MAA - A Balancing Act

MAA Group Bhd is in danger of losing its listing status as it may not have enough funds left following the sale of its conventional insurance arm – Malaysian Assurance Alliance Bhd (MAA) – to buy a new core business, said its executive chairman Tunku Datuk Ya'acob Tunku Abdullah

That's because the Practice Note 17 (PN17) company plans to use the balance sale proceeds to recapitalise the general insurance unit of its Islamic insurance arm, MAA Takaful Sdn Bhd.
"There is no regularisation plan (to regularise its financial condition) on the table now. It is impossible to ask for a regularisation plan because there is nothing we can buy,"

He ruled out MAA Group borrowing money to acquire a new business. As such, the group plans to ask Bursa Securities for a further extension to submit a regularisation plan "because we are not going to buy a new business". It has been granted an extension of time of up to Nov 30, 2013 to submit the plan to the regulator.

Tunku Ya'acob blames its problem on the new Islamic Financial Services Act, 2013 (IFSA) which restricts MAA Group's activities, as the holding company of MAA Takaful, to the financial services sector that is expensive and something that the group can ill afford.

"So what financial service businesses are there (that MAA Group can buy)? A bank? I can't buy a bank. Stockbroking (firm)? That is very expensive. I definitely don't want to buy another insurance company. So, what else is there to buy?" Tunku Ya'acob said in frustration.

He argued that MAA Group's predicament is unique as it is not financially distressed, but that its hands are tied by the IFSA.