KUALA LUMPUR, Oct 18 — The Malaysian government has denied having forcibly taken over the shareholding of United Engineers Malaysia Bhd (UEM) and Renong Berhad owned by the latter’s former executive chairman Tan Sri Halim Saad 23 years ago.
In their statement of defence, former Prime Minister Tun Dr Mahathir Mohamad, former Finance Minister II Tan Sri Nor Mohamed Yakcop and the government stated that the takeover was approved by Halim who received RM165 million in compensation.
“The takeover of Khazanah Nasional Berhad (Khazanah) was consented to by the plaintiff (Halim). This was acknowledged by the plaintiff through his letter to Khazanah dated May 13, 2003.
“Following the letter, the plaintiff was compensated with a total amount of RM165 million by Khazanah which was paid out in two payments. The first payment of RM45 million was made on May 22, 2003, and the second one totalling RM120 million on May 26, 2003,” said the three defendants in response to the lawsuit filed by Halim, who is also a former Renong Bhd director, on Aug 2 last year.
According to the defendants, the entire group of Renong-UEM companies is a significant part of the Kuala Lumpur Composite Index and when the performance of Renong and UEM shares was weak and stock prices did not recover, it had a negative impact and burdened the overall stock market.
“Under the plaintiff’s management, the market capitalisation of the Renong Group had declined by 41 per cent from RM7.2 billion in 1997 to RM4.2 billion in 2000.
“At the peak of the Asian Financial Crisis 1997/1998, Renong had a debt totalling RM26 billion which constituted seven per cent of the entire banking system in Malaysia at that time. To rectify the situation, Dr Mahathir agreed with Nor Mohamed’s proposal that the best way forward was to restructure Renong and UEM.
“This proposal could be implemented by privatising UEM with a general offer to all UEM shareholders. Nor Mohamed was entrusted by Dr Mahathir to carry out the restructuring,” according to the defence statement.
The defendants said since the plaintiff held controlling shares in Renong and owned 37.92 per cent of UEM’s shares, his support was needed to carry out the takeover.
Based on his statement of claim, Halim, who is the former executive chairman and director of Renong, had intended to make a general offer to buy out UEM and privatise it as a subsidiary of Renong, which would have enabled him to gain full control and ownership of the company.
However, the plaintiff alleged that he was instructed by Dr Mahathir and Nor Mohamed not to pursue the deal as the government intended to take over all UEM shares through Khazanah or a party selected by Khazanah.
“I was also directed to divest my shareholding in UEM and Renong as well as my directorship of the two companies and their subsidiaries. This obligated me to relinquish control over Renong and UEM to the government and dispose of my shares at a loss,” he said in the statement of claim.
Halim claimed that Khazanah had acquired the entirety of UEM shares through its subsidiary, Danasaham Sdn Bhd and gained control over UEM, which owned 32.6 per cent of Renong shares.
Therefore, Halim is seeking compensation for the forced takeover by the government between July and October 2001 and a declaration that he is a Renong shareholder.
