It did not release its annual reports for two years running. It is a BN company, so the Registrar of Companies would not step in. Yet when the Indian Progressive Front (IPF) president raised questions about Maika Holdings, we were fed the spin Maika Holdings was about to be listed on the Kuala Lumpur Stock Exchange. Several meetings of Maika Holdings shareholders were held. But all but one or two only wanted to be paid what they put in. The one or two wanted an explanation from the board how and why it had mismanaged the company. Now the Maika board pleads with its shareholders for more time, at least a year, to reduce its liabilities of RM202 million and debt of RM92 million. How would it do that? The standard way of modern companies: sell off what it should not have bought or formed? It would sell 15 privately held companies. These companies were run well by its previous owners, but which Maika Holdings quickly ran it down after paying too high a price. All now run at a loss.
It would retain
only the money-making subsidiaries, all non-listed, and in a year,
shareholders are assured, Maika Holdings would be the company to watch.
If you listen to its directors, its mismanagement is not why Maika
Holdings did so badly. It is the Press for "exaggerating" its financial
crisis. And that old and well-tested standby - the 1997 Asian financial
crisis - is brought out to justify the huge losses. The board, headed by
Dato' Seri Samy Vellu's son, Mr S. Vell Paari, did little to stem
losses, is not about to turn the company around on its businesses, only
on its extraordinary gains from the sales of subsidiaries and assets. In
other words, Maika Holdings as an investment asset of the Indians is
now only in the figment of one's imagination.
It was formed in high hope. Analysts at the time, as now, shortchange
Malaysians with over-optimistic view of new companies. Maika Holdings
was one for which a bright future was uniformly predicted. It began
business in January 1983. Dato' Seri Samy Vellu said the Indians would
have RM2.2 billion in funds at its disposal by 1990. It had stakes in
TV3, in United Asian Bank, since merged in a succession of banking
mergers into what is now the Bumiputra Commerce Bank, choice land in
choice locations. It went into doubtful businesses like commodities
trading - there is nothing wrong with commodities trading, but how it
was done in Malaysia was a pure and simple scam. But the good times
cannot last. Losses soon dotted the accounts books. Its construction arm
had been given the right to build the 48 km Seremban-Port Dickson-Teluk
Kemang privatised tolled road. It did not. When it was offered 10
million shares in Telekoms Malaysia, at its listing, Dato' Seri Samy
Vellu ordered Maika Holdings to subscribe for one million, the other
nine million given to three shell companies with a total paid up capital
of less than RM10 but to which the MIC president was somehow linked.
The Asian financial crisis was not why Maika Holdings collapsed. The
mismanaement bled the company long before that.
For the driving force of Maika Holdings is not its board but one of its
shareholders, Dato' Seri Samy Vellu. He spoke of Maika Holdings to the
Press as if he owned it, issued statements to the Tamil press talking as
if he controlled or was Maika Holdings personified. He would not let
Maika Holdings survive without his permission, and to make sure,
installed his son as the CEO. He has not made a success of anything in
the past, nor has he of Maika Holdings. But the sustained pressure on
Dato' Seri Samy Vellu on Maika Holdings takes its toll. He has sued
eight men, including Dato' Pandithan, the Malaysia Nanban publisher and
editor-in-chief, for defamation, and demands damages of RM50 million
from each and other relief. Curiously, he does not want an injunction in
place until the trial, only after. No doubt he has excellent legal
counsel, but he should know that by the time the case comes to trial, he
would, like Tun Mahathir Mohamed, not have the clout he has, and he
could well be laughed out of court. Did you notice that when Tun
Mahathir says something sensible these days, it rates at best a report
on the inside pages of the mainstream newspapers? Do Dato' Seri Samy
believe he would fare any better?
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