Dr M: Proton reserves fall from RM4b to RM600m

(Business Times) – Proton Holdings Bhd’s cash reserves fell from a high of RM4 billion to a staggering low of RM600 million to help cut company losses, said its adviser Tun Dr Mahathir Mohamad.

He said that Tengku Tan Sri Mahaleel Tengku Ariff had accumulated some RM4 billion when he was the chief executive officer (CEO) of the company. Of the amount, RM1.8 billion was spent on Proton’s Tanjung Malim plant.

“When Tengku Mahaleel left Proton in 2005, some RM2.4 billion was left to the new management led by Datuk Mohammed Azlan Hashim,” Dr Mahathir said in a statement released through the Proton adviser’s office yesterday.

Dr Mahathir said by the end of 2008, when Mohamed Azlan stepped down as chairman, Proton was left with only RM1.2 billion.

This, he said, was “due to losses sustained during this period, and partly contributed by the sale of MV Agusta for ?1 (RM3.97), which Proton had bought for some RM300 million”.

Proton sold all its 57.7 per cent stake in Italian motorcycle maker MV Agusta to littleknown Gevi Spa in June 2006.

In return, Gevi took over the motorcycle maker’s restructured frozen debts amounting to ?106.9 million (RM424.39 million) and working capital requirement of ?32.5 million (RM129 million).

“In fact, under Datuk Mohammed Azlan, Proton’s cash reserves went as low as RM600 million,” he added.

Dr Mahathir attributed Proton’s turnaround to the current managing director Datuk Seri Syed Zainal Abidin Syed Tahir.

“However, he (Mohammed Azlan) managed later on to improve the numbers with Syed Zainal Abidin Syed Tahir as managing director, who introduced new models, which led to greater revenue and profitability for Proton,” he said.

The statement ended with: “In Tun Mahathir’s view, the current management has done a good job in stabilising the company and that can be seen in the operating profits and sales in the last five years.”

The statement from Proton adviser’s office was issued following Dr Mahathir’s statement made during an interview with Bloomberg last week. He had said that Proton had at one time a reserve of RM4 billion which would be able to finance the growth of the future, but unfortunately, due to things done by the wrong management, Proton had lost the cash.

Meanwhile, Business Times reported last week that Tengku Tan Sri Mahaleel could return to Proton as chairman after the sale of Proton’s 42.7 per cent held by Khazanah to DRB-HICOM Bhd.