PETALING JAYA: Tycoon Halim Saad has dismissed media reports claiming he was questioned by the Malaysian Anti-Corruption Commission (MACC) over an alleged embezzlement of RM2.3 billion pertaining to the purchase of a listed company’s shares by a Malaysian conglomerate 26 years ago.
“MACC did not call me in for questioning on the issue as speculated in the media,” Halim said in an exclusive interview with FMT Business.
Last Friday, various media outlets reported that MACC was investigating a former senior minister and a businessman holding the title of “Tan Sri” over the alleged embezzlement of state funds.
Halim, who is now involved in the oil and gas (O&G) industry overseas, lambasted business weekly The Edge for linking him to the RM2.3 billion acquisition of shares.
In its latest issue, The Edge claimed that a MACC source had confirmed that the transaction involved the purchase of a 32.6% stake or 722.9 million shares in Renong Bhd by United Engineers (M) Bhd (UEM) for RM2.3 billion in November 1997, in the midst of the Asian financial crisis.
The Edge also republished in full three of its articles on UEM’s Renong share acquisition from November 1997 to “refresh the memory of readers as well as enlighten those who were not aware of this transaction”.
Halim said the articles have fuelled unfounded speculation about him and cast aspersions over his role in UEM’s purchase of the Renong shares.
“I challenge them to provide evidence of my wrongdoing in the transactions in question,” he said.
The man who built the Renong empire
Halim was instrumental in growing the Renong corporate empire from the mid-1980s to the 1990s.
He was credited with building the cash cow that is the North-South Expressway (NSE). A Rating Agency Malaysia report published in 2001 stated the NSE’s projected net present value (NPV) cashflow for 2001-2030 at RM28 billion.
The conglomerate had interests in construction, tolled highways, financial services, telecommunications, and property development, and had about a dozen listed companies in its stable.
However, like many of the big corporations then, Renong was badly hit by the 1997-98 Asian financial crisis. Reeling from its mountain of corporate debt (over RM4 billion), the group fell into financial distress and was in danger of being taken over by hostile parties.
It was in this context that UEM’s acquisition of the Renong stake took place. Cash-rich UEM was at the time part of the Renong stable, in which it had a 38% stake.
News of the purchase reportedly led to the KL Composite Index plunging by more than 20%, causing a huge outcry. Fingers were pointed at Halim, accusing him of using UEM to save himself and other key shareholders by propping up Renong’s share price at a time when the stock market was plunging in the wake of the financial crisis.
No government bailout
Twenty-six years on, Halim is still grappling with the same accusations made against him at the time.
He refuted claims that UEM’s acquisition of the shares was a “government bailout” of Renong.
He stressed that UEM purchased the Renong shares using its own resources and banking facilities, and that the shares were purchased on the open market.
“Since UEM used its own money, how can it be a bailout? You can only call it a bailout if government funds were utilised to buy the shares,” he argued.
He pointed out that UEM acquired the Renong shares from the open market, at market price, through six nominee companies.
“UEM did not buy the 32% by way of private treaty. If it were so, it would be disclosed as a related party transaction (RPT),” he said, adding that subsequent investigations by the then Kuala Lumpur Stock Exchange and Securities Commission confirmed it was not an RPT.
In January 1998, to reassure UEM shareholders and ensure UEM did not suffer any loss from the transaction, Halim, who was also a director of UEM, granted a put option to UEM which gave the company the right to sell back the 32.6% of Renong shares to him at RM3.24 a share (the average purchase price).
Role of the finance ministry
Halim also revealed that it was the finance ministry that had requested UEM to buy the shares of Renong to prevent the company and its assets such as the NSE from being gobbled up by foreign parties in a hostile takeover.
The finance minister and deputy prime minister at that time was Anwar Ibrahim, who is now the current prime minister.
Halim pointed out that UEM’s purchase of the Renong shares was done in the “national interest” to protect the country’s strategic assets such as the North-South Expressway from being controlled by foreigners.
He also disputed claims he personally benefited from the transaction. He said the Renong shares that UEM acquired did not include any shares from his own stake.
“I had a 23% stake in Renong, and this was never sold (to UEM),” he said.
He also highlighted that UEM shareholders subsequently voted overwhelmingly to approve the acquisition of the Renong shares at an extraordinary general meeting in February 1998.
“The ultimate accountability is to shareholders, not the market. The motion was passed with over 90% majority, so it is academic if non-shareholders were against the purchase.
“Everything was done according to the law,” he said.
Since leaving the Malaysian corporate scene over a decade ago, Halim has been astutely building up his oil and gas (O&G) business overseas. His plan to list his Kazakhstan-based O&G production concession holder Caspi Oil Gas LLP on the Nasdaq is close to fruition.
Caspi is owned by Halim via his investment vehicle Markmore Energy (Labuan) Ltd, which signed a merger agreement with Nasdaq-listed special purpose acquisition company (SPAC) Liberty Resources Acquisition Corp last November.
The resultant amalgamated company ultimately will be Liberty Onshore Energy B.V., which is expected to be listed on the Nasdaq later this year. The company will own the Rakushechnoye oilfield situated in West Kazakhstan.