Mahathir and Mahaleel’s questions on  the one euro sale of MV Agusta and Proton deserve prompt and satisfactory answers by the Proton management

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Media Statement
by Lim Kit Siang  
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(Parliament, Tuesday): The questions by former Prime Minister and Proton Adviser Tun Dr. Mahathir Mohamad and former Proton CEO Tengku Tan Sri Mahaleel Tengku Ariff about the one euro sale of MV Agusta and Proton deserve prompt and satisfactory answers by Proton.

It is not only the Securities Commission but the 26 million Malaysians who also  have a right to an explanation as to why Proton “just gave away almost RM400 million just like that”,  whether “there were other bids or was there only bid?”,  why Proton took 14 months to deliberate on the purchase of MV Agusta but only two months to dispose it for one euro, and the  position of the three common directors of the Proton Board who had unanimously agreed to buying MV Agusta.

It must be most embarrassing that Mahaleel is hijacking the Abdullah administration’s buzzwords of “transparency” and “good corporate governance” by accusing the new Proton Board of the sin of “transparency of falsehood contrary to the wishes of the government and transparent for all to see” in rightly insisting on replies from Proton to the many queries posed by Mahathir and him.

Mahaleel maintained that Proton’s losses in Q1/Q2 of its financial year are not wholly due to MV Agusta – and also nothing to do with him since he had already departed from Proton. He pointed out that Proton’s reports of loss during the two quarters were due to provisions of RM137 million and RM161 million, respectively, and drew attention to the fact that the provision for MV Agusta was only RM45 million in the first quarter. In other words, Proton’s losses could not be blamed entirely on the MV Agusta issue.

Mahaleel pointed out that unsold stocks at the end of October 2005 were 25,000 units which, if valued at RM40,000 each, amounted to RM900 million. He said there were at least 30,000 units of unsold stocks now, 18,000 units of which were 2005 models which would likely have to be sold at a discount since they are old models.

In his media conference, Mahaleel also  provided an overview of the management performance “before and after” his CEO tenure, viz:

Mahaleel claimed that under the   strategy that he and his team had formulated, which included the anticipated revenues from Lotus and MV Agusta – from 2008 - Proton would have been able to fully repay its government loan of RM800 million (which was given when Proton began business) by 2007.

However, in view of what has taken place since the new management took over, he believes that “the sale of MV Agusta has placed risk on the company’s future, reduced its ability to increase engineering capability and also reduced its access to new markets through the Agusta network and products”.

A full and satisfactory response from the new Proton Board  to the many  public interest questions raised by Mahathir and Mahaleel can no longer be  avoided or delayed.

(14/02/2006)