Saturday, April 24, 2010

Hulu S’gor: Why does GT resources have to bail out MAIKA Holdings, why not the BN Government themselves as in all the previous bailouts like the Deposit Taking Co-operatives,Bank Rakyat, MAS, Syarikat Perkapalan.Bank Bumi, Renong etc. And why is there no written commitment about any of the offer yet – why only press statements.

The manipulations of the Indian poor continues in the MAIKA fiasco.This is yet another attempt at pre-election promises and then nothing as always. Do not be fooled.
The MIC/UMNO/BN leaders have decided on the following directly or indirectly:
1) The MAIKA Shareholders will be reimbursed their investments in MAIKA –a ringgit for ringgit.maika holdings logo
2) The company GT resources will be the vehicle which will buy back all the shares of MAIKA from its current shareholders
3) On May 1st GT resources will make that ringgit for ringgit offer for the entire RM 106 million stake.
4) The key player in GT resources Gnanalingam gave an assurance that that MAIKA shareholders will get back their investments within three months of the offer or the 31st of July 2010.
There is a problem with each of these propositions.
Let me quote Gnanalingam, “ We thought a fair system would be to pay back all the shareholders what they have invested even though the company is now valued at only RM 85 million.” NST 23rd April 2010 front page
Contrary to what he said, the ringgit for ringgit payback is only an illusion, it is actually only a 25 sen for a ringgit payback. From 1984 MAIKA has not paid any significant dividend to its shareholders.
In 1987 the Government did a bailout o the 24 Chinese Deposit Taking Cooperatives (DTC) for 1.5 billion ringgits and paid out a ringgit for a ringgit to 588,000 members, mostly Chinese. But the DTCs paid out regular dividends. A ringgit for ringgit under those circumstances was reasonable. Now, if the MIC/UMNO/BN wants to bail out the MAIKA shareholders on the basis of a ringgit for ringgit then it should pay 4 ringgits for each ringgit of investment, as MAIKA has not paid any significant dividend all these 26 years.
Otherwise they must say that they are only paying back a quarter of the money invested by the largely poor 66,000 odd shareholders and not a ringgit for ringgit and create an illusion of equity when in fact they have lost 3 quarters of their investment.
When the BN Government can directly bailout the DTCs in 1987 for RM1.5 billion on a true ringgit for ringgit basis, they should do the same here. They use a private vehicle of GT resources for this purpose to deflect that responsibility.
This tactic aids the Government from accepting any responsibility for the problem, for the loss encountered by the Indian poor due to a program of one of its component parties. MIC did this in response to the NEP of the 1980s where large scale channeling of the National resource went into vehicles like the PNB and created significant dissatisfaction among the Indians and the Chinese. To counter this UMNO encouraged the formation of ethnically orientated capital mobilization vehicles . Arise Multipuprose Holding, arise MAIKA. UMNO/BN has a direct hand in the formation of MAIKA holdings and in inviting all the Indians in the country to invest in what appeared as a PNB/ASN type scheme. But MAIKA obviously was no PNB .
When they bailed out the DTCs or all the failed BUMI owned companies the BN /UMNO Government accepted responsibility outright,they did not use white knights companies. What is so special about this situation that you need a white Knight.Think about the “niat” in all this.
Because Indians do not really matter the best way of dealing with them is the cheapest way. Something necessarily must be done, but what is the cheapest or most expedient way of doing this – that is the niat . Whenever it comes to Indian issues you will see this pattern and these things are very visible during election times. The facts in this case here speaks volumes about that.
In any case, we do not think that the GT resources will make the offer on the 1st of May 2010 to buy back the shares from MAIKA shareholders. This is a Hulu Selangor Election gimmick. Just you wait and see. This is no more than gimmick. If this is not so, then can they issue a legally binding document to this effect, but they do not. Either the MAIKA Holding Management to its shareholders and put it up on the website or from GT resources to MAIKA holdings and put it out on the MAIKA website. They will surely not do this as we see this as just a pre-election gimmick.
Also we do not think that the shareholders will get their cheques by the 31st of July 2010 as Gnanalingam is assuring . All this is just to simply delude. There is no firm commitment to any of these schedules. This is exactly what we have seen all these 52 years from the MIC/UMNO/BN politicians. Just the same theatrics.