Proton's decision to sell its stake in motorcycle maker MV Agusta to Italy's Gevi Spa for a token one euro (RM4.55) last month has sparked another round of controversy.

Former premier and Proton adviser Dr Mahathir Mohamad and his protege former Proton chief executive Mahaleel Ariff slammed the national car maker over the transaction.

In a joint statement published in newspapers today, they asked Proton to answer the following questions:

  • Who offered to sell or who offered to buy at one euro?
  • Were there other bidders?
  • Was there an attempt to get the buyer a higher price?
  • Was there an announcement that MV Agusta was up for sale?
  • If not, did Proton approach only one bidder?
  • If other bidders were offered, did they reject?
  • Who in fact made the decision to sell?
  • Can Proton explain how selling an entity bought at 70 million euros for one euro would not cause Proton to lose money as claimed?

Who is responsible?

DAP leader Lim Kit Siang also appeared puzzled over the transaction as he demanded answers from Proton.

"The Proton management board cannot continue to keep mum on these questions and issues," he said in a statement today.

Lim also wanted to know who was responsible for the RM510 million loss linked to MV Agusta.

"Was it Mahathir and Mahaleel or the present Proton management board or both parties?" he asked.

(The RM510.24 millions appears in Proton's cash flow statement in its 2005 annual report, and includes the acquisition price of 70 million euros or RM367.68 and a further RM142.66 million presumably for financial assistance).

He said Mahathir and Mahaleel should give a proper accounting on the justification for the acquisition of Agusta.

"The due diligence conducted on the acquisition of Agusta at the time should also be made public," he said.

At the same time, he said Proton management board should give a separate accounting as to how, from the financial and technology transfer perspective, the acquisition had failed to live up expectation during its one-year ownership and control.

Proton has announced that in line with its strategy of divesting non-core assets, it had sold Agusta's 57.75 percent stake, which it rescued in December 2004 with a 70 million euro investment.

This would assume Agusta's restructured frozen debts of 106.9 million euros (RM486.6 million) and shoulder working capital requirements of 32.5 million euros (RM147.95 million).

Proton suffered a net loss of RM154.33 million for the second quarter to September, reversing a profit of RM198.91 million a year earlier.

It attributed the loss to provisions totaling RM160.7 million, mainly for the struggling Agusta unit.