KHAZANAH-PROTON PIRATISATION ROJAK WAFFLE!

Here are some FACTS based on Proton Holding's unaudited Accounts for the six months ended 30th September 2011, as filed with Bursa/Kuala Lumpur Stock Exchange (KLSE) and MSM reports:

1. Net Tangible Assets (NTA) - $5,390,296,000
2. Paid Up Share Capital - $549,213,000 
3. NTA per share - $9.81  - (1) divided by (2) 
4. Khazanah recently sold its 42.74 % equity shareholdings in Proton for $1.291 Billion @ $5.50 per share to DRB Hicom Bhd. which is also listed on KLSE. 
5. DRB is now controlled by that most favoured darling crony of BUMNO/BN, "investor" Syed Mokhtar al-Bukhary. He is of course the Scarlet Pimpernel of Malaysia as far as serial corporate acquisitions are concerned. He's here, he's there, he's everywhere, swallowing up State-owned and monopolistic enterprises with huge bank financed leveraged buyouts. Recently, Pos Malaysia (32.2%) monopoly was piratised to him/DRB by Khazanah for $623 million. Al-bukhary is also the front runner for the piratisation of KTM Bhd. (ex-Malayan Railways).
6.  In justifying the sale, Khazanah's MD Tan Sri Dato Azman Mokhtar was widely reported to have said:   "It's true Proton's NTA per share is $9.81 per share. Our cost per share of investment in Proton is NOT  $8 per share. We did NOT make a Capital Loss of about $600 million ($2.50 per share). Our investment holding cost in Proton is below $5 per share. We will therefore book in a modest gain. 
7. Do note that Khazanah MD wily fox did not say exactly how much "profit" Khazanah was booking in on the sale of Proton. And since it's classified under OSA, we'll have to wait till Pakatan comes into power to unearth that piece of vital information. 

Elsewhere he was quoted as saying Khazanah's holding cost had been reduced to below $5 per share by dividends received over the years.

HUH? SAY WHAT?  

I'm no chartered accountant or investment guru/expert. But according to long-established international and Malaysian accounting rules, the only time you write down the cost of your long-term controlling investment cost in a company by the dividend received is when you receive a dividend SHORTLY AFTER (within 1year) you have made that investment. In that specific instant, the dividend is deemed a return of Capital and NOT a return on Equity (investment).

So, what does Azman Mokhtar mean that Khazanah's holding cost in Proton had been reduced by dividends received over the years?

Let's be very, very clear.

Dividend income from equity investment is therefore 99.99% of the time treated as Return on Equity (ROE). The astuteness of MD's and their investment committees are judged by this % ROE benchmarked against risk free Fixed Deposit rate. 

So, Tan Sri Dato Azman Mokhtar, MD of Khazanah, why the WAFFLE? What are you trying to hide? 

Here are some more FACTS:

1. Some years ago, Proton was controlled by DRB whose major controlling shareholder then was the late Tan Sri Yayha Ahmad.
2. Proton was subsequently bailed out by Petronas which then got rid of it to Khazanah.
3. Since Dr.Mahathir retired as PM in 2003, he's been THE paid "Adviser" to both Petronas and Proton.
4. Proton's Chairman since January 2009, Dato Nadzmi was once an executive in Petronas and later MD of Proton from 1993-1996.
5. In 2006, Proton sold its investment in motorbike manufacturer MV Augusta of Italy for Euro 1, thereby realising an investment loss of over $500 million. Mahathir and his handpicked CEO Tengku Mahaleel who were both involved in the original acquisition of MV Augusta claimed they were not consulted in the Euro 1 disposal! 
6. Proton, like so many of our mollycoddled and cosseted lame-duck Government Losing Concerns, has been suffering from serious High Level Management problems like, since, forever. That's palpably apparent to even any average standard six student. High Level Management problems compounded by even higher level paid "Advisers".

I mean, Dr.Mahathir was again apparently NOT consulted when PM Najib bulldozed his way through with the appointment of Dato Mohamed Omar Mustapha Ong as Petronas Director after elbowing out of office its objecting and long-standing, internationally acclaimed MD, Tan Sri Hassan Merican.

And guess who else sits on the Board of Directors of Khazanah?

Why, none other than Tan Sri Dato Nor Mohamed Yakcop who was once asked to leave Bank Negara for losing some $10-$30 Billion in forex dealings!! Now he is also Minister in charge of our Economic Plundering Unit, having before that been Finance Minister II??!! Wtf?

Before Proton was sold to DRB, DR.Mahathir was openly championing a management buy-out proposal by Chairman Dato Nadzmi. Mahathir and Proton CEO Dato Seri Syed Zainal Abidin had also rammed through a $2.4 Billion 5-year Turnaround Plan for its UK loss making Lotus Motors. But this week, Mahathir is talking about selling off Lotus. 

Don't you think there's something very sickeningly incestuous in all this? 

Today, Mahathir's been praising to the skies Proton's latest 1.6 litre engine car, "to be released in a few months". If the prospects are so good, why sell anything to DRB?

Why sell Proton to Syed Mokhtar Bukary for $5.50 a share when its book and unrevalued cost is $9.81 per share? An early Hari Raya gift, perhaps?

Why after 25 years is Proton still uncompetitive and needs protection and cruches in the form of 150% Import Tax/Duty and $30,000-50,000 per Approved Permit (AP) cost for imported cars? And hasn't DRB, like Naza Motors, been raking in $Billions these past 25 years, being one of the main beneficiaries of selectively allocated and freely awarded AP's?

Now, can we all see where the source of all Proton's problems  have descended from all along and why the continual dithering? One stop forward, two steps back? You bet!

Medical doctors forcing their understanding of kitchen economics on $Billion enterprises, Bernie Madhoff fake forex losers, looting and plundering and amateur MD's, please get out of Proton, DRB, PNB, Khazanah and the like today, NOW! You are killing Malaysia and propelling it towards bankruptcy and 4th world status.

Get the professionals in now, even if you have to swallow your pride and court the experts from abroad.

Ultimately, this Proton fiasco may have been engineered by God, I think, to once and for all free it from the clutches of that interfering busybody amateur, Maha Firaun,  and that management washouts ridden and infested and secretive National Treasury Body!

Think about it.

God moves in mysterious ways.

Donplaypuks® with our Government Losing Concerns, man!