It’s time for Khazanah to state position on Proton

THE time has come for Khazanah Nasional Bhd to state its intentions about its 42.7% stake in Proton Holdings Bhd.
With
so much speculation on Khazanah's possible divestment plans, it would
only do Khazanah and the market good if it said something more than the
usual “We don't comment on speculation”.
Topping the speculative talk on Proton was the statement by Proton advisor and former Prime Minister Tun Dr Mahathir Mohamad over the weekend in Langkawi, namely that Khazanah is selling its 42.7% stake in Proton to DRB-HICOM.
Khazanah
has so far done well with many of its divestments and hence the market
will expect the same level of openness and transparency for the Proton
deal.
One of Khazanah's last major divestments involved its 32.21% stake in Pos Malaysia Bhd.
That divestment process was seen as a test case for government-linked
companies to embark upon greater openness and integrity in their
transactions and to benchmark for further divestments by these
companies. Pos Malaysia's stake divestment had a two-stage process, with
the first stage addressing regulatory aspects such as the increase in
postage tariff rates and rise in salaries and allowances for most of Pos
Malaysia's staff, while stage two involved the drawing up of an open
bidding and evaluation process to select a new shareholder.
One
wonders if Khazanah will also use a similar structured divestment model
with its stake in Proton. Or are there reasons why Khazanah isn't opting
for this?
Note that in the sale of PLUS Expressways Bhd,
Khazanah and the Government had embarked on a slightly different
approach. While there wasn't a formal bidding process, bids in various
forms had come to Khazanah for PLUS. Khazanah had then taken the
approach of trying to ensure that the bidders had sufficient funds to
complete the acquisitions by requiring certain documentation be
presented. When bidders failed to do that satisfactorily within the
stipulated time frame, their bids were deemed to have lapsed and an
offer jointly made by UEM Group and the EPF was accepted by the PLUS board.
Hence,
it is understandable that in some situations, an open tender process
may not be the most efficacious. Restricted tenders or direct
negotiations are allowed in some cases, even when it involves
international organisations awarding tenders. However, in these
situations, the parties involved, the rationale and benchmarks ought to
be disclosed to the public.
It has been about a month now since
rumours hit the market about a possible sale of Khazanah's stake in
Proton. Surely, that's enough time for Khazanah to come up with a
planned divestment programme, if indeed, that is its game-plan for
Proton. On that matter, Proton and DRB-HICOM
also have a duty to update the market, more than the usual “we are not
aware of any new development” type statements. Perhaps Proton should
come out to say that this is a matter for its major shareholders to
decide, namely Khazanah and DRB-HICOM should admit that Proton is very
much on its radar.