KUALA LUMPUR (April 4): The International Trade and Industry Ministry (MITI) is in the process of reviewing Proton Holdings Bhd’s application for a soft loan.

In a statement today, MITI said a vital consideration of the review process is the welfare of Proton’s 12,000 employees, as well as the more than 47,000 workers employed by the company’s 350 components manufacturers and services-related vendors.  

“Despite Proton’s status as a private company, the government cannot abdicate its responsibility to ensure the resilience of the eco-system of the domestic automotive industry,” said the ministry.

“In line with the aspirations outlined in the National Automotive Policy (NAP), the government is committed to further enhance the development of this sector (automotive industry).  

“Proton's application for financial help from the government will be evaluated in the context of this larger national goal,” it added.

MITI also said Proton’s longstanding position as one of the national car project will be taken into consideration, as will the real and urgent need for Proton to implement a sustainable, even difficult-restructuring plan that can ensure its long-term economic viability.

It was reported that Proton has bled RM2.5 billion in the four years, since it was taken over by DRB-Hicom Bhd.

Automotive executives reportedly said that DRB-Hicom is seeking a RM1.5 billion soft loan from Putrajaya to assist with the new model development.

Last Friday (April 1), MITI Minister Datuk Seri Mustapa Mohamed said the current business model adopted by Proton is not sustainable.

He said that since its establishment in 1983, the government has provided grants, various forms of assistance, as well as tax breaks to Proton to the tune of about RM13.9 billion.

“I have been informed that there were instances when Proton appeared to be unprofessional in its decision-making process.

“In order for the government to consider providing financial assistance to Proton, it is important that a competent leadership team be appointed in the company,” he added.

Mustapa’s statement comes on the heels of former premier Tun Mahathir Mohamad’s resignation from Proton and other posts, after the government terminated his appointment as advisor to national oil corporation Petronas.