KUALA LUMPUR (Nov 1): An opposition lawmaker has called on the government to be more transparent with regards to how much China's Zhejiang Geely Holding Group Co Ltd (Geely) paid for its acquisition of a 49.9% stake in Proton Holdings Bhd from DRB-Hicom Bhd.
"I feel that as Malaysians, we have the right to know how much Geely paid to purchase their 49.9% stake in Proton," said Rasah member of parliament Teo Kok Seong.
"Since the announcement of the Proton-Geely partnership in May, we have heard a lot of news on the benefits of the alliance but nothing on how much we are getting from the purchase of the stake," Teo told reporters at the Parliament building.
The DAP parliamentarian said he had posed the question to the International Trade and Industry Ministry (Miti) and the minister, Datuk Seri Mustapa Mohamed, had replied that Proton would receive a "cash injection of RM170.3 million from Geely as well as implied value of RM290 million for the Boyue SUV model platform".
The sale price was not disclosed during the announcement of the strategic partnership on May 24. However, the following day, DRB-Hicom reportedly informed analysts that the 49.9% stake was valued at about RM770 million, whereby Geely would pay RM170 million in cash and give Proton the rights to its best-selling model, the Boyue SUV, valued at RM600 million.
DRB-Hicom later clarified to Bursa Malaysia that the rights to the Boyue valued at RM600 million as stated during the analyst briefing was merely an assumption and that its management was illustrating how the assumed valuation of Boyue would lead to the implied valuation of Proton.
On Sept 29, DRB-Hicom announced the completion of the share subscription of 547.02 million shares (49.9% stake) in Proton by Geely for RM460.3 million.
It added that Proton has subsequently divested 49% of its issued shares in Lotus Advance Technologies and 49% in Lotus Cars Preference shares to Etika Automotive Sdn Bhd, which is owned by tycoon Syed Mokhtar Al-Bukhary.
DRB-Hicom said the divestments by Proton of interests in Lotus Advance Technologies totalled £100 million (or RM567 million).
Teo today recapped a written response to him from Mustapa dated May 25, 2016, in which the minister said the government has provided RM13.9 billion in assistance to Proton since its establishment in 1985 and that the sum comprises government grants, tax exemptions and other non-fiscal assistance.
"Since a total of RM13.9 billion has been invested into Proton by the government and now, 49.9% of the national car manufacturer has been sold to Geely, I feel that all those responsible should inform Malaysians the exact amount paid by Geely to Proton," he said.
"The RM13.9 billion is our people's money. This is a huge amount, which is why the government needs to be more transparent," he stressed.
On a related note, Teo also questioned why the chief executive officer (CEO) post in Proton's manufacturing arm Perusahaan Otomobil National Sdn Bhd (PONSB) was given to a foreigner instead of a Malaysian.
DRB-Hicom and Geely had announced on Sept 29 in a joint media conference that Dr Li Chunrong — who recently joined Geely's senior management from Dongfeng Honda Engine Co Ltd — would be the new CEO of PONSB, succeeding Datuk Ahmad Fuaad Kenali effective Oct 1.
"Why not appoint a Malaysian since Proton is a national car company?" Teo asked.
Mustapa has said the appointment of a foreigner instead of a local "was a business decision made by Proton themselves and the government does not meddle in the business management of any private company".
"In addition, the appointment of foreign nationals as a private company's CEO is nothing new considering the business world is going global," the minister said.