(Dewan Rakyat, Wednesday): The government should realise that it should be consistent and rational in every decision-making process as otherwise, confidence at this delicate stage of the national economic crisis cannot be restored.
A lot of confusion reigns over the statement by the Securities Commission executive chairman Datuk Dr. Munir Majid that the Securities Commission would wait for the United Engineers Bhd's (UEM) extraordinary general meeting of shareholders to ratify the company's plan to buy 32.6 per cent of its parent Renong Bhd., before deciding on whether it should make a general offer for remaining Renong shares.
After the Finance Minister, Datuk Seri Anwar Ibrahim had made his Ministerial statement in Parliament on Monday on the emergency financial package to deal with the economic crisis, Munir was interviewed by reporters where he said: "If the shareholders approve it, then the commission will study the waiver given (by the Foreign Investment Committee) on whether UEM complied with the regulation".
This is a contradiction of the announcement by the Finance Minister, Datuk Seri Anwar Ibrahim, who had announced the withdrawal of the waiver in his Ministerial statement in Parliament on 25th November on the UEM-Renong deal as UEM together with Renong chief Tan Sri Halim Saad and associated company Time Engineering Bhd would hold a combined 76.9 per cent stake in Renong.
It does not inspire confidence when the various government authorities cannot give a clear-cut answer on a simple issue as to whether the waiver granted to UEM to make a mandatory general offer to minority shareholders had been withdrawn as announced by Anwar in Parliament, or whether the waiver still stands.
I had asked this question to the Deputy Finance Minister, Datuk Dr. Affifuddin Othman during the winding-up of the debate on the Finance Bill (No. 2) 1997 yesterday, but Affifudin was unable to give a clear-cut statement, referring weakly to Anwar's statement but not prepared to take a strong stand and contradict Munir.
Why are the various government authorities so ambiguous about whether the waiver given to UEM from making a mandatory general offer to Renong minority shareholders had been revoked or whether it still stands?
The picture has become even more cloudy with the pronouncement by the Economic Adviser to Government, Tun Daim Zainuddin, who clearly disagree with Anwar Ibrahim on this issue. Yesterday, he said that the UEM-Renong deal was a private sector matter which was not linked to the government and that he had no interest in it.
However, this did not prevent Daim from commenting that UEM's stake is below the 33 per cent trigger for mandatory general offer, and that approval was given to UEM on its own and not in concert with other interested parties.
Calling it a "matter of interpretation", Daim admitted that if related interests like those of Renong chief, Tan Sri Halim Saad's are taken into account, then the stake would exceed the trigger point of 33 per cent.
Parliament and the country are entitled to know which "interpretation" has prevailed in government, that of Anwar or Daim, whether Daim had overruled Anwar on this issue, and this is why Anwar should clarify whether his announcement in Parliament on the withdrawal of the waiver to UEM from having to make a mandatory general offer to Renong minority shareholders still stands or has been revoked or overruled.
The UEM-Renong deal had been a national catastrophe not only for UEM, UEM minority shareholders but also for investors for the stock market, wiping out about RM70 billion of investors' funds in three days.
Let the government use the UEM-Renong case to restore public confidence, not only in the KLSE but also in the banking and finance sectors.
Let there be a full inquiry as to whether it is true that the RM2.34 billion UEM-Renong deal is actually a bail-out for Tan Sri Halim Saad in his US$800 million purchase of Philippines' National Steel Corporation (NSC) from Wing Tiek Holdings Bhd, through his proxy, Abdul Rashid Manaf, through the shell company Hong Kong-based Hottick Investment Ltd as well as take over the liabilities.
Let there be a full inquiry as to whether it is true that four banks, namely Maybank, Rashid Hussein Bank, Bank Bumiputra and Bank of Commerce shared equally in the syndicated US$800 million loan, given to Abdul Rashid Manaf in December last year, guaranted by Halim with Renong shares, although this is a breach of the rule on single customer limit which, I understand is RM450 million for Maybank, RM250 million for Bank Bumiputra and Rashid Hussain Bank and RM150 million for Bank of Commerce - all exceeded by the four banks when they each give US$200 million (or RM500 million at the time).
In January, the price per share of Renong was RM4.58, but it fell to RM2.90 per share on 17th November, the date of the announcement of the UEM-Renong deal, which is a fall of 36.68 per cent. If the entire collateral is in Renong shares, it would mean a top up of 37 per cent of US$800 million, which comes to about US$300 million, and at current exchange rate, this would work out to over RM1 billion.
Finally, let there be a full inquiry as to whether these four banks were also the banks which have given UEM the RM2.34 bill loan for the acquisition of 723 million Renong shares.
If so, then the government and the various regulatory authorities should explain what they are doing to protect the public and national interest. It is time for the finance companies and banks to be cleaned up to stop all the abuses in mega-loans, and if Bank Negara cannot put a stop to such abuses, Bank Negara should also be cleaned up.
(10/12/97)