National carmaker Proton confirmed today Mahaleel Ariff would remain as chief executive and announced the completion of restructuring with the listing of its new investment company.

The state-controlled company said in a statement its new holding company, Proton Holdings, would assume its listing status on Friday.

It also confirmed Abu Hassan Kendut as chairman of Proton Holdings and Mahaleel as its non-independent executive director and group chief executive officer, squashing news of a boardroom tussle.

Second Finance Minister Nor Mohamed Yakcop told reporters earlier that Mahaleel, whose contract was due to expire April 2005, would remain as Proton chief executive.

"The government has made a decision. Mahaleel's position will not be discussed at Proton's board meeting this week," he said.

A report last week cited sources as saying that Mahaleel had survived a bid to oust him and sell parts of the company.

The report said the attempted coup against Mahaleel was led by chairman Abu Hassan, whose plan was to take control of the car maker and its assets including a RM3.4 billion cash pile as at end-December.

Avert problems

Proton's shares have been suspended from trading since March 24 to facilitate the group's revamp. Proton Holdings evolved after the company's businesses were split into four core areas - namely manufacturing, marketing, engineering and ancillary services.

Abu Hassan was nominated to the board by state investment arm Khazanah Nasional, which owns a 35 percent stake in Proton and is the single largest shareholder, followed by national oil firm Petronas.

But both Mahaleel and Khazanah managing director Anwar Aji have said they were unaware of any moves to oust Mahaleel or sell Proton's assets, including its British unit Lotus.

Prime Minister Abdullah Ahmad Badawi, who is also finance minister, told reporters the government hoped to "avert some serious problems" at the upcoming board meeting but did not elaborate.

Proton has been grappling with poor sales amid intense foreign competition ahead of market liberalisation under the Association of Southeast Asian Nations (Asean) Free Trade Area (Afta).

Its domestic market share tumbled to 49 percent last year from 60 percent in 2002, with car sales falling 27.5 percent to 155,420 units last year. But Proton is pinning its hopes on its new GEN-2 and two other new models expected to be launched this year to revive sales.

Under Afta, import tariffs for most products in the region were cut to below five percent from last year. Malaysia obtained a two-year reprieve for its auto industry until 2005 but it recently said it would further defer reducing duties to the required level until 2008. - AFP