Everyone thought Malayan Banking Berhad (KLSE: MAYBANK, stock-code 1155) was a sucker for draining its coffer to the tune of US$2.7 billion to buy a financial-weak PT Bank Internasional Indonesia (JAK: BNII). Almost all analysts thought it was too pricey and were scrambling to cut Maybank’s rating. Investors who invest based on dividend cried foul as almost 25 percent from the Malaysia’s largest lender “cash-reserve” have just evaporated – they were hoping for special dividend from the huge US$11 billion cash on hand initially.

No matter how fishy the deal sounds, I thought the actual winner was Singapore’s Temasek which invested only $217 million for the stake and hence made fivefold profit from the sucker (Maybank). But I was wrong because someone has made more than that. It was interesting that Maybank’s “top management” made the decision (was it pre-planned?) right after it’s president and CEO, Amirsham, was about to serve the remaining months before hand-over to Telekom Malaysia Berhad’s group CEO Abdul Wahid Omar.

Was it a coincidence that Amirsham somehow was called to tender his service as the Minister in the Prime Minister’s Department when he should finish his term at Maybank till June 30th 2008? Or was it a haste decision so that Maybank could blindly pay $2.7 billion for BII knowing Amirsham would not agree to it (or somehow delay it)? If what Malaysia-Today claimed is true, then it could provide the missing piece of the puzzle.

Everything can be traced back to the shameful defeat by Abdullah Badawi’s National Front coalition parties recently. By now everyone on the street knows UMNO is a sinking ship and most of its parasites sailors are waiting for the right signal to jump off just like the TITANIC, only this time there’s no icy ocean, no Leonardo DiCaprio, no Kate Winslet but loads of boats from opposition waiting to pick-up the leftovers.

According to Malaysia-Today, it was a simple equation of transferring as much money as possible out of the country assisted by the “broker” who advised that the Indonesian bank was a freaking good deal that Maybank should not let go. So the nation’s largest lender was made to over-pay RM3 billion for BII, a small token compared to over RM42 billion taken out by former Finance Minister Daim Zainuddin and the RM21 billion just before the recently 12th general election by some invincible hands. Well, that’s what the article said. I just say what Malaysia-Today said.

And assuming the claims were true, could the recent staggering purchase of 55 Boeing 737-800 aircraft for US$4.2 billion by the national flag carrier Malaysia Airline System (KLSE: MAS, stock-code 3786) tainted with irregularities as well? MAS is expected to take the delivery from Sept 2010 onwards. With weakness in the global economy to persist for sometimes, wouldn’t it be wise to purchase only when it hit the bottom, i.e. when MAS could bargain and buy at a lower price? Furthermore MAS is not short of planes the same way as AirAsia Berhad (KLSE: AIRASIA, stock-code 5099). Maybe the whole idea was to renovate and transform MAS into the “World’s Five Star Value Carrier” but still, why the rush and the huge order and most importantly, why now? What was the actual discount rate for such a bulk purchase? Any hidden commissions paid to unknown “agent(s)”?

Now, it’s up the Maybank shareholders to approve or reject the over-price acquisition although I doubt Bank Indonesia regulatory will rejects it. Reject the acquisition and you might see a better chance of getting special dividend. At least bombard the top management and ask them to bargain for a lower price unless you wish to be the laughing stock of foreign investors and analysts.

Other Articles That May Interest You …

• Anwar, PM-in-waiting plans Sabahan for Prison Break
• Maybank’s stock punished after $2.7 billion BII purchase

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April 2nd, 2008 by financetwitter

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