Sources told The Malaysian Insider that MIC leaders have had several meetings since last month, with a number of GLCs to finalise the deal.
Under the proposal forwarded by Maika Holdings, a GLC under Permodalan Nasional Berhad (PNB) which operates insurance services was proposed as a suitor for Oriental Capital for a price of RM130 million.
At the same time, Maika Holdings has also filed a request in court to allow it to hold an annual general meeting, which has not been held since 2007.
The MIC investment arm is unable to repay its 66,400 shareholders who have invested RM106 million with it.
The proposed sale of Oriental Capital is part of the MIC’s plan to enable Maika to refund its shareholders.
“Yes, the prime minister has given his blessing to the proposal for a GLC to buy over Oriental Capital,” a source familiar with the deal told The Malaysian Insider.
Vell Paari, the CEO of Maika Holdings since 1999, declined to comment on the proposal.
But it is understood the proposal was put forward by Vell Paari’s father, MIC president Datuk Seri S. Samy Vellu, during a meeting last September of the Special Cabinet Committee on the Development of the Indian Community chaired by Prime Minister Datuk Seri Najib Razak.
The Malaysian Insider understands Najib subsequently instructed Human Resource Minister Datuk Dr S. Subramaniam to meet with various GLCs, including Khazanah Holdings, to look for a suitor for Oriental Capital.
“Datuk Subramaniam already had few meetings with [the] relevant agencies and we will have [a] meeting with Khazanah Holdings in coming weeks,” the source said.
“By getting a price of RM1.75 per share, Maika hopes to gather around RM130 million to settle with shareholders at the level of a minimum of RM1 per share, and also settle other dues.”
Oriental Capital had been profitable until 2006, when it suffered a loss of RM9.33 million.
Maika Holdings had proposed to sell Oriental Capital for RM1.75 per share, the level that was offered by engineering company Celcon to them two years ago. That sale never materialised due to objections from Koperasi Nesa Pelbagai Bhd, one of their main shareholders.
The MIC investment arm, set up to increase Malaysian Indian equity, also received bids from two other companies between 2007 and 2009 for a prices between RM1.50 to RM1.33 per share.
Oriental Capital is one of the few active subsidiaries of Maika Holdings. Other subsidiaries are Maika Corporate Services Sdn Bhd, Capital Oca Berhad, Maika Intellectual Resources Sdn Bhd and Golden Properties Sdn Bhd.
Maika Holdings was slapped with an injunction on Sept 24, 2007 to stop the implementation of resolutions passed at the annual general meeting that was scheduled for Aug 30 that year.
The main resolution affected by this injunction was the proposed sale of Oriental Capital Assurance Berhad.
The injunction was obtained by Koperasi Nesa Pelbagai Bhd, a company which has 625,000 shares in Maika and led by former MIC deputy president Datuk S. Subramaniam.
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