KL's Tajudin in tough court fight with agency
KL's Tajudin in tough court fight with agency
Wong Choon Mei, Reuters, Kuala Lumpur
A debt-plagued Malaysian tycoon, who once had powerful political contacts, heads to court on Monday in a bid to save the last bastion of his financial empire.
Tajudin Ramil, the former chairman of Malaysian Airline System and a protege of Malaysia's former Finance Minister Daim Zainudin, is hoping to prevent a state agency from selling his stake in Technology Resources Industries, the country's second largest cellular firm.
The state agency, Pengurusan Danaharta Nasional, set up four years ago to take over the banking industry's bad debts, acquired large chunks of Tajudin's 24 percent stake in TRI when he defaulted on his loans during the 1997-98 Aisan crisis.
Danaharta said on Sunday it will "defend its rights over the said loan collateral vigorously and be appropriately represented in any court proceedings.
"It is a basic principle of banking that borrowers who comply with the terms of their loans need not fear sale of their collateral," Danaharta's statement said.
The state agency has not made a formal bid to sell the shares in the company which has two million customers and reported 2.6 billion ringgit in sales last year. Tajudin's suit is considered a pre-emptive step.
Tajudin created a political stink last year when he persuaded the government to buy his 29 percent state in TRI at more than twice the market price.
Lurking in the background is the state-controlled Telekom which is seeking to get a controlling stake in TRI.
Tajudin needs to meet a crucial April 5 deadline to buy rights shares in TRI, part of conditions attached to last month's 1.6 billion ringgit new shares sale which included 755 million ringgit of rights that were underwritten by 16 financial firms.
Analysts say the deadline is also being watched closely by regulators, fearing a default might prompt a meltdown in TRI stock and reawaken a storm of complaints about poor corporate governance standards in the Malaysian market.
The rights underwriting agreement is contingent on Tajudin buying his shares, and provides opportunities for white knights like Telekom to step in, if he faltered.
With two weeks left to find the US$40 million needed, the pressure is mounting on the tycoon to secure new loans.
"Something during his talks with Danaharta must have triggered this move," said a merchant banker close to the deal.
"If he can get his hands on fresh funding, Danaharta has the right to ask why doesn't he refinance his bad debts which have been in default for the past three years."
Tajudin is also trying to unlock cash from his holding company Naluri which has funds from the sale of 29 percent of Malaysian Airline System (MAS). But that is not likely to be approved by regulators in time.
Government investigators are probing MAS for management irregularities covering Tajudin's time at the airline's helm.
"This issue is related to companies, so let them sort it out. This is not a matter for the government," Deputy Prime Minister Abdullah Ahmad Badawi was quoted by Bernama news agency.