Screenshots: Shouldn't we bail out the Prime Minister?

Would you like to bail out the Prime Minister from a sticky situation?

Last night, two weeks after Screenshots sounded a warning shot, the Prime Minister, who is the Finance Minister, has finally admitted that there is a problem to the sale of controlling stake in Pantai Holdings Berhad to Singaporean interest.

Quote Bernama, August 13, 2006 19:03hr:

Prime Minister Datuk Seri Abdullah Ahmad Badawi said the government was studying the necessary action to be taken pertaining to the disposal of a 31 per cent stake in Pantai Holdings Bhd to Singapore-based Parkway Holdings Ltd.

He said the matter was being looked into by the Treasury after realising that it had become a problem as it was related to the concession for the supply of hospital requirements.

"The share sale has become a problem, as it involves several matters related to the concession given to Pantai Holdings, that is a contract to supply hospital requirements," he told reporters after launching the Yayasan Budi Penyayang Foundation Day and opening of the Bank Muamalat Malaysia Bhd's Kepala Batas branch at the Budi Penyayang Complex here Sunday.

He said the government had always hoped that the equity would remain with Malaysians but unfortunately it had gone into the hands of foreigners.

"The concession has changed hands, and it has gone to other people and (we) hope it would remain with the Malaysian side, and held by Malaysian citizens," he said.

Asked the type of action which may be considered by the government, Abdullah who is also Finance Minister declined to elaborate.

According to published records, Parkway Holdings had paid RM311.58 million entirely in cash to take control of 124.7 million shares in the capital of Pantai Holdings, representing roughly 31.34% of the issued and paid-up capital of the Malaysian company. The transaction as completed on September 20, 2005, and management control was passed on from Malaysian Dr Lim Tong Yong to the Singapoeans..

Important contexts

July 31, Screenshots blogged about Umno Youth's Schindler's List. The Youth movement's deputy chief had threatened to release a list of brands and international companies with operations in Malaysia that are known to be supporting the Israeli regime financially, calling for a boycott. Screenshots advised the Son-in-Law to hold his horses and to check his backyard before the joke boomerangs on him.

In the blog entry, Screenshots also listed out details, culled from official websites of Singapore authorities, about the cosy nexus among ECM-Libra and Avenue Capital Resources -- which have since been merged into ECM-Libra Avenue Berhad -- and Pantai Holdings.

The keywords are Malaysia's ECM-Libra Avenue and Singapore's Parkway Holdings.

If you remember, barely one week ago the Prime Minister went on the TV interview with his confidant Annuar Zaini on August 7, stating that "none of our local companies have been taken over".The PM also blamed people for starting "furore when it involves a Singapore company". The PM said: "I don’t know why." Here's the transcript on The Star:

The plot thickens

Now that some individuals have disposed off significant shares in ECM-Libra Avenue in the last few days -- in the midst of the completion of the Distribution and Capital Reconstruction exercise at ECM-Libra/Avenue, and the Public Audit Committee's (PAC) investigations of the controversial 'merger'' -- let's put the context in place before we look at the big picture.

Context 1: It has been confirmed, via voluntary disclosures on the part of involved parties, that Singapore-owned Parkway Holdings are having de facto control over Malaysia-based Pantai Holdings despite holding just 31.34% of shareholding..

Context 2: In Point 22 of the condensed consolidated income statement, the quarterly report, for the financial period ended June 30, 2006 of Pantai Holdings Berhad released through Bursa Malaysia on July 26, 2006, it is stated that Parkway Holdings, the Singapore-owned company, is effectively a significant stakeholder in ECM-Libra Avenue Berhad.

Does the management control over Pantai benefit Parkway strategically and fiscally? The answer is a trouncing yes. Quote The Star BizWeek, August 12 (and also see the StarBiz chart below):

The many-fold benefits that the acquisition of Pantai brings to Parkway are easy to appreciate. For one, Pantai owns 7 private hospitals totalling 1,300 rooms in the Klang Valley, Penang, Ipoh and Malacca, hence widening Parkway's exposure from the current 2 hospitals throughout the country.

Parkway's recently released results for the first half ended June 2006 show that its revenue increased 106% while earnings before interest, tax, depreciation and amortisation (EBITDA) grew 64%. Excluding Pantai, Parkway's revenue and EBITDA grew 20% and 10% respectively.

And that's not mentioning the proceeds from Pantai subsidiaries that hold the prized 15-year government concessions in Fomema Sdn Bhd and Pantai Medivest Sdn Bhd. Fomema'sconcession will only end in 2012.

In reality, Fomema holds the monopoly for the mandatory monitoring and supervision of medical examinations of all foreign workers in the country. And the business is booming.

According to Rating Agency Malaysia Bhd (RAM), Fomema has been growing at a compounded annual growth rate (CAGR) of 31.3% over the past three years.

On the other hand, Pantai Medivest, holds a 15-year concession from the Health Ministry for the provision of hospital support services such as facility engineering, biomedical engineering, cleaning services, laundry and linen and clinical waste management services to the three southern states of Negri Sembilan, Malacca and Johor.

With these concession rights, says BizWeek, Medivest and the Fomema group of companies are Pantai's main sources of income, accounting for about half of Pantai Holdings' group sales and over 40% of the group's operating profit in its recently released results for the four quarters ended June 2006

However, given Malaysia's international relations policy vis-a-vis the nationhood of Israel, there is a politically very incorrect element in the business relationship.

Jewish interests

Interestingly, American-Jews interests are present in the Parkway-Pantai business relationship.

Noted American financier Richard Blum (picture left), a known Zionist lobbyist, is a substantial shareholder in Parkway, and by extension, Pantai Holdings. See this blog entry and this Jpg.)

See the Parkway-Jews-Pantai-ECM-Libra Avenue business relationship now? And we heard someone speak over the weekend that investment bankers shouldn't be ashamed of building relationship in business, didn't we?

Incidentally, on August 10 and August 11, three prominent shareholders of ECM-Libra Avenue had cashed out from the company, throwing a total of 82.73 million shares, or a combined total of RM49.26, in off-market trading.

Why the hindsight?

Now, the business relationship involving Pantai Holdings is up for review. It came from none other than the Prime Minister who is also Finance Minister. Why the hindsight?

The Star's BizWeek has an interesting story on Saturday. It involves what Parkway Holdings have in mind in the South Johor Economic Region mega-project that the Prime Minister has proclaimed as his idea of development for Johor, a state within breathing distance from the Little Red Dot. Quote StarBiz:

PARKWAY Holdings Ltd has been appointed as the consultant for the setting up of a mega medical hub in South Johor. Sources say that this is one of the major projects that come under the grand South Johor Economic Region masterplan that was unveiled not too long ago by Prime Minister Datuk Seri Abdullah Ahmad Badawi.

It is not hard to appreciate why Parkway was chosen; it is the region’s leading fully integrated healthcare group and has one of the largest networks of hospitals and healthcare services in the region.

And now, the Prime Minister says the sale of Pantai Holdings shares to Parkway has become a national problem.

As patriotic Malaysians, shouldn't we bail out the Prime Minister from this sticky situation so that he does not succumb to the 'iblis' he so despised.

Parkway paid RM311.58 million to take control over Pantai. The Singaporeans, with the Jews at the back, may be ready to dispose off Fomema and Medivest for the right price.

For this, BizWeek gives a context: "Market sources say the price tag for Fomema's concession ranges from RM300mil-RM500mil and around RM40mil for Pantai Medivest." Any takers, patriotic Malaysians?

Concessions and Privatisation

And, lastly, has anybody also ever wondered and pondered about policies governing concessions and privatisations?

Wasn't it mentioned in history that the objectives of privatisation include the principle of an ownership structure that must be minimum 30%-bumiputra owned, and at least 50% Malaysian-held, “until such time the company is listed”?

How was the case with concessions given to Pantai Holdings, past and present?

Comments

Since the national interest is at stake, we Malaysians should really work together to amend this. Political interest or any other personal agenda aside, this is about our nation.

Do the right thing.

Posted by: auyongtc | August 14, 2006 09:50 AM

Question:

Who sold pantai holding to Parkway? I'm sure TDM has been barking about ppl selling the country to foreign interest ....i'd like a clear NAME, who sold Pantai in the first place? We'll know then who's the real traitor who betrayed the country!

Will answer some of TDM's allegation ...i wanna know...who's this traitor..who sold pantai off to parkway!

JEFF OOI says: The sale of controlling stakes in Pantai to Parkway was judicially completed on September 20, 2005 -- Pak Lah was the reigning PM and Finance Minister. The Star's BizWeek frontpage story on Saturday, titled "Poser for Pantai", has given a clear depiction to answer your question above. Read it already?

Posted by: goks | August 14, 2006 10:20 AM

Other pertinent questions should be asked and be answered.

1. Any violations?

2. Who & When violated?

3. Any "tutup mata" for the violations for non-action?

Please don't suggest another Royal Commission of Inquiry. We hear enough of this.

Looks like be prepared to change lifestyle again for this mess.

Posted by: gunnena | August 14, 2006 10:36 AM

Hi Jeff

There is a Chinese saying: "You cannot use paper to hide a fire." Which means we cannot sweep dirt under the carpet forever.

Internet archeology is unearthing the dirt. It stinks!

Posted by: dignity2u | August 14, 2006 12:53 PM

Hi goks

I chuckle when you ask:

"... i wanna know ... who's this traitor .. who sold pantai off to parkway!"

Bravo! I myself dare not pop that question. Shamelessly I chose to remain quiet.

Posted by: dignity2u | August 14, 2006 01:09 PM

The only misktake is this brouhaha is for AAB to claim that none of the local companies have been taken over. In the event, Pantai was 31% owned by Parkway Holdings of Singapore. Even this point is debatable as the normal definition is more than 50%, that is, it becomes a subsidiary. Although with 30%, it is possible to exert control, if they majority act together, it still has overall control.

The questions that need to be asked are:
1) Has any Malaysian laws been broken? I think not.
2) Was the sale of the 31% to Parkway been approved by the Stock Exchange and FIC?
3) When was Mokzhani's stake sold to Dr Lim Tong Yong?

The real question is whether Pantai is a strategic company. If it is, why the hell list it on the stock exchange where it can be sold to anyone? If it is, why didn't they have a separte local and foreign tranche for the shares? Why not have a golden share, where management is always in the hands of the Malaysian government?

The key question is - does Malaysia want to be part of the global trading system?

Posted by: TheWrathOfGrapes | August 14, 2006 01:34 PM

Why do you have to use the word Zionist everytime.
Look up the definition of Zionist and you will find out that they do not exist anymore, since the goal of a Jewish state within the borders of the ancient homeland has been achieved.
To much influence of TV 1/2/3? They only can take about zionist regime....and also dont know the meaning.

Posted by: Albert | August 14, 2006 01:34 PM

so jeff, as per your article, we would be actually sending money out to singapore until 2012?

i m no economist, but as a working man i know that if there is a steady flow of money going out of your pockets, it is NOT good.

Posted by: blackrage | August 14, 2006 01:40 PM

Quoting from 'Poser for Pantai', "sources say it appears that the minimum bumiputra shareholding requirement (in the context of the concessions) may have fallen short when Datuk Lim Tong Yong (T.Y. Lim) acquired 32.85% of the shares in Pantai from Mokhzani Mahathir back in April 2001.".

Let's disregard the thorny issue of why then Mohhzani-controlled Pantai was given the two juicy 'national interest ' 15 year concessions in the first place.

The article points to the Mokhzani-Datuk Lim deal as breaching the "minimum 30%-bumiputra owned, and at least 50% Malaysian-held" policy. I think that aspect should be examined carefully especially in the light of Dr M's accusations and claims. (Including his claim that in his time, the govt never helped his children?). Is what the article says a valid assessment of the deal? If so, why was it allowed to go through?

Perhaps one of the lessons to be learnt from the Pantai case is to have a clause in any imprtant govt concession contract (similar to Fomema Sdn Bhd and Pantai Medivest Sdn Bhd) which automatically revokes the contract should certain policy conditions be breached.

If that clause had been in the Fomena and Pantai Medivest contracts, there would be no question now of whether the govt will have to "revoke Pantai's rights to its two lucrative concessions considering the infrastructure that has been put in place and its 10-year track record, it adds that these patriotic sentiments could well weigh on their renewal prospects". (Quoting from 'Poser for Pantai' again)

Writing the above paragraph brought to my mind the absolutely vile-tasting matter of another set of Dr M era contracts - the toll highway concession contracts. Their heavily-lopsided terms and still shoruded in secrecy contents. If Dr M wants to hurl accusations now, can the contents of the toll contracts be revealed for all to see? If Dr M wants to accuse the present govt of being half-past six, what sort of adjective would he apply to the govt which saw such contracts signed, burdening the future generations of Malaysians for a long, long time to come?

Posted by: Leithaisor | August 14, 2006 01:45 PM

I wish our good PM would elaborate further on how it is a PROBLEM for a foreign company to own 31% of a company that holds two concession agreements. Are these agreement to provide hospital services really deemed NATIONAL INTEREST?

Another mark on Malaysia FDIs

Posted by: JAM | August 14, 2006 02:11 PM

at time of desperation, the sinister type who is morally backrupt can always be counted on to call upon the spirits of racism and xenophopia to rally support for thier cause(s). and the ignorant masses can always be counted on to marched to their tune accordingly.
so what's new?

Posted by: lsk | August 14, 2006 03:36 PM

WrathOfGrapes: "The key question is - does Malaysia want to be part of the global trading system?"

______

Which Malaysia are your referring to? The xenophobic Malaysia (for example, those who want the editor of the NST to be of a certain race) or the global outlook Malaysia?

Posted by: banjaran | August 14, 2006 03:37 PM

Close Bursa Malaysia, close our borders, make trading in our currency illegal punishable by death, move people back to the kampungs and teach them to worry about output per acre and output per tree. Sounds like the Khmer Rouge, doesn't it ?

Posted by: Godfather | August 14, 2006 04:14 PM

Jeff,

thanks for the links ..So...first TDM's son sells off his bumi stake... bringing the un-balance ....then the Datuk LIM being a businessman....sold it off to Parkway when he wanted to offload it!!!! so we have 2 traitors ...one who's a traitors in the eye's of all the bumi putra's and one...a traitor to the eye's of TDM..for selling the stake to Singapore!

Well i dont see why TDM should make so much noise as at the point of sale, Pantai didn even have sufficient bumi stakeholders...thanks to his own Son's doing!

Why didnt the father stop the son from selling off precious bumi stakes? to a china man? Why didnt he talk to him...and ask him tow ait for a bumi to buy it over?

How can TDM's son sell his bumi stake to a non-bumi?

Question also...(Assuming the G handed over contracts to Pantai before departure of TDM's son) if Mokhzani wasnt in Pantai...would they still have gotten all the hospital contracts?

Posted by: goks | August 14, 2006 05:07 PM

/// Which Malaysia are your referring to? ///

Banjaran, good question. I didn't think hard about the problems associated with a xenophobic and schizophrenic Malaysia with respect to trade and investments. Tough choices:

1) Malaysian Malaysia
2) Malay Malaysia
3) Mahanomics Malaysia
4) Market-oriented Malaysia

I guess I must be referring to 4).

;)

Posted by: TheWrathOfGrapes | August 14, 2006 10:20 PM

leithaisor:

"Writing the above paragraph brought to my mind the absolutely vile-tasting matter of another set of Dr M era contracts - the toll highway concession contracts. Their heavily-lopsided terms and still shoruded in secrecy contents. If Dr M wants to hurl accusations now, can the contents of the toll contracts be revealed for all to see? "

Very good and valid Q to the ex-PM who seems to suffer from apnexia, or is he resorting to faulty memory recall -- sign of second childhood? -- like what Mr Opposition Leader said regarding Ops Lallang?

While we are at it, might as well pull out the files on Leader shares allocation (Bumi) involving Rafidah Aziz's SIL? (She answered in Parliament the PM's sons also got what!?)....

I'm not condoning all these robber baronry acts -- it's just that here's one ex-PM seeing the speck in Khairy's eyes but not see the log in his own son's eyes...or another then "favoured" Miister's SIL's eyes...

Posted by: desiderata | August 15, 2006 04:14 PM

INTERNET does not operate in a legal vacuum.
Read this before you post a comment in this blog!

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Shouldn't we bail out the Prime Minister?

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