Independence of RAM’s Operations Unaffected by Changes in Shareholdings

Published on 07 Jun 2022.

Share Tweet Email

We refer to the 3 June 2022 article by MalaysiaNow titled “Storm Brewing In Malaysian Debt Capital Market As New Entity Set To Take Control of RAM Rating Agency”. We would like to allay any fear or concerns that may be caused by the opinions expressed in the article, which we believe are unsubstantiated and formed without adequate knowledge of the credit rating industry and RAM’s operational structure.

RAM Holdings Berhad (“RAMH”) and its wholly-owned subsidiary, RAM Rating Services Berhad (“RAM Ratings”) are strictly regulated by the Securities Commission Malaysia (“SC”). We are bound by and unceasingly adheres to the ethics of good governance, transparency and integrity set out in the SC’s Guidelines on the Registration of Credit Rating Agencies (“Guidelines”) and the Capital Markets and Services Act 2007. Our governance structure and its operational set-up are designed to allay the sort of concerns highlighted in the MalaysiaNow’s article. 

Regardless of past, present and future shareholding changes, the integrity and independence of the credit rating agency (“CRA”) have and will continue to be the bedrock of RAM Ratings’ operations – established to serve in the best interest of all bond market participants. Regulated under the Guidelines, these key safeguard measures undertaken in its day-to-day operations attest to these principles: 

  • Any change in shareholding structure which results in a party controlling 20% or more shares will require the approval of the SC.  The SC would not grant approval to any party to exceed this limit, if it deems this to be detrimental to the best interest of the CRA and the bond market.  
  • The entire Board of RAMH and RAM Ratings comprise independent directors, with the exception of the Executive Director.  All directors including its chief executive, deputy chief executive and members of the rating committee are subject to the approval of the SC.  Furthermore, the tenures of directors and rating committee members are also subject to a maximum limit. 
  • Except for governance oversight, the Board does not participate in the operations of the CRA, which is the domain of its Chief Executive Officer and management staff.
  • All rating actions by RAM Ratings are decided and assigned by an independent rating committee. The chairman and majority of the members that constitute the rating committee are external individuals with relevant expertise who do not participate in the operations of the CRA. 
  • The SC reviews the registration of a CRA on a regular basis and conducts its periodic examination on the compliance record of both RAMH and RAM Ratings. Both entities have continued to fulfil the requirements of the CRA registration.

The Annual General Meeting to be held on 9 June 2022 will see RAMH shareholders voting on the proposed amendment to clause 12.1 of RAMH’s Constitution. Noteworthy that the proposed amendment is consistent with the wordings in paragraph 2.3 of the Guidelines. This will require 75% of shareholders’ approval. RAMH is confident that our credit rating operations at RAM Ratings will not be impacted and shall remain independent, regardless of the outcome of the vote. 

Given our 30-year track record, we believe bond market participants can attest to RAM Ratings’ independence and integrity in performing its mandate. We reiterate our commitment to the principles of good ethics, transparency and integrity that will remain core values of RAM Ratings’ operations, now and in the future.

Thank you.


Chris W.K. Lee
Chief Executive Officer/Executive Director
RAM Holdings Berhad