A study of the RM6.1 billion MAS restructuring proposals showed that it is another government bail-out - a year after the outrageous RM1.79 billion government buy-back of 29.09 per cent stake in MAS to bailout Tan Sri Tajudin Ramli’s Naluri Bhd. at the sucker’s price of RM8 per share, which was more than double the market price of RM3.68 when the deal was signed on 20th December 2000.
The RM6.1 billion MAS restructuring exercise would involve two important
elements:
As the RM6.1 billion for the purchase of the eight MAS aircrafts
and the various MAS properties would come from the government, in the form
of Ministry of Finance Incorporated special purpose vehicles (SPV),
this would mean a double government bail-out of MAS after the RM1.8 billion
bail-out in December 2000 to buy back Tajudin’s MAS stake to enable Tajudin
to laugh all the way to the bank at the taxpayers’ expense!
This is probably the first case in the world of a double government bail-out of a troubled or failed company - paying RM1.8 billion at more than double the market price to become the largest shareholder of MAS and then one year later, committing another RM6.1 billion to inject cash into the national carrier by using various government vehicles to buy over some of the MAS assets.
This is a very creative double bail-out of MAS, but is it in the interests of the Malaysian taxpayers?
If the government is to inject RM6.1 billion to bail-out MAS, why should it throw away RM1.79 billion in December 2000 to reward Tajudin to relieve him of his MAS stake at more than double the market price?
Before the end of last year, there was another great corporate scandal - the biggest corporate pardon in Malaysian history when RM3.2 billion UEM “put option” of Tan Sri Halim Saad was arbitrarily and unaccountably cancelled!
The cancellation of the RM3.2 billion UEM "put option" raised many disturbing questions.
In the past, “bail-outs” whether through "buying assets" or to "inject" finance into corporations were meant for companies but never for an individual - as in the case of the biggest corporate pardon for Halim Saad which in the final analysis, involved the cancellation of a private debt arising from a private commercial contract.
The cancellation in no manner helped United Engineers Malaysia Bhd (UEM) or Renong. It helped Halim --- pure and simple. This outrageous use of public funds is both immoral and a breach of the public trust.
Also in question is whether the Board of Directors of UEM and Renong, which are partly owned by the the Minister of Finance Incorporated via Khazanah, (its investment arm), had discharged their fiduciary duty to their shareholders in cancelling Halim Saad’s RM3.2 billion “put option” and private debt!
Have the Directors, who are subject to the provisions of current Company law, the right to cancel Halim Saad’s RM3.2 billion debt obligation without first making provision for a write-off. Or will the Ministry of Finance, through another “creative bail-out”, have to finally bear responsiblity for the biggest corporate pardon for an individual in Malaysian history from the taxpayers’ monies?
The RM6.1 billion MAS double government bail-out and the RM3.2 billion biggest corporate pardon for Halim Saad’s RM3.2 billion UEM “put option” debt are proof that good governance, accountability and integrity remain major problems although Tun Daim Zainuddin has stepped down as Finance Minister.
This will probably the real reason why after an active search for more than nine months, the Prime Minister, Datuk Seri Dr. Mahathir Mohamad has not been able to find a Finance Minister who is competent, non-controversial and “clean” - and he has to continue to double up as Finance Minister.
(8/1/2002)