Hand over profits to ex-Maika holders, DAP tells Gnanalingam

KUALA LUMPUR, May 22 — The DAP wants port tycoon Tan Sri G. Gnanalingam to hand over profits made from the RM153 million sale of his controlling stake in Oriental Capital Assurance (OCA) that he bought from the 66,000 former shareholders of Maika Holdings.

Maika was set up in 1981 by the MIC under the leadership of Datuk Seri S. Samy Vellu who promised multiple returns for Indians, many of whom went into debt to pour in a total of RM108 million into the investment vehicle.

But it was eventually bailed out by Gnanalingam, who set up a special purpose vehicle called G Team Resources in 2010 to buy out the 66,000 shareholders for a total of RM106 million, or 80 sen per share, with OCA being the shining light in the troubled investment company.

DAP vice-chief M. Kulasegaran (picture) said in a statement today that Gnanalingam had promised that the insurance firm, “the crown jewel” of Maika, “would only be sold to an Indian concern” and proceeds minus the cost of the Maika takeover “would be distributed to Indian-based charities.”

“We want Tan Sri Ganalingam to immediately reveal in detail all the handsome profits that will be obtained with the sale of OCA. It would be good if the former shareholders who had suffered loss by investing into Maika be compensated with the distribution of the handsome profits,” said the Ipoh Barat MP.

Tune Ins Holdings Sdn Bhd, controlled by aviation magnate Tan Sri Tony Fernandes, had last month entered an unconditional share sale to acquire 78 per cent of OCA from Maika and G Team for RM153.13 million cash, or RM1.965 per share.

OCA’s net tangible assets per share was at RM1.22 as of December 2009. Principally involved in the underwriting of all classes of general insurance business, it ended the 2009 financial year with a net profit of RM12 million before being taken over by G Team.

“In less than two years of the takeover by G Team Resources of Maika, a handsome amount may have been realised by G Team from sale of OCA,” Kulasegaran said.

He said that prior to the 2008 general election, Samy Vellu, who was eventually defeated at the polls, had promised to return RM1.30 for every Maika share of RM1 but “his promise never materialised.”

“Will the monies be ploughed back to the shareholders as the majority of the 66,000 have lost thousands of ringgit due to the earlier mismanagement of Maika?” he asked.