Statement by Lim Guan Eng in Petaling Jaya on Wednesday, 16th July 2008:
A Royal Commission of Inquiry into the RM 800 million ringgit MV Agusta
scandal to determine how Proton lost RM 500 million when it could have
earned RM 300 million
with the call by former Prime Minister Tun Dr Mahathir Mohamad for a
Royal Commission of Inquiry into the RM 800 million ringgit MV Agusta
scandal to fully disclose mismanagement and financial misjudgments by
Proton Holdings Bhd, action against those responsible and new measures
to be implemented against such weaknesses. This follows the shocking
announcement by Harley Davidson Inc two days ago that it will purchase
Italian motorcycle manufacturer MV Agusta, once owned by Proton Holdings
Bhd, for US$109 million (RM352 million), making the total sale proceeds
of RM 800million.
Holdings had bought MV Agusta in 2006 for RM368 million which it had
then sold for only one euro (RM5) to an unknown company in Italy - Gevi
SpA. In justifying the sale for one euro Proton had said here were no
operational, engineering, and technological synergies between Agusta,
the motorcycle maker, and Proton as a carmaker.
a 57.75 percent stake in MV Agusta in December 2004 for 70 million euro
(RM367.6 million), which was treated as goodwill and written off.
However Proton lost more than RM 500 million in the sale for one euro
because it had to assume the additional provisions relating to MV Agusta
in the accounts of the Proton group for the financial year ended March
31, 2006, amounting to RM136.2 million.
Agusta was sold off for one euro(RM5), Gevi SpA sold Husqvarna, a
division of MV Agusta which manufactures scrambler sporty off-road
motorcycles, to a German company BMW for 90 million euro (RM450
million). Now MV Agusta has been bought by Harley-Davidson Motor Cycles
of the United States for RM350 million.
interest therefore requires a full accounting from Proton on how it went
so terribly until BMW can pay RM450 million for one third of MV Augusta
and Harley Davidson pay RM 352 million for the remaining stake which
Proton sold only one euro at a loss of more than RM 500 million.Tun Dr
Mahathir is correct to state that Proton appears to have lost
approximately RM800 million by selling Agusta for only RM5 stating that
the buyer of MV Agusta “invested one euro and made 160 million euro,".
have a right to know what type of management can makes such a decision
that allows other foreign companies to benefit at our expense. Instead
of losing RM 500 million, Proton could have earned RM 300 million if it
had sold to BMW and Harley-Davidson. Proton has refused to anwer despite
Khazanah Malaysia, the Malaysian government's investment arm, holding
about 42.74 %t of Proton.
interest requires full accountability and transparency. Unfortunately
Proton’s refusal to give full disclosure leaves requires an
establishment of a Royal Commission of Inquiry into this RM 800 million
MV Agusta scandal in the interests of good corporate governance and
social responsibility. Malaysians wants answers to this RM 800 million
Lim Guan Eng, Penang Chief
Minister & DAP