Tajudin's plea on TRI case rejected

Tajudin's plea on TRI case rejected

Reuters, Kuala Lumpur

Malaysia's High Court on Friday rejected tycoon Tajudin Ramli's bid to block the sale of his shares in cellular firm Technology Resources Industries, held as collateral by the nation's state asset manager.

Pengurusan Danaharta Nasional holds a large chunk of Tajudin's 24 percent stake in TRI, which is a potential takeover target for state-controlled Telekom Malaysia, as collateral for debts racked up during the Asian crisis.

"The case was dismissed," Danaharta's lawyer Tommy Thomas told reporters.

"Our instructions are to appeal. We have 30 days to do that," said Tajudin's lawyer Ong Chee Kwan.

Tajudin was chairman and controlling shareholder of Malaysian Airline System until a year ago, when he sold the stake back to the government in a controversial deal blessed by one-time mentor Daim Zainuddin, who quit as finance minister a few months later.

A source said on Wednesday Tajudin this week defaulted on a payment needed for the TRI Chairman to pick up his rights share entitlement, and in consequence the collateral value of his loans will be halved.

Danaharta would usually have clearance to sell any collateral 30 days after the default notice was served.

In the meantime Danaharta is expected to pay for the rights shares before the April 5 acceptance deadline in order to protect the value of its collateral.

Tajudin has hitherto said he would take up his rights shares, which is key to a US$1 billion recapitalization plan recently announced by the firm, which owns the second largest cellular network.

His stake in TRI will be halved to 12 percent if he cannot take up the rights shares, but the recapitalization plan is seen as too big to fail and a white knight is expected to step in.