Press Statement by Lim Guan Eng in Petaling Jaya on Sunday, 5^th October 2008: 

Datuk Seri Najib Tun Razak defence of the RM 8.25 billion PT Bank Internasional Indonesia Tbk (BII) scandal as a purely commercial decision shows that BN has still not learnt the lessons from the March 8 political tsunami of the necessity for Competency, Accountability and Transparency(CAT) in good governance   

New Finance Minister Datuk Seri Najib Tun Razak’s defence of the RM 8.25 billion BII scandal as a purely commercial decision shows that BN has still not learnt the lessons of the March 8 political tsunami of the necessity for CAT in good governance. Malaysians denied BN its 2/3 majority for the first time in history because they were sick of corruption abuse of power, financial malpractices and shady deals that has caused Malaysia to tumble in the rankings of the Transparency International’s Corruption Perception Index of No. 37 in 2003, when Datuk Seri Abdullah Ahmad Badawi took over as Prime Minister, to No. 47 this year.

Unfortunately the BN government has refused to stop questionable deals such as Malayan Banking Bhd’s (Maybank) acquisition of Indonesia fifth largest bank, BII, for RM 8.25 billion despite widespread condemnation. Consequently Maybank’s share price closed to its 5½ year low of M 6.60 on Friday. While Maybank is still the nation’s largest bank by assets, its market capitalisation has fallen to RM 32.2 billion, behind Public Bank Bhd’s RM 35.1billion.

So unfavourable was the deal that the vendors had to give a RM 758.9 million or 15% discount to sweeten the deal. So far Maybank has failed to explain how it can pay 4.3 times BII’s book value compared to the current market valuation of Indonesian banks at a maximum of 2.7 times. CIMB Research estimated that the cost to acquire 100% of BII at RM8.25bil, or 467.2 rupiah per share, was still 51% higher than BII’s current market price of 310 rupiah.

In fact the value of Indonesian banks have dropped so drastically, serious questions are raised as to whether Maybank would even get half of what was paid for, should BII be sold now by Maybank. Bank Negara also has to answer questions why it approved this deal when it was clearly not in the interests of Maybank and the Malaysian public. Do we need a bank that Singapore’s Temasek Holdings does not want and is desperately willing to give a further 15% discount of RM 758.9 million even AFTER the deal has been closed?

DAP calls on Najib as the new Finance Minister to review the RM 8.25 billion BII acquisition to fulfil the changes he had said in Kota Kinabalu yesterday that BN must make to take heed of the March 8 general election results. Should Najib fail to look after the public interests and the desire for change, then his prophecy that the people will have no choice but to change the BN government will ring true. Najib should pass this first test if he is to succeed as a Finance Minister of financial prudence, competency, accountability and transparency.
 

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* Lim Guan Eng, Penang Chief Minister Penang & DAP Secretary-General