KUALA LUMPUR (Dec 17): The passing of founder Tan Sri Teh Hong Piow is unlikely to impact the bank that has made many shareholders millionaires.

But with his passing, all eyes are on how his 23.4% block in Public Bank Bhd, worth close to RM20 billion at the current price, would be passed on to his heirs and what that would mean for the future franchise value of the bank.

Teh has four children, Diana Teh Li Shing, William Teh Lee Pang, Lillian Teh Li Ming and Dr Lillyn Teh Li Hua. His wife, Puan Sri Tay Sock Noy, passed away in August this year. None of his children is in the business, and it is said that not one of them is interested in taking over the business.

Even if they were working and involved in Public Bank, the entire block cannot be passed on to them, according to the Financial Services Act 2013 (FSA), which limits an individual's shareholding in a bank to 5%. That individual stake can go up to 10% only with Bank Negara Malaysia's permission. As for institutional investors, the limit of shareholding is capped at 20%.

Teh was allowed to hold 23.4% because of the “grandfather rule”, which states that those who already had an interest exceeding the threshold when the FSA came into effect in 2013 do not need to comply with it.

There are no immediate concerns about the operations of the bank, which are in the capable hands of Tan Sri Tay Ah Lek and the board of directors and management, but how Teh’s 23.4% block in Public Bank is passed on or distributed will be closely watched as it could result in the emergence of new shareholders, which is discussed in The Edge Malaysia's cover this week.

We will also take a closer look at how Bank Negara’s rules that limit individual and institutional shareholding in a financial institution were applied in previous banking mergers and acquisitions.

Another story looks at how Public Bank shareholders have gained from staying invested in the country’s second largest banking group by market capitalisation and the third largest by assets.

Teh, who passed away on Dec 12 at the age of 92, will go down in history as among the greatest bankers in Malaysia. An extraordinary banker and individual, he left an indelible mark on the industry and in the hearts of those who worked for him.

Tan Sri Nazir Razak recalls that when he first became a banker with the CIMB group in 1989, Teh was already a banking legend. “He is surely the most successful banker in Malaysian history,” Nazir, who is currently the chairman of Bank Pembangunan Malaysia Bhd, tells The Edge.

While it isn’t unusual for employees to hold their leaders in high regard, in Public Bank employees’ case, it is clear that their reverence for Teh ran much deeper.

Read the tributes to the late Teh and more on the bank he left behind in the latest issue of The Edge Malaysia.

https://www.theedgemarkets.com/article/banker-no-other