MIC man suggests gov't bailout for Maika

Blaming a weak management for the failures of MIC's investment arm Maika Holdings, a former party leader today urged the government to bail out the ailing company for the sake of the Indian community.

Former Federal Territory MIC chief VKK Teagarajan suggested that the government pumped in RM150 million into Maika to help the 66,000 investors who had put in about RM106 million of their hard-earned cash into the venture.

The shareholders have grown disillusioned after seeing little returns on their investments, with many accusing the company of squandering the capital through dubious channels.

Maika, a brainchild of long-time president S Samy Vellu, was established in 1982 purportedly to enable Indian Malaysians to have a share in the country's economic growth.

"The government has acknowledged that the Indians need help. Presently their share of economic wealth is only between one to two percent and the government has plans to solve the issue by 2020. This is not acceptable," said Teagarajan at a press conference held in Kuala Lumpur today.

He said that the economic pie of the Indian community should be elevated by 2010 or 2012.

Stating that the government has no specific vehicle to uplift the economic status of the Indians, Teagarajan suggested that the government just make use of the already available Maika Holdings.

"Take over Maika Holdings. It is not a dead horse," added the former MIC central working committee member.

He said that Maika's only profitable asset and cash cow was the United Oriental Assurance insurance company, which could not be sold off due to a pending legal suit against Maika.

He added that Maika also had a sizeable plot of land in Sepang which could be sold for a profit.

Maika management blamed

As such, he said that Maika, could be the proper vehicle for the government to uplift the status of the Indian community.

He proposed that by taking over Maika, the government could then give Maika five percent of government projects.

"Within a year, Maika would be a billion-dollar company," he said confidently.

"People must be allowed to take away their money from Maika Holdings. It is a bullet in the head. It is also the main cause of dissent of Indians against MIC," he said.

Teagarajan, who will be contesting for the deputy president's post in the party polls next September, also urged for the management of Maika to undergo a total revamp.

He did not mince his words in blaming the management of the company for the failures thus far.

"Maika's management has totally failed. It was not focused or aided by business models," he said.

He also said that MIC had a duty to solve the problems of Maika.

"MIC cannot run away from the Maika issue. It is both mother and midwife to Maika Holdings. MIC has moral responsibility to solve this issue," he said.

This is not the first time the subject of a government bailout has cropped up.

In August 2008, a group of investors had also urged for the government to intervene and bailout Maika in order to help pay back all the shareholders.

Vell Paari: Good news soon for investors

In an immediate reaction, Maika chief executive officer S Vell Paari when contacted by Malaysiakini said that the investment company was in a good shape.

"When I took over as the CEO in 1999, Maika was technically insolvent. Now with the help of the board, we have RM150 million in gross assets," he said.

He added that the government has been helpful in solving some of Maika's financial woes through the national asset management company Danaharta.

"At the last annual meeting last year, I had proposed a resolution to sell off the assets of Maika and pay off a dollar for a dollar to all our investors. However, that plan has to be put on hold due to the legal suit slapped against us by a shareholder," he said.

Vell Paari further said that he was hopeful of a quick and amicable resolution on the legal matter which would allow Maika to pay off all investors.

"We expect a favourable decision any time soon," said Vell Paari, who is son of MIC leader Samy Vellu.

He also said that he would be talking to Teagarajan soon on the matters raised by the latter.

SPECIAL REPORT: Maika - the failed venture