Tuesday, November 3, 2009

Mahathir dashes hopes of groups eyeing Proton sale

KUALA LUMPUR, Nov 3 – Malaysia’s former prime minister Mahathir Mohamad has dismissed news reports that national car maker Proton Holdings is for sale, writing in his blog that he has told the company’s chairman and chief executive that it “is not for sale”.

Dr Mahathir’s influence has soared in the new administration of Prime Minister Najib Razak, and the former PM indicated that he is back as Proton’s adviser and “busy on a plan to resuscitate the company”.

Under the previous administration of Abdullah Badawi, Dr Mahathir hinted that he had no role in Proton as “no one asks me for advice”.

His unequivocal statement that Proton is not for sale will dash the hopes of at least three parties said to be interested in the company. They are the DRB- Hicom conglomerate, the Naza auto group and the management of Proton itself, whose chairman suggested it two weeks ago.

Dr Mahathir began by saying that Proton is returning to profitability given the number of new cars he keeps seeing on the roads. “I know that a new car is not noticed on the roads until a certain volume of sales is achieved,” he said in his blog.

“Since Proton acquired a new chairman in the person of Nadzmi Salleh, I find it easier to perform the work of Proton adviser,” he continued. “The Prime Minister has also indicated that Proton’s affairs should be referred to me. Accordingly, I have been busy on a plan to resuscitate the company and have been talking to potential technology partners for Proton.”

Then he got to the point. “Lately I have been disturbed by media reports that Proton is to be sold to certain parties. This talk has agitated the staff of Proton. Their worry affects their performance. I have told the chairman and the chief executive that Proton is not for sale – and there is no plan to sell Proton in the foreseeable future.

“The need is to restructure the company and reach agreement with the potential partner,” said the former premier. “After that, work has to be done to ensure Proton fully recovers.”

Dr Mahathir’s comments are likely to have been noted seriously by the government, as Proton was his brainchild back in 1984. They would also have been noted with regret by Syed Mokhtar Al-Bukhary, the controlling shareholder of DRB-Hicom, which news reports indicated was front runner for the car firm.

The tycoon bid for Proton six years ago but his bid was rejected by the-then premier Abdullah. DRB-Hicom was thought to be looking at buying 32 per cent of Proton.

The car firm posted a net loss of RM320 million for the year to March 31, 2009 but is expected to be back in the black in the current financial year. Its sales have climbed steeply and it expects to sell 155,000 units by the time its financial year closes in March 2010. – Business Times Singapore

No comments: