(Petaling Jaya, Friday): Finance Minister, Tun Daim Zainuddin, has again denied that the government’s proposed purchase of 29% stake in Malaysian Airlines (MAS) from Naluri Bhd was a bail-out claiming that it was essential to bring about speedy solution to the airline’s current problems.
The Finance Minister’s sudden sense of urgency to resolve MAS’ problems when they have dragged out for more than three years is nothing but a tactic to deflect widespread public criticisms inside and outside the country of the RM1.8 billion buy-out bail-out of Tan Sri Tajudin Ramli’s 29.09 per cent stake in MAS through Naluri, at the exorbitant price of RM8 per share or a premium of RM4.32 or 117 per cent over the closing market price of the MAS share at RM3.68 each when the deal was signed.
Tajudin had told a foreign news agency that he was lucky in getting
a good price of RM8 a share, which will enable him to settle Naluri’s
entire debt of RM1 billion but Malaysians are now saddled with MAS’
RM9.4 billion debts after the buy-out bail-out costing RM1.8 billion.
The government has violated its own rules for assisting industries and companies as laid down by the National Economic Recovery Plan (NERP) formulated by the National Economic Action Council and adopted by the Cabinet in the RM1.8 billion MAS buy-out bail-out.
Chapter 4 of the NERP’s Agenda for Action on "Establish Rules for Assisting Industries and Companies" laid down ten rules which, among other things, made a distinction between assistance to troubled companies that involve only privately owned companies and assistance that involve the government.
On assistance to be granted by government to troubled companies, this will be guided by three criteria , namely, national interest, strategic interest, and equity considerations under the New Economic Policy and the National Development Policy.
The NERP said:
Two of the NERP rules for "assisting industries and companies"
"4.In the event of a rescue involving public funds, private investor and lenders must take their appropriate ‘hair-cuts’. Except for the most extreme extenuating circumstances, promoters, controllers and management of rescued entities must be seen to be relieved of their control and involvement. The proof of viability should also be established before commitment of rescue funds."
Daim should explain why in the RM1.8 billion buy-out bail-out of Tajudin’s MAS shares, there was not only total lack of transparency and accountability undermining government credibility and public confidence, Tajudin is spared from taking his "hair-cuts".
Instead, Tajudin has been 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.
The national and international outrage at the MAS deal is that it is not Tajudin who had to take his "appropriate hair cuts", but the taxpayers who have to suffer "hair cuts" for the benefit of Tajudin!
Daim said yesterday that the Ministry of Finance, Inc. had not completed the purchase of Tajudin’s stake in MAS, having only paid 10% of the purchase price of RM1.79 billion subject to obtaining the necessary regulatory approvals first.
The most important approval the government must secure in a democratic society which upholds the principle of responsibility, accountability and transparency is public approval.
For this reason, DAP calls on Daim to order a freeze in the MAS
deal and commission a public inquiry as to whether the RM1.8
billion public rescue of MAS violated government’s own rules
on transparency and ‘hair-cuts’ for Tajudin, as well
as making recommendations whether the government should go through with
the purchase of Tajudin’s stake in MAS - spelling out the
"hair cuts" for Tajudin - and how to turn MAS into a leading
and successful international airline.