As Maika winds up, new row brewing over OCA

By Baradan Kuppusamy

January 20, 2011

G Team’s sale of OCA has drawn protests from Indian NGOs. — file pic

KUALA LUMPUR, Jan 20 — In the heydays of Maika Holdings, thousands of share holders would gather for the annual general meetings, fight and then leave disillusioned to lodge police reports — only meet again a year later for more of the same.

In comparison, the 25th — and probably the last — annual general meeting of Maika Holdings yesterday was a tame affair with only about 10 shareholders present to speedily approve all the resolutions — including one to sell and wind up the corporation that was founded in 1984 to lift the Indian poor out of poverty.

Founded by former MIC president Datuk Seri S. Samy Vellu with RM110 million in cash raised from the poor, Maika had been launched with great promise.

But it quickly ran into trouble because of mismanagement and failed investments running into the millions of ringgit.

Maika’s cash reserves were soon exhausted and it started to sell mother shares in blue chip corporations like TV3 and Telecoms Malaysia to make ends meet and pay dividends.

It lost heavily in various manufacturing ventures such as chopstick manufacturing, soft drinks and even brick making — all of which foundered, leaving angry shareholders disillusioned.

Then the 10 million Telekom share scandal erupted, and debate sprang up on whether the Finance ministry allocated one or 10 million Telekom shares to Maika.

Samy Vellu was accused of hijacking nine million of the shares and although several investigations cleared him of fraud, the Indian community never forgave him.

At yesterday’s AGM, witnessed by Bank Negara officials and attended by majority shareholder, G Team Resources and Holdings, which now owns 95 per cent of Maika shares, a winding-up resolution was passed.

G Team became majority shareholder after a successful exercise last year to buy up all Maika shares at RM1 each, and assume the firm’s over RM60 million in debt.

While there was some unhappiness from critics of Samy Vellu over the sale, the vast majority of 66,000 shareholders were located and accepted the offer — signalling their agreement to fold the failed company.

According to sources, several founder members of Maika who had bought shares from shareholders at a premium of up to 50 per cent and had held on to it, had cashed out and earned a tidy profit.

As part of the winding up exercise, G Team — helmed by port tycoon Tan Sri G. Gnanalingam and businessman Datuk S. Kunasingam — must dispose of Maika’s 75 per cent stake in Oriental Capital Insurance Bhd (OCA).

The profits, if any, are to be given to Indian charities.

Today, several Indian community leaders spoke up, urging for OCA to remain in “Indian hands” because it was part of the effort to raise the economic standards of Indians.

To date, two local merchant banks are said to have agreed to seek Bank Negara approvals to commence negotiation.

Originally, six parties had shown interest in OCA but only the two banks acted upon it.

“One has given an indicative price of RM1.59 per share for Maika’s 75 per cent stake in OCA, but we may get a higher offer,” Gnanalingam told reporters.

It was reported that the RM1.59 per share is at 1.3 times price-to-book.

OCA was also reported to have a paid-up capital of RM100 million and total assets valued in excess of RM380 million.

Its niche strength is in onshore and offshore oil and gas and marine hull and cargo classes of business.

“We should not let it (OCA) go to other hands,” said an Indian NGO leader, declining to be identified. - Malaysian Insider