KUALA LUMPUR: A Royal Commission of Inquiry should be set up to investigate allegations by former prime minister Tun Dr Mahathir Mohamad that national car maker Proton Holdings Bhd had suffered RM3.4 billion in losses in its cash reserves due to bad management, the DAP said.
Commenting on a report in the New Straits Times on Tuesday quoting Mahathir that Proton’s cash reserves had fallen from a high of RM4 billion to RM600 million to help cut losses, DAP secretary-general and Bagan MP Lim Guan Eng said the inquiry must suggest the appropriate action to be taken against those responsible for the staggering losses incurred and recommend steps to prevent such future losses.
“The inquiry should determine whether the government should cut losses by cashing out immediately and winding up Proton, or risk losing more money as in the MV Augusta deal. This is an important decision that must be studied by the inquiry as the Malaysian public does not want Proton to end up as a sacred cash cow that continues to chew cash,” Lim said in a statement.
According to Mahathir, Proton had accumulated RM4 billion during Tengku Tan Sri Mahaleel Ariff’s tenure as CEO, but its cash reserves had dropped to a low RM600 million during his successor Datuk Mohammed Azlan Hashim’s stewardship, the statement said.
Mahathir added that the losses sustained are partly due to the sale of MV Augusta to a little-known company called Gevi SpA in 2006 for only €1 (RM4), even though Proton had paid more than RM300 million for a 57% stake.
Subsequently, after the sale of MV Augusta by Proton, BMW paid €93 million or RM446 million at the time for one third of MV Augusta. Following that, Harley Davidson bought the rest of MV Augusta for US$109 million or RM360 million at the time, Lim said.
The inquiry should also look into whether Khazanah Nasional, the Malaysian government’s investment arm, received a good price over the recent deal in which it divested its 42.7% stake in Proton to DRB-Hicom Bhd, said Lim. Khazanah sold their stake for RM1.3 billion or RM5.50 per share, which is half of Proton’s book value of RM9.81 per share and a write-down compared with the RM8 per share that they had originally paid.
One of the key persons involved in building up Proton’s cash position to RM4 billion is Tengku Mahaleel, Lim said.
“As such, we propose that Tengku Mahaleel’s should be a member of the inquiry panel as he will understand the issues best,” he said.
This article appeared in The Edge Financial Daily, February 9, 2012.
Commenting on a report in the New Straits Times on Tuesday quoting Mahathir that Proton’s cash reserves had fallen from a high of RM4 billion to RM600 million to help cut losses, DAP secretary-general and Bagan MP Lim Guan Eng said the inquiry must suggest the appropriate action to be taken against those responsible for the staggering losses incurred and recommend steps to prevent such future losses.
“The inquiry should determine whether the government should cut losses by cashing out immediately and winding up Proton, or risk losing more money as in the MV Augusta deal. This is an important decision that must be studied by the inquiry as the Malaysian public does not want Proton to end up as a sacred cash cow that continues to chew cash,” Lim said in a statement.
According to Mahathir, Proton had accumulated RM4 billion during Tengku Tan Sri Mahaleel Ariff’s tenure as CEO, but its cash reserves had dropped to a low RM600 million during his successor Datuk Mohammed Azlan Hashim’s stewardship, the statement said.
Mahathir added that the losses sustained are partly due to the sale of MV Augusta to a little-known company called Gevi SpA in 2006 for only €1 (RM4), even though Proton had paid more than RM300 million for a 57% stake.
Subsequently, after the sale of MV Augusta by Proton, BMW paid €93 million or RM446 million at the time for one third of MV Augusta. Following that, Harley Davidson bought the rest of MV Augusta for US$109 million or RM360 million at the time, Lim said.
The inquiry should also look into whether Khazanah Nasional, the Malaysian government’s investment arm, received a good price over the recent deal in which it divested its 42.7% stake in Proton to DRB-Hicom Bhd, said Lim. Khazanah sold their stake for RM1.3 billion or RM5.50 per share, which is half of Proton’s book value of RM9.81 per share and a write-down compared with the RM8 per share that they had originally paid.
One of the key persons involved in building up Proton’s cash position to RM4 billion is Tengku Mahaleel, Lim said.
“As such, we propose that Tengku Mahaleel’s should be a member of the inquiry panel as he will understand the issues best,” he said.
This article appeared in The Edge Financial Daily, February 9, 2012.
