MCA: Asset strippers and plumbers within?

The latest tension within the party hierarchy on the proposed Matang-Scope affair is a good reason for the re-introduction of the CBOT to the party.

COMMENT

There is a certain hypocrisy and controversy in the latest proposed Matang-Scope merger involving MCA’s financial arm, Huaren Holdings Berhad.

The ongoing proposed merger between Scope Industries and Matang Holdings Bhd had minority shareholders crying foul and alleging bad faith over the proposed deal.

Scope Industries is an electrical and electronic manufacturer while Matang Holdings Berhad is a property investment company that was established some 36 years ago.

Huaren Holdings is the largest capital shareholder in Matang, having 10.72 per cent or 12.864 million shares. With 19,984 shareholders, most of them are in Johor (81.48%) followed by Selangor and Malacca.

Spokesman for the minority shareholders Wong Pang Nam, who has since left Matang as financial controller, had claimed that he was kept in the dark and disallowed to be engaged in the negotiation on the proposed merger.

Wong, in his formal written complaints to the relevant authorities, listed five major grievances, the main one over the market value figures on the assets held by Matang Holdings.

According to claims by the minority shareholders, the valuation on the assets (properties) of Matang indicated a shortfall or difference of RM48.45 million, assessed by their respective professional market consultants engaged separately by the disputed parties.

The disputed parties have also engaged their respective solicitors. In a statement through its solicitors, the Matang Board of Directors had denied they acted in bad faith or have failed to discharge their fiduciary duties to the shareholders of Matang.

The prevailing dispute is not only an embarrassment but has put the party leadership into the public’s spotlight on the hypocrisy and double standard of its leadership in tackling its own backyard on investment matters when it had frivolously attacked the Pakatan-led Selangor government over the disputed valuation of landed assets of Talam Corporation.

On the political front, besides blaming the party president Dr Chua Soi Lek for the MCA’s disastrous electoral showing, his critics are raising questions as to why an outgoing president and his key officials are pursuing investment opportunities for the party’s financial arm when they should in fact leave it to the impending new MCA leadership expected to emerge in a few months’ time.

This they argued would be consistent to the tough stand undertaken by Chua and his core group when they had similarly challenged and opposed the proposal for a Board of Trustees in 2008 on the ground that outgoing Ong Ka Ting presidential office should leave the matter to the newly elected incoming leadership.

Then, Ka Ting’s detractors objected to the proposal for a Central Board of Trustees (CBOT) to manage the party’s movable and immovable assets believed to worth some RM1.5 billion at that time.

CBOT’s objectives were to ensure more transparency in investment decision-making and a collective accountability in managing the party assets. It would also have diluted the powers of the party president in relation to the management of party assets and custody of the party’s funds.

It was not surprising that those who objected the CBOT proposal were backers of Chua.

Introduce CBOT now
Perhaps this is the time again for MCA to bring back the CBOT proposal.

The latest tiff within the party hierarchy on the proposed Matang-Scope affair is a good reason for the re-introduction of the CBOT to the party.

The proposal to set up a central board of trustees would be a positive move to rationalise or prevent the power abuses of the president’s office in making investment decision-making.

It would also involve key signatories, including the party treasurer and the secretary general, in managing party assets and party funds.

That will definitely require a major review and overhaul in the party’s constitution, specifically referring to the Article 146 and other related provisions pertaining to managing the party’s assets.

“Many in the party seemed to have forgotten or perhaps have not learned any lessons over the party’s decision to acquire Nanyang Siang Pau group of companies which split the party into two major factions,” a party insider said.

To recap, MCA’s investment arm Huaren Holdings took over Nanyang Press despite strong public protests against the much maligned RM230 million deal in 2001.

But the political damage within the party was a heavy price for MCA to pay when the issue split the party into Teams A and B, one led by president Dr Ling Liong Sik and the other, by his deputy Lim Ah Lek.

An extraordinary general meeting was held with pro-Dr Ling’s decision to acquire winning by a wafer thin majority of 157 votes – 1,176 voting for and 1,019 or 47% delegates voted against the decision.

The Matang-Scope affair has the potential of causing a similar rift in the party again.

MCA will be heading for party elections commencing at branch level as early as next month and Chua had reportedly said that he would not step down immediately because he has some “loose ends” to tie up.

He is also said to be keen to oversee the party elections even though he had publicly announced he would not defend his presidency.

His political rivals have since put on their thinking caps, trying to figure out what are these “loose ends” that Chua had in mind.

But they are certain that the proposed Central Board of Trustees is certainly not one of them.

Stanley Koh is a former head of MCA’s research unit and a FMT columnist.