KUALA LUMPUR: Prominent Malaysian businessman G Gnanalingam today denied any political motive behind the proposed RM106 million Maika Holdings deal.
The tycoon, who preferred to be known as Maika's “Brown Knight”, said he was in no position to bail out anybody in response to allegations that the move was intended to quell criticism that MIC had mismanaged its investment arm.
“This is not a bailout, but a social service,” he said during a press conference in Kuala Lumpur.
He also denied that the deal was linked to the upcoming Hulu Selangor by-election, where some parties have charged that it was a political gimmick to attract Indian votes for Barisan Nasional.
According to reports, there are some 1,500 Maika shareholders in the parliamentary constituency.
“There is no political gimmick here. The media broke the story during the Hulu Selangor by-election, that's all,” stressed the businessman who is one of Malaysia's richest.
The deal was first reported by national news agency Bernama on April 16, a day ahead of the nomination for the by-election.
The Maika Holdings fiasco is always raised by the opposition during elections, especially when the candidate is from MIC as in the case of Hulu Selangor, which has a sizeable number of Indian voters.
The Malay-majority seat had fallen into the hands of PKR in the 2008 general election, and Prime Minister Najib Tun Razak is said to be keen on winning it back since he is the Selangor Umno chief.
There was also talk that Bernama had received instructions from the top man to run the story, which was penned by the agency's editor-in-chief Yong Soo Heong himself.
The report quoted sources as saying that the government understood that the Maika share problem had been a sore point with the Indian community for many years and decided to resolve the prickly issue.
"The very long wait of more than 26 years is finally over for these thousands of people from the Indian community," one of the sources told Bernama.
The sources added that the proposed purchase value of the shares was RM20 million above the total net value of Maika's assets, which were only worth about RM85 million currently.
G Team to the rescue
Meanwhile, Gnanalingam explained that the Maika solution was an important issue for the prime minister.
The businessman, who co-chaired a cabinet taskforce to look into the Maika situation, felt that the RM106 million offer was a “win-win situation” and was the “best move” given the circumstances.
“There are no perfect answers in this world,” he said.
He also explained that the deal was still in the proposal stages, and it will take at least three months
before all the shares from some 66,000 shareholders could be collected.
After this had been done, Maika's assets and liabilities will be dealt with independently, he explained.
The new company that will buy over the Maika shares is eponymously named G Team Resources.
Gnanalingam intimated that he was heading the organisation but refused to comment who else was involved.
However, he revealed that the G Team will be placed under a board of trustees in the near future.
Furthermore, he explained that Maika only owned 74.6% of insurance firm Oriental Capital Assurance Bhd (OCAB).
After the global economic downturn, OCAB's worth plummeted to RM130 million and Maika's shareholding in the company was then valued at RM99 million.
Maika's attempt to sell off OCAB, termed as its cash cow, to reimburse its shareholders had hit a snag following a court injunction by shareholder Nesa Cooperative, linked to former MIC deputy president S Subramaniam.
Subramaniam is considered as MIC president S Samy Vellu's arch rival. The president's son Vell Paari is the chief executive officer of the debt-ridden investment arm.
Maika also has a piece of land worth RM11 million and a cash balance of RM6 million, bringing Maika's assets to a total of RM115 million. Maika had also accrued RM30 million in liabilities, and from this it was deduced that Maika's value is RM85 million.
Once the RM106 million deal goes through, there will be a shortfall of about RM20 million.
At the moment, G Team will be absorbing this loss but it hopes to reduce this over the next year.
It is also hoped that this social service will bring closure to the Maika issue and help the Indian community move on and to find other ways to participate in the economy.
Many of those who invested in Maika in 1984 were Indian estate workers who had pawned their family jewellery and withdrawn their life savings to invest.
But Maika, which was established in 1982 to enable Indians to participate in the country's economic growth, had not produced good returns, much to the disillusionment of its shareholders.
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