This article first appeared in The Edge Financial Daily on May 24, 2018

PUTRAJAYA: The new federal government led by Prime Minister Tun Dr Mahathir Mohamad has no plans to acquire a stake in national car manufacturer Proton Holdings Bhd from China’s auto giant Zhejiang Geely Holdings Group.

“Proton does not belong to the government. It belongs to [DRB-Hicom Bhd major shareholder] Tan Sri Syed Mokhtar Al-Bukhary.

“It is up to him whether he wants to purchase [back the shares]… The government has no intention to buy back Proton,” Dr Mahathir said.

He was addressing reporters after the first cabinet meeting of the new Pakatan Harapan administration yesterday, following a surprise victory against incumbent Barisan Nasional at the national polls on May 9.

Proton was a brainchild of Dr Mahathir during his first 22-year stint as the country’s fourth prime minister, as part of his efforts to move the nation towards a more industrialised economy.

Back in May 2017, Dr Mahathir bashed the decision by DRB-Hicom to sell a stake in the auto firm, describing the incident as the moment Malaysians “lost one of their national icons”.

The loss-making automaker was previously a wholly-owned unit of DRB-Hicom, before a 49.9% stake in the company was sold to Geely in 2017 for RM460 million.

DRB-Hicom is in turn controlled by tycoon Syed Mokhtar, who indirectly owns a 55.92% stake in the diversified group.

DRB-Hicom also disposed of a 51% stake in wholly-owned Lotus Advance Technology Sdn Bhd — valued at for £100 million — to Geely, with the remaining to Syed Mokhtar’s private unit Etika Automotive Sdn Bhd.

Geely’s presence as a foreign strategic partner was a requirement set for Proton in order to receive a RM1.5 billion soft loan from the previous government, in exchange for redeemable convertible cumulative preference shares in the company.

The new government is tightening its belt, partly to achieve its election promises of a less burdensome consumer tax scheme, abolishment of highway tolls and government-backed student loans, among others.

In a related matter, Dr Mahathir said that the government is still reviewing Malaysia’s many ongoing and approved government-linked megaprojects such as the East Coast Rail Link and the Kuala Lumpur-Singapore high-speed rail.

“We are studying which project to scrap, which to continue, which to defer… [we will announce at a] later date,” he said.