Mahathir scoffs at Khazanah's move to buy Indian-owned hotel chain

Former prime minister Dr Mahathir Mohamad has questioned the move by the government's investment arm Khazanah Nasional to acquire a major stake in hotel chain Aman Resorts from DLF, India's largest real estate developer.

"These are six star resorts in Bali, Phuket and other exotic places. I don't know how profitable they are but I do know that hotels and resorts are not easy to manage, even less easy to make profits.

"It is the management companies which make the profits because profitable or not they get their cut of the takings," said Mahathir in a brief blog posting yesterday.

On June 17, Economic Times reported that Khazanah was to spend US$350 million (RM1.225 billion) to buy the controlling stake in the luxury hotel chain owned by the debt-laden DLF.

Mahathir however reminded that the move came hot on the heels of Khazanah's RM3 billion loss through Sime Darby, and said it should learn from its past poor decision-making such as the failed investment in fishing.

"Experience is a good teacher. Has this experience taught anyone anything?" he asked.

Khazanah's fishing trip

Mahathir recalled Khazanah's investment in a fishing venture with special nets to catch tuna fish in the Indian Ocean, which would be fed and grown until big enough to harvest.

He said while the real amount in losses were not known, "it must involve maybe a hundred million plus".

"It is peanuts by comparison to the kind of money handled by Khazanah. We should regard it as a failed experiment," he added.

Mahathir said fishing equipments for the failed venture were now dumped in the Langkawi Boustead boatyard.

"I am told they are for sale," he quipped.

Meanwhile, in his written reply to Parliament, prime minister Najib Razak defended the embattled Sime Darby, saying that the financial position of the company was stable with pre-tax profits of RM1.7 billion and net profits of RM804 million for the first three quarters of the financial year 2010.

For the nine months ended March 31, Sime Darby had reported an operating loss of RM1.02 billion in the first nine months of the year compared to net profit RM150.57 million a year.

Mahathir's comment on Khazanah appeared to be the latest in a series of criticism targeted at prime minister Najib Razak's administration, in what some analysts believe was a sign of a rift between the two.

Last month, Dr Mahathir renewed pressure on Najib to revive the crooked bridge he had proposed to replace the Johor Causeway connecting Malaysia and Singapore.

“The question that many have asked me, and I am convinced that this is also being asked by a majority of people, is why Datuk Seri Najib as the powerful prime minister is not willing to continue building this bridge?” asked Dr Mahathir.

courtesy of HarakahDaily