Letter by Lim Guan Eng to Najib in Penang on Friday, 10th
Seri Najib Tun Razak,
Minister of Finance,
Putrajaya, Malaysia. 10 October 2008
Yang Amat Berhormat,
Special inquiry into Maybank’s immediate RM 4 billion losses
following its RM 8.25 billion acquisition of PT Bank Internasional
DAP calls for a special inquiry into
Maybank’s immediate RM 4 billion losses following its RM 8.25 billion
acquisition of BII. YAB had mentioned that the RM 8.25 billion purchase
was a purely commercial decision. This special inquiry is necessary as a
commercial decision would require Maybank to forfeit the RM 483 million
in deposit instead of proceeding with the acquisition and risking the
entire purchase price of RM 8.25 billion.
The public is highly suspicious of such shady deals as they remember the
total RM 500 million losses suffered by Proton Holdings Bhd from selling
MV Augusta for one euro, what it had bought for 70 million euros.
Consequently the interests of minority shareholders and the Malaysian
public must be protected in this RM 8.25 billion purchase as to why
• Singapore state investment company
Temasek Holdings Pte. Ltd. and South Korea's Kookmin Bank were so
desperate to sell their 56% stake in BII that they were willing to
give a further 15% discount of RM 758.9 million even AFTER the deal
has been closed?
• Maybank bought at a price that is more than 65% higher than the
prevailing market price or 4.3 times BII’s book value compared to
the current market valuation of Indonesian banks at a maximum of 2.7
The special inquiry should therefore focus
on 5 areas to determine whether Maybank’s Board of Directors and
management acted prudently and professionally in the best interests of
minority shareholders and Malaysians.
The first area is to determine whether there was a proper risk
management. Two, to determine Maybank’s rationale for purchasing a bank
at such a high price and insistence on proceeding with the acquisition
instead of cutting losses by forfeiting its RM 483 million deposit.
Three, were there any parties that benefited in commissions from this
deal. Fourthly, were there proper consultations with all parties,
especially whether there were any objections from independent directors?
Five, to punish severely those who failed to perform their duties in
accordance to the principles of competency, transparency and integrity.
It is such shady deals that have crippled Malaysia’s anti-corruption
efforts causing Malaysia to tumble in the rankings of the Transparency
International’s Corruption Perception Index of No. 37 in 2003 to No. 47
this year. Losing RM 500 million from the MV Augusta deal is bad enough
but to lose RM 4 billion immediately upon acquisition is outrageous and
scandalous. With the collapse in the global share market and suspension
of the Indonesian stock exchange following its 10% drop it is imperative
to conduct a special inquiry protect public interest.
Lim Guan Eng
Lim Guan Eng, Penang Chief
Minister Penang & DAP