By Khairie Hisyam
While Liew Kee Sin’s private RM12 billion joint venture deal in London casts questions on conflicts with his role at the Battersea project, another question is his use of the Eco World brand for a personal vehicle. Who really owns the brand?
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Following news that Battersea redevelopment project chairman Liew Kee Sin has inked a joint venture deal with Irish developer Ballymore Group worth RM12 billion for three London residential developments, the spotlight was firmly on the apparent conflict of interest.
Specifically, the conflict between Liew’s personal business interests in the London property market and his role as chairman at the Battersea Power Station redevelopment project.
However another question also emerges, given Liew’s vehicle for the deal is called Eco World Investment Co Ltd. Can Liew use the brand for his personal business activities?
The answer to that question boils down to the ownership of the Eco World brand.
Malaysian trademark registered
A KiniBiz search in the Intellectual Property Corporation of Malaysia (MyIPO) database found that the “Eco World” trademark along with the “CREATING TOMORROW & BEYOND” tagline belongs to Eco World Development Sdn Bhd (EWDSB).
Information from the MyIPO database shows that both the “Eco World” trademark and the tagline was applied for goods and services Class 35, 36 and 37 , all of which pertains to use for real estate and property-related business activities. Similarly the tagline was also trademarked for similar classes of goods and services.
According to MyIPO’s website, applicants are not encouraged to claim entire classes of goods and services in the application form, rather itemising the specification of goods or services of interest to the trademark applicant.
The “Eco World” trademark for all three classes was applied for on Oct 22, 2012 and became legal on April 10, 2014, expiring on Oct 22, 2022 at the end of the 10-year effective period. The trademark will be gazetted this week on Jan 29, according to information from MyIPO’s database.
On the other hand, the tagline was applied for trademark purposes on July 16, 2013 but received legal status separately .
In any case, the trademark owner EWDSB is a major shareholder in Bursa Malaysia-listed Eco World Development Group Berhad, holding a 30.01% stake.
This means the trademark for both “Eco World” and its tagline ultimately belongs to long-time Liew associates Abdul Rashid Manaf and Eddy Leong Kok Wah, who are the two shareholders of EWDSB through an 85:15 vehicle called Eco World Development Holdings Sdn Bhd (EWDH) (see chart).
That said however Eco World Development Group had announced an assets injection exercise last April which will also involve shares subscription, private placement and rights issue with warrants, for which the deadline for completion is now Feb 25.
After the whole exercise is completed, EWDH is set to see its 30% stake rise to 42.3% while Eddy Leong’s Sinarmas Harta Sdn Bhd will emerge with 30.7% equity in the listed company. In turn Liew’s son Tian Xiong will see his 35% direct shareholding reduce to 13.52%.
Liew goes for UK trademark
However, ownership of a trademark registered in Malaysia is limited to Malaysian shores, said a MyIPO official to KiniBiz previously.
This means that for Bursa Malaysia-listed Eco World Development Group to secure exclusive rights to its brand overseas, it will have to register the brand and tagline again with the relevant authority in the market it is eyeing.
A KiniBiz search in the United Kingdom Intellectual Property Office (UKIPO)’s database found that there exists several applications for the Eco World trademark alongside the same tagline, “CREATING TOMORROW & BEYOND”.
The applications were for use pertaining to various real estate and property-related business activities in addition to engineering and provision of facilities, among others. Among others, the UK trademark applications covers three different styling of the “Eco World” brand, encompassing use over Class 35, 36, 37 and 41.
According to UKIPO’s website, classes 1-34 of its trademark classification system encompasses goods while classes 35-45 covers services.
However, the applications were filed by Eco World International Berhad (EWI), which was previously named as Liew’s proposed special purpose acquisition company (Spac) focusing on international property markets.
KiniBiz had previously looked at Liew’s proposed Spac and found a hard-hitting lineup of directors in EWI. While the entity itself was incorporated on Aug 28, 2013, all six of its directors were listed on Sept 12, 2014.
Apart from Liew, a veteran property man under whose watch SP Setia grew to become Malaysia’s foremost property brand until recently, other directors of EWI include his long-time associate from SP Setia days Teow Leong Seng, whose resignation from SP Setia was announced alongside Liew’s own resignation.
The other four directors of EWI are Cheah Tek Kuang, Azlan Mohd Zainol, Siow Kim Lun @ Siow Kim Lin and Ahmad Johan Mohd Raslan or Johan Raslan as he is better known.
Former chief executive officer of the Employees Provident Fund (EPF) for 12 years, Azlan Mohd Zainol chairs infrastructure group Malaysian Resources Corporation Berhad (MRCB) and RHB Bank Berhad, among others, while Cheah Tek Kuang is currently chairman of conglomerate IOI Group Berhad.
Notably Cheah is also former managing director of financial services group AMMB Holdings for seven years, a stint that capped a long career within the group that began in 1978. Another director, Siow Kim Lun, is a former Securities Commission director who is now on the boards of Citibank Berhad, Retirement Fund Incorporated (KWAP) and UMW Holdings, among others.
In turn, Johan Raslan is an Eisenhower fellow who was previously chairman and director of PwC Malaysia, which is part of the global PricewaterhouseCoopers global network of accounting firms in 157 countries. Johan Raslan is also the first son of the late Mohammad Raslan Toh Muda Abdullah, who among others was Malaysia’s first Accountant-General and headed Bank Bumiputera Bhd — which later evolved to become part of CIMB Group today — when it was founded in 1965.
According to the UKIPO database, the applications by EWI were filed on Nov 28, 2014. In comparison, Bursa-Malaysia listed Eco World Development Group announced its intention to subscribe to 30% of the Spac’s initial public offering, expected to raise RM1.89 billion, in mid-October.
Notably, the registered address of Liew’s proposed Spac is nearly identical to that of EWDSB, barring the unit number. Both are based in Setia Avenue in Jalan Setia Prima, Shah Alam.
Can Liew use Eco World’s brand?
In any case, this raises various concerns on Liew’s responsibilities as a non-executive director of Bursa Malaysia-listed Eco World Development Group as he is effectively using the company’s brand for his personal ventures overseas — and also locally in the case of his proposed Spac listing.
As director of Eco World Development Group, Liew is obliged to act for the best interests of the company’s shareholders, which includes his 23-year-old son Tian Xiong, an executive director with about 35% shareholding at present.
This fiduciary duty is outlined in the Companies Act 1965, which stipulates in Section 132 that a director must “act honestly and use reasonable diligence in the discharge of the duties of his office”. This in turn includes the duty to act in the best interest of the company as well as avoid conflicts of interest at all times, said the Companies Commission of Malaysia (CCM) in a previously published booklet.
Similarly this duty is expected of directors in the United Kingdom via Companies Act 2006, which requires directors to promote the success of the company as well as avoid conflicts of interests.
The situation appears to be the opposite as far as the Eco World brand goes. Using the company’s brand for his personal ventures raises the implication that, in doing so, Liew is effectively denying the benefits of the brand’s use to Eco World Development Group’s shareholders.
This is irrespective of whether Eco World Development Group’s shareholders intend to use the brand overseas where Liew had gone, as noted in the United Kingdom Companies Act’s Section 175 which says a director “must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company … this applies in particular to the exploitation of any property, information or opportunity (and it is immaterial whether the company could take advantage of the property, information or property)”.
At publishing time, KiniBiz is waiting for a response from Eco World Development Group on whether Liew was permitted by EWDSB owners to use the Eco World brand for his personal ventures, among other questions.
However there had been conflicts galore as far as Liew is concerned, even when he was still helming SP Setia.
Yesterday: Will Liew exit derail Battersea?
Tomorrow: Liew, a man of many conflicts
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