[Rakyat jangan terpedaya tindak-tanduk terkini Mahathir yang selalu ditulis sebagai penyelamat negara sedangkan dia menyelamatkan dirinya sebenarnya. Renong diselamatkan kerana ada sesuatu di dalamnya yang berharga buat Umno tetapi tidak dapat dibilang lagi kerana sudah jauh bercampur-baur. Besar kemungkinan tiada sesiapa pun didenda. Itulah cara penjenayah diselamatkan walaupun mencuri (bukan sedikit - malah sebuah bank dan dana orang tua) sekian lama. - Editor]

http://interactive.wsj.com/

The Asian Wall Street Journal
20th July 2001

Malaysia Agency Director to Assume
New Post, Oversee Renong Takeover

By LESLIE LOPEZ

Staff Reporter of THE WALL STREET JOURNAL

KUALA LUMPUR, Malaysia -- Azman Yahya, the managing director of Malaysia's asset management agency, will be appointed chairman of the country's Corporate Debt Restructuring Agency, a position from which he will supervise Kuala Lumpur's planned takeover of the Renong Group.

Finance executives close to the government say that Datuk Azman, who recently completed his three-year assignment as managing director of Pengurusan Danaharta Nasional Bhd., will replace C. Rajandram.

It isn't clear whether Datuk Azman's contract at Danaharta will be renewed by the government. But the financial executives say that as the new CDRC chief, the former banker's main task will be the restructuring of roughly 13 billion ringgit ($3.42 billion) of debt owed by the Renong Group.

Datuk Rajandram, who has headed the CDRC since its incorporation in early 1998, will retain his current position as chief of the country's main rating agency, the Rating Agency of Malaysia, the executives say.

Datuk Azman and Datuk Rajandram couldn't be reached for immediate comment.

The Malaysian government is expected to make a general offer for shares in Renong's affiliate concern, listed United Engineers Malaysia Bhd., on Monday. Financial executives say that Kuala Lumpur will use Khazanah Nasional, the state-owned investment arm, as the vehicle for the takeover bid.

Renong controls a 37.1% interest in UEM, which in turn owns a 32.6% stake in Renong. As a result of this convoluted equity structure, a successful government takeover bid will see Halim Saad, Renong's single largest shareholder, losing control of his business empire.

The government's takeover plan is aimed at resolving the mountain of debt that the conglomerate owes to financial institutions. Renong's inability to restructure its huge debt burden has been a major drag on Kuala Lumpur's efforts to restore investor interest in its stock market after the economic crisis swept the region in mid-1997.

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Renong revamp seen as Malaysia's big chance for redemption

By Simon Cameron-Moore

KUALA LUMPUR (Reuters) - The rehabilitation of the debt-sodden Renong Group is Malaysia's big chance for redemption in the jaundiced eyes of investors.

The country's reputation has been badly affected by investor concerns over standards of corporate governance, tardy restructuring of troubled corporates following the Asian crisis, and cronyism.

Unable to push the envelope anymore within politically connected Renong, the country's biggest corporate debtor, the government is working on a plan to inject funds and change its management.

Investors are watching how the Prime Minister Mahathir Mohamad's government stacks up taking over a group with 20 billion ringgit ($5.3 billion) in debts.

"This could restore Malaysia's reputation for the impartial implementation of corporate governance norms," said P.K. Basu, economist at Credit Suisse First Boston in Singapore.

The local view is little different.

"It will take away a lot of anxiety and uncertainty if it is done in a very transparent and clean way," said Ramon Navaratnam, an former top finance ministry official, now adviser to the SungeiWay Group .

"The government must ensure that there is no recurrence."

The wraps will only come off the plan on Monday, but already talk is spreading that Mahathir, who took over the finance ministry after Daim Zainuddin quit without explanation in June, will persuade other troubled, but politically connected firms to brave the restructuring knife.

"We welcome the decision as a move which sends a strong signal that the government is serious about accelerating corporate reform and that other politically connected companies will no longer be treated differently/preferentially," wrote HSBC Fixed Income Research note issued in Hong Kong on Thursday.

MAHATHIR'S APPROACH

Investors hope Mahathir's approach to restructuring differs radically from Daim's ways.

"The method by which the restructuring is conducted communicates an important signal to the market as to whether Mahathir is willing/able to detach himself from the unfashionable corporate restructurings following the likes of MAS and Time dotCom, which were managed during Daim's tenure," HSBC concluded.

The bailouts ordered by Daim for Tajudin Ramli, the former chairman of debt laden Malaysian Airline System , and Halim's troubled listing of telecom firm Time dotCom , raised a political stink at home and eyebrows everywhere else.

Mahathir should avoid any hint of a bailout for Halim, who was put in charge of Renong in 1990 during Daim's first stint as finance minister and held up as an example of the new breed of Malay businessmen the government wanted to nurture.

"This is Malaysia's big chance to make peace with investors and with the world watching, it had better tread carefully," a Singapore based analyst said.

Renong is a mighty chicken come home to roost for Mahathir.

Companies formally controlled by his United Malays National Organisation (UMNO) party, were banded together under Renong in 1990, and the industrial conglomerate thrived on contracts to build Malaysia's infrastructure until the Asian crisis struck.

"Parliament and the country must be given a full and satisfactory accounting of the UMNO interests in the UEM-Renong conglomerate," said opposition leader Lim Kit Siang, adding that the government needed to dispel suspicions that it was "a bailout of UMNO interests" in the conglomerate.

WHO NEXT?

A government agency, possibly investment arm Khazanah Nasional, is expected to pay around two billion ringgit to take control of United Engineering Malaysia , the sound half of the Halim stable, and with it the Renong Group via a complex cross-shareholding structure.

As part of that transaction it is expected to pay Renong, in which Halim has a 17 percent stake, just over a billion ringgit for its 38 percent of UEM.

The purchase price for UEM is expected to show a slight premium over the market price. It closed at 3.56 ringgit on Tuesday and is suspended along with Renong until Monday.

That will be well below UEM's fair value of six to ten ringgit per share, according to analysts.

"The government shouldn't overpay, otherwise it's a bailout for the existing shareholder," said the Singapore based analyst.

Halim is also likely to be required to repay UEM the 3.2 billion ringgit he borrowed in late 1997. Currently he is expected to have repaid the full amount by May next year -- but he couldn't even pay the second 100 million ringgit instalment due this month.

Analysts here are already wondering who will be next.

"Rumours are rife that there will be other restructures next week," said Yee Yang Chien, research head at HLG Capital.

A revamp within the diversified Malaysian Resources Corp Bhd -- the developer of Kuala Lumpur's new multi-billion ringgit transportation hub -- is on the radar screen.

MRCB also owns controlling stakes in broadcaster TV3 and publisher NSTP . All three firms are burdened by massive debts run up during the crisis and are now regarded as possible takeover targets.