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| SM Nasaruddin and SM Faliq spotted at the lobby of Khazanah Nasional Berhad earlier today |
Apparently that was the briefing he received from Azman Mokhtar and co on the issue and the former Prime Minister told the Media what he was told.
My first thought was why Khazanah did not shed more light on the proposals they received because transparency is crucial in a deal involving such a huge national asset and the people should also be informed as to what factors helped sway Khazanah’s decision towards Tan Sri Syed Mokhtar al-Bukhary’s DRB-Hicom.
The whole week was spent calling people here and there, snooping and trying to nose what is actually happening behind closed doors.
TDM’s statement needed close scrutiny because many people consider the former Prime Minister an inseparable part of Proton and any deals that would involve the company must get his blessings first.
His statement last week was seen by the market as the blessing that DRB-Hicom needed to move forward with the deal and since Tun is regarded as a statesman that considers his words carefully the market also thought that the briefing Khazanah gave him was a fair representation of the facts.
In fact sources close to TDM said that the former PM thought that Khazanah had given him a fair briefing on the subject and that was why he made the statement.“You have to understand that Tun is also frustrated with Khazanah’s reluctance to invest further in Proton so that it can grow further and finding a new and more cooperative owner may not be such a bad thing," said our source.
Trouble is, the briefing by Khazanah is a sham, nothing more and nothing less.
I say this because it has come to my attention that at least one of the party that are allegedly interested in purchasing Proton has not even submitted their proposal to the Khazanah, in fact the Joint Executive Chairman of the Naza Group, SM Nasaruddin SM Amin was spotted going there earlier today.
The Naza group had long expressed interest in the national carmaker, in fact their interest in Proton came in the early years of the new Millennium before they made any announcement to build a significant manufacturing facility in Bertam, Kepala Batas.
According to the late Tan Sri SM Nasimuddin SM Amin, the investments in Bertam would be in excess of RM1 billion and it would take a few years before cars could start rolling out of the factory and he would see any kind of returns on his investments.
On the other hand, purchasing Proton, even at prices that are slightly higher than it would cost him to build the Bertam facility made perfect sense to Nasimuddin because it is a going concern and he can start selling cars the day after his cheque was cashed.
The Naza group’s interest in Proton has not faded, in fact we understand that they sought TDM’s blessings before submitting a letter of intent to Khazanah. According to sources, the Naza was not invited to bid for Proton but did so on their own initiative.
We heard, but have yet to get any official confirmation that Siem Darby has also not submitted any proposals with regards to Proton.
The question is, why did Khazanah lie to TDM that DRB-Hicom’s offer is the best when they have yet to see the other two proposals?
Is this sale an ad hoc event prompted by a proposal from DRB or is it a planned divestment by KNB?
What is the accepted procedure for such a large divestment? How does KNB ensure that the interests of the Malaysian people are protected in terms of getting the best price for the shares and also ensuring that Proton, as a national asset, remains secure.
Datuk Rocky in his blog suggested that Syed Mokhtar may be on a buying spree as he tucks his tail out of the southern state of Johor.
Rumours of his impending purchase of Penang Port is spreading steadily, just as the stories of his acquisition of Proton.
So, is this move by DRB on Proton a way of absorbing some of the excess cash that DRB may have after they divest their stakes in Port of Tanjung Pelepas and the Senai airport?
Why is DRB given special preference anyway? Is Naza and Sime Darby not worthy of controlling Proton?
Naza is a 100% bumi owned company that has proven time and again that it is a dynamic and competitive key player in the national automotive scene and they have the breadth and depth of experience in the sector having started in 1975 as a reconditioned car importer, assembler and even brand owner.
Sime Darby is also a major player in the automotive sector with their Auto Group commanding the presence for several important international brands such as BMW, Land Rover, Alfa Romeo, Ford, Hyundai and Porsche.
Why not give them all a fair chance? Why give preference to DRB?
On another note, DRB’s deep involvement with Volkswagen is also causing tongues to wag.
Analysts and industry observers say that the amount of special concession that DRB obtained on behalf of the VW brand this year indicates that they are more than just favoured by the current administration and this has led many to suggest that DRB’s acquisition of Proton may have unexpected consequences.
We have to remember that the Volkswagen group has made it their intent to become the world’s largest carmaker by 2015 and in order to do that they will have to find additional market share and South East Asia is considered as a prized developing market that is growing at a fast rate.
South East Asia is the stomping ground of Japanese carmakers with Toyota leading the charge. If Volkswagen wants to be number one it needs to quickly ramp up its virtually non-existent presence to one that dominates in several key regional markets.
The South East Asian market is still a new market and demands here are for entry level and affordable vehicles in the family car, pick-up and MPV segments, all three are dominated by Toyota.
The reality is that Volkswagen has no products that can be price competitive in the region and the German carmaker is always wary about throwing prices because it damages the brand.
If they wanted to push the lower priced Skoda or Seat brand, it would take a mammoth marketing effort to introduce these virtually unknown brands into the region. Skoda is languishing in Malaysia after more than 10 years.
A good option for Volkswagen is to get hold of a local carmaker and find their market volume that way.
There are no other regional carmakers other than Proton and Perodua and Daihatsu already controls Perodua on behalf of Toyota.
Volkswagen can quickly instate fast quality upgrades and rebadged some older models as Proton to immediately gain the low-priced market share without damaging the brand.
Some may argue that Volkswagen developed special entry-level models for China and they would probably just bring some of those models to South East Asia.
Obviously that is an option but as General Motors have learnt through their acquisition of Daewoo, having and indigenous partner does help a lot because they can tap into a wealth of local knowledge that head office simply does not have.
This debacle with DRB-Proton smacks of political heavy handedness that borders on ridiculous and certainly runs contrary to the Prime Minister’s sentiments that the Government no longer knows best about everything.
Khazanah and Azman Mokhtar needs to quickly get off their high horse and be open and transparent about the three offers, if there are indeed three offers, and let the people in on the terms and conditions set by the various parties.
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