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CNN: Government to take helm of Malaysia's Renong group
By Alex Frew McMillan

21/7/2001 8:14 pm Sat

[Rencana ini tidaklah mengancam sangat tetapi ada satu perenggan yang menarik. Mahathir mengatakan dia tidak tahu langsung apa yang berlaku. Tetapi AWSJ (Asian Wall Street Journal) membongkar Mahathirlah dibelakang semua itu.

Halim Saad kerap dikatakan anak didik Daim - mengapa tidak dikatakan anak didik Umno? Daim dan Mahathir sama sahaja jika tidak mereka takkan berkawan rapat sebegitu lama - Kawan penyangak selalunya adalah penyangak juga. Lagipun Mahathir kerap merujuk semula demi memperkasakan kuasa. Editor]

Government to take helm of Malaysia's Renong group

By Alex Frew McMillan in Hong Kong

KUALA LUMPUR, Malaysia -- The Malaysian government is expected to take control of the country's biggest industrial group next week.

Prime Minister Mahathir Mohamad's administration plans to wrest control of the Renong group from its chairman, Halim Saad.

Officials have said the takeover would mark a new get-tough-on-debt approach, showing the days of favorable treatment for the politically connected are over in Malaysia.

Halim is a protégé of Malaysia's former finance minister, Daim Zainuddin. But Daim, once the prime minister's closest adviser, quit in June.

There was speculation Daim and Mahathir fell out over economic policy.

A change in control at Renong would be the biggest consequence since Daim's exit left the prime minister alone at the top.

Mahathir, Asia's longest serving elected ruler, has enjoyed 20 years at Malaysia's helm.

The government also wants to clean up the complicated structure of the Renong group. Like many Asian conglomerates, it is a web of interwoven companies that own part of each other.

A massive debt load

The group carries a massive debt burden of $3.4 billion (13 billion ringgit), making it Malaysia's biggest private borrower.

The government plans to bid for a large stake in United Engineers Malaysia Bhd. (UEM), Malaysia's biggest construction company.

UEM is the Renong group's key company. That could lead to the exit of Halim, 47, because he would lose control of the group after 11 years in control.

Renong used to be the finance arm of Malaysia's ruling party. Besides construction, the conglomerate spans oil, banks, transport and property.

Halim-run Renong Bhd. owns 37.1 percent of UEM, which owns 32.6 percent of Renong.

One of "Daim's boys"

As a young man, Halim was viewed as a shining star, an ethnic Malay thriving in a business community dominated by a Chinese minority.

He was known as one of "Daim's boys", but his luster dimmed as debts skyrocketed after the Asian financial crisis in 1997.

Fears about cronyism and political favoritism have long plagued Malaysia, turning away overseas investors. Stocks in Malaysia have rallied strongly with the prospect of a new approach.

Mahathir himself declines to comment, citing that the companies involved are publicly traded.

"I don't know what is happening," he said.

But The Wall Street Journal, which broke the story, reports he directed the takeover, personally.

UEM stock was suspended for four days ahead of a "major announcement" on Monday. Trading halted in Renong, too. They had run up ahead of the trading freeze.

Malaysian stocks closed almost flat Friday, with the Kuala Lumpur composite index down 0.1 percent at 648.78.

Investors said they were waiting for details of any deal. Reports suggest the bid will cost the government 2 billion ringgit and be for at least 45 percent of UEM, perhaps all of it.

There is also speculation that Mahathir has picked Azman Yahya, head of the agency in charge of bad loans in Malaysia, to take over at Renong.

Azman, managing director of the agency Pengurusan Danaharta Nasional Bhd., has declined to comment.