Penang-based reform movement Aliran today demanded an explanation why United Engineers Malaysia Bhd cancelled an obligation by billionaire Halim Saad to buy 32 percent of blocked shares in Renong Bhd.

Aliran is disturbed by the decision to 'forgive or forgo' a huge debt owed by Halim, said the movement's executive committee in a statement today.

On Wednesday, UEM announced it was terminating the ex-Renong chairperson's contentious put option to buy the blocked shares worth RM3.2 billion, and made a RM2.4 billion provision on the debt.

Halim was supposed to pay in three installments of RM100 million each in February, July and December and the balance in May 2002, but with the termination Halim has forfeited the RM100 million he has paid to UEM so far.

Halim granted the put option to UEM on Dec 11, 1998, giving him the right to purchase its shares in Renong.

The put option was granted after UEM's controversial buy-up of 722.9 million Renong shares at the height of the Asian financial crisis in 1997.

'Giving reprieve'

According to Aliran, the decision to terminate the put option has raised concerns that the government-controlled UEM is giving a reprieve to "certain prominent individuals".

"It is a bailout. But the question is, was Halim acting on his own or was he acting on behalf of more powerful interests aligned to the ruling party?" queried the movement.

It maintained that the people are entitled to know why Halim is being so easily let off the hook because the takeover of UEM by the government early this year was carried out using taxpayers' money.