“It involves several matters relating to the concession granted to Pantai Holdings, that is a contract to supply hospital requirements. But unfortunately it had gone to the hands of others”
PM Datuk Seri Abdullah said that the government was studying the necessary action to be taken pertaining to theal 31% stake in Pantai Holdinggggs Bhd to Singapore based Parkways Holding Limited.. The Prime Minister said the matter is being looked into by the Treasury after it had realizing that it had become a problem, as it involved a concession for the supply of hospital requirements.
: Insert Datuk Mokhzani Mahathir sold his shares to CEO Dato Lim T Y who resold to Singapore's Parkways Holding Ltd.
Earlier, news reports said that the former Prime Minister’s son, Datuk Mokhzani Mahathir, had sold his shares
in Pantai Holdings to Pantai Group chief executive, Datuk Lim Tong Yong. (see Bernnama’s report below)
The shares were sold gradually since 2001 and according to the reports; the 31 per cent interest in Pantai Holdings was sold by Mokhzani to Lim and sold to Parkways Meanwhile PAS vice-president Husam Musa amonst other things has called PM Abdullah for a full discolosure of he circumstances for this sale. It looks like it is greed on the part of Datuk Mokhzani Mahathir as Khazanah Nasional Bhd had also expressed interest to invest in Pantai, but backed out when the asking price was “too high”
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'Pak Lah, tell us the truth' ; Aug 16, 06 7:30pm
Prime Minister Abdullah Ahmad Badawi has been asked to clear the contradictions in his statements on the issue of Malaysian companies being snapped up by foreigners, especially Singaporeans.
In an open letter to the premier, PAS vice-president Husam Musa raised, among others, Singapore firm Parkway Holdings Ltd's purchase of a 31 percent controlling stake in private healthcare services provider Pantai Holdings Bhd.
Other issues raised include the merger of ECM-Libra and Avenue Capital, the dealings of Scomi Bhd - owned by Abdullah's son Kamaluddin - and the premier's son-in-law Khairy Jamaluddin's involvement in business. Over the weekend, Khairy sold his entire stake in ECM-Libra worth more than RM9 million following much controversy.
When contacted, Husam said a copy of his letter was both faxed and posted to the prime minister yesterday.
In his five-page letter, the PAS leader said he welcomed the government's decision to try to regain control of Pantai Holdings as reported in the media.
Husam cited a Berita Harian report on Aug 14 which quoted Abdullah as saying the government was relooking at the issue because the concessions given to Pantai Holdings included a government contract for hospital supplies.
The premier said with the sale of the shares, the concession was now "in the hands of others", which the government had hoped it would remain with Malaysians.
However, Husam said this contradicted what Abdullah had claimed in an interview with TV3 on Aug 7 that no Malaysian business entity had been taken over by foreigners.
In his letter, the PAS leader also included an excerpt of the interview where Abdullah said:
"Firstly, I say what is wrong with foreign companies wanting to buy shares in our companies as this is good because they have confidence in our companies...
"But what is important is that we safeguard our interests, we should not let others take over. In this matter, not one of our companies have been taken over..."
Why didn't you act earlier?
Husam also pointed out an earlier letter he wrote to Abdullah late last year, which among others questioned why the Finance Ministry allowed Parkway Holdings to buy a stake in Pantai Holdings, which operated seven hospitals.
"Maybe I am such an insignificant person that my letter was not worthy to be read by you despite you asking everyone to 'tell you the truth'...," said the PAS leader.
"Due to this, you have forgotten that the issue was raised long ago, and you should have acted then even if you had not read my letter," he added.
Husam wondered how Abdullah failed to act when the issue was raised by many quarters, including a member of the cabinet, the health minister.
Newspapers also reported that soon after the takeover, five out of the seven Pantai Holdings directors were changed, he added.
He said under the Practice Notes 2.4 for the Malaysian Code on Take-Overs and Mergers, a company is deemed as being under a new management when more than half of its directors are changed in less than a year following the entry of a new shareholder.
"I am sure you (Abdullah) were aware of all these," he said. "What is even more confounding is that all transactions involving the sale of a local company's interest to the foreigners must first get your approval as finance minister, or at the very least you must be informed about it."
Husam also listed other similar transactions that took place under the stewardship of Abdullah:
Singapore's purchase of a five percent stake in Telekom Malaysia in 2004, where ECM-Libra was its financial advisor.
The five percent stake in Proton purchased by the Government of Singapore Investment Corp (GSIC), also in 2004.
"Why did you agree then but now talk about regaining control? Are you not aware of the cost involved in this process?" asked the opposition leader.
"What is even more unforgivable is that the sale of Pantai Holdings shares amounting to 31 percent to Parkway Holdings contradicted the guidelines on mergers and takeovers issued by the Prime Minister's Department on May 21, 2003," he alleged.
Abdullah took over as prime minister from Dr Mahathir Mohamad six months after that - in November 2003.
"You have transgressed the guidelines issued by the Prime Minister's Department. How can this happen?" he asked.
Meanwhile, Husam said two Pantai Holdings subsidiaries - Fomema and Medivest - were involved in privatisation concessions and based on the privatisation guidelines, they are not allowed to change hands and fall into the control of foreigners.
"Strangely, this has happened. Who gave the approval? As much as you are fond of hearing the truth from the people, I as a citizen would also like to know the truth about this issue and you can do this (tell the truth) at the coming Dewan Rakyat sitting," he added.
Conflict of interests
Touching on the prime minister's family, the PAS leader said there could be a conflict of interest between Abdullah's position as finance minister and his son and son-in-law's business interests.
"Although your son-in-law has given up his stake in ECM-Libra, you must be aware that the government-linked Avenue Capital whose assets are estimated to be around RM4 billion - including its stake in POS Malaysia worth more than RM600 million - is now in the final stages of a merger with ECM-Libra and this happened when your son-in-law was still a shareholder in ECM-Libra."
He said the management of the merged entity ECM Libra-Avenue will be under investment advisory group ECM-Libra.
"This would mean the government-owned company (Avenue Capital) will fall
into the hands of private individuals," he said.
Husam also cited news reports which revealed that Scomi, owned by Abdullah's son, obtained numerous contracts.
"It is difficult to understand how these contracts have nothing to do with your position as prime minister," he said.
Husam said the current situation does not bode well for Abdullah's political standing and it gave the impression that "the nation's agenda has now become your family matters".
Parkway's Pantai booster;Updated : 12-08-2006 ;Media : The Star ;Story By : ANITA GABRIEL and TEE LIN SAY
IN the middle of last year, the rumour in early 2003 that Pantai's major shareholder Datuk Lim Tong Yong was keen to put his block of shares up for sale turned into reality. There were two interested parties ¨C Parkway and Singapore's Raffles Medical Group.
Prior to this, state investment arm Khazanah Nasional Bhd had also expressed interest to invest in Pantai considering healthcare services features prominently in its overall strategy. However, negotiations bogged down essentially due to pricing-related issues.
Parkway, who had the highest bid, managed to secure the block. It acquired a stake of some 31% in Pantai for RM311.58mil through various transactions ¨C 8.8% from off-market transactions at RM1.70 per share from a ¡°mysterious seller¡± and 22.5% from T.Y. Lim at RM2.45 per share.
It also acquired 37% of warrants from T.Y. Lim at RM1.33 per warrant. At an average price of RM2.24 per ordinary share, the purchase was transacted at the historical FY05 PE multiple of 20x.
Parkway is listed on the Singapore stock exchange. In June 2005, Newbridge Capital and Associates emerged as a significant shareholder of the company after acquiring a 26% stake. Newbridge is a US private equity firm.
It ought to be noted that since the emergence of Parkway into Pantai, the management team of the latter has remained intact with Datuk Lim Tong Yong still holding key executive powers as group CEO.
In fact, a key member of Pantai's staff points out that apart from the board and exco, Parkway has not ¡°brought into Pantai any of its own key people.¡±
The many-fold benefits that the acquisition of Pantai brings to Parkway are easy to appreciate. For one, Pantai owns 7 private hospitals totalling 1,300 rooms in the Klang Valley, Penang, Ipoh and Malacca, hence widening Parkway's exposure from the current 2 hospitals throughout the country.
Parkway's recently released results for the first half ended June 2006 show that its revenue increased 106% while earnings before interest, tax, depreciation and amortisation (EBITDA) grew 64%. Excluding Pantai, Parkway's revenue and EBITDA grew 20% and 10% respectively.
The board said it would consolidate the full year results of its investment in Pantai Holdings.
In Parkway Holdings' financial statement on its first quarter ended March 2006, it notes that the group had acquired about 30% equity interest in Pantai Holdings.
It added, however, that notwithstanding that the equity interest is less than 51%, the directors consider Pantai as a subsidiary on the basis that inter alia, the group has board control of Pantai¡±, adding that it has accordingly accounted for Pantai as a subsidiary with effect from Sept 30, 2005.
In other words, as pointed out by an accountant, although Parkway may not have control in terms of percentage (which is anything over 50%), it does have control in substance as it clearly has board control of Pantai Holdings; it now has four members (out of seven) representing the interests of its new major shareholder.
In addition, she says that it is important to look at the rest of the shareholding.
If someone has a big block of shares in a company but it does not amount to over 50%, and the rest of the shareholders are small and are not likely to consolidate to assert control, then it is called defacto control.
But that's debatable, and is currently vigorously discussed in global markets,¡± she says. Interestingly, on July 28, the Government of Singapore Investment Corp Pte Ltd emerged as a substantial shareholder in Pantai with a 5.01% stake or 25.59mil shares.
While the move appears to have piqued the suspicion of some market observers, others think nothing of it.
Their entry into Pantai changes nothing. The GIC is a passive institutional investor,¡± says an analyst.
Pantai's shares have been climbing steadily since June this year from RM2.14 to RM2.30-RM2.35 at current levels, which is not far from its high of RM2.50 achieved in May this year.
PARKWAY Holdings Ltd has been appointed as the consultant for the setting up of a mega medical hub in South Johor. Sources say that this is one of the major projects that come under the grand South Johor Economic Region masterplan that was unveiled not too long ago by Prime Minister Datuk Seri Abdullah Ahmad Badawi.
It is not hard to appreciate why Parkway was chosen; it is the region¡¯s leading fully integrated healthcare group and has one of the largest networks of hospitals and healthcare services in the region.
It is believed that Parkway has in fact already submitted its study and recommend-ations to Khazanah Nasional Bhd.
The other mega projects under the masterplan include the state¡¯s new administrative centre, Southern Johor Industrial Logistic Cluster, Waterfront City, Educity and an international resort.
Report from Bernama
Govt studying action to be taken on Pantai sale
August 14 2006
KEPALA BATAS: Prime Minister Datuk Seri Abdullah Ahmad Badawi said the Government was studying the necessary action to be taken pertaining to the disposal of a 31 per cent stake in Pantai Holdings Bhd to Singapore-based Parkway Holdings Ltd.
He said the matter was being looked into by the Treasury after realising that it had become a problem as it was related to the concession for the supply of hospital requirements.
“The share sale has become a problem as it involves several matters related to the concession given to Pantai Holdings, that is a contract to supply hospital requirements,” he said.
He spoke after launching the Yayasan Budi Penyayang Foundation Day and opening Bank Muamalat Malaysia Bhd’s Kepala Batas branch at the Budi Penyayang Complex here today.
He said the Government had always hoped that the equity would remain with Malaysians but unfortunately it had gone into the hands of foreigners.
“The concession has changed hands, and it has gone to other people and (we) hope it would remain with the Malaysian side, and held by Malaysian citizens,” he said.
Earlier, news reports said that the former Prime Minister’s son, Datuk Mokhzani Mahathir, had sold his shares in Pantai Holdings to Pantai Group chief executive, Lim Tong Yong.
The shares were sold gradually since 2001 and according to the reports, the 31 per cent interest in Pantai Holdings was sold by Mokhzani to Lim and was later sold to Parkway.
Parkway acquired the 31 per cent interest in Pantai Holdings which operates seven hospitals in Malaysia for RM311.58 million in a bid to be the key player in the healthcare industry in the region.
Parkway chairman Richard Seow was reported to have said that the acquisition would enable the company to expand the number of hospitals under its flagship in Malaysia to nine compared to the current two.
UPdate, Aug 08 2006; 19:32 hrs
And response from Datuk Mukhriz Mahathir
Thursday, August 17, 2006
Mukhriz: I've done nothing wrong ;R. Manirajan; The Sun
Umno Youth exco member Datuk Mukhriz Mahathir says he has done nothing wrong and that his conscience is clear.
"For 22 years, when my father was the prime minister, all kinds of allegations had been hurled against me," he told theSun yesterday.
"As far as I know, I have done nothing wrong. My conscience is clear and I don't want to respond to allegations.
"Those making the allegations can continue to do what they are doing. I know my credibility."
Mukhriz, who polled the highest votes in the race for an exco seat in the party elections in 2004, was responding to recent listings of his business interests on the Internet by bloggers.
Tun Dr Mahathir Mohamad, who has been engaged in verbal attacks against the Datuk Seri Abdullah Ahmad Badawi government during the past few months, had said his children were not involved in businesses in the country and challeged the authorities to probe their wealth.
Mukhriz is the youngest of Mahathir's five children.
The bloggers claim a local magazine had estimated Mukhriz to be worth RM55 million, making him among the 10 richest in Malaysia, with ownerships in Mesdaq-listed companies.
The bloggers listed details of his business interests, beginning from the day he was appointed a tourism affairs consultant by a bank with a RM20,000 monthly fee after graduating from Japan's Sophia University in business administration and Boston University in marketing.
The bloggers also claim that a report on a search with the registrar of companies revealed that Mukhriz had business interest in 67 companies as at 1994.
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