FEER: Tajudin's Impunity - AWSJ: Danaharta SuperPower
By FEER Intelligence
4/4/2002 2:29 pm Thu
Malaysia's tycoons have always been quite cavalier with
the public purse and court documents furnished in a
recent case between Malaysian businessman Tajudin Ramli
and Danaharta, the state asset management agency, only
confirm it. Tajudin used to control national carrier
Malaysia Airlines and still runs cellular-phone concern
Technology Resources Industries. In 1998-99, Danaharta
took over 1.4 billion ringgit ($368 million) in loans
Tajudin had taken from local banks as well as shares
Tajudin had pledged against those loans. These included a
17.3% interest in TRI. All the loans had gone bad. The
documents revealed that Tajudin, a protege of former
Finance Minister Daim Zainuddin, did not service the
newly consolidated debt even once, though Danaharta said
it would accept full payment at 942 million ringgit--a
discount of 32.7%. Nor did he bother to attend many
meetings called by the agency. In early January national
utility Telekom Malaysia approached Danaharta to buy
Tajudin's interest in TRI at current market prices, then
2.40 ringgit a share. Tajudin agreed but demanded 24
ringgit a share. In the event, Tajudin lost his case to
stop Danaharta from selling his TRI shares. He is
appealing against the decision.
The Asian Wall Street Journal
Malaysia's Tajudin Files Appeal
DOW JONES NEWSWIRES
KUALA LUMPUR -- Malaysian businessman Tajudin Ramli is appealing
Friday's High Court ruling that rejected his bid to prevent a
government agency from selling part of his stake in Technology
Resources Industries Bhd.
"We filed an appeal on Saturday," his lawyer, Ong Chee Kwan, said
Monday. "No date has been set for a hearing." The move was expected
after Mr. Ong told reporters right after Friday's ruling he had
instructions from Mr. Tajudin to appeal.
The high profile court case left Mr. Tajudin facing an increasingly
likely scenario in which the government's debt-restructuring agency,
Pengurusan Danaharta Nasional Bhd., could sell part of his stake in
TRI held as collateral for unpaid loans.
Mr. Ong said he is waiting for a complete decision to be issued by the
High Court and then would press the Court of Appeal to set a hearing
"as soon as possible ... If it's too late, the question will become
academic," he said.
In a 31-page draft summary of the ruling, the High Court decided in
favor of Danaharta, saying the agency's powers to recover loans and
sell assets are legally protected from court challenges.
The ruling detailed Mr. Tajudin's financial difficulties and concluded
he is unable to service his debts despite a steep discount on the
amount owed and a number of extensions.
Mr. Ong noted the court battle is centered around whether Mr. Tajudin
has defaulted on interest payments over the 942 million ringgit
($247.8 million) owed and not a default on an additional 130.4 million
ringgit payment to Danaharta for a share rights issue, part of the
company's 3.5 billion ringgit debt restructuring plan. Mr. Tajudin
contends the interest payment is due at the end of June.
Danaharta recovered in 1998 and 1999, loans from three banks totaling
more than 1 billion ringgit on which Mr. Tajudin had defaulted.
Mr. Tajudin's debt stood at 1.32 billion ringgit by the end of last
year, but Danaharta agreed to give him a discount of 373.9 million
ringgit, reducing the amount to 942 million ringgit.
Mr. Tajudin had a 24% stake in mobile operator Technology Resources
Industries Bhd., but the holding has been diluted by the equity issues
of the group's ongoing debt restructuring plan.
Danaharta holds most of the stake, or 17.3%, before the restructuring,
as collateral for outstanding loans. Already its stake has been
diluted to 10.6% following a restricted share issue.
Danaharta also holds as security on the loans, a 44.8% stake in
Tajudin's Naluri Bhd., through which he previously owned a controlling
stake in national carrier Malaysian Airline System Bhd. and an 80%
stake in Promet (Langkawi) Resorts Sdn. Bhd.
The judgment said Mr. Tajudin has now defaulted, to Danaharta, on an
interest payment on the loans for 18.7 million ringgit and the 130
million ringgit for subscription to the rights shares.
The agency has given Mr. Tajudin 30 days to pay the 130 million
ringgit, "failing which Danaharta will be free to look at other
recovery options." The payment deadline to subscribe to the rights
shares is April 5.