Press Statement by Lim Guan Eng in Penang on Tuesday, 7th October 2008: 

Datuk Seri Najib Tun Razak should have directed Maybank to cut its losses by forfeiting the RM 483 million deposit than risk losing RM 8.25 billion to pursue with its “commercial decision” to purchase PT Bank Internasional Indonesia (BII)   

DAP Secretary-General and MP for Bagan Lim Guan Eng will write to new Finance Minister Datuk Seri Najib Tun Razak requesting that Datuk Najib explain why he did not direct Maybank to cut its losses by forfeiting the RM 483 million deposit than risk losing the entire acquisition price of RM 8.25 billion to pursue with its “commercial decision” to purchase BII. The public is highly suspicious of such shady deals as they remember the losses suffered by Proton Holdings Bhd of selling MV Augusta for one euro what it had bought for 70 million euros resulting in total losses of RM500 million.

Maybank, Malaysia's largest bank by assets, had agreed to pay RM 4.8 billion for a 56% stake in BII held by Singapore state investment company Temasek Holdings Pte. Ltd. and South Korea's Kookmin Bank. Maybank had paid a deposit of RM 483 million which would have been forfeited if the purchase was not completed. The purchase of the 56%-stake at 510 rupiah per share would have triggered a general offer at the same price.

The acquisition price of 510 rupiah per share was 65% higher than the share price of 310 rupiah per share. So unfavourable was the deal that both Temasek Holdings Pte and Kookmin Bank had to give a RM 758.9 million or 15% discount to sweeten the deal. This would reduce the full acquisition price to RM 8.25 billion. 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.

With the drastic drop in value of Indonesian banks together with the bearish global share markets, would Maybank even get half of its acquisition price of RM 8.25 billion should BII be sold now? 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. Is there a need for Mayban to buy 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?

Why is Maybank allowed to behave unprofessionally and risk further heavier losses of RM 8.25 billion when a more responsible decision should be to forfeit the RM 483 million deposit? Lim is asking Najib to order an inquiry into Maybank’s conduct in this RM 8.25 billion scandal that is not in the public interest.

It is such shady deals that have crippled Malaysia’s anti-corruption efforts causing Malaysia’s to tumble in the rankings of the Transparency International’s Corruption Perception Index of No. 37 in 2003 to No. 47 this year. Lim added that to succeed in fighting corruption, Najib must prove that he is a Finance Minister that practices prudence, competency, accountability and transparency. Where else but to protect the public interest by withdrawing such “protection” from Maybank?

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