Saturday, August 09, 2008

No reason for RM480 million deposit forfeited in Maybank-BII deal

Deposit will only be forfeited if there was no Force Majeure clause in the Sales and Purchase Agreement (SPA). Is such clause included in the M&A SPA? If not, could it be a money siphoning scheme that involved Temasek? A touch of Khairy's hand, perhaps?

When the Bank Indonesia Internasional (BII) issue was first raised in Parliament on May 28th, 2008 by YB Puad Zarkashi, the valuation on the deal was put to question.

Maybank purchased BII at 4.6 times of book value, which to YB Azmin Ali (PKR) is substantially above the 2.5 times market valuation for Indonesian Banks. It pissed many that Singapore's state-owned Temasek, exited with a capital gain of RM2.6 billion after holding it for nine years at the expense of Malaysia.

A subsequent bi-partisan MP briefing by Dato Abdul Wahid Omar was not convincing. Wahid who had just assume the post to replace Tan Sri Amirsham Aziz was understandably unable to answer all the enquiries.

The BII issue was first answered in Parliament by Tan Sri Nor Mohamad Yakcop. He basically gave a non-commital and non divulging answer to say it was a necessary business decision and the Ministry is supportive. And, he continued with the same stance after the rejection by the Indonesian authorities.

Surprisingly, former MBB CEO and non-Economist but leading EPU, Tan Sri Amirsham Aziz did not stood up to answer in Parliament. He was instead answering a leaked question from Khairy that caused an uproar in Parliiament.

In the second session of Parliamant, PM Department Minister, Dato Nazri gave a more detailed explanation providing comparative valuation numbers and names of other bidders to show the competitiveness of the bid for BII.

That answer may not be convincing for the more knowledgable market practitioner but was a sufficient political answer to thwart further criticism on the issue of valuation. The book value multiple is substantially higher than Azmin's earlier claim but it still doesn't justify the premium for BII and the market condition to the purchase is made.

Hmmm ... the stench of a conspiracy bigger than ECM Libra merger with Avenue Capital is pervading the air.


The deal is now rejected by the Indonesian authority and the concern for the rejection has been raised earlier by Minority Shareholders Watchdog Group (MSWG) chief executive Abdul Wahab Jaafar Sidek during Maybank's EGM.

As usual in Malaysia, minority shareholders are greedy mute and majority shareholders steamrolled deals without consideration for the minorities.

Now talk is that RM480 million deposit will be for Temasek and Koomin Bank to keep. Wong Chun Wai wrote that Edge Financial Daily believed Maybank could lose up to RM3.5 billion if forced to sell the existing block of 20%.

He asked "who was responsible for this great idea of taking over BII? So, can foreign investors be blamed when they look at the state of Malaysia's economy? The last thing they need - and we need - are politicians who only care about themselves."

Abdul Wahab is making a strong call for the wholesale resignation of the Board of Directors but saved for new and current CEO, Dato Abdul Wahid Omar.

Lest be reminded of the question is there "a consultant behind a consultant" raised by YB Dato Bung Mokhtar in Parliament? Is it justified for Temasek to keep the RM480 million? If it is legally justified, did someone intentionally removed the Force Majeure clause?

Since every other thing is political in Malaysia, what is the political implication?

Force Majeure

In the Wikipedia, "Force majeure (French for "greater force") is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime, act of God (e.g., flooding, earthquake, volcano), prevents one or both parties from fulfilling their obligations under the contract."

Such circumstances include Government intervention as a typical sample of such clause reads:

"No Party shall be liable for any failure to perform its obligations where such failure is as a result of Acts of Nature (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalisation, government sanction, blockage, embargo, labour dispute, strike, lockout or interruption or failure of electricity [or telephone service], and no other Party will have a right to terminate this Agreement under Clause 19 (Termination) in such circumstances."

Thats quite clear a situation.

If the RM480 million deposit is unrecoverable, can it be assumed there was intentional negligence by those involved in the deal? When something obvious is left out, the possibility is for political intervention.

Rumours Boiling To Fact

When the controversy of the deal began to be talked on the Internet, regular little bird alerted that this deal is about siphoning RM300 million for Khairy. Since it is an insufficient lead to work on, the story was left in the backburner.

The recent debacle only provide a possibility of how the RM300 million was siphoned out of a cash rich and well run company. The subsequent question is how Temasek and Koomin Bank, Korea will legitimise the disbursement of such RM300 million?

Does Temasek indulge in such questionable unsavory transaction? By reputation, Singapore is not totally absolved from indulging in pay-off and corruption of its boarders. Utter the word Ithmus of Kra canal and Singapore money will be flowing for some Thai General's who just did a military coup d'etat.

That possibility is not without a historical possibility. Is it a matter of how?

A question that begs for answer is why Nor Mohamad is so gung ho on the deal, as though he is a forex trader again? Since Nor Mohamad make the final go ahead on any deal by Khazanah, did he instructed Khazanah to cook up the deal?

Words on the "financial" street of Kuala Lumpur is that he instructed the Khazanah boys to "make the deal".

Nor Mohamad is no more the same gentlemen that resigned for his hand in the mother of all forex losses at Bank Negara Malaysia.

He has his hand in the questionable ECM Libra-Avenue merger. And in the recent General Election, highly reliable source at the UMNO Bahagian Bukit Gelugor mentioned he spent RM10 million for campaign. His face is slowly resembling one Hindustani movie crook.

Other than Son-in-Law whispering instruction to Father-in-law, is there any other way for Khairy to have a hand in this deal?

Those in the know are aware that the Director Investment of Khazanah for deals involving Indonesia is a close Khairy associate, Dato Farid Alias. He is presently Khazanah's representative in the Bank Niaga-CIMB deal.

How could Khazanah not aware of the Indonesian Government policy on country exposure limit to its banking industry? But there is an exit clause for them.

Maybank is controlled by PNB and not directly controlled by Khazanah. However, it could mean PNB has lost control over its own investment and over riden by Khaazanah? This never happened in the past.

By the way Synergy Drive merger was initiated by CIMB and forced onto the throat of PNB, ther is that possibility. Tan Sri Azman Mokhtar never cease to mention PNB. LTAT, LTH and other Trust Institutions in any of his presentation on Khazanah.

Further investigation into Farid's background leads to more suspicion on thsi deal. He was the person advising Dato Dr Jamaluddin Jarjis (JJ), when he was Minister of Finance II, to "privatise" and list a certain arm of Felda that raised concern of "ketirisan" by the public. Tengku Zafrul, now part Air Aisa-Tune Group, led Avenue Capital and was appionted advisor to the deal.

JJ maybe deemd as Najib's man but he is very casual and close with Khairy and his associates. For instance, Dato Shaziman, Khairy's cousin was his Director when he chaired Tenaga Nasional. Inside sources in TNB are saying there are even business partners in some deals in East Malaysia.

Coming back to Farid, he has Singapore links from his work experiance in Singapore.

Another clue that raised suspicion of this deal was Amisham's meteoric rise to full Ministership and Tan Sriship after his retirement from MBB. His qualification to lead the Economic Planning Unit (EPU) is also in question. He is not capable of speaking in Parliament session.

Judging by his conservative and prudent track record in Maybank, the whole industry is surprised by his aggresive stance to takeover majority control of BII. Is he forced to do the deal allegedly initiated by MoF II and Khazanah? The convenient fallback, which Wahab MSWG has done, is to blame the responsibility to the whole Board of Director, including former MD, Amirsham.

Another suspicious question is, is Amirsham being kept underleash from talking by his Ministerial appointment? Amirsham does not have guts to "talk" but it could be so big a scandal that "they" are not taking chances and must ensure the lids are air-tight.

To add another twist, the buzz in UMNO Rembau is that he was seen on several occasions at Khairy's family home in Rembau during the March 9th, General Election.


berasiam said...

Menurut pihak berkuasa Indonesia, syarat yang dikuatkuasakan itu telah dimaklumkan setahun lebih awal kepada para pemain industri kewangan di negara itu. Oleh yang demikian tidak timbul bahawa peraturan itu dikuatkuasa secara tiba-tiba sebagaimana yang digembar gemburkan. Secara logiknya pun, mustahil untuk sesebuah negara memperkenalkan peraturan secara mendadak sedemikian rupa dalam keadaan tanpa sebarang ancaman terhadapnya.

Jika benar, dan amatlah kecil kemungkinan dakwaan pihak berkuasa Indonesia itu salah, tidak ada faktor force majuere boleh dikaitkan. Sebaliknya, siasatan mendalam haruslah dibuat terhadap urus niaga berkenaan dengan meneliti terutama tarikh-tarikh langkah demi langkah yang terlibat. Dalam pentadbiran Pak Lah sekarang, amatlah kecil harapan kita untuk mendapatkan gambaran yang jelas melainkan angka-angka kerugian bersama dakwaan bahawa pihak luar yang melakukan penganiayaan terhadap modal kita.

Bung Karno said...

Temasek's owners have got to get some funds somewhere in exchage for Pulau Batu Putih. The beneficiaries are still the same father and SIL team.

Anonymous said...

So it all boils down to one person called Khairy, the youngest unemployed billionaire who has assumed a post of YB.

Before being an ordinary MP, if he would have made this much money, what he possibly could if becomes a minister.

Maybe he would sell malaysia to become the first richest Malaysian in the world.


Anonymous said...

Temasek bought BI from ICB sometimes in year 2007. ICB is owned by Tun Daim.

My Say