The Business Times reported recently that tycoon Tan Sri Syed Mokhtar Al-Bukhary’s conglomerate DRB-Hicom Bhd, which holds a 70 per cent stake in Bank Mualamat, had approached BIMB Holdings Bhd —Bank Islam’s parent — to explore a possible merger between the two banks.
Today, Salahuddin said the proposed merger reeked of a bail-out, and questioned the state of Bank Mualamat finances.
“If it’s financially stable, why does it want to lose its identity?” asked Salahuddin at a press conference today.
“I’m afraid this is a bail-out engineered by certain people,” he added.
When asked to provide evidence that Bank Mualamat may be financially distressed, Salahuddin offered none and instead said, “If there’s no problem, why sell? Why does it want to merge?”
DRB-Hicom reportedly said the proposed merger would create a mega Islamic bank and reinforce Malaysia’s position as a leading international centre for Islamic finance.
The conglomerate’s comments came after BIMB reportedly revealed that DRB-Hicom and Khazanah Nasional Bhd had targeted it as a potential buyer for their stakes in Bank Muamalat.
DRB-Hicom recently won a bid to buy Khazanah’s 32.2 per cent stake in Pos Malaysia Bhd.
The conglomerate helmed by Syed Mokhtar, who also controls a vast array of other businesses such as ports, including the nation’s second-largest, the Port of Tanjung Pelepas; the nation’s largest independent power producer, Malakoff Corp; water treatment plants; national rice supplier, Bernas; and the national gas distribution business via Gas Malaysia.
The tycoon’s growing empire has come at a cost, however, as his companies have racked up a total debt estimated at RM25 billion.
The debt levels have, nevertheless, been described by some analysts as still manageable due to the way they are structured.
DRB-Hicom had reportedly noted that Islamic banking assets increased by 15.7 per cent last year to RM350.8 billion.
The Islamic banking sector now accounts for over 20.8 per cent of the overall banking system in Malaysia in terms of assets, financing and deposits.
Salahuddin said today that he will urge the Public Services Commission (PSC) to push Khazanah, which owns 30 per cent of Bank Mualamat, for an explanation of the bank’s financial status.
“We don’t want BIMB Holdings to buy the troubled Bank Mualamat and then Tabung Haji will have to use its money,” said the Kubang Kerian MP.
Lembaga Tabung Haji, a pilgrims’ management fund, has a 51 per cent stake in BIMB Holdings and an 18.5 per cent stake in Bank Islam, said Salahuddin.
“Bank Islam has 115 branches nationwide. What’s the use in taking Bank Mualamat?” he asked.
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