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The MAS manpower rationalisation exercise to retrench 3,000 - 4,000 workers should be made public as this goes against the public undertaking of “no retrenchment” during the RM1.8 billion government buy-back bailout of MAS last year

Media Statement
by Lim Kit Siang

(Penang, Tuesday): It has been reported that Malaysia Airlines (MAS) has completed a study on a manpower rationalisation exercise to help it stay competitive, which would involve the elimination of between 3,000 and 4,000 jobs from its current payroll of over 21,000 for the national airline to remain operationally viable and that the report will be submitted to the Government, the controlling shareholder, for approval and implementation early next year. (Business Times)

DAP calls on the government to make public the MAS manpower rationalisation exercise to retrench 3,000 to 4,000 workers as this goes against its public undertaking of “no retrenchment” during the RM1.8 billion government buy-back bailout of MAS last year.

The RM1.8 billion government buy-back of 29 per cent MAS stake to bailout Tan Sri Tajudin Ramli and Naluri at the exorbitant price of RM8 per share representing a premium of RM4.32 or 117 per cent over the closing market price at RM3.68 per share when the deal was signed on 20th December 2000 becomes even more outrageous and indefensible when the naked and blatant result is the bailout of one person and one company at the expense of thousands of loyal MAS employees and the Malaysian taxpayers.

The then Finance Minister, Tun Daim Zainuddin, gave a most irresponsible reply in Parliament in March when he claimed that RM8 per share was a “good buy” for the government to re-acquire 29 per cent of MAS stake, when the highest price ever reached by MAS this year (even before the September 11 terrorist attacks) was only RM4 per share.

Up to now, Daim’s failure to address two important issues about the government MAS buy-back bailout stood as a terrible indictment on his tenure as Finance Minister, viz:

Why no independent professional valuation was ever done when the government agreed to pay Tajudin's Naluri Bhd for the MAS stake at RM8 per share when its closing market price when the deal was signed on 20th December 2000 was only RM3.68 per share. Tajudin had subsequently admitted in a circular dated Jan 22, 2001 to minority shareholders of Naluri Bhd, in which he owns 47 per cent: "No independent valuation was carried out for the said sale consideration".
Why rules for the bail-out of companies established by the National Economic Action Council in the "National Economic Recovery Plan" was violated and Tajudin was not only spared from having to "take his appropriate hair-cuts" but was given a bonanza at taxpayers' expense to reward for his mismanagement of MAS by being given 117% premium for the MAS shares over the market price, transforming it into a personal rescue for Tajudin instead of a public rescue for MAS.

Be that as it may, now that the Prime Minister, Datuk Seri Dr. Mahathir Mohamad has personally taken over as the Finance Minister, and as he was the one who gave the public undertaking that there would be no retrenchment of workers by MAS after the government buy-back of the controlling stake in the national airline, the Malaysian public as the ultimate owners of MAS are entitled to a full accounting as to how the government proposes to restore the viability and competitiveness of the national airline - including the proposed retrenchment of 3,000 to 4,000 MAS workers in violation of his earlier “no retrenchment” pledge.

(25/12/2001)

*Lim Kit Siang - DAP National Chairman

The MAS manpower rationalisation exercise to retrench 3,000 - 4,000 workers should be made public as this goes against the public undertaking of “no retrenchment” during the RM1.8 billion government buy-back bailout of MAS last year

Media Statement by Lim Kit Siang

Media Statement
by Lim Kit Siang