By Parliamentary Opposition Leader, DAP Secreatry-General, MP for Tanjung and Assemblyman for Kampong Kolam, Lim Kit Siang, in Petaling Jaya on Wednesday, Sept. 24, 1986:
If Pernas is negotiating to buy Daim Zainuddin family companies’ 51% stake in UMBC at $8.50 per share, it must explain why it did not take up the million UMBC shares of rights issue in 1985 at $4.50 per share
Monday’s Business Times reported that Pernas is interested in buying the 51 per cent UMBC stake owned by Daim Zainuddin’s family companies. I understand that Pernas is negotiating to buy the Daim Zainuddin family companies’ UMBC shares at $8.50 per share.
Pernas, which already has a 32 per cent stake in UMBC, did not take up some 7 million UMBC shares as rights issue last year at $4.50 a share. If Pernas is seriously negotiating to buy Daim Zainuddin family companies’ 51% stake in UMBC at the region of $8.50 per share, it must explain why it did not take up the seven million UMBC shares of rights issue at $4.50 per share, which would have saved Pernas, and the Malaysian taxpayers, $ 28 million.
Daim Zainuddin’s explanation at the UMNO general Assembly that the approvals were given by the Acting Finance Minister and not by him does not hold water, for the Acting Finance Minister was acting for him directly.
Similarly, Daim Zainuddin’s explanations justifying his purchase of UMBC shares also do not bear examination. Daim Zainuddin said in 1981 UMNO Youth leader, Suhaimi Kamaruddin complained about the lack of Bumiputera ownership in UMBC. As a result, he made efforts to purchase a stake in the bank through his family companies.
What has Daim Zainuddin’s purchase of UMBC in 1984 to do with Suhaimi and UMNO Youth’s objection to Multi-Purpose Holdings’ proposed acquisition of 51 % of UMBC in 1981? Suhaimi’s attack was not on lack of bumiputera ownership in UMBC, but Multi-Purpose’ acquisition of majority ownership in UMBC.
In view of the thick cloud of conflict-of-interest questions surrounding the first two UMBC transactions involving Daim Zainuddin’s family companies in 1984 and 1985, it is essential that the third UMBC transaction of the Daim Zainuddin family companies should be conducted in a manner which is above-board, and beyond any doubt about impropriety or conflict of interest.
For this reason, Pernas, which is a government corporation, must explain and justify any proposed purchase of the 51 per cent of UMBC shares owned by Daim Zainuddin’s family companies at $8.50 per share. Daim Zainuddin should be conscious that he must not give rise to any criticism or query as to whether he and his family had made money from divesting of their UMBC shares.
Again, we do not want to have another instance where Daim Zainuddin goes overseas so that the Acting Finance Minister could approve the Pernas purchase of the UMBC shares from Daim’s family companies.
So long as Daim Zainuddin is the Finance Minister, he must bear personal and full responsibility for approval of restructuring of bank equity ownership. He cannot escape such responsibility by the simple device of going overseas, leaving to an Acting Finance Minister to append his signature to the approval papers.
I suggest that Daim Zainuddin set a high standard of public integrity by submitting the propos sale of the UMBC shares of his family companies to a Parliamentary Committee for approval. In this manner he would be able to show that he has nothing to hide in the divestment of his UMBC shares, and that he is prepared to allow every aspect of the sale of the UMBC shares to public and parliamentary examination.