HOLDINGS BHD 3.45% 1.25 48.22% 1.43% 1.97 52.53% 110.67%

ESSO MALAYSIA BHD 2.16% 6.36 41.56% 0.24% 4.14 74.83% 297.34%

ESTHETICS INTERNATIONAL GROUP BHD 9.96% 1.40 41.25% 4.55% 4.02 23.62% 30.92%

FABER GROUP BERHAD 6.35% 0.82 10.48% 0.81% 2.13 50.78% 103.15%

FACB INDUSTRIES INCORPORATED BHD 3.95% 0.61 18.23% 0.72% 1.97 47.83% 91.69%

FIMA CORPORATION BHD 11.08% 2.18 32.37% 5.68% 4.42 19.40% 24.07%

FORMOSA PROSONIC INDUSTRIES BHD 0.01% 0.96 12316.50% 0.43% 3.11 36.46% 57.38%

GAMUDA BHD 3.72% 3.14 181.32% 22.17% 2.21 40.00% 66.68%

GENTING BHD 6.60% 65.00 49.91% 11.70% 3.53 28.58% 40.01%

GHL SYSTEMS BHD 0.76% 0.59 81.68% 1.35% 4.5 17.95% 21.88%

GRAND CENTRAL ENTERPRISES BHD 4.89% 0.70 32.49% 7.92% 3.42 11.89% 13.49%

HAP SENG CONSOLIDATED BHD 8.58% 2.58 152.32% 11.24% 5.7 17.02% 20.51%

HIAP TECK VENTURE BHD 7.54% 3.20 8.25% 0.46% 3.12 56.32% 128.96%

HIROTAKO HOLDINGS BHD 3.37% 1.09 62.82% 4.16% 3.55 13.77% 15.97%

HOVID BHD 5.28% 2.65 25.01% 2.85% 1.89 57.51% 135.35%

HUNZA PROPERTIES BHD 7.52% 1.99 32.73% 6.88% 2.61 46.39% 86.53%

HUP SENG INDUSTRIES BHD 3.06% 1.20 90.76% 2.24% 3.43 26.53% 36.11%


Dividend /

Earning

Dividend /

Sales

Z score

Debt /

Assets

Debt /

Equities



I-BHD 1.16% 1.20 109.13% 52.29% 5.6 10.56% 11.80%

IGB CORP BERHAD 3.22% 3.12 27.21% 5.53% 2.53 35.62% 55.33%

INTI UNIVERSAL HOLDINGS BHD 0.58% 2.06 117.17% 1.78% 2.03 28.05% 38.99%

IPMUDA BHD 0.79% 0.89 0.00% 0.00% 2.45 63.51% 174.05%

JAYCORP BHD 6.44% 1.30 32.73% 1.41% 3.35 38.92% 63.72%

JOHORE TIN BHD -3.34% 0.48 -38.00% 1.75% 2.24 29.22% 41.29%

KENCANA PETROLEUM BHD 9.82% 15.50 0.00% 0.00% 5.24 62.21% 164.65%

KNM GROUP BHD 15.60% 24.63 7.22% 1.11% 7.08 53.63% 115.64%

KPJ HEALTHCARE BHD 6.41% 3.10 28.27% 1.89% 2.18 53.38% 114.49%

KSL HOLDINGS BHD 17.27% 2.00 19.88% 8.44% 6.6 14.26% 16.63%

KUALA LUMPUR CITY CORPORATION BHD 2.24% 0.90 0.00% 0.00% 9.59 5.01% 5.28%

LANDMARKS BHD 37.86% 2.32 1.26% 14.28% 3.45 18.98% 23.42%

LB ALUMINIUM BHD 4.53% 0.86 32.74% 1.40% 2.44 43.70% 77.63%

LBS BINA GROUP BHD 0.48% 0.40 0.00% 0.00% 0.99 66.66% 199.90%

LINGUI DEVELOPMENT BHD 8.16% 2.70 12.69% 1.98% 2.28 46.38% 86.49%

LION DIVERSIFIED HOLDINGS BHD 9.66% 2.54 3.05% 0.36% 2.1 49.93% 99.73%

MAGNI-TECH INDUSTRIES BHD 2.59% 0.91 88.71% 1.91% 3.15 26.95% 36.89%

MAGNUM CORPORATION BHD 23.84% 6.72 232.44% 32.28% 12.99 15.86% 18.84%

MALAYSIA AICA BHD -12.38% 1.24 0.00% 0.00% 20.12 5.28% 5.58%


Dividend /

Earning

Dividend /

Sales

Z score

Debt /

Assets

Debt /

Equities



MALAYSIAN AIRLINE SYSTEM BHD 8.47% 3.84 0.00% 0.00% 3.01 60.74% 154.69%

MALAYSIAN BULK CARRIERS BHD 24.89% 17.44 58.76% 52.62% 8.07 18.90% 23.30%

MALAYSIAN PACIFIC INDUSTRIES BHD 8.28% 17.40 60.40% 5.36% 3.84 39.23% 64.56%

MEGA FIRST CORPORATION BHD 8.09% 1.21 16.39% 1.88% 2.78 30.14% 43.14%

METACORP BHD 15.22% 0.98 6.28% 5.87% 3.36 15.17% 17.88%

MUDA HOLDINGS BHD 2.07% 0.87 33.98% 0.82% 1.55 52.11% 108.79%

MYCRON STEEL BHD 5.14% 0.70 12.33% 0.56% 1.97 41.68% 71.46%

NALURI CORPORATION BHD 0.00% 0.74 0.00% 0.00% 2.2 23.33% 30.42%

NATIONWIDE EXPRESS COURIER SERVICES 7.11% 0.88 55.58% 3.99% 10.12 6.87% 7.37%

NIKKO ELECTRONICS BHD -30.44% 0.17 0.00% 0.00% 0.78 30.17% 43.20%

NTPM HOLDINGS BHD 11.35% 0.98 13.05% 3.35% 3.54 39.38% 64.96%

OCB BHD 0.51% 0.72 81.56% 0.40% 2.16 47.97% 92.19%

PADINI HOLDINGS BHD 16.11% 6.56 46.09% 4.57% 5.34 26.78% 36.57%

PARAMOUNT CORPORATION BHD 7.41% 2.18 29.02% 4.77% 2.71 30.74% 44.38%

PCCS GROUP BHD 2.09% 0.76 35.78% 0.50% 2.36 51.57% 106.50%

PELIKAN INT.CORPORATION BHD 6.06% 3.32 26.94% 2.10% 2.22 66.53% 198.78%

PERAK CORPORATION BHD 2.12% 0.89 13.48% 1.58% 1.63 29.68% 42.21%

PHARMANIAGA BHD 5.69% 3.24 32.04% 1.36% 2.63 58.80% 142.72%

POH KONG HOLDINGS BHD 4.38% 1.01 28.98% 1.29% 3.02 43.61% 77.34%


Dividend /

Earning

Dividend /

Sales

Z score

Debt /

Assets

Debt /

Equities



POS MALAYSIA BHD -2.70% 3.40 -172.22% 6.75% 4.2 30.94% 44.80%

PRESTAR RESOURCES BHD 4.09% 1.02 98.18% 3.93% 2.02 55.85% 126.52%

PRICEWORTH WOOD PRODUCTS BHD 4.52% 1.28 15.73% 0.75% 1.8 61.70% 161.08%

QSR BRANDS BHD 8.44% 2.10 29.91% 4.30% 2.67 39.98% 66.62%

RESORTS WORLD BHD 16.65% 33.06 15.74% 5.63% 13.33 12.26% 13.97%

SAUJANA CONSOLIDATED BHD -1.53% 0.60 0.00% 0.00% 1.21 23.86% 31.33%

SEG INTERNATIONAL BHD 1.67% 0.65 25.23% 1.48% 0.65 49.33% 97.37%

SHANGRI-LA HOTELS (M) BHD 7.50% 2.38 33.04% 6.21% 3.67 24.62% 32.66%

SOUTH MALAYSIA INDUSTRIES BHD 2.32% 0.22 0.00% 0.00% 1.29 60.06% 150.37%

SOUTHERN ACIDS (M) BHD 3.26% 1.78 58.23% 2.22% 4.53 12.95% 14.87%

STAR PUBLICATIONS (M) BHD 10.27% 3.46 72.04% 15.12% 5.48 25.97% 35.08%

TANJONG PUBLIC LIMITED COMPANY 4.57% 2.09 46.47% 9.47% 1.4 69.68% 229.84%

TEXCHEM RESOURCES BHD 2.66% 1.28 55.40% 0.79% 2.55 66.99% 202.91%

THE STORE CORPORATION BHD 4.66% 2.81 8.26% 0.18% 3.2 59.73% 148.33%

TONG HERR RESOURCES BHD 19.06% 2.86 19.96% 2.67% 9.92 12.82% 14.71%

TOP GLOVE CORPORATION BHD 9.85% 9.32 26.65% 2.25% 5.71 39.53% 65.37%

TRADEWINDS CORPORATION BHD 1.45% 0.69 0.00% 0.00% 0.85 33.87% 51.22%

TRANSMILE GROUP BHD -23.55% 2.05 0.00% 0.00% 1.94 62.39% 165.86%

TRC SYNERGY BHD 8.11% 1.75 8.06% 0.56% 3.67 38.88% 63.62%


Dividend /

Earning

Dividend /

Sales

Z score

Debt /

Assets

Debt /

Equities



UEM WORLD BHD 7.84% 3.00 2.63% 0.28% 1.84 58.01% 138.16%

UNIMECH GROUP BHD 8.57% 1.74 16.16% 2.02% 3.62 23.28% 30.35%

UNISEM (M) BHD 6.97% 2.48 39.61% 4.85% 1.94 51.82% 107.54%

UNITED MALAYAN LAND BHD 3.76% 1.49 37.85% 4.45% 2.75 27.99% 38.87%

UPA CORPORATION BHD 7.94% 1.46 31.87% 3.49% 3.25 25.48% 34.19%

YEE LEE CORPORATION BHD 2.49% 1.10 16.42% 0.33% 1.85 59.94% 149.61%

YI-LAI BHD 8.33% 1.90 86.12% 13.49% 7.35 10.94% 12.28%

YTL CEMENT BHD 6.45% 8.68 32.01% 4.49% 2.48 45.52% 83.55%

Appendix B: Financial Status of Company (Independent Variables)



Company Market Capital Shares Par Value Sales 2007 Dividend (sen)

A & M REALTY BHD 253.91 362.73 0.5 115.93 1.1

ALUMINIUM COMPANY OF MALAYSIA BHD 138.36 134.33 1 395.5 5.5

AMWAY (M) HOLDINGS BHD 1060.29 164.39 1 584.25 40.2

APOLLO FOOD HOLDINGS BHD 212 80 1 154.27 18.3

ASTINO BHD 80.05 128.61 0.5 289.06 3.7

ATIS CORPORATION BHD 208.02 158.79 0.5 452.24 0

BINA PURI HOLDINGS BHD 66.13 82.67 1 612.55 3.7

BOLTON BHD 285.53 320.82 1 325.33 1.8

BRITISH AMERICAN TOBACCO (M) BHD 12206.41 285.53 0.5 3830.87 329

CARLSBERG BREWERY MALAYSIA BHD 1259.68 305.75 0.5 897.53 27

CHIN WELL HOLDINGS BHD 258.91 272.53 0.5 389.8 3

CYCLE & CARRIAGE BINTANG BHD 211.56 100.75 1 630.35 7.3

CYMAO HOLDINGS BHD 45 75 1 179.03 5

DAIMAN DEVELOPMENT BHD 355.52 215.01 1 99.81 7.3

DK LEATHER CORPORATION BHD 147.86 301.75 0.2 128.36 0


DOMINANT ENTERPRISE BHD 64.48 124 0.5 275.23 3



EASTERN PACIFIC INDUSTRIAL CORP. BHD 290.72 168.95 1 176.2 7.2

ENG KAH CORPORATION BHD 174.97 61.83 1 65.2 20.4

ENG TEKNOLOGI HOLDINGS BHD 148.87 119.1 1 500.59 6

ESSO MALAYSIA BHD 858.9 270 0.5 9740.49 8.8

ESTHETICS INTERNATIONAL GROUP BHD 92.4 132 0.5 124.66 4.3

FABER GROUP BERHAD 295.85 363 1 669.68 1.5

FACB INDUSTRIES INCORPORATED BHD 51.17 83.88 1 466.57 4

FIMA CORPORATION BHD 177.22 81.3 1 157.31 11

FORMOSA PROSONIC INDUSTRIES BHD 78.82 82.11 1 571.65 3

GAMUDA BHD 6286.72 2001.35 1 1516.36 16.8

GENTING BHD 24073.17 3703.56 0.1 8483.82 26.8

GHL SYSTEMS BHD 40.96 138.86 0.5 51.34 0.5

GRAND CENTRAL ENTERPRISES BHD 137.9 197 1 54.7 2.2

HAP SENG CONSOLIDATED BHD 1606.46 622.66 1 2244.46 40.5

HIAP TECK VENTURE BHD 523.84 327.4 0.5 1281.05 1.8

HIROTAKO HOLDINGS BHD 97.16 178.28 0.5 124.2 2.9

HOVID BHD 201.95 762.08 0.1 186.86 0.7


HUNZA PROPERTIES BHD 281.11 141.12 1 186.73 9.1



HUP SENG INDUSTRIES BHD 72 60 1 193.12 7.2

I-BHD 127.68 106.4 1 4.07 2

IGB CORP BERHAD 2324.34 1489.72 0.5 673.93 2.5

INTI UNIVERSAL HOLDINGS BHD 217.24 210.91 0.5 130.35 1.1

IPMUDA BHD 64.5 72.47 1 619.55 0

JAYCORP BHD 89.21 137.25 0.5 282.94 2.9

JOHORE TIN BHD 31.67 65.98 1 82.88 2.2

KENCANA PETROLEUM BHD 1398.1 902 0.1 824.28 0

KNM GROUP BHD 6445.47 1046.58 0.25 1230.12 1.3

KPJ HEALTHCARE BHD 644.38 207.75 1 1108.31 10.1

KSL HOLDINGS BHD 355.49 355.45 0.5 278.09 6.6

KUALA LUMPUR CITY CORPORATION BHD 200.76 223.07 1 20.35 0

LANDMARKS BHD 1115.18 480.68 1 50.5 1.5

LB ALUMINIUM BHD 106.84 248.47 0.5 318.87 1.8

LBS BINA GROUP BHD 154.08 385.19 1 288.39 0

LINGUI DEVELOPMENT BHD 890.5 659.63 0.5 1629.59 4.9

LION DIVERSIFIED HOLDINGS BHD 936.27 737.22 0.5 5171.68 2.5


MAGNI-TECH INDUSTRIES BHD 94.77 103.58 1 201 3.7



MAGNUM CORPORATION BHD 4801.88 1429.13 0.5 2953.07 66.7

MALAYSIA AICA BHD 80.82 130.36 0.5 19.8 0

MALAYSIAN AIRLINE SYSTEM BHD 6416.61 1670.99 1 14686.13 0

MALAYSIAN BULK CARRIERS BHD 4360 1000 0.25 608.14 32

MALAYSIAN PACIFIC INDUSTRIES BHD 1730.46 198.9 0.5 1485.33 40

MEGA FIRST CORPORATION BHD 289.45 239.21 1 471.81 3.7

METACORP BHD 332.85 679.28 0.5 81.03 0.7

MUDA HOLDINGS BHD 123.93 284.91 0.5 696.02 2

MYCRON STEEL BHD 125.3 179 1 482.34 1.5

NALURI CORPORATION BHD 459.88 621.47 1 465.35 0

NATIONWIDE EXPRESS COURIER SERVICES 52.9 60.12 1 73.88 4.9

NIKKO ELECTRONICS BHD 16.88 99.27 1 103.55 0

NTPM HOLDINGS BHD 58.8 60 1 125.51 7

OCB BHD 74.05 102.85 1 468.29 1.8

PADINI HOLDINGS BHD 431.59 131.58 0.5 316.87 11

PARAMOUNT CORPORATION BHD 234.57 107.56 1 300.08 13.3

PCCS GROUP BHD 45.61 60.01 1 417.05 3.5


PELIKAN INT.CORPORATION BHD 956.39 288.07 1 1194.99 8.7



PERAK CORPORATION BHD 88.5 100 1 113.79 1.8

PHARMANIAGA BHD 346.56 106.96 1 1183.98 15

POH KONG HOLDINGS BHD 207.23 410.35 0.5 414.24 1.3

POS MALAYSIA BHD 912.45 536.74 0.5 859.33 10.8

PRESTAR RESOURCES BHD 92.3 180.98 0.5 455.76 9.9

PRICEWORTH WOOD PRODUCTS BHD 87.9 137.86 0.5 549.12 3

QSR BRANDS BHD 601.4 286.38 1 466.38 7

RESORTS WORLD BHD 19274.56 5830.12 0.1 4352.33 4.2

SAUJANA CONSOLIDATED BHD 66.05 110.09 1 70.97 0

SEG INTERNATIONAL BHD 55.21 84.94 1 86.3 1.5

SHANGRI-LA HOTELS (M) BHD 1047.2 440 1 410.73 5.8

SOUTH MALAYSIA INDUSTRIES BHD 45.14 209.94 1 204.85 0

SOUTHERN ACIDS (M) BHD 243.74 136.93 1 370.16 6

STAR PUBLICATIONS (M) BHD 2555.43 738.56 1 805.87 16.5

TANJONG PUBLIC LIMITED COMPANY 6331.12 403.26 7.5 2721.65 63.9

TEXCHEM RESOURCES BHD 158.85 124.1 1 1258.57 8

THE STORE CORPORATION BHD 192.5 68.5 1 1948.32 5.1


TONG HERR RESOURCES BHD 364.46 127.43 1 487.68 10.2

TOP GLOVE CORPORATION BHD 1402 03 300 73 0 5 1228 78 9 2



TOP GLOVE CORPORATION BHD 1402.03 300.73 0.5 1228.78 9.2

TRADEWINDS CORPORATION BHD 763.16 1106.02 1 417.17 0

TRANSMILE GROUP BHD 553.74 270.12 1 616.23 0

TRC SYNERGY BHD 244.88 139.8 1 422.07 1.7

UEM WORLD BHD 4164.26 1388.09 1 6978.67 1.4

UNIMECH GROUP BHD 107.88 123.91 0.5 110.58 1.8

UNISEM (M) BHD 584.59 471.44 0.5 972.48 10

UNITED MALAYAN LAND BHD 360.07 241.65 1 396.77 7.3

UPA CORPORATION BHD 97.14 66.54 1 139.29 7.3

YEE LEE CORPORATION BHD 68.97 62.7 1 507.9 2.7

YI-LAI BHD 152 160 0.5 112.65 9.5

YTL CEMENT BHD 2038.09 469.61 0.5 1150.04 11

Appendix C: Management and Ownership of Company

CTotal Board Independent

Wid l H ld CEO D li



Company

Member

p

Board

Widely Held CEO Duality

A & M REALTY BHD 9 3 0 0

ALUMINIUM COMPANY OF MALAYSIA BHD 5 3 0 0

AMWAY (M) HOLDINGS BHD 8 3 0 0

APOLLO FOOD HOLDINGS BHD 6 3 0 1

ASTINO BHD 9 3 1 1

ATIS CORPORATION BHD 8 3 0 0

BINA PURI HOLDINGS BHD 8 3 0 0

BOLTON BHD 12 5 0 1

BRITISH AMERICAN TOBACCO (M) BHD 7 3 0 0

CARLSBERG BREWERY MALAYSIA BHD 8 4 0 0

CHIN WELL HOLDINGS BHD 10 4 1 0

CYCLE & CARRIAGE BINTANG BHD 11 4 0 0

CYMAO HOLDINGS BHD 6 2 0 0

DAIMAN DEVELOPMENT BHD 6 3 0 0

Company

Total Board

Member

Independent

Board




DK LEATHER CORPORATION BHD 5 2 0 1

DOMINANT ENTERPRISE BHD 8 3 0 0

EASTERN PACIFIC INDUSTRIAL CORP. BHD 10 3 0 0

ENG KAH CORPORATION BHD 5 2 0 1

ENG TEKNOLOGI HOLDINGS BHD 11 5 1 0

ESSO MALAYSIA BHD 8 3 0 1

ESTHETICS INTERNATIONAL GROUP BHD 6 2 1 0

FABER GROUP BERHAD 7 4 0 0

FACB INDUSTRIES INCORPORATED BHD 8 4 0 1

FIMA CORPORATION BHD 5 3 0 0

FORMOSA PROSONIC INDUSTRIES BHD 9 4 0 0

GAMUDA BHD 14 4 1 0

GENTING BHD 8 3 0 1

GHL SYSTEMS BHD 7 2 1 0

GRAND CENTRAL ENTERPRISES BHD 7 3 0 0

Company

Total Board

Member

Independent

Board


HAP SENG CONSOLIDATED BHD 10 5 0 0




HIAP TECK VENTURE BHD 11 4 0 0

HIROTAKO HOLDINGS BHD 9 3 0 0

HOVID BHD 6 4 0 1

HUNZA PROPERTIES BHD 6 4 0 0

HUP SENG INDUSTRIES BHD 10 3 0 0

I-BHD 6 2 0 0

IGB CORP BERHAD 13 4 0 0

INTI UNIVERSAL HOLDINGS BHD 9 3 0 0

IPMUDA BHD 9 4 0 0

JAYCORP BHD 10 4 0 0

JOHORE TIN BHD 7 2 0 0

KENCANA PETROLEUM BHD 7 2 0 0

KNM GROUP BHD 8 3 0 0

KPJ HEALTHCARE BHD 9 7 0 0

Company

Total Board

Member

Independent

Board


KSL HOLDINGS BHD 6 3 0 0




KUALA LUMPUR CITY CORPORATION BHD 6 4 1 0

LANDMARKS BHD 7 4 0 0

LB ALUMINIUM BHD 9 5 0 0

LBS BINA GROUP BHD 9 4 0 0

LINGUI DEVELOPMENT BHD 5 3 0 0

LION DIVERSIFIED HOLDINGS BHD 7 3 1 0

MAGNI-TECH INDUSTRIES BHD 9 3 0 0

MAGNUM CORPORATION BHD 7 4 0 0

MALAYSIA AICA BHD 6 5 1 0

MALAYSIAN AIRLINE SYSTEM BHD 12 6 0 0

MALAYSIAN BULK CARRIERS BHD 8 6 0 0

MALAYSIAN PACIFIC INDUSTRIES BHD 5 2 0 0

MEGA FIRST CORPORATION BHD 9 5 0 0

METACORP BHD 5 3 0 0

Company

Total Board

Member

Independent

Board


MUDA HOLDINGS BHD 7 3 0 0




MYCRON STEEL BHD 8 3 0 0

NALURI CORPORATION BHD 9 7 0 0

NATIONWIDE EXPRESS COURIER SERVICES 5 4 0 0

NIKKO ELECTRONICS BHD 11 6 0 0

NTPM HOLDINGS BHD 6 2 0 0

OCB BHD 6 3 0 0

PADINI HOLDINGS BHD 8 3 0 0

PARAMOUNT CORPORATION BHD 8 5 0 0

PCCS GROUP BHD 7 3 0 1

PELIKAN INT.CORPORATION BHD 5 4 1 0

PERAK CORPORATION BHD 6 3 0 0

PHARMANIAGA BHD 11 3 0 0

POH KONG HOLDINGS BHD 10 4 0 1

POS MALAYSIA BHD 9 4 0 0

Company

Total Board

Member

Independent

Board


PRESTAR RESOURCES BHD 9 8 0 0




PRICEWORTH WOOD PRODUCTS BHD 6 4 0 0

QSR BRANDS BHD 7 2 0 0

RESORTS WORLD BHD 8 4 0 1

SAUJANA CONSOLIDATED BHD 5 3 0 0

SEG INTERNATIONAL BHD 10 4 0 0

SHANGRI-LA HOTELS (M) BHD 12 4 0 0

SOUTH MALAYSIA INDUSTRIES BHD 6 3 1 0

SOUTHERN ACIDS (M) BHD 8 4 0 1

STAR PUBLICATIONS (M) BHD 10 4 0 0

TANJONG PUBLIC LIMITED COMPANY 6 3 0 0

TEXCHEM RESOURCES BHD 8 3 0 0

THE STORE CORPORATION BHD 9 5 0 0

TONG HERR RESOURCES BHD 8 3 0 0

TOP GLOVE CORPORATION BHD 9 5 0 0

Company

Total Board

Member

Independent

Board


TRADEWINDS CORPORATION BHD 9 3 0 0



TRANSMILE GROUP BHD 8 3 1 0

TRC SYNERGY BHD 5 2 1 1

UEM WORLD BHD 9 3 0 0

UNIMECH GROUP BHD 9 4 0 1

UNISEM (M) BHD 9 3 0 0

UNITED MALAYAN LAND BHD 9 3 0 0

UPA CORPORATION BHD 7 4 0 0

YEE LEE CORPORATION BHD 8 4 0 0

YI-LAI BHD 5 2 0 0

YTL CEMENT BHD 15 5 0 0

Appendix D: TDI, TDI-Board, TDI-Disclosure, and TDI-Shareholders

Company TDI TDI Board TDI Disclosure TDI Shareholding



A & M REALTY BHD 15 7 5 3

ALUMINIUM COMPANY OF MALAYSIA BHD 15 6 7 2

AMWAY (M) HOLDINGS BHD 16 7 7 2

APOLLO FOOD HOLDINGS BHD 17 7 6 4

ASTINO BHD 14 7 5 2

ATIS CORPORATION BHD 16 6 7 3

BINA PURI HOLDINGS BHD 16 6 6 4

BOLTON BHD 18 7 7 4

BRITISH AMERICAN TOBACCO (M) BHD 21 8 9 4

CARLSBERG BREWERY MALAYSIA BHD 18 6 8 4

CHIN WELL HOLDINGS BHD 16 6 6 4

CYCLE & CARRIAGE BINTANG BHD 19 7 8 4

CYMAO HOLDINGS BHD 12 5 5 2


DAIMAN DEVELOPMENT BHD 15 5 7 3



DK LEATHER CORPORATION BHD 15 6 6 3

DOMINANT ENTERPRISE BHD 15 6 6 3

EASTERN PACIFIC INDUSTRIAL CORP. BHD 16 6 7 3

ENG KAH CORPORATION BHD 15 7 5 3

ENG TEKNOLOGI HOLDINGS BHD 16 6 7 3

ESSO MALAYSIA BHD 18 7 7 4

ESTHETICS INTERNATIONAL GROUP BHD 17 7 7 3

FABER GROUP BERHAD 18 7 8 3

FACB INDUSTRIES INCORPORATED BHD 14 5 6 3

FIMA CORPORATION BHD 15 5 6 4

FORMOSA PROSONIC INDUSTRIES BHD 13 4 6 3

GAMUDA BHD 16 6 8 2

GENTING BHD 20 7 9 4


GHL SYSTEMS BHD 18 7 8 3



GRAND CENTRAL ENTERPRISES BHD 13 5 5 3


HIAP TECK VENTURE BHD 14 5 6 3

HIROTAKO HOLDINGS BHD 12 5 5 2

HOVID BHD 13 4 7 2

HUNZA PROPERTIES BHD 15 6 6 3

HUP SENG INDUSTRIES BHD 16 6 8 2

I-BHD 15 6 6 3

IGB CORP BERHAD 18 7 7 4

INTI UNIVERSAL HOLDINGS BHD 13 5 6 2

IPMUDA BHD 14 5 6 3

JAYCORP BHD 15 5 6 4

JOHORE TIN BHD 12 5 5 2


KENCANA PETROLEUM BHD 16 6 8 2



KNM GROUP BHD 16 6 7 3

KPJ HEALTHCARE BHD 19 8 8 3


KUALA LUMPUR CITY CORPORATION BHD 12 5 5 2

LANDMARKS BHD 18 7 7 4

LB ALUMINIUM BHD 19 7 8 4

LBS BINA GROUP BHD 15 6 6 3

LINGUI DEVELOPMENT BHD 19 7 8 4

LION DIVERSIFIED HOLDINGS BHD 18 6 8 4

MAGNI-TECH INDUSTRIES BHD 15 5 6 4

MAGNUM CORPORATION BHD 18 7 7 4

MALAYSIA AICA BHD 15 6 6 3

MALAYSIAN AIRLINE SYSTEM BHD 20 7 9 4


MALAYSIAN BULK CARRIERS BHD 16 5 7 4



MALAYSIAN PACIFIC INDUSTRIES BHD 16 5 8 3

MEGA FIRST CORPORATION BHD 16 6 6 4

METACORP BHD 17 7 7 3


MYCRON STEEL BHD 18 7 7 4

NALURI CORPORATION BHD 13 6 5 2

NATIONWIDE EXPRESS COURIER SERVICES

BHD 20 7 9 4

NIKKO ELECTRONICS BHD 13 6 5 2

NTPM HOLDINGS BHD 18 7 7 4

OCB BHD 18 7 7 4

PADINI HOLDINGS BHD 17 6 7 4

PARAMOUNT CORPORATION BHD 20 8 8 4


PCCS GROUP BHD 13 6 5 2



PELIKAN INT.CORPORATION BHD 20 7 9 4

PERAK CORPORATION BHD 15 5 7 3

PHARMANIAGA BHD 19 7 8 4

POH KONG HOLDINGS BHD 15 5 7 3

POS MALAYSIA BHD 17 6 8 3


PRICEWORTH WOOD PRODUCTS BHD 11 4 5 2

QSR BRANDS BHD 19 8 8 3

RESORTS WORLD BHD 19 7 8 4

SAUJANA CONSOLIDATED BHD 14 6 6 2

SEG INTERNATIONAL BHD 21 8 9 4

SHANGRI-LA HOTELS (M) BHD 18 6 8 4

SOUTH MALAYSIA INDUSTRIES BHD 13 6 5 2


SOUTHERN ACIDS (M) BHD 16 6 6 4



STAR PUBLICATIONS (M) BHD 15 5 7 3

TANJONG PUBLIC LIMITED COMPANY 19 8 8 3

TEXCHEM RESOURCES BHD 17 7 7 3

THE STORE CORPORATION BHD 12 4 5 3

TONG HERR RESOURCES BHD 17 7 6 4

TOP GLOVE CORPORATION BHD 19 7 8 4

TRADEWINDS CORPORATION BHD 15 7 6 2

TRANSMILE GROUP BHD 15 6 7 2

TRC SYNERGY BHD 14 5 6 3

UEM WORLD BHD 19 7 9 3

UNIMECH GROUP BHD 15 4 7 4

UNISEM (M) BHD 17 6 7 4

UNITED MALAYAN LAND BHD 18 7 7 4


UPA CORPORATION BHD 16 6 6 4



YEE LEE CORPORATION BHD 14 6 5 3

YI-LAI BHD 14 4 6 4

YTL CEMENT BHD 18 6 8 4

phd 2009 cg listed companies.pdf

Documents