The Mas-AirAsia deal – part 1


Done or no done deal, we will continue to offer looking at the deal from different angles. What are the issues over this deal? One commentator sarcastically said, TF would say poodah to all that I have written. Hopefully he will also say that to those others who write critically too about this deal. But, hello Friend, TF is not Tamil. Try sending him Deepavali card if you would. He would instead say, sorry, I am not Tamil.

Look at the share swap?  TF got so many shares of MAS right? He parted with so many shares of AA to Khazanah no? What has happened? MAS shares rose in value meaning the shares TF has increased in value. The boy who managed MAS for a short time gets 11 million MAS shares and he is rewarded for bad-managing MAS.

What has been produced at this deal? Immediate improvement in the services of MAS? A renewed sense of commercial evangelism by which TF is famous for? Some say it as snakoil-salemanship. Doesn’t matter because it works for him personally. On the PROMISE of MAS getting TF Midas’s touch, he has made over RM 30m. Those with AA shares got lesser value for the shares including Khazanah.

So what do you feel about the whole thing? You will feel that MAS is being made a tool in a vast corporate game exercise masterminded by a few using an asset owned by Malaysians held in trust by those boys at Khazanah. You could almost feel you have been had. You represent thus the people who feel violated.

The shares and assets held in trust are held for what purpose? Let’s not beat around the bush- there is an unspoken truth that the shares are held in trust for a wider social and political purpose. So that value can be added on the shares in the pursuit of social and political adjustments. Chief among these- adjusting wealth distribution on behalf of Bumiputeras.

Two, these corporate games are being played by a few well connected individuals. The benefits (mostly immediate and short term) accrue to them. The full impact only to be felt years later and borne eventually by the government and taxpayers.

All this point to the incompetence of the government at managing wealth generating national assets.

Sure, everyone is parroting what Fernandes said at a forum on ETP – that government gets out of business. We have been saying that all along too, except that TF is saying it with capacity. In any case, I fully agree with that portion of his take. So let’s begin by dismantling the very organization that throws its weight around as a government- khazanah itself. If there is a new government next time, let’s put as priority, the agenda of dismantling Khazanah.

Khazanah is left holding shares that have gone down in price. Net, TF wins. But what about the minority shareholders holding the balls shares of AA?  The lady boss at Bursa Saham needs to investigate whether substantial blocks of MAS shares changed hands before the deal was announced.

Does the share swap entail AA assuming a new nationality? Does AA now become a ‘Malaysian airlines’ so that it acquires previously unavailable landing and flying rights? If it has changed effectively and since landing and flying rights are attached to an airline’s nationality, AA has effectively gotten rights that are enjoyed by MAS.  So MAS is arm-twisted into giving up more concessions. AA got what Asia-X has been clamoring all this time.

That makes the deal having all the ingredients of being much manipulated and not fair especially to MAS. You twist and turn, ending up by giving up more by MAS.  Now where is the reason for being angry? You feel angry because the government itself is played out and looking stupid.

Very sorry if you insist this is a debate about bumi non bumi, tamil non Tamil. It isn’t. It’s about transparency and probity in the treatment of assets belonging to this nation. If MAS were an entirely private company, we will say – serve you right, you have been a laggard and therefore you deserve to be outmaneuvered by TF. AA has got a leaner management team, its nimble and all that. We wouldn’t bat an eyelid because it’s purely an affair between private business entities.

The issues here are about MAS and Khazanah. The issues with MAS center on its management. It’s not led by a keen entrepreneurial mind. But why are we confining ourselves to just around the talent in AA to prop up MAS? We want to insist MAS and AA remain two separate entities so that there is competition. TF and his gang can do whatever they want with AA.