Frankly Speaking: Control poser at MMAG’s unit amid MACC probe

TheEdge Mon, Feb 27, 2023 11:30am - 1 year View Original


Last week, loss-making supply chain management company MMAG Holdings Bhd announced that it had suspended two top executives from their duties at its 80%-owned air cargo logistics unit M Jets International Sdn Bhd (MJets), after the Malaysian Anti-Corruption Commission (MACC) raided the office of MJets on Feb 13. 

The anti-graft agency also ordered the freezing of MJets’ bank accounts, pending the outcome of its probe.

MMAG revealed that while it holds a controlling stake in MJets, it had left the day-to-day running of the latter to its joint-venture partner, JT Aerotech Solutions Sdn Bhd (JTAS), which owns the remaining 20% stake. Even so, being an 80% business owner, it should know what’s going on at MJets.

It also said that until their suspension, the two executives — Gunasekar Mariappan and Philip Phang Kin Ming of JTAS — were fully in charge at MJets, with MMAG having limited access to its operations. What is puzzling is why it was difficult for MMAG to access MJets’ information and documents even though it was a major shareholder of the company.

It is worth noting that red flags were raised in January when MJets was sued by AeroControl Group DWC-LLC, which sought US$536,387.44 and/or RM2.31 million in outstanding claims. At the time, MMAG said MJets was not a major subsidiary of the group, despite having invested RM44.66 million in the unit to date.

Following the raid by MACC, MMAG assigned its former independent director Woo Kam Weng to MJets as interim executive officer. With more than 40 years of experience in the aviation ground handling industry, it is hoped that the former CEO of Pos Aviation Sdn Bhd will be able to better manage the air cargo logistics company.

But is it a case of too little, too late?

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