Pua wants Proton shareholders to guarantee RM1.5b soft loan

DAP lawmaker Tony Pua is of the opinion that the RM1.5 billion soft loan to Proton must be recalled unless the company's shareholders can jointly and severally guarantee the loan.

Pua said this was the only way to ensure that the government is "protected" and that Malaysians can be assured that Proton would not end up in their unwitting hands again.

"The only way [...] is to elicit a joint and several guarantee from both shareholders of Proton - DRB-Hicom and Geely (Automobile Holding Ltd). This will be nothing less than what any commercial bank would demand from Proton.

"We hope that the Ministry of Finance can provide an official undertaking to concerned Malaysians that such a shareholders guarantee for the RM1.5 billion soft loan, or whatever outstanding amounts, will be secured before Geely’s 49.9 percent acquisition of Proton can be officially completed," said Pua in a statement today.

Finance Minister II Johari Abdul Ghani yesterday had given assurance that the RM1.5 billion loan to Proton "will be fully secured".

Johari had said that the deal with Geely requires the redeemable convertible cumulative preference shares (RCCPS) of RM300 million to be redeemed immediately after completion and that the balance of RM1.2 billion will be secured with various assets.

He also said that the government was treating the deal as a "strictly private" one and that whatever was promised before Geely came in would be fulfilled.

Pua however pointed to the "confusion and contradiction" of Johari's remarks.

"First the second finance minister says that the terms of the RCCPS is no longer valid post-Geely acquisition. Then he says that whatever the government has promised and committed before Geely came in, it will fulfill them.

"So which is which? If the deal is now 'strictly private', then why does the government need to continue with the soft loan to Proton which has a tenure of up to 15 years?"

Pua also questioned the need to set a new repayment timetable for this.

"On the contrary, the government is proceeding to disburse the final instalment of RM250 million from the RCCPS to Proton.

"Even if we were to agree to continue to lend Proton the sum of RM1.5 billion, which we should not, what is this new 'security' for the loan Johari is talking about?"

Pointing out how Geely was acquiring 49.9 percent of Proton for only RM170 million, Pua wonders what were the assets left in Proton that were worth RM1.5 billion which could secure the borrowings from the government.

"Hence even if the RCCPS 'conversion to shares' terms are modified, ultimately the failure of Proton to produce the necessary assets valued at RM1.5 billion to repay the loan would still mean the government taking possession of Proton once again," he added.- Mkini