Asia’s stockmarket nightmare

WHEN shareholders in Bolton, a Malaysian property developer, gathered in Kuala Lumpur in November, some were in for a nasty shock. Bolton called the meeting to approve its purchase of a stake in Kejora Harta, a troubled property firm controlled by the family of Lim Yan Hai, Bolton's boss and biggest shareholder. Not all shareholders thought the price reasonable. Yet when one fund manager resolved to vote against the board, it discovered that the nominee company through which it held its stake also held shares belonging to Bolton's directors. Under Malaysian company law, the nominee was obliged to cast its votes according to the wishes of the first shareholders to contact it—and had already been instructed to vote in favour of management. The acquisition was duly approved.