Family Feud Threatens Malaysian Auto Dynasty
fairplay
KUALA LUMPUR, May 25 (Reuters) - A feud between members of Malaysia's
prominent
Tan Chong family has boiled over, threatening to unravel one of the
country's
oldest and richest dynasties.
A two-year squabble between the children of brothers Tan Kim Hor and the
late
Tan Yuet Foh erupted into the open on Friday.
Kim Hor's family filed a court petition to dissolve Tan Chong
Consolidated Sdn
Bhd, the holding company of the Tan Chong Group auto empire the two
brothers set
up in 1959.
"Despite attempts to settle the differences between the two families,
the
relationship has irretrievably broken down," Kim Hor said in a
statement.
The nature and cause of the dispute was not made public.
Ownership of Tan Chong Consolidated is currently split between the two
branches
of the family at a 55:45 percent ratio, with Kim Hor's side holding the
smaller
slice.
The firm is the parent of four listed companies including flagship Tan
Chong
Motor Holdings, assembler and distributor of Nissan cars.
Other firms under the Tan Chong stable are car parts maker APM
Automotive
Holdings, travel firm Warisan TC Holdings and Tan Chong International
SUCCESS STORY
The Tan Chong group shares a similar success story to many other family
dynasties in Malaysia such as YTL
Tan Chong, as an early ethnic Chinese settler, ran a provision store in
the
1930s called Tan Chong & Co. The business flourished during World War
Two,
supplying food rations to government hospitals and army camps.
In 1957, the businessman's sons Kim Hor and Yuet Foh turned the company
into an
auto distributor after winning the franchise to sell Nissan cars,
marking the
arrival of Japanese vehicles into Malaysia.
The Tan Chong group has since expanded into a sprawling empire
comprising 114
subsidiaries and 15 associated companies in 10 countries throughout
Asia.
FUTURE IN DOUBT
Now, the future shareholding structure of the Tan Chong Group hangs in
the
balance.
Family members refused to comment on the feud during Tan Chong Motor
Holdings's
annual general meeting on Friday.
Lawyers for Kim Hor's family expect the courts to begin hearing the
legal battle
within three months.
The assets of the family's holding company could end up being split
between the
two sides.
"They want to dissolve the holding company so that the two families can
hold
separate stakes," lawyer for Kim Hor's family, Won Walter Pereira, told
reporters.
Still, the family feud is unlikely to hurt the group's operations,
analysts
said.
Shares of flagship Tan Chong Motor were unchanged at 1.26 ringgit at
0740. The
stock has gained 19 percent year-to-date compared with a 17 percent fall
on the
benchmark Composite Index.
"Operations-wise, there won't be much disruptions because the people
there are
professional enough," said Vincent Khoo, an analyst at SG Securities,
who is
maintaining his buy recommendation.
Tan Chong Motor reported on Thursday a 78 percent jump in operating
profit to
37.96 million ringgit in the first quarter.
Net profit was not comparable due to a one-off gain of 32.4 million
ringgit last
year.
Copyright 1999 Reuters