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Wednesday, 30 June 2010

Finance Ministry denies compensating Vincent Tan

KUALA LUMPUR, June 29 – Second Finance Minister Datuk Seri Husni Hanadzlah denied today that the government had paid compensation to Tan Sri Vincent Tan after withdrawing approval for his company’s football betting licence.
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“We have not issued the licence... so questions about compensation should not arise,” he said.

He was responding to questions in Parliament from Rasah MP Anthony Loke about allegations that the government had paid RM10 million in compensation to Tan for withdrawing the licence.

The tycoon had told gaming analysts at a luncheon yesterday that he had been refunded RM10 million following the government’s capitulation to public opinion on Friday.

Sources said Tan had used the money to obtain a bank guarantee worth the same amount as a first-right-of-refusal claim, and suggest that he is biding his time until conditions are more agreeable before attempting to launch the football betting service again.

It was also revealed during the get-together with analysts that after his company Ascot Sports’s licence was withdrawn in 1990, RM8 million in licence fees was refunded to the company by the Finance Ministry and that it was also given compensation of RM10.9 million for sports betting equipment by the Totalisator Board.

Tan’s meeting with gaming analysts was seen as a move to repair his company’s image after Berjaya Corp shares were battered yesterday.

Husni added today that no money exchanged hands because the deal between Tan and the government had not been finalised.

“We were in discussions about the conditions for the licence [re-issuance]. The conditions had not finalised so we did not issue the licence,” he said.

“He (Tan) did not pay a fee but gave a letter of guarantee. That’s all. Not cash but a letter of guarantee.”

He added that the government might review its decision not to re-issue the licence in future but explained to reporters later that the review would probably be done decades from now.

Berjaya Corp reported that the government had last month re-issued the licence to Tan-owned Ascot Sports Sdn Bhd after the original licence was cancelled by the previous Abdullah administration.

The gaming, property and hospitality group had told Bursa Malaysia in a May 12 filing that it intended to acquire Tan’s 70 per cent stake in Ascot for RM525 million. The tycoon’s son — Datuk Robin Tan Yeong Ching — would have retained control of his 30 per cent stake.

Tan had first obtained the licence in 1987 but had “asked the government to take it back” when the venture was unsuccessful while retaining the right to get the licence back.

His most recent attempt to revive long-suffering Ascot — which posted a loss of RM4.6 million at the end of 2008 — ran into a concerted hail of criticism from opposition parties who managed to turn the issue into a national talking point on the back of apparent anti-gambling sentiment.

Tan-controlled Berjaya Corp had planned to offer football betting services through the telephone and at selected Toto outlets nationwide.

It is understood that the tycoon had spent a considerable sum in preparation for the start of play in European football leagues this August.

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