Monday, August 28, 2006

The Pantai "Political-Economic Bail-Out"

It would seem the Pak Lah administration is now responsible for a new political phenomena in Malaysia, the "Cross-Border Politico-Economic Bail-Out".

For the first time in history, a financial arm of the Malaysian Government (Khazanah) is BAILING-OUT a FOREIGN ENTITY (Parkway) for the sake of saving the POLITICAL Miss-Step of the Finance Ministry.

Khazanah has now come in to save Parkway's and Pak Lah's bacon by forming a 'JV' with Parkway, supposedly in the works for the 'past year':

Questions that remain include ...

1 - How much is this due to Pak Lah's admin suddenly realising the extent of betrayal to national interest his Finance Ministry has committed in allowing the Parkway deal to go through in the first place?

2 - Why has Parkway been allowed to profit from this deal after only 10 months when Parkway is in reality in a very difficult position with Malaysian regulations allowing Parkway to be forced to dispose of FOMEMA and Pantai Medivest, its two most profitable subsidiaries, at low prices to Malaysian/Bumiputra investors; 2 of whom were recently rejected!

Note that Pantai accounts for ~50% of Parkway's EBITDA growth over the past year, and the FOMEMA and Pantai Medivest portions of Pantai in turn accounts for ~50% of Pantai's profitability.

3 - Why is Pak Lah allowing Khazanah to bail-out Parkway, a foreign entitiy owned and controlled by Singaporean and US interests, when he has the day before refused to assist Petronas in sorting out Petronas' problems in Chad? Are Singaporean and US companies now a bigger priority to Pak Lah's admin than Malaysian companies?

4 - With Khazanah in a position of such strength, why is Dato' Azman Mokhtar's Khazanah so generous towards Parkway, 'buying' Pantai shares at a 5% PREMIUM to Market Value (Khazanah's JV is 'buying' the Pantai shares from Parkmay @ RM2.65/share whilst 26 August 06 Market Closing Price is @ RM2.51/share)!

5 - Khazanah is also being doubly generous, by endorsing and facilitating Parkway's INCREASE in ownership and allowing Parkway to continue to CONTROL Pantai whilst it is now a clear Minority Shareholder. Why not commit to Pantai being Malaysian run, as it had been for many years of growth prior to Parkway's acquisition of it?

It is unbelievable Dato' Azman has not gone for Parkway's jugular in this - or has he been stopped from doing so by the "4th Floor"?

Some open discourse also on the web:


It would appear questions remain of the legality of the original purchase of the controlling share of Pantai in the first place by Parkway. With the Proton-MV Agusta and ECM Libra-Avenue scandals, are we seeing yet another symptom of an Enron-like desease spreading across the Economic Management of our country? See details here...

It would seem that the government continues to guide Malaysia down a meandering course towards political and economic oblivion...

No comments:

Tangential Malay Search Results