Thursday, May 6, 2010

Khazanah Cash Raid??



In its letter to the editor (StarBiz, May 4), Khazanah Nasional Bhd avoided answering questions on Syarikat Prasarana Negara Bhd. The Auditor-General's Report said it had no record of assets acquisition and write-offs.
Debts totalled more than RM8bil.
Losses were RM900mil.
Four hundred usable buses were abandoned, while inferior new ones were bought from vendors not approved by the Treasury.

When realistically, Khazanah effects control over the board and management of Pos Malaysia Bhd, as reflected in certain decision-making. It showed considerable satisfaction.
When the decision making turned ugly, it evoked the legality of the board, as in the case of the 'stop sale' order over the disposal of 40million Transmille Group Bhd shares at RM14 per share.

Following the subsequent collapse of Transmille, share is now worth a few sen.

I did not mention then so-called RM546mil loss in the next of my speech (at a closed-door forum on the New Economic Model on May 1) nor during the post-forum interview. I said if the Transmille shares had been sold then RM14, the proceeds would have been RM560mil.
If sold now at 36sen, the proceeds would be RM14mil. Therefore, the difference is RM546mil.

I first learned about the concept of opportunity loss or opportunity cost in my economics study at the Higher School Certificate level abouty 50 years ago, when most of the management staff of Khazanah were not born yet. So educating me on that is an exercise of very little value.

I prefer to put it simply - Khazanah made a blunder in that.

The RM800mil taken out from Pos Malaysia's cash reserve was nothing but cash raid. Khazanah got the lion's share of it. It was a respite given its then performance. Of course, the Pos Malaysia board had no alternative but to comply with the assertion of control by Khazanah.

After this, what alternative did the High Court have other than approving it?

That was precisely legalistic, in tandem with the company law.On June 18, 2008,

The Edge Financial Daily quoted Khazanah managing director Tan Sri Azman Mokhtar saying "as a major shareholder, of course we will have a major say....if you don't take the lead, who is going to take lead?".


-The Star Letters to the Editor by Tan Sri Adam Kadir, President, Umno Ex-Legislators Association


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