Dr M: Syed Zainal might not want to continue as Proton MD

KUALA LUMPUR (April 16): Former Prime Minister Tun Dr Mahathir Mohamad on Monday hinted that PROTON HOLDINGS BHD [] managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir might not want to continue leading the national car maker under the ownership of DRB-HICOM BHD [].

Mahathir, who is also Proton adviser, said in Syed Zainal's case, there was no question of sacking but merely a question of an agreement between the latter and DRB-Hicom as to how best to deal with the problem of redundancy.

"DRB-Hicom is quite entitled to change the MD because they now own Proton but at the moment Syed Zainal is still the managing director and he is getting paid for the position.

"But of course he might not want to continue. It's his choice," Mahathir told reporters after chairing a Roundtable High Level Strategy Session organised by the National Chamber of Commerce and Industry of Malaysia.

He was commenting on news report that Syed Zainal would be removed as managing director of the company after the launch of the Proton Preve sedan model tonight.

When asked on the potential successor, Mahathir said: "I think if Syed Zainal is not there, DRB-Hicom has to place someone there."

"Maybe, one of their own DRB-Hicom people who are experienced in the automotive industry (could fill the position)," he said.

Last week, The Edge Financial Daily reported that Syed Zainal had handed in his resignation, days before launching its latest model and weeks after DRB-Hicom took over the loss-making company.

However, later on the same day, Proton issued a statement refuting the news report by saying: "Syed Zainal is still holding the position of group managing director of Proton and his services are still required in the company".

It is believed that DRB-Hicom chief operating officer Datuk Lukman Ibrahim is poised to take over from Syed Zainal.

Syed Zainal, 50, who ventured into the automobile industry by becoming Perusahaan Otomobil Kedua Sdn Bhd (Perodua) senior general manager in 1999 and later the company's deputy managing director in 2005, was appointed Proton's managing director on Jan 1, 2006.

In January, state asset manager Khazanah Nasional Bhd announced the sale of its 42.74% stake in Proton to DRB-Hicom for RM1.291 billion.

The sale was concluded last month and DRB-Hicom appointed its managing director Datuk Seri Mohd Khamil Jamil as Proton executive chairman and executive director, replacing Datuk Seri Nadzim Salleh, who tendered his resignation days after the completion of the deal. — Bernama



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Syed Zainal still MD, says Proton

KUALA LUMPUR (April 10): PROTON HOLDINGS BHD [] has said Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir is still holding the position of group managing director of the national carmaker, and that his services are still required in the company.

Responding to a report in the Edge Financial Daily on Tuesday citing sources that Syed Zainal had resigned from the company, Proton in a statement on Tuesday said it was not aware of the source of the speculation.

The Edge Financial Daily, citing close associates of Syed Zainal and industry executives, said the resignation was due to differences with the new owners of Proton, namely conglomerate DRB-HICOM BHD [] that took over the national carmaker.

"The post-acquisition exercise is still proceeding smoothly — and upon the completion of the same, Proton is expected to have a strong synergy of current and new management team members that will provide Proton with the necessary impetus to lead the company in its aspiration to become a globally-successful automotive player," said the national carmaker.



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Mustapa: Proton, Perodua should continue collaboration

KUALA LUMPUR (March 28): PROTON HOLDINGS BHD [] and Perusahaan Otomobil Kedua Sdn Bhd (Perodua) should continue to collaborate in areas they had previously agreed on, said Minister of International Trade and Industry (MITI), Datuk Seri Mustapa Mohamed .

This, he added, is despite the recent developments in the pioneer national car maker.

He said the collaboration talks, had benefited both carmakers and the automotive industry, as a whole.

"As this is the case, I do not see why the new owners of Proton, DRB-HICOM BHD [], should not continue with what had been agreed to by the old management.

"The previous Proton management and Perodua had agreed to collaborate in certain areas such as vendor distribution and marketing, as the merger proposal was extreme," he added.

Mustapa said MITI would continue to engage with both national car companies.

He also said that he was given a briefing by DRB-Hicom Bhd last week.

Perodua Managing Director Datuk Aminar Rashid Salleh said recently that the compact car maker is open to collaboration talks with DRB-Hicom.

However, he reiterated that Perodua, as the country's largest car maker, is still against any kind of merger between the two entities.

On Jan 16, DRB-Hicom entered into a sale and purchase agreement with Khazanah Nasional Bhd, to acquire 42.74 per cent of the issued and paid up share capital of Proton for RM1.291 billion. - Bernama



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DRB-Hicom group MD Mohd Khamil appointed Proton chairman

KUALA LUMPUR (March 19): DRB-HICOM BHD [] group managing director Datuk Seri Mohd Khamil Jamil has been appointed chairman of PROTON HOLDINGS BHD [] with effect from Monday.

Proton said in a statement that Mohd Khamil was also appointed executive director upon completion of the acquisition of a 42.7% stake in Proton by DRB-Hicom on March 16.

He takes over from Datuk Seri Mohd Nadzmi Mohd Salleh, who resigned as Proton chairman and director of Proton last Friday.

Mohd Nadzmi’s resignation followed the approval by shareholders of DRB-Hicom Bhd on March 14 for the acquisition of the remaining equity interest in Poton after DRB-Hicom had increased its stake in Proton to about 50.01%.

He was a director nominated by Khazanah Nasional Bhd to the national carmaker’s board.



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Mohd Nadzmi resigns as chairman, director of Proton

KUALA LUMPUR (March 16): Datuk Seri Mohd nadzmi Mohd Salleh has resigned as chairman and director of PROTON HOLDINGS BHD [], the national carmaker told Bursa Malaysia Securities Bhd on Friday.

Ohd Nadzmi’z resignation followed the approval by shareholders of DRB-HICOM BHD [] on March 14 for the acquisition of the remaining equity interest in Poton after DRB-Hicom had increased its stake in Proton to about 50.01%.

He was a director nominated by Khazanah Nasional Berhad to the national carmake’s board

DRB-Hicom had on Jan 16 entered into a conditional share sale and purchase agreement (SSPA) with Khazanah Nasional Bhd to acquire 234.734 million ordinary shares of RM1.00 each in Proton representing approximately 42.74% of the issued and paid up share capital of Proton, for a total cash consideration of RM1. 29 billion or equivalent to RM5.50 for each ordinary share of RM1.00 each.

It subsequently acquired another 7.27% in Proton, taking its stake to 50.01%.

Maybank Investment Bank Bhd had on March 14, on behalf of DRB-HICOM, served a notice of unconditional take-over offer to the Board of Directors of PROTON informing of its intention to undertake an unconditional take-over offer to acquire all the remaining ordinary shares of RM1.00 each in PROTON ("PROTON Shares") not already owned by DRB-HICOM after the Acquisition for a cash consideration of RM5.50 for each PROTON Share.

“We wish to highlight that the resignation of Dato' Sri Mohd Nadzmi Bin Mohd Salleh as the Chairman of the Board of PROTON and all other appointments by virtue of Dato' Sri Mohd Nadzmi's position as Director of PROTON, is part of the terms of the SSPA,” said Proton.



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Proton board not seeking other parties for takeover offer

KUALA LUMPUR (March 15): PROTON HOLDINGS BHD []’s board of directors has picked Affin Investment Bank Bhd as an independent adviser for the non-interested directors and shareholders in relation to DRB-HICOM BHD []’s takeover offer.

“The board of directors of Proton wishes to confirm that the board is not seeking any other person to make a take-over offer of its voting shares or voting rights,” it said in a statement to Bursa Malaysia.

Proton also advised the holders of the offer shares not to take any action until they have received the independent advice circular from the independent adviser.

On Wednesday, Proton received a notice of unconditional take-over offer from Maybank Investment Bank Berhad, on behalf of DRB-Hicom which had extended a mandatory take-over offer to acquire all the remaining 274.55 million Proton shares or 49.99% at RM5.50 cash per share.



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DRB-Hicom extends mandatory take-over offer for remaining Proton shares

KUALA LUMPUR (March 14): DRB-Hicom Holdings Bhd’s stake in PROTON HOLDINGS BHD [] has increased to about 50.01% and it is extending a mandatory take-over offer for all the remaining shares in the carmaker which it does not own.

DRB-Hicom said the acquisition of the 42.7% stake in Proton had become unconditional on Wednesday after shareholders approved the purchase of the stake from Khazanah Nasional Bhd.

It said the offer for all the remaining Proton shares would remain at RM5.50 per share.

It had also served the notice of the offer on the board of directors of Proton.



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Flash: DRB-Hicom mulls selling Lotus if does not meet performance target

KUALA LUMPUR (March 14): DRB-HICOM BHD [] mulls selling Lotus Group International if it does not meet the performance objectives, wire reports said.

The reports said other options included a potential change in the management of Lotus, which is owned by Proton.

DRB-Hicom had on Wednesday received its shareholders’ approval to buy the 42.7% stake in PROTON HOLDINGS BHD [] for RM1.29 billion.

The purchase of Proton is expected to be completed in seven days.



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AmResearch reaffirms Buy on DRB-Hicom, unch FV RM4

KUALA LUMPUR (March 5): AmResearch has reaffirmed its Buy rating on DRB-Hicom with its fair value unchanged at RM4 a share, pegging a 10% discount to its sum-of-parts value of RM4.40 a share.

The research house said on Monday it was reported in the press today that DRB-Hicom is evaluating plans by Mitsubishi, Volkswagen and General Motors (GM) to revive Proton.

It said that GM has proposed to gain control of half of Proton’s production lines at the latter’s plant in Tanjung Malim. This is not something new as it was already speculated in the market earlier that GM plans to buy a 50% stake in the plant.

“This proposal makes sense given the much-publicised under-utilised Tanjung Malim plant – running at barely 50% utilisation. A valuation of RM800 million for the plant stake has been bandied about but the key point here is that Proton would be able to achieve economies of scale,” it said.

AmResearch said it continues to like DRB-Hicom, given it is one of the cheapest conglomerates – trading at CY12 of 13 times versus its peers of 18 times.

“The group is on an exciting growth path, as it is the best proxy to VW’s ambition to be a key ASEAN auto player. DRB would also benefit in the transformation of Pos Malaysia – recently showing strong a set of results – and the next leg up would be to reap the synergies with its sister company, Bank Muamalat,” it said.



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Dr M: Transform Proton and reverse financial losses

KUALA LUMPUR (Mar 2): DRB-HICOM BHD [] has been urged by Tun Dr Mahathir Mohamad to transform PROTON HOLDINGS BHD [] and look at ways to reverse the current fiscal losses.

In making the call, the former premier and adviser to the national auto maker said the new management after the takeover, scheduled to be completed this month, has to bring the national automotive company to its old glory.

"Obviously, you (DRB-Hicom) need to beef up the organisation, examine all the losses to see how you can reimburse the losses.

"Generally, the new company will have to look at all aspects of management of Proton as it is weak in all angles," Mahathir told Bernama in an interview.

The national car maker's pre-tax loss widened to RM84.054 million for the third quarter ended Dec 31, 2011 compared to a pre-tax loss of RM51.535 million in the same period in 2010.

Revenue for the period also decreased to RM1.432 billion from RM1.833 billion previously.

Turnover for the first nine months also dipped to RM5.92 billion from RM6.36 billion on the back of a RM36.530 million loss before taxation against a pre-tax profit of RM134.3 million recorded in the corresponding period in the preceding financial year.

On the new Proton chief, Mahathir said it is up to DRB-Hicom whether to name a new successor or to retain the old management.

Asked whether Proton can regain its glory with the old management under a new parent, Mahathir said: "Obviously, there might be some new inputs from DRB-Hicom. For sure it is not just going to buy Proton and leave it as it is."

He added the profitability aspect was lacking from the current management under the leadership of chairman Datuk Seri Mohd Nadzmi Mohd Salleh and group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed.

"Well, they (Proton) are not making a profit. Business must make profit. So we must find out why they are not making profit," Mahathir said.

In January 2012, DRB-Hicom struck a deal to buy Khazanah Nasional Bhd's 42.7 per cent stake in Proton for RM1.29 billion or RM5.50 per share.

DRB-Hicom is expected to officially take Proton private later this month, after the completion of certain take-over codes and regulations. — Bernama



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Stocks to watch: Silver Bird, MAS, Proton, Ekovest

KUALA LUMPUR (March 1): Blue chips could extend their gains on Thursday, as regional market sentiment would receive the boost after the European Central Bank provided 530 billion euros (US$711 billion) of cheap funding for banks.

The ECB's Long Term Refinancing Operation (LTRO) has been a major factor behind the rally in European equities since the turn of the year.

A total of 800 banks borrowed money at the tender, the second round of three-year funds, with demand exceeding the 500 billion euros expected by traders polled by Reuters.

At Bursa Malaysia, the FBM KLCI was up 12.92 points or 0.83% to close at 1,569.65, its highest since July 2011.

However, the losses from MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and PROTON HOLDINGS BHD [], which were expected by the market, could have some impact.

SILVER BIRD GROUP BHD [], which resumes trading on Thursday, cautioned investors in the trading of its securities after the auditors have expressed a disclaimer opinion on the company’s latest audited accounts for the financial year ended Oct 31, 2011.

Silver Bird Group suspended its group managing director, Datuk Tan Han Kook and two other key executives effective Feb 24 as it undertakes an internal inquiry into allegations of irregularities in the company’s accounts.

Meanwhile, MAS posted net losses totaling RM1.277 billion in the fourth quarter ended Dec 31, 2011 versus net profit of RM225.92 million a year ago as it severely affected by high fuel costs and non-fuel expenses.

Proton posted heavier net losses of RM88.20 million in the third quarter ended Dec 31, 2011 compared with the net loss of RM60.10 million a year ago due to a decline in year-end sales.

Other stocks to watch are SIME DARBY BHD [], KENCANA PETROLEUM BHD [], MAH SING GROUP BHD [], and EKOVEST BHD [].

Sime Darby reported net profit of RM1.10 billion in the second quarter ended Dec 31, 2011. For the first half, it reported a 42% increase in net profit to RM2.175 billion from RM1.531 billion in the previous corresponding period.

Kencana Petroleum Bhd has secured a RM74 million contract from ExxonMobil Exploration and Production Malaysia (EMEPMI) to fabricate the substructure for a platform off Terengganu.

Mah Sing Group Bhd expanded its land bank with the latest acquisition of 157 acres (63.4 ha) in Bandar Kundang, Gombak for RM40.94 million about RM6 per sq ft. It proposed to build a self-contained, secured lifestyle township named M Residence 2@Rawang with a gross development value of about RM650 million.

Ekovest's earnings soared 615.82% to RM11.31 million for its second quarter ended Dec 31, 2011, from RM1.58 million a year ago, due to increased revenue from its CONSTRUCTION [] arm.

Malaysia Steel Works (KL) Bhd posted net losses of RM13.33 million in the fourth quarter ended Dec 31, 2011 compared with net profit of RM8.99 million a year ago. For the financial year ended Dec 31, 2011, it was still profitable, with net profit of RM24.53 million, or down 12.6% to RM24.53 million from RM28.09 million in FY10.

Poultry-based TEO SENG CAPITAL BHD [] posted a 12.95% increase in its profits to RM7.15 million for the third quarter ended Dec 31, 2011, from RM6.33 million a year ago, underpinned by larger sales of eggs and better prices.



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Proton posts 3Q net loss of RM88.2m

KUALA LUMPUR (Feb 29): PROTON HOLDINGS BHD [] posted heavier net losses of RM88.20 million in the third quarter ended Dec 31, 2011 compared with the net loss of RM60.10 million a year ago due to a decline in year-end sales.

It said on Wednesday that total sales volume was lower when compared to the immediate preceding quarter due to the expected slowdown in buying trend as customers opted to wait until after the new year to purchase a new vehicle in order to capitalise on better future resale value.

“Customer demand over the period also showed an unfavourable volume mix of Proton models, which further affected the profit margin. Consequently, the lower sales volume also resulted in the group having had to adjust production numbers to better manage cost,” it said.

Proton said its 3Q revenue was lower at RM1.432 billion compared with RM1.833 billion a year ago. Loss per share was 16.10 sen compared with loss per share of 10.90 sen a year ago.

For the nine-month period, its registered net loss of RM68.09 million compared with net profit of RM90.50 million a year ago. Its revenue was lower at RM5.928 billion compared with RM6.363 billion a year ago.

Proton group chairman Datuk Seri Mohd Nadzmi Mohd Salleh said the lower profit was largely due to lower revenue from domestic sales.

“However, the unfavourable impact from the lower revenue was cushioned by a decrease in manufacturing overheads and lower administrative expenses incurred in the same financial period. Additionally, the result was also affected by lower volume sale of Lotus cars in Europe in the past quarter,” he said.

Nadzmi said the one-month delay of the launch of Proton’s latest model, the Exora Bold, a turbocharged variant of its popular-selling people carrier had also affected projected sales.

However, he added the delay was necessary to ensure that all issues were addressed and that the customers would get the best from the car.



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Dr M: Proton's transfer of ownership to be completed by March

KUALA LUMPUR (Feb 23): PROTON HOLDINGS BHD []'s transfer of ownership from Khazanah Nasional Bhd to DRB-HICOM BHD [] will be completed by next month, says Tun Dr Mahathir Mohamad, adviser to the national automaker.

The former Prime Minister said by the given timeline, the new leadership will also be finalised. "As for now, the new management has not been decided. We (Proton) are still in the midst of the transfer process to the new company as there are certain takeover codes which have to be complied with.

"I think by March we should have completed the transfer of ownership to the new management," he told reporters after launching the Malaysia OSV Owners' Association (OSV Malaysia), here on Thursday.

Asked as to whether former Proton chief executive officer Tengku Tan Sri Mahaleel Tengku Ariff would make a comeback as the company's new chairman, Dr Mahathir said as far as he is concerned, "there is no confirmation".

Current chairman Datuk Seri Nadzmi Salleh had earlier also indicated to the local media his willingness to lend a helping hand to Proton's new owner.

On this, Mahathir said: "Whether he is to be retained is not for me to decide. It is for the new owners to make that decision."

Khazanah sold its 42.7% equity interest to DRB-Hicom, citing the company's capital base and experience in the automotive industry.

Nadzmi was one of the bidders for the stake. — Bernama



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Proton ownership transfer to be completed in March: Dr M Read more: Proton ownership transfer to be completed in March: Dr M

Proton Holdings Bhd's transfer of ownership from Khazanah Nasional Bhd to DRB-Hicom Bhd will be completed by next month, says the adviser to the national automaker, Tun Dr Mahathir Mohamad.

The former Prime Minister said by the given timeline, the new leadership will also be finalised.

"As for now, the new management has not been decided. "We (Proton) are still in the midst of the transfer process to the new company as there are certain takeover codes which have to be complied with.

"I think by March we should have completed the transfer of ownership to the new management," he told reporters after launching the Malaysia OSV Owners' Association (OSV Malaysia), here today.

Asked as to whether former Proton chief executive officer, Tengku Tan Sri Mahaleel Tengku Ariff would make a comeback as the company's new chairman, Dr Mahathir said as far as he is concerned, "there is no confirmation."

The current chairman, Datuk Seri Nadzmi Salleh had earlier also indicated to the local media, his willingness to lend a helping hand to Proton's new owner.

On this, Mahathir said: "Whether he is to be retained, is not for me to decide. It is for the new owners to make that decision."

Khazanah sold its 42.7 per cent equity interest to DRB-Hicom, citing the company's capital base and experience in the automotive industry. Nadzmi was one of the bidders for the stake. -- Bernama



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Proton to offer YES in-car 4G Internet access

Proton Holdings and Yes, a 4G network provider under YTL Communications Sdn Bhd, today launched a collaboration to offer Malaysia's first in-car 4G internet access in Proton's high-end cars and the new sedan P3-21A to be launched next month.

In the partnership, Proton customers will enjoy 4G connectivity as a new value-added standard feature which will tap into Yes' 4G mobile internet network that currently covers over 65 per cent of the country's populated area.

Proton Group managing director Datuk Seri Haji Syed Zainal Abidin Syed Mohamed Tahir said this innovation, the first endeavour in Proton's rebranding exercise, opens a new spectrum of possibilities and offers customers speed, mobility, comfort and greater productivity while on the road.

"We have been working with YTL for about a year and signed an agreement last year. Today is one small step. Following this, we are trying to work together to integrate more features embedded in the car," he told reporters after the launching ceremony.

He said this initiative would make the Proton brand much more attractive and add income to the company. The cost impact of the new Proton 4G internet car would be very minimal to its customers as providing quality and affordable cars is the objective, Syed Zainal said adding that Proton has negotiated a good package with YTL.

Yes is the only wireless network operator in Malaysia to offer seamless 4G connectivity along the full 960 km stretch of the North-South Expressway and a large portion of the East-Coast Expressway.

Up to five mobile devices can be connected to the car's micro wireless network at any one time. -- Bernama



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'New financing guideline hurt sales'

Bank Negara Malaysia (BNM)'s new responsible financing guideline, introduced in November last year, has severely damaged PROTON EDAR Dealers Association Malaysia's sales, with only 30 per cent of applicants securing car loans in the first two months of the year.

Its president, Armin Baniaz Pahamin, said the growth of the automotive industry depended on customers' ability to secure financing to buy a car.

"If this measure is not reviewed our automotive industry, which supports economic growth, will slowly collapse, as the average Malaysian population is not able to meet the guideline," he added.

In a statement today, the association said BNM should encourage healthy competition among bankers to provide financing for buyers and provide a standard procedure of compliance for the public to refer to when buying a car.

Armin also said the new guideline would give rise to illegal "loan sharks" and promote unproductive population, with vehicle loan approval rate, decreasing.

"When the banks are more stringent, it provides a better opportunity for loan sharks to grow, and it was already at its prime even before the guideline was introduced," he added. -- Bernama



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DRB-Hicom extends losses from Friday

KUALA LUMPUR (Feb 13): Shares of DRB-HICOM BHD [] which had surged recently on its takeover of Khazanah Nasional Bhd’s 42.7% stake in PROTON HOLDINGS BHD [] seemed to have exhausted with investors taking profit.

At 10.48am, it was down 12 sen to RM2.86 with 10.30 million shares done.

The FBM KLCI inched up 0.04 of a point to 1,561.70. Turnover was 1.13 billion shares valued at RM579.85 million. There were 303 gainers, 309 losers and 306 stocks unchanged.

Last Friday, DRB-Hicom fell 16 sen to RM2.98.

News reports quoted DRB-HICOM group MD Datuk Seri Mohd Khamil Jamil as saying DRB-Hicom had not yet decided on the new management line-up to steer Proton.

Mohd Khamil was quoted saying he was surprised with all the names suggested through the media. "I do meet them (Proton officials) from time to time on business arrangements, but I have not made any decision on the new Proton line-up. I must first go through the merger and acquisition process.

"We will hold an EGM on the first or second week of March to finalise the deal,” he said.

There were news reports that Proton's former CEO Tengku Tan Sri Mahaleel Tengku Ariff was poised to make a comeback as the national carmaker's new chairman, replacing Datuk Seri Mohd Nadzmi Mohd Salleh. DRB-HICOM's group COO Datuk Lukman Ibrahim and Hicom Automotive Manufacturers CEO Abdul Rashid Musa were also names tipped to be potential candidates as Proton CEO.



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DRB-Hicom yet to endorse anyone as Proton CEO

KUALA LUMPUR: DRB-Hicom Bhd group managing director Datuk Seri Mohd Khamil Jamil has quashed speculation that a new CEO has been endorsed to head Proton Holdings Bhd.

“I’ve got in my mind the formation of the new management [for Proton] but for the time being I can’t reveal [it],” he said.

Khamil said he was surprised when the media raised a certain name as the person to be appointed CEO and that he had been endorsed by DRB-Hicom.

“I’m not endorsing anybody as CEO yet,” he told reporters at the signing of an international collaborative agreement between Liverpool John Moores University and International College of Automotive yesterday.

Last month, DRB-Hicom announced the proposed acquisition of 42.74% equity interest in Proton from Khazanah Nasional Bhd for RM1.3 billion cash and a mandatory general offer for the remaining Proton shares for RM5.50 a piece.

Khamil said he had yet to see the Proton management officially to discuss the future of the national car manufacturer.

He said DRB-Hicom must complete the acquisition process before going into the details in terms of Proton’s future direction.

Asked whether the shareholders would respond positively to the deal, Khamil said they have been accommodating.

“They’ve expressed their support of our decision to take over Proton and I hope they will also endorse and agree with our decision at the upcoming EGM,” he said.

On whether DRB-Hicom will dispose of Proton’s loss-making unit Lotus Group, he said the company needs to have access and has to look at Lotus because it is an important element of Proton.

“We’ve to make calculations and make an evaluated decision,” he said, adding that he cannot move on Lotus Group without knowing the details of what Lotus is all about and how it can fit into DRB-Hicom’s future plans.

On DRB-Hicom’s plans for Proton’s under-utilised Tanjung Malim plant, Khamil said there must be a rationalisation instead of maximisation.

“It’s easy to maximise capacity as we did at our automotive plant in Pekan, Pahang. But as a car manufacturer, we must not only look into maximising capacity, but also at production and manufacturing cars to fit Proton’s DNA,” he said.


This article appeared in The Edge Financial Daily, February 10, 2012.



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Set up royal panel to probe Proton’s losses, says DAP

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.



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VW to parner Proton for Malaysian hub?

Volkswagen AG is considering expanding production in Malaysia and has dispatched senior executives, including management board members, to review Proton Holdings Bhd’s operations for a potential partnership, a person familiar with the matter said.

Europe’s largest carmaker is considering producing vehicles at Proton factories after its partner DRB-Hicom Bhd. agreed last month to buy 43 percent of Proton, the person said, declining to be identified because the talks are private.

The high-ranking executives are considering whether the plants are equipped to produce VW models as it considers creating a production hub in Malaysia to target Southeast Asian markets, the person said.

The Wolfsburg, Germany-based manufacturer has been expanding production in a bid to overtake General Motors Co. as the world’s largest automaker. VW plans to add a factory in Ningbo, China, by 2014, adding to plants being built in Yizheng and Foshan. A new U.S. assembly site opened last year in Chattanooga, Tennessee.

VW started a partnership in Malaysia last year with DRB- Hicom, which also makes vehicles for Daimler AG’s Mercedes-Benz. The two companies agreed to invest about 1 billion ringgit ($332 million) to assemble Passat sedans from parts produced at other factories.

Volkswagen has flirted with a Proton partnership in the past. The German carmaker called off cooperation talks with Proton in June 2010. The two companies also failed to reach an agreement in November 2007 after 12 months of negotiations. The partnership with DRB-Hicom was agreed in December 2010.

The Proton deal gives DRB control of two Malaysian car plants with the capacity to make a combined 350,000 vehicles per year. Proton’s vehicles are driven by taxi drivers across Malaysia and are among the cheapest cars sold in the country. The company had two annual net losses over the past five years. -- Bloomberg



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