Khazanah sold Proton for no profits?

Mohd Ariff Sabri Aziz | January 25, 2012
Free Malaysia Today

The ‘Che Det Consensus’ is an economy built around problem solving that is ‘practical’ only for the Malaysia’s business and Umno political elite.


I found it odd the statement from Khazanah Nasional Bhd that it didn’t make profit from its sale of Proton Holdings Bhd’s shares to DRB-Hicom Bhd. If no profits were made, why sell the shares?

Secondly, Khazanah’s statement can be construed as an admission that it was given a fait accompli – take this price and don’t ask any questions. In Malaysia, only one person can do that – the man who can walk on water – Dr Mahathir Mohamad.

I hope I can throw more light on the sale of Proton shares to DRB-Hicom. Were there any other bids besides DRB-Hicom presented to Khazanah?

Is Khazanah brave enough to publish the identity of all the bidders?

If it has the courage to do so, we shall not be surprised if the bidders were the Tengku Mahalil-Arumugam group, DRB-Hicom and Nazmi and company. And they all have only one master – Mahathir.

We all know Mahathir’s end-game.

He wants to be the Malaysian “King” Croesus. Croesus was a legendary king in a country known as Lydia in Asia Minor.

He was fabulously rich. It was said that gold from the mines and sands filled up his coffers.

Allow me to re-tell a short story about King Croesus in my own style.

I hope he (Mahathir) will suffer the same fate as the original King Croesus.

Empire destroyed

When the Greek law-giver Solon came to Lydia, Croesus displayed all his wealth and asked Solon to name three individuals whom Solon regarded as the happiest.

Solon named three unknown persons and Croesus was expectedly angered and asked why he, with all his wealth, was not included in the three.

Solon answered: how Croesus can be included as Croesus does not know what God has in store for him?

Shortly after the incident, Croesus consulted the Oracle of Delphi just as the Persian King Cirrus was embarking on his empire-building mission.

The oracle told Croesus that if he goes to war with Cirrus, he will cause the destruction of an empire.

Croesus went to war and was defeated by Cirrus. The empire that was foretold was his own!

Mahathir’s plutocracy

I recall hearing a remark that Khazanah at one time was supposed to be the golden handshake to Mahathir. That was the reason why almost all the equity in big companies is concentrated in Khazanah’s hands.

They were to be divested to private companies in line with the much exalted public-private sector partnership.

It should be called collusion between the political elite and the business elite. You get therefore a plutocracy.

If Mahathir cannot get Khazanah directly, he gets it indirectly through his business associates.

Mahathir is manipulating the business world.

Here’s more. Last year, Keretapi Tanah Melayu Bhd (KTMB) has been asked to assist MMC Corp Bhd to conduct due diligence on the national railway company.

The due diligence is important for MMC to decide if it wants to privatise KTMB.

MMC takeover of KTMB

MMC plans to pump in some RM1 billion into KTMB and take over its operations. And KTMB was asked to assist MMC. What exactly does “assist them” mean?

KTMB, on its part, said that it has not received any instructions from the government to put the matter on hold. In other words, it’s an ongoing process. When will the takeover take place?

The answer: when Mahathir paves the way for MMC to take over.

How can MMC recoup the huge investments or finance it? The answer: the double-track project from Gemas to Johor Baru.

Remember it has been delayed for 10 years. It will take off when MMC takes over KTMB.

Then they will go to the government and say since they are the end-user for that facility, we can build it ourselves.

Maybe we team up with the Chinese to give face to China.

Chet Det economics

So how do you describe our economic system since the time of Mahathir?

The smorgasbord of acronyms – ETP, PDP, NKEA, EPP – all mean nothing.

So what do we have? A capitalist development state like Japan? Malay mysticism mixed with market economics?

Can it be a slow-motion version of Soviet-style economics, where the elite grabbed productive public assets for private gain?

It looks that way: since Mahathir and Najib Tun Razak talk about welfare all the time, our economy should be called “robber baron socialism”.

But I prefer to call it a new model – the Che Det Consensus.

It’s an economy built around practical, problem-solving and technologically innovating model.

Except that it is “practical” only for the business and political elite.

It solves the problem for the robber barons, masking them under the guise of technological innovativeness.

Hence you have the fashionable phrase of unlocking value, releasing potential… ad nauseam.

The writer is a former Umno state assemblyman who has now joined the DAP, and is a FMT columnist.

  1. #1 by Bigjoe on Thursday, 26 January 2012 - 10:16 am

    I tell you that the acquisition of Proton by Syed Mokhtar makes no sense whatsoever. Why would someone who has carefully build his safe and predictable businesses – infrastruture, utilities, finance take on something so unpredictable as the auto industry that occupy such a big portfolio. What happens if PR take over Putrajaya and protection is removed? It makes no sense.

    The real reason is the wealth of Syed Mokhtar is partly that of you-know-who. And the deal is done based on a few things – its cheap NAV wise – their property holding is worth a few times more and the easy bank financing – also dubious because its risky lending.

    Hence I propose to send a warning – 1) IF PR takes over. PR must pass a law specific to Proton – make it illegal to sell properties of Proton other than to fund the car-maker and they are not allowed to pay dividend. 2) Remove protection of Proton over a definitive period with NO compromise.

  2. #2 by k1980 on Thursday, 26 January 2012 - 10:54 am

    Kneel, you knaves, kneel and kowtow before the “Father of Moderation and Transformation”!

    He will soon be praised as the “Father of Adam and Eve”, the “Dzulkarnian Iskandar of the Modern World”, the Lord of the Lords ….

  3. #3 by Godfather on Thursday, 26 January 2012 - 12:11 pm

    The Lord of the Cows ?

  4. #4 by Godfather on Thursday, 26 January 2012 - 12:14 pm

    No Mamakthir baby can be seen to fail.

  5. #5 by Jeffrey on Thursday, 26 January 2012 - 12:24 pm

    ///Mahathir is manipulating the business world.///per Mohd Ariff Sabri Aziz (former Umno state assemblyman, hence ex-Insider)

    Appropriately “Selling Goreng pisang- Malaysia Incorporated Berhad- selling speciality Bread/pastry” – ought to be a compulsory case study, necessary for award of the Entrepreneurship degree under the new Entrepreneurship progam started by universities.

  6. #6 by sotong on Thursday, 26 January 2012 - 12:25 pm

    Proton could not continue to suffer huge losses at the expense of taxpayers… was a failed project from the start.

  7. #7 by Loh on Thursday, 26 January 2012 - 6:32 pm

    Proton started as a project to satisfy the ego of Mamakthir. The Rakyat were made to pay for Mamakthir’s folly through higher import duties for motor vehicles and AP scheme. The later was then said to be NEP vehicle to make persons chosen by Mamakthir to be filthy rich. Beneficiaries of APs includes the sons of Mamakthir. If NEP was to help the poor, how can it be morally right that the sons of the Prime Minister of the day compete with other Malays for benefits under NEP?

    Malaysians pay more for motor vehicles either in taxes for imported makes or for Proton makes because of high cost of production. With government funds and consumers’ sufferings Proton has built up plants and is in a position to go into joint ventures with others and be independent of the government. Malaysians would be happy if the government divests in Proton and severs its link to it.

    The government should have sold Proton to the highest bidders now that Proton should have completed its multiplying effects in having related industries established, the original excuses for its establishment. There is no need to attach the national car label to Proton which should stay independent after its sale.

    The government in the words of Muhyiddin still takes Proton as national car with the intention to bail it out when it needs and to restrict its sale to persons favoured by the powers-that-be. Since the sale is not at arm’s length, the government is in fact transferring government resources to private hands.

    The label of national car for Proton has the following consequences:

    1, Motorists pay more for their motor vehicles,
    2, Public transportation system is destroyed so that people have to depend on private vehicles,
    3, The company Proton can only be sold to persons who could maintain the national car status and thus the government chose not to sell Proton to the highest bidders.
    4. The import duties of vehicles and CKDs will remain high to protect the profit margin of the company.
    5. The government will still come to the aid of the company because it is national car.
    6. Legalized corruption through the continuation of AP scheme.

    It must be a record that the folly of one person can cause sufferings for so many people, the whole population of Malaysia and for so long; three decades ad counting.

  8. #8 by slashed on Friday, 27 January 2012 - 11:32 pm

    None of the claims in this article is substantiated by the author. If we criticize our opponents for making unsubstantiated claims, why do we tolerate the same with our own?

  9. #9 by Kampong Orang on Saturday, 28 January 2012 - 2:46 pm

    Both Khazanah and DRB are controlled by UMNOputras lah. So, make decision to sell, someone in Khazanah also could get benefit lah!

    Just like Mathir’s time, selling government of Mathir bought high priced share of MAS. Remember?

    All cronism encouragement credited to the people of Malaysians who voted for BeEnd (UMNO, MCA, MIC, Gerakan, PBB, etc.)

    MCA said, they have served the Chinese community well! Najib said for long term development of Malaysia, his government is the best!

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