Tony Pua wonders whether gov't 'paid' Geely to acquire Proton

DAP parliamentarian Tony Pua today questioned whether the government had "paid" Chinese automaker Zhejiang Geely Holding Group through the latter's acquisition of a 49.9 percent stake in Proton.

Pua cited Finance Minister II Johari Abdul Ghani who said that there will be no more subsidies for Proton after the final payment of RM1.1 billion.

The Finance Ministry is also set to disburse the final RM250 million from the RM1.5 billion soft loan provided to Proton last year.

"For those that did the simple mathematics, effectively, Geely is paying only RM170 million to acquire a 49 percent stake in a company which the government is about to inject RM1.35 billion of cash," said Pua in statement today.

The Petaling Jaya Utara MP also pointed out how there has been no mention of any commitment or additional investment by Geely into Proton to turn around the beleagured carmaker.

"Hence, despite the fact that Proton is already a private company sold to DRB-Hicom in 2012, it looks like the government is effectively bailing out DRB-Hicom, a company owned by Syed Mokhtar Al-Bukhary, by indirectly 'paying' Geely to make it worthwhile for the latter to acquire 49 percent of Proton.

Pua further described the Finance Ministry's action as "completely inexplicable" and made "absolutely no financial sense".  

"What is the point of privatising Proton by selling its entire stake to DRB-Hicom when at the end of the day, the government continues to 'finance' the company’s sustenance?

"This further raises the question – if Geely fails to resuscitate Proton and gives up on the company, will the government step in again to keep Proton on life support?"

Pua pointed out that Proton would "fade into oblivion" if Geely had no plans to invest in strengthening Proton's technical capacity.

"We are not even sure if Geely intends to fully utilise the oft-cited 'excess capacity' in Proton to produce more cars, regardless of whether they are branded Proton, Geely or Volvo," added Pua.

The government agreed to give Proton, the brainchild of former prime minister Dr Mahathir Mohamad, a soft loan of RM1.5 billion on condition that it pursues a turnaround plan and seeks a foreign partner.

Apart from the 49.9 percent stake, Geely will also acquire 51 percent in British sports car brand Group Lotus Plc, which is a fully-owned subsidiary of Proton Holdings. The balance would be acquired by little-known Etika Automobile Sdn Bhd.

"After attending the Hannover Messe - the world's biggest trade fair for industrial technology - they talked about fully electronic cars that come equipped with an autopilot function," The Star reported Ong as saying.

He was painting possible advances in the car industry including "a future where cars came without steering wheels" according to the English daily.

"With just the touch of a panel, the car will bring you to your destination. Next year, Volvo will be launching their first full-autopilot vehicle and it is currently undergoing a year-long test run," he was reported telling a press conference yesterday.

The minister hoped Geely's expertise would benefit Proton.

"I'm not saying to expect Proton to be a front-liner in this, but at least with a strategic partner, they can work and move along with the times," said Ong.- Mkini