KUALA LUMPUR: Tan Sri Azman Yahya refuted media reports on his association with the controversial Automated Enforcement System (AES) project, saying that he is currently not involved with Angsana Tiara Sdn Bhd and was surprised by the news.

Angsana Tiara owns 67.74% of ATES Sdn Bhd, which operates the AES.

“Angsana Tiara is a former investment company that I owned with Hamid (Abdul Hamid Sheikh Mohamed). He took over the company from me and they haven’t updated it (the information of the company),” Azman said after Symphony Life Bhd’s AGM yesterday.

Azman is a substantial shareholder and executive chairman of Symphony Life, formerly known as Bolton Bhd.

It was reported recently that Azman owns 66.6% of Angsana Tiara while the rest is owned by Hamid. Angsana Tiara was also said to own 67.74% of ATES, which is one of two companies operating the AES. The other is Beta Tegap Sdn Bhd.

Azman however, noted that Angsana Tiara is not a shareholder of ATES. “The company [ATES] needed funding and Angsana Tiara acquired some preference shares [in ATES].

“ATES was looking for financiers after they obtained the contract, so it [Angsana Tiara] invested in some mezzanine financing in the form of preference shares. The preference shares were reported as shares as though it [Angsana Tiara] is the shareholder,” Azman explained.

He said while Angsana Tiara receives a fixed return from its investment, it is not involved in making decisions relating to the AES operations.

In a letter to the local media last week, Hamid explained that he had acquired Angsana Tiara from Azman, and then decided to invest in ATES at the mezzanine capital stage through redeemable non-convertible preference shares (RNCPS) with a limited tenure that is pegged on fixed returns.

Hamid stressed that the RNCPS is not convertible to ordinary shares in ATES, and hence Angsana Tiara has no equity interest in ATES.

“My position on the board of ATES is to protect the financier’s interest. Angsana Tiara is not a majority shareholder of ATES. ATES is purely a private investment vehicle owned by me. It is one of several such vehicles that I employ for my personal private investments.

“I am not involved in the day-to-day operations of ATES, nor have I ever been involved in any negotiations with the government before or after the signing of the AES contract. I am merely a faceless investor in ATES as far as the government is concerned,” he said.

In August, acting transport minister Datuk Seri Hishammuddin Hussein announced that a government-owned company, AES Solutions Sdn Bhd would be taking over the operation and enforcement of the AES from ATES and Beta Tegas.

When asked on how much the two companies would be compensated by the government, Azman said, “Honestly, I don’t know.”

This article first appeared in The Edge Financial Daily, on September 25, 2013.