Maika Holdings assets - such as Oriental Capital Assurance Bhd (OCAB) - should remain in the hands of Indian Malaysians to ensure that the community is on track to achieve its 3 percent equity target.

In calling for this, former MIC deputy president S Subramaniam also said a proper evaluation of OCAB, Maika's debt-ridden insurance arm, should be carried out before any move to dispose of the company.

Maika, an investment company set up to increase Indian Malaysian equity, is being criticised for putting OCAB up for sale at RM129 million, even though the company had made money until last year when it suffered a loss of RM9.33 million.

Announcing the sale two weeks ago, Maika chairperson Abdul Rashid Abdul Manaf said the move was to alleviate the financial burden caused by the high loan interest repayment and accumulated losses suffered by the company.

At a press conference at his residence in Kuala Lumpur today, Subramaniam said: "What I think should be done properly, or rightly, is, to evaluate the company's real worth. You must have a proper consultant ... a merchant banker, to do a study and establish the right value of OCAB.

"It is not (a matter of) RM50 or RM100 or RM2,000 or RM50,000...(This) is a RM129 million company. So a proper study must be made and be given to shareholders."

OCAB is a general insurance company with a paid-up capital of slightly more than RM100 million. It was incorporated in 1976 and was one of the earliest insurers in Malaysia.

Maika started buying a stake in it in 1986 and became the major shareholder in 1994, holding more than 63 percent of the paid-up capital of RM42.6 million.

It has proposed to use the money raised from the sale of the company to settle loans with CIMB Bank and national asset management company Danaharta Nasional Bhd.

'Get right price'

Subramaniam said he was not opposed to the sale of OCAB, but questioned the price listed.

"I'm saying do it properly ... and thereafter invite the highest bidder. Then you are able to establish the right price. It is a company that has been making money every year except for last year.

"(The loss) is over RM9 million and even that is recoverable, according to the report. OCAB was considered the golden goose of Maika Holdings."

Holding on to OCAB, he said, would assist in increasing Indian equity. The government has set a 3 percent target for Indian equity ownership by 2010. Currently this stands at 1.5 percent.

"What I'm proposing is, if you have to sell, give the first option to an Indian company, to an Indian individual, to an Indian co-operative or something like that, so that the equity does not (leave Indian hands)," Subramaniam said.

"This is the only financial institution that the Indians have at the moment. An insurance company. That's all. There's nothing else."

Asked to comment on allegations by shareholders that OCAB's losses last year were due to mismanagement, he said: "Those are questions that the board needs to answer. If these are raised by members at the AGM, I think they need to be answered in a straightforward (way ... explanations must be given.

"As far as the price is concerned. I don't know. I personally have no confidence that this asset can be managed well. It was a profit-making company that (only) showed a loss last year."

Subramaniam also questioned why the board only comprises two directors, given the fact that there are more than 60,000 shareholders.

"It is anybody's guess as to why there are only two. There are not enough qualified people maybe. Nobody knows the reason.

"If anybody wants to contest, they can under the rules, it's a question whether they can get the support of shareholders, who will be the deciding factor. All the shareholders have already lost a lot of money."

'Settle debts first'

Subramaniam also said he is likely to attend the Maika AGM, scheduled for Thursday at the Sime Darby Convention Centre in Kuala Lumpur.

"f possible I will attend, but this (proposal for evaluation) I will forward to them in writing," he said.

Minority shareholder representative V Kanagaraju told reporters after the press conference that Maika "must settle the debts of the poor who invested with the company before settling other debts".

"After that, even if it goes bankrupt, it doesn't matter," he said.

Shareholders have criticised Maika for choosing the eve of Merdeka Day for the AGM, saying this is intended to discourage high attendance because of anticipated contention over a number of issues.

Maika, the brainchild of MIC president S Samy Vellu ( photo ), was established in 1982. It is helmed by his son Vel Paari.

The company raised RM106 million in 1984 from 66,000 investors. However, some shareholders - after seeing little returns on their investments - have since accused the company of squandering the capital through dubious deals.

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