DAP MP Tony Pua wants to know if the government would have to bail out Syed Mokhtar Al-Bukhary's companies, which have incurred massive debts.
(FMT) - Will there be a repeat of the 1998 financial crisis due to the massive corporate debts of tycoon Syed Mokhtar Al-Bukhary amounting to RM34.5 billion?
Asking this today, Petaling Jaya Utara MP Tony Pua cited the 1998 Asian financial crisis which precipitated the collapse of “Umno crony company, Renong Bhd”, which, at the time, had debts in excess of RM20 billion (about 7% of all loans in the banking system then.)
He said that Renong had gone bankrupt and caused hundreds of millions in losses to investors, leading to the collapse of the stock market index and triggered a RM10 billion bailout of the company by the government.
Pua said Renong was one of the largest and favoured conglomerates by the BN government with interests in highways (PLUS, UEM, Linkedua), rail (KTM, Putra LRT), property, telecommunications (TIME) and a whole host of other companies.
“Fast forward 14 years later, we now have Syed Mokhtar’s group of companies which have a combined debt of RM34.3 billion or more than 10% of all local currency outstanding corporate bonds as at 2011.
“These companies have a total cash and cash equivalents of RM7.8 billion as at May 2012,” said the DAP publicity chief.
Pua urged the government to explain what measures have been taken with Syed Mokhtar’s companies to avoid a situation similar to Renong.
“The finance ministry must make available data on how much our financial institutions and statutory bodies such as the Employees Provident Fund (EPF), Civil Service Retirement Fund (KWAP), Tabung Haji Fund and Armed Forces Fund (LTAT) have invested in these debts,” Pua said, adding that all the above have provided loans to Syed Mokhtar’s companies.
“We call upon the government to assure Malaysian taxpayers that in the event of a default, public monies will not be made to pay for the follies of Barisan Nasional cronies.”
Detailing the debts of Syed Moktar’s companies, Pua said they far exceeded that of Renong’s and expressed his fear that there would be a repeat of the Renong crisis requiring “monster bailouts with taxpayers’ funds”.
“This fear is especially real in the light of a global economic slowdown and a fallout from the eurozone financial crisis,” he said.
Pua said that Syed Mokhtar’s empire is generally held under four listed entities.