Gnanalingam's Firm To Buy Maika Equity For RM106 Million

KUALA LUMPUR, April 22 (Bernama) -- Port tycoon Tan Sri G. Gnanalingam's firm, G Team Resources, has offered to buy out financially-troubled Maika Holdings Bhd for RM106 million and pay back the money invested by some 66,000 long suffering shareholders of MIC's investment arm.

A formal bid for the acquisition of the entire stake in Maika would be submitted to the authorities on May 1 this year, he said.

He said the acquisition was a social service on his part and partly inspired by Prime Minister Datuk Seri Najib Tun Razak's concern to help Maika shareholders and resolve the more than two-decade old problem.

Gnanalingam has promised to buy back shares from shareholders at a fair price of roughly 80 sen in a preliminary proposal he laid out Thursday.

"We will return all the shareholders the money that had been invested," he told a media briefing here.

He said that some shareholders had sold their shares before for 30 sen to 50 sen and others still hoping to get dividend for the investment.

He said the new company was incorporated in January this year with a paid-up capital of RM1.5 million specifically to resolve Maika's financial woes and monies owing to shareholders which has been a concern for the Indian community.

Maika had previously issued a bonus issue of 25 million shares free to the shareholders. As such, there could be 125 million outstanding shares.

For 125 million shares, shareholders would get 80 sen each or original investment of RM1 each.

Once the shares have been taken over, a committee comprising Gnanalingam as co-chairman, engineering consultant Datuk Kuna Sithambaram, Datuk N. Sadhasivam, who is Petronas and Bank Negara Malaysia director, Datuk R. Karunakaran, former MIDA director general and Ravin Ponniah, a special officer from the Prime Minister's Department, would act as the trustees of Maika.

He said he had also bought a 12 per cent stake in Maika from the management and that its chairman, Vijay Kumar had gotten him the board's approval to buy the shares.

He denied that the move to buy the stake was politically motivated and neither was it a bailout for the politicians involved in the failed running of Maika.

"I'm in no position to bail out anybody and this is not a bail-out exercise. This is genuinely trying to return to shareholders what they invested in and we are going directly to shareholders," he said.

He said the board of trustees would look at ways to sell the assets and to eventually close down the company.

"If we can break even, I'll be very happy," he said.

Presently, he said Maika was valued at RM85 million, after eliminating RM30 million of liabilities owed to commercial banks and government securities fund.

In bridging the gap between the current value and the RM106 million to be spent from his personal coffer, Gnanalingam said they were looking to sell off Maika's two assets, namely a pice of land worth RM11 million and its insurance firm Oriental Capital Assurance (OCA), which at 74.6 per cent stake is worth RM99 million.

He said the land could be developed into a housing project which could increase its value while OCA could be sold off to another insurance entity, especially with the industry going in for a round of consolidation.

"Within six months to a year, we hope to do both and reduce the gap. I'm not sure we can recover the whole lot, but I am confident we can reduce the amount," he said.

Asked on the injunction by Nesa Cooperative to stop the sale of assets of Maika, he said, "Hopefully, we can prevail on all parties to resolve this amicably. Ultimately, the sale of OCA is subject to Bank Negara's regulations and we have to fully abide by that."

He clarified that the acquisition of Maika was not to sell the assets of Maika but get back all the shares and purely to return shareholders the money they invested in.

"Hopefully we can get back 100 per cent or even 90 per cent of the shares," he said, in view of the difficulties as some shareholders had passed away and some had lost their share certificates.

He also denied reports that the deal was shrouded in mystery. "You guys (the media) made it a mystery."

However, "I'm not ready to tell you everything yet as I need to do due diligence and get the bankers to give me a price. I'm just giving you a preliminary outline.

To earlier speculative reports that he would emerge as the white knight to buy over Maika, he retorted that he was the not the white knight but rather the "brown knight" pointing to the colour of his skin.