[Nadarajah urged Maika shareholders to vote for PR if buy-out share price is too low. - Picture by Jack Ooi]
Nadarajah urged Maika shareholders to vote for PR if buy-out share price is too low. - Picture by Jack Ooi
By Yow Hong Chieh
KUALA KUBU BARU, April 23 — Maika activist S. Nadarajah today called Tan Sri G. Gnanalingam’s offer to buy out Maika Holdings Bhd a “Samy Vellu-friendly deal” and called for a revaluation of the company.
“It appears that it is politically motivated for Samy Vellu’s exit plan because there are a lot of skeletons in the closet wherein they have not taken the interest of the shareholders seriously,” he said.
Nadarajah, representing the Maika Holdings Shareholders Good Governance Task Force, also repeated his claim that the buy-out is a bid to win back Indian support for the MIC and BN in the run-up to the Hulu Selangor by-election.
“He (Gnanalingam) claims that he’s doing social service. This doesn’t look like a social service. It looks like more like short-changing the shareholders.
“It reinforces further (the notion that) this is... politically motivated,” he stressed.
“We’re not very sure if Gnanalingam is very serious. Is he there to cium tangan the prime minister or taking the Indian interest at heart?”
Nadarajah said if Gnanalingam was really inspired by Prime Minister Datuk Seri Najib Razak, as the prominent businessman claimed, he should work closely with the government to make sure shareholders get the best deal.
“It might be even possible to get an interest waiver. Maybe they might save another RM10 million,” the activist suggested.
He said the government should provide projects from GLCs to assist the turnaround, like they did for KUB’s failed investment in Sime Bank.
“They can be more like a broker and make RM30-40 million. This will enhance the offer.”
Nadarajah pointed out that the detailed proposal will only be made after May 1 and asked if the government was going to keep its word if they lost the by-election.
He urged Najib to make a statement on the matter to reassure shareholders.
Nadarajah said that while he welcomed the move by Gnanalingam to buy out Maika, he felt the offer was too low.
“The price is grossly undervalued. We reckon the price would be RM1.10. We don’t know how he got his valuation because the main asset of the company is OCAB (Oriental Capital Assurance Berhad), [an] insurance company.”
Nadarajah pointed out that Ananda Krishnan, through Usaha Tegas Sdn Bhd, had been prepared to offer RM149 million in June 2008 for OCAB’s 74.6 percent stake in Maika.
He said this meant that Ananda had valued Maika at RM200 million.
“If the price is RM0.80 [per share]... I recommend the 1,500 shareholders in Hulu Selangor to vote for the opposition. If it’s RM1.00 or above, [they should] vote the candidate of their choice.”
Nadarajah further urged Pakatan Rakyat Indian MPs and state assemblymen to apply political pressure to ensure that Maika shareholders “are not taken for another ride.”
Maika was established in 1982 to enable Malaysian Indians to increase their market equity but has been plagued by underperforming shares from the start.
Most of its 66,000 shareholders are poor Indian estate workers, some of whom had withdrawn their life savings to invest in the company.
The relatively poor return on investment of Maika shares has been a nagging problem for MIC and the Indian community for the past 26 years.
Gnanalingam revealed yesterday that he was the “white knight” who will buy out troubled Maika Holdings Bhd to the tune of RM106 million.
The executive chairman of West Port already has a 12 percent stake in the troubled company and says he will complete the buy-out in three months.
He claimed it was his intention to return all monies invested by shareholders.
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