KUALA LUMPUR (Aug 9): When Prime Minister Datuk Seri Anwar Ibrahim was the finance minister during the 1997/98 Asian Financial Crisis, he had requested Tan Sri Halim Saad to buy shares in Renong Bhd, according to the businessman who was then the controlling shareholder of the debt-laden conglomerate.
In Halim’s statement of claim (SOC) to his latest lawsuit against Tun Dr Mahathir Mohamad, Tan Sri Nor Mohamed Yakcop and the federal government, he claimed that the request by Anwar was to help shore up the local stock market and prevent Malaysia from losing prized assets, including North-South Expressway (PLUS) which was then a wholly-owned unit of UEM.
Furthermore, Halim said in the SOC that Anwar was the party who had proposed a put option for him to buy back the block of Renong shares transacted. The put option later became the main point of contention in the Renong/UEM share deal, in which Halim claimed that he had suffered large losses.
According to the SOC, in the upshot UEM bought 722.882 million shares, which was equivalent to a 32.6% stake, in Renong Bhd for RM2.338 billion cash, resulting in the two companies having cross-shareholding. Renong owned a 37.92% stake in UEM.
The cross-shareholding reduced the possibility of a hostile takeover of Renong and indirectly, UEM, Halim said in the SOC.
He said the purchase of Renong shares was approved by the shareholders of UEM at a shareholders’ meeting on Feb 14, 1998. And a put option was in place for Halim to buy back the shares from UEM at cost of purchase plus holding costs less payment of dividend and distribution of reserves (if any).
He claimed that Anwar proposed the put option as a condition for the Securities Commission granting UEM a waiver from making a general offer on Renong after the share purchase as well as to appease the minority shareholders of UEM.
Dr Mahathir was the Prime Minister then while Nor Mohamed Yakcop was a minister in the Prime Minister’s Department in 2001 when Halim wanted to buy Renong shares and to take the debt-laden conglomerate private.
Compensated by only RM165 million
In December 2000, UEM exercised the put option, consequently Halim was obliged to buy the block of Renong shares that cost him RM3.165 billion.
The block of Renong shares would only be transferred to him upon full settlement. Halim said that he made the first payment of RM100 million through a financing facility, and requested more time to pay the second and third instalment to seek approval to bring the funds from overseas.
At the same time, he was planning a bid to take Renong private.
While he was raising funds, the businessman claimed that he was summoned to meet Dr Mahathir and Nor Yakcop on July 12, 2001.
Halim claimed that he was directed not to complete the share purchase via the put option exercise by UEM and also not to launch his takeover bid for Renong.
Halim did not agree with the request to abort its takeover bid.
Five days later, he was informed that Khazanah Nasional Bhd, or an entity it designated, would be directed to make a general offer to UEM and he was required to exit from the UEM-Renong group.
Halim alleged that he was required to support the general offer by PNB and in return he would be compensated if he were to support the takeover offer.
The SOC stated that Nor Yakcop told Halim that immediately upon completion of the general offer, he would be given the following:
- a) to be paid in cash and in kind, a sum equivalent to RM1.3 billion. This would be made up of a sum of RM325 million in cash, RM325 million in cash equivalent, and within the Prolink development with a value of RM650 million, its value to be determined on the last sale price as at Jan 1, 2001;
- b) Halim’s 16% shareholding in Renong in hand then to be taken over for a transaction value of RM465 million at RM1.25 per share by Khazanah or its designated acquirer;
- c) the transfer to his entire stake in Kualiti Alam Sdn Bhd, free of all encumbrances, in settlement of the loss of RM508 million incurred by him in the rescue of Fleet Group and Fleet Holdings;
- d) Halim would be discharged and released from any and all liability in respect of sums payable by him to UEM under the put option; and
- e) To permit a senior executive of the Renong Group to be nominated by Halim to effect a management buyout of Pharmaniaga Bhd.
Given the offer on the table, Halim then agreed to support Khazanah’s takeover offer and to abort his own plan to take Renong private.
However, Halim claimed that he received only RM165 million from Khazanah. The sum was to compensate for his having paid the RM100 million to UEM in relation to the exercise of the put option to buy Renong shares.
"The sum of RM165 million was not in any way representative of the true value of the Vested Right and the Plaintiff’s (Halim's) Renong shares having regard to the matters stated above," said the SOC.
Following this, he is seeking compensation within the meaning of Article 13(2) of the constitution over his vested right as the controlling shareholder of Renong for such compensation to be assessed by the court, and the compensation be paid within 14 days of the amount being determined.
As an alternative, Halim sought general, exemplary and aggravated damages along with interests to be assessed by the court.
Also read : https://theedgemalaysia.com/node/668118 - What was the RM2.3 bil UEM/Renong transaction 26 years ago that MACC is now investigating?