This article first appeared in The Edge Financial Daily on April 19, 2018

KUALA LUMPUR: The Perodua Labour Union has objected to a proposed acquisition of MBM Resources Bhd by UMW Holdings Bhd as it fears the move would negatively affect the rights and interests of its members.

Taking over MBM Resources, which owns 22.58% of Perusahaan Otomobil Kedua Sdn Bhd (Perodua), would give UMW control over the national carmaker since the conglomerate already owns 38% of it.

The union expressed concerns that the takeover will be detrimental to the rights and interests of the union members, safeguarded by the existing Perodua management for the past 25 years.

It is also worried that Perodua’s Japanese partner Daihatsu Motor Corp may review its involvement as a technological partner of Perodua and discontinue the partnership.

“If this happens, it will be a huge loss for Perodua, considering the valuable support and contribution that Daihatsu has given to Perodua all this while,” the union said in a statement yesterday.

It also indicates that as Perodua’s 7,841 employees could be affected by any changes in the management structure, they could feel less secure in their jobs which could affect their work performance.

The union alluded to last year’s partial sale of national carmaker Proton by DRB-Hicom Bhd to China’s Zhejiang Geely Holdings Group.

“We really hope that the previous incident that happened to the other car manufacturer will not happen to us,” it said.

“We were surprised by Mara’s (Majlis Amanah Rakyat) move to easily agree to release their shares in MBM Resources to UMW which goes against Mara’s aspirations to assist the bumiputeras.”

To recap, UMW made an offer on March 9 to acquire Med-Bumikar Mara Sdn Bhd and its wholly-owned subsidiary Central Shore Sdn Bhd’s (CSSB) stakes in MBM Resources for RM501 million or RM2.56 per share.

UMW also made a separate RM417.5 million offer to PNB Equity Resource Sdn Bhd for its 10% stake in Perodua.

However, on March 26, UMW announced that Med-Bumikar Mara and CSSB had rejected the conditional offer made by UMW for their collective 50.07% equity interest in MBM Resources.

It was also reported that while Mara — the largest shareholder in Med-Bumikar Mara with a 33% stake — and another shareholder are agreeable to the sale of Med-Bumikar Mara’s stake in MBM Resources, the remaining five are not.

Mara has reportedly called for an extraordinary general meeting of Med-Bumikar Mara to be held at the end of this month to consider UMW’s offer to buy its 50.07% stake in MBM Resources.