Sunway executives raise equity exposure as MACC reviews RM11b IJM takeover

PETALING JAYA (March 5): Senior executives within the Sunway Group ecosystem increased their personal shareholdings while transaction mechanics linked to Sunway Bhd’s proposed RM11 billion acquisition of IJM Corp Bhd continued to advance.

The disclosures come as the Malaysian Anti-Corruption Commission (MACC) examines governance issues related to the takeover proposal.

Several senior management figures at Sunway Construction Group Bhd (SunCon) exercised share options on March 4 under the company’s Employees’ Share Option Scheme (ESOS), according to a filing lodged with Bursa Malaysia on March 5.

The exercise price was RM3.74 per share.

Chief financial officer Elaine Lai Ee-Ling converted options representing 240,000 shares, while group deputy managing director Eric Tan Chee Hin exercised 85,000 shares. Senior executive director Lim Vin Tze converted 235,000 shares.

In total, the transactions represent 560,000 ordinary shares acquired by senior management through the ESOS mechanism.

ESOS conversions are commonly used to align executive incentives with shareholder performance, though the timing of the exercises coincides with heightened attention on Sunway’s proposed acquisition of IJM Corp.

The takeover proposal is currently subject to regulatory review following confirmation that MACC is examining aspects of the transaction.

Bursa approval for consideration shares

In a separate filing with Bursa Malaysia, Sunway said Bursa Malaysia Securities had approved the listing and quotation of new Sunway shares to be issued as consideration under the proposed acquisition.

The approval was issued on March 4.

The new shares form part of the equity component that Sunway intends to offer IJM Corp shareholders if the transaction proceeds.

According to the filing, the approval remains subject to compliance with Bursa Malaysia's listing requirements and the completion of shareholder approvals.

Maybank Investment Bank Bhd, acting as adviser to Sunway on the transaction, confirmed that the exchange’s approval enables the company to proceed with the technical steps required for the proposed share issuance.

Diverging market response

Trading in the two companies has reflected differing investor responses since confirmation of the MACC probe earlier this week.

Shares of IJM Corp have remained under pressure. The stock closed at RM2.37 on Wednesday, well below the RM3.15 offer price proposed by Sunway.

The gap suggests investors continue to price in regulatory and execution risk associated with the takeover.

MACC Chief Commissioner Tan Sri Azam Baki confirmed on March 4 that the commission is investigating possible bribery and governance issues related to the proposed acquisition.

No enforcement action affecting the transaction structure has been announced.

Sunway shares, however, have been more resilient.

The stock closed 1.24% higher at RM5.70 on the same day, indicating that investors have so far largely separated the parent company’s valuation from uncertainties surrounding the target company.

Pension funds adjust positions in Sunway REIT

Filings released on the same day also showed changes in institutional shareholdings within the wider Sunway ecosystem.

The Employees Provident Fund (EPF) disposed of 3,278,500 units in Sunway Real Estate Investment Trust (Sunway REIT) on March 2, according to a Bursa Malaysia filing.

A separate Bursa Malaysia filing showed that Kumpulan Wang Persaraan (KWAP) acquired 1,280,200 units in Sunway REIT on March 4.

Sunway REIT is one of Malaysia’s largest listed property trusts and forms a core component of the broader Sunway Group platform, which spans property development, construction, healthcare, education and infrastructure assets.

The filings suggest differing positioning among institutional investors during a period of increased scrutiny of the group’s takeover plans.

Regulatory review continues

The MACC investigation is understood to be examining governance matters linked to the takeover proposal, including issues related to shareholdings held by government-linked investors in IJM Corp.

Authorities have said the probe focuses on potential abuse of power and corruption elements, although details of the investigation have not been publicly disclosed.

There has been no directive from regulators requiring the transaction to be halted.

Corporate filings indicate that procedural steps linked to the proposed acquisition are continuing in parallel with the investigation.

Key timeline ahead

The next milestone for the transaction will be the release of the Independent Advice Circular, expected by March 16.

The document will contain the independent adviser’s assessment on whether the offer is “fair and reasonable” for IJM shareholders.

Under current terms, the offer acceptance deadline is scheduled for April 6, subject to revisions depending on regulatory developments.

For now, the filings suggest that operational preparations for the transaction—including share issuance approvals and internal equity conversions—are continuing while the investigation proceeds.

Editor’s note: While the MACC investigation (confirmed on March 4) is examining "governance and public funds" due to GLC stakes in IJM Corp, it is important to note that these management share exercises are fully disclosed regulatory events. As of today, no legal "Stop Order" has been issued, and the corporate machinery remains in motion toward the April 4 acceptance deadline.

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