[Banyak berita telan-menelan yang ganjil sejak akhir-akhir ini bila Mahathir memegang potfolio menteri kewangan. Kes RHB ini adalah salah satu darinya yang paling terkini. Ia telah membuat ramai analis menggeleng kepala kerana bank Utama yang kecil lagi sarat hutang itu mahu mengunyah dan menelan gergasi RHB. Menurut analis ini adalah satu tindakkan bermotifkan politik yang akan mencemarkan lagi institusi perbankan negara ini. Pilihanraya Sarawak memerlukan banyak wang kerana itulah punca kemenangan BN selama ini. Ini menunjukkan dana yang sedia ada sudah tidak mencukupi sehingga bank milik orang lain mahu dikawal agar bisa menebuk isinya buat sang kroni melalui beberapa projek sebagai gula-gula meraih undi. - Editor]

The Asian Wall Street Journal
1st August 2001

Malaysia Banking Analysts Criticize Sarawak State's Bid for RHB Bank

By CRIS PRYSTAY

Staff Reporter of THE WALL STREET JOURNAL

KUALA LUMPUR, Malaysia -- The Sarawak state government's bid for control of Malaysia's RHB Bank Bhd. could mark a turning point for the bank and its key shareholder, Rashid Hussain, a former highflying financier who fell out of favor with Prime Minister Mahathir Mohamad's government.

Cahya Mata Sarawak Bhd., the Sarawak government's investment arm, last week bought a 23% stake in RHB's parent, Rashid Hussain Bhd., from Malaysian Resources Corp. Bhd. for 399.5 million ringgit ($105.1 million). Banking analysts say the move is the first step in a plan to make Sarawak's Utama Bank, a unit of Cahya Mata, a dominant domestic bank by merging it with RHB Bank, Malaysia's third-largest commercial bank.

The deal could herald Tan Sri Rashid's exit from Malaysia's banking industry, where he has been an prominent figure for more than a decade. It also raises some red flags for investors, banking analysts say. Credit rating agency Fitch IBCA said Tuesday that it views the Cahya Mata's initiative "with concern." Fitch questioned whether the smaller, government-owned Utama Bank -- which Fitch said had a poor lending record because of "excessive" loans to Malaysia's property sector -- can add much value to RHB Bank.

Complex Control

Tan Sri Rashid indirectly controls RHB Bank through his 24% equity stake in Rashid Hussain Bhd., where he is the largest single shareholder. That holding company owns a 55% stake in RHB Capital Bhd., which, in turn, holds a 70% stake in unlisted RHB Bank. RHB Bank is one of 10 so-called anchor banks to be created under a government-mandated consolidation plan announced in 1999.

But Cahya Mata's purchase of a chunk of RHB Bank's ultimate holding company from Malaysian Resources -- a conglomerate with close ties to Dr. Mahathir's ruling political party -- indicates that Kuala Lumpur supports the Sarawak government's banking ambitions, analysts say. With the backing of two government-run pension funds that own a combined 26% interest in Rashid Hussain Bhd., Cahya Mata could gain management control of the company, dislodging Tan Sri Rashid.

"If [Tan Sri Rashid] or Utama come out to say he'll remain as chairman or his executive team will stay, we can be more comfortable that things will continue on in a reasonably commercial fashion," said Peter Tebbutt, associate director of Fitch in Singapore. But an Utama Bank-led merged bank brings credit and political risks to RHB Bank, he said. "This is the government of Sarawak, and they want to develop Sarawak and lend money to people committed to that vision," Mr. Tebbutt said.

Management Differences

Fitch also questioned whether Utama Bank's executives have the skill to run RHB Bank's much larger operations. Fitch cited differences in management culture stemming from Utama's state-government ownership and RHB's private-sector control as a cause for concern. Utama has seven billion ringgit in assets and 35 branches. RHB has 51 billion ringgit in assets at 217 branches. Utama Bank also carries a higher proportion of nonperforming loans on its books: 25% compared with 12% at RHB Bank.

Fitch said it won't change its credit rating on RHB Bank, which it ranks third in Malaysia after Malayan Banking Bhd. and Public Bank Bhd., solely on news of the possible merger. But the agency said it will watch the development closely.

Banking analysts say they expect a statement soon from Cahya Mata on the possible merger. A spokeswoman for Rashid Hussain Bhd. said executives were negotiating, but declined to elaborate.

Tan Sri Rashid, a former merchant banker and stock-broking executive, rapidly expanded RHB Bank in the booming 1990s, becoming one of Malaysia most prominent and influential financial entrepreneurs. In the process, the banker forged ties with leading Malaysian politicians, including then-Deputy Prime Minister and Finance Minister Anwar Ibrahim.

Change of Fortune

But when Asia's economic crisis struck in 1997 and Dr. Mahathir fired Datuk Seri Anwar the following year, Tan Sri Rashid paid a price for RHB Bank's fast growth and for his links to Datuk Seri Anwar, who is now serving a 15-year prison term for s###my and corruption.

Tan Sri Rashid has since tried and failed to secure his grip on his financial empire, which carries about 3.8 billion ringgit in debt. RHB Capital offered a 38% premium to buy back shares that RHB Bank had issued to Malaysia's national bank restructuring agency in 1999 as part of a rescue plan. But the Finance Ministry rejected the offer, astonishing banking analysts. Many concluded that the government was bent on barring Tan Sri Rashid from regaining control of RHB Bank for political reasons.

"If [Tan Sri Rashid] had been able to buy those shares, he may have been able to upstream cash from the bank to RHB Capital and to Rashid Hussain Bhd., and repay or reschedule the debt," said the head of research at a foreign owned brokerage firm in Kuala Lumpur.

Most analysts expect Tan Sri Rashid will surrender RHB Bank to Cahya Mata, but possibly retain control of his investment-banking business. But a few contend that he might remain in charge of a merged Utama and RHB.