Open Letter by Lim Guan Eng to Najib in Penang on Friday, 10th October 2008: 

YAB Datuk Seri Najib Tun Razak,
Minister of Finance,
Finance Ministry,
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 Indonesia (BII)

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 times.

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.

Yours faithfully,

Lim Guan Eng

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