Vincent Tan passes the baton
TYCOON Tan Sri Vincent Tan, who surprised corporate Malaysia with the appointment of Abdul Jalil Abdul Rasheed as the new chief executive officer of Berjaya Corp Bhd (BCorp), says this will be the first step of him taking a backseat.
He says it is his wish that none of his children would be involved in the listed businesses and to let professional managers run it.
Abdul Jalil, 38, a former CEO of Permodalan Nasional Bhd, is the first non-family member CEO of Berjaya.
“My children can start their own business as they already have. We need to have a clear demarcation of listed and private entities.
“This could also involve having a family constitution that defines involvement within the group so we pick only the best for the job, ” Tan tells StarBizWeek in an interview.
Strengthening operations: Berjaya Times Square, which houses BCorp’s headquarters. The group is in a period of consolidation to sweat its assets better and enhance its value.
He also says that he wanted to focus on doing charity work, pointing out that he had been a big supporter of Tzu Chi Foundation (an international humanitarian organisation) and would like to devote more time to its cause.
“The best decision I have made in my life is becoming a vegetarian after meeting Master Cheng Yen. I feel physically healthier, mentally more alert and spiritually richer.”
Cheng Yen is the founder of Tzu Chi Foundation, a Buddhist humanitarian group.
Tan admits he announced his retirement in 2012 when he celebrated his 60th birthday, which included relinquishing his position as chairman, but only to return as executive chairman in 2017.
“There has been a big difference since then. I am 69 years old now and by next year, I will be 70. I think that’s enough. I have been working since I was 17 years old when I first joined a bank as a clerk and I have been working non-stop for almost 52 years now, ” he says, adding that although he has jet black hair, it did not mean he wasn’t tired.
Tan says his values in life have also changed and that he has become a vegetarian and wants to leave a mark in a small way for the environment by not consuming meat and adding to greenhouse emissions.
“I’m also passionate about building affordable homes for Malaysians. Housing is a basic need of human being. It is essential for a person’s sense of dignity, safety and inclusion.
“The Better Malaysia Foundation (formerly known as the Vincent Tan Foundation) has, in the last two years, assembled a “brain trust” of the like-minded professionals to formulate solutions to address the affordability gap faced by the B40 and B50 families.
“The private sector should be prepared to sell affordable houses with a price range of RM250,000 to RM300,000 for a 900-sq-ft apartment in different towns and cities in Malaysia.
“Berjaya has successfully designed and built two showrooms for this purpose: a 5-bedroom 4-bathroom/toilet unit of 900 sq ft and a 4-bedroom 3-bathroom unit of 750 sq ft. You can view this at the Berjaya Times Square complex.
“I hope to get a buy-in from the government and the key policymakers. This is my passion now, ” he says.
On the direction of Berjaya Corp Bhd:
I have been an entrepreneur the past few decades. The pandemic has been tough for the group and me personally; it’s time we brought in an outside professional to manage the group and institutionalise the process.
The company must be about collective individuals, not me alone. Having a fresh pair of eyes will be good for the businesses too. I have run the company as an entrepreneur, now it’s time for a manager to run the company.
We have a wide ranging number of businesses. Jalil will be tasked with identifying core and non-core assets and clustering the group into consumer verticals, in line with our vision to become a diversified consumer group.
We also want to establish better discipline in allocating capital to the various businesses. Essentially, BCorp is a fund manager of various businesses that will allocate capital and measure this against ROE (return on equity). We need to ensure what we spend is giving the desired return.
Jalil will spearhead IR efforts with the investment community. We need to gain back investor confidence and inject good corporate governance and demonstrate to investors that we are indeed a changed company and are undergoing a transformation phase.
Jalil is an authority on good corporate governance and transparency, and we’d like this to be implemented at BCorp.
We will communicate our strategies externally better to explain our businesses and strategy. Good communication is vital today as it helps shape investor and public sentiments, and that will help the share price.
Now that Jalil is GCEO, I would like to focus on bigger picture issues and building relationships. We have established an executive committee (exco) that will consist of myself, (executive deputy chairman) Datuk Seri Robin Tan and Jalil, who will be responsible for the strategic matters of the group.
Jalil will chair management committees on all operational matters.
Additionally, an exco will be established at each operating company chaired by Jalil and will consist of key management of these companies. This is to ensure regular communication and oversight from the head office.
We will undergo a period of change slowly to ensure we are future-proofed against any external shocks. This means we need to have a balance of businesses from recurring and non-recurring income.
This means having a rethink about what we want to be and where we want to focus on. We are in a period of consolidation to sweat our assets better and enhance our value. We will not be acquiring any assets for now.
I got to know Jalil for eight months where he gave me sound advice on what BCorp should do to enhance value, improve corporate governance, reorganise the businesses and put in a stricter governance framework.
He had spent 17 years doing this in his previous roles and I was impressed. He was a fund manager, knows investor sentiments on BCorp, knows how to allocate capital and is a clear strategic thinker. Most importantly, we share the same values in life, and he has displayed principles and integrity of the highest order.
We need to keep talent like this in Malaysia and not lose them to other countries. Jalil had many offers overseas and was set to move his family until I made him this offer to help reorganise BCorp.
When I first met Jalil, we were talking about football (laughs). He spends his free time studying how revenue and profits are made by football clubs, including details of transfer fees. He is a Liverpool supporter and of course, I am an owner of Cardiff FC and Belgian club, KV Kortrijk, a first division team, where Malaysian footballer Luqman Hakim Shamsudin is playing. Eventually, we met and talked a lot.
We must have had over 20-plus meetings. Soon, I began to know him more. I realised that he has good ethics and that is very important.
It is my wish that no children are involved in the listed businesses, let professional managers run it. My children can start their own business as they already have. We need to have a clear demarcation of listed and private entities.
I have shared my wish with my family and they have taken it well. They understood my intentions and what is best for them and Berjaya.
Should any of them still wish to be involved in management in the listed group, this must have the concurrence of Jalil and the board of the listed company.
Giving his wealth to charity
I also pledge to give half of my wealth to charity when I’m no longer around. Even though it is less now (laughs). I am a signatory of the Giving Pledge started by Bill and Melinda Gates and Warren Buffet.
(In 2000,40 of America’s wealthiest people joined together in a commitment to give the majority of their wealth to address some of the society’s most pressing problems.)
I hope more wealthy Malaysians, who have passed 70 years old, will consider giving away half of their wealth to help the underprivileged and charity, especially to help people own affordable homes and have a decent living.
I think it is not wise to leave all your wealth to your family only when after all, our accumulated material wealth is made possible with the support from Malaysians and government’s concessions and licences and other help by many people we encountered in our lifetime of wealth accumulation.
I didn’t become rich because I invented something. But I was lucky to receive many opportunities such as getting the franchise for McDonalds and Starbucks in Malaysia, as well as to buy 7-11 for a good price from a Malaysian group. There are also other household brands such as Cosway and Singer. Of course, we also obtained the licence to start Sports Toto.
It is only right that I give half of my wealth back to the people and country. It is a wise and right thing to do.