Prime Minister Abdullah Ahmad Badawi has been asked to clear the contradictions in his statements on the issue of Malaysian companies being snapped up by foreigners, especially Singaporeans.

In an open letter to the premier, PAS vice-president Husam Musa raised, among others, Singapore firm Parkway Holdings Ltd's purchase of a 31 percent controlling stake in private healthcare services provider Pantai Holdings Bhd.

Other issues raised include the merger of ECM-Libra and Avenue Capital, the dealings of Scomi Bhd - owned by Abdullah's son Kamaluddin - and the premier's son-in-law Khairy Jamaluddin's involvement in business.

Over the weekend, Khairy sold his entire stake in ECM-Libra worth more than RM9 million following much controversy.

When contacted, Husam said a copy of his letter was both faxed and posted to the prime minister yesterday.

In his five-page letter, the PAS leader said he welcomed the government's decision to try to regain control of Pantai Holdings as reported in the media.

Husam cited a Berita Harian report on Aug 14 which quoted Abdullah as saying the government was relooking at the issue because the concessions given to Pantai Holdings included a government contract for hospital supplies.

The premier said with the sale of the shares, the concession was now "in the hands of others", which the government had hoped it would remain with Malaysians.

However, Husam said this contradicted what Abdullah had claimed in an interview with TV3 on Aug 7 that no Malaysian business entity had been taken over by foreigners.

In his letter, the PAS leader also included an excerpt of the interview where Abdullah said:

"Firstly, I say what is wrong with foreign companies wanting to buy shares in our companies as this is good because they have confidence in our companies...

"But what is important is that we safeguard our interests, we should not let others take over. In this matter, not one of our companies have been taken over..."

Why didn't you act earlier?

Husam also pointed out an earlier letter he wrote to Abdullah late last year, which among others questioned why the Finance Ministry allowed Parkway Holdings to buy a stake in Pantai Holdings, which operated seven hospitals.

"Maybe I am such an insignificant person that my letter was not worthy to be read by you despite you asking everyone to 'tell you the truth'...," said the PAS leader.

"Due to this, you have forgotten that the issue was raised long ago, and you should have acted then even if you had not read my letter," he added.

Husam wondered how Abdullah failed to act when the issue was raised by many quarters, including a member of the cabinet, the health minister.

Newspapers also reported that soon after the takeover, five out of the seven Pantai Holdings directors were changed, he added.

He said under the Practice Notes 2.4 for the Malaysian Code on Take-Overs and Mergers, a company is deemed as being under a new management when more than half of its directors are changed in less than a year following the entry of a new shareholder.

"I am sure you (Abdullah) were aware of all these," he said. "What is even more confounding is that all transactions involving the sale of a local company's interest to the foreigners must first get your approval as finance minister, or at the very least you must be informed about it."

Husam also listed other similar transactions that took place under the stewardship of Abdullah:

  • Singapore's purchase of a five percent stake in Telekom Malaysia in 2004, where ECM-Libra was its financial advisor.

  • The five percent stake in Proton purchased by the Government of Singapore Investment Corp (GSIC), also in 2004.

"Why did you agree then but now talk about regaining control? Are you not aware of the cost involved in this process?" asked the opposition leader.

"What is even more unforgivable is that the sale of Pantai Holdings shares amounting to 31 percent to Parkway Holdings contradicted the guidelines on mergers and takeovers issued by the Prime Minister's Department on May 21, 2003," he alleged.

Abdullah took over as prime minister from Dr Mahathir Mohamad six months after that - in November 2003.

"You have transgressed the guidelines issued by the Prime Minister's Department. How can this happen?" he asked.

Meanwhile, Husam said two Pantai Holdings subsidiaries - Fomema and Medivest - were involved in privatisation concessions and based on the privatisation guidelines, they are not allowed to change hands and fall into the control of foreigners.

"Strangely, this has happened. Who gave the approval? As much as you are fond of hearing the truth from the people, I as a citizen would also like to know the truth about this issue and you can do this (tell the truth) at the coming Dewan Rakyat sitting," he added.

Conflict of interests

Touching on the prime minister's family, the PAS leader said there could be a conflict of interest between Abdullah's position as finance minister and his son and son-in-law's business interests.

"Although your son-in-law has given up his stake in ECM-Libra, you must be aware that the government-linked Avenue Capital whose assets are estimated to be around RM4 billion - including its stake in POS Malaysia worth more than RM600 million - is now in the final stages of a merger with ECM-Libra and this happened when your son-in-law was still a shareholder in ECM-Libra."

He said the management of the merged entity ECM Libra-Avenue will be under investment advisory group ECM-Libra.

"This would mean the government-owned company (Avenue Capital) will fall into the hands of private individuals," he said.

Husam also cited news reports which revealed that Scomi, owned by Abdullah's son, obtained numerous contracts.

"It is difficult to understand how these contracts have nothing to do with your position as prime minister," he said.

Husam said the current situation does not bode well for Abdullah's political standing and it gave the impression that "the nation's agenda has now become your family matters".