The route Renong Group and its executive chairman Tan Sri Halim Saad took to unload and restructure its RM26 billion debts after the Asian financial crisis in 1997 were strewn with scandals of good corporate governance sacrificing the interests of minority shareholders as well as government scandals of public accountability and integrity.
Starting with the corporate scandal in November 1997 over UEM’s RM2.4 billion debt to buy a 32.6 per cent stake in Renong, causing the stock market to plunge by 6.8 per cent in a single day, the failure of Halim Saad to honour his three-year RM3.2 billion put option to purchase UEM’s 32.6 per cent holding in Renong, the saddling of Renong’s short term debt load of RM5 billion to UEM in exchange for investments in several unprofitable and debt-heavy businesses and the use of public funds and government-linked agencies like Khazanah Nasional, Pensions Trust Fund (KWAP) and Employees’ Provident Fund (EPF) to help relieve Renong’s mega-debts, the Renong-UEM Group had been the worst advertisement of the lack of good corporate governance in the country and major cause for the erosion of investment confidence.
Up to now, the government has not been able to give a full picture and state the total amount of government-linked funds and agencies involved in the RM1.88 billion TimedotCom IPO offer, whether they constituted some 90 per cent of the entire IPO offer which would mean a colossal investment of some RM1.7 billion and involving a loss of several hundred millions of ringgit of public monies for a partial bail-out of the Renong Group.
The KWAP sub-underwriting of the TimedotCom IPO offer to the tune of RM903.74 million or 48 per cent of the IPO issue of 572 million shares is an unlawful and criminal misuse of public funds but no one has been prosecuted or been held to account for such a very clear-cut criminal offence.
It has been reported that under the rescue plan, the government would acquire 45% of UEM.
Malaysian taxpayers do not want to see another charade of government bail-outs of select companies and individuals using public funds, like the TimedotCom IPO and the MAS buy-out/bail-out scandals, with certain individuals cash-rich and laughing all the way to the bank at the expense of the minority shareholders and the public taxpayers.
Any government rescue plan for UEM-Renong must pass the three tests of being fair to the minority shareholders of the companies in the Renong Group, the taxpayers and the principle of accountability and transparency - which is why the rescue plan should be presented for approval by the current meeting of Parliament, especially as this would mean an additional government expenditure of some RM2 billion.
Furthermore, Parliament and the country must be given a full and satisfactory accounting of the UMNO interests in the UMNO-Renong conglomerate of companies, whether directly or indirectly, to dispel suspicions that the RM2 billion bailout of UEM-Renong is not a bailout of UMNO interests in the conglomerate.