PETALING JAYA: Former second finance minister Johari Ghani has urged the government to exercise greater caution and carry out more careful consideration and strategic planning in its investment endeavours.
Johari said the stock market had been shaken by the recent collapse of a deal to sell a 33% stake in Boustead Plantations Bhd to plantations group Kuala Lumpur Kepong Bhd (KLK).
“When you make an announcement, and the investing public has already agreed, they react positively,” said Johari (BN-Titiwangsa) in the Dewan Rakyat. “After that, if we reverse course, it causes people to lose confidence in our capital market.”
The KLK deal was the result of an agreement with the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd in August for a takeover of Boustead Plantations, in which KLK was to acquire a 33% stake plus one share for a cash payment of RM1.15 billion.
LTAT, a statutory body, is the majority shareholder in Boustead Holdings, which owns Boustead Plantations.
On Wednesday, KLK, LTAT and Boustead said they had agreed not to proceed with the takeover. However, the next day, LTAT said it was seeking to buy out the plantation group at RM1.55 a share.
Johari said the government must grasp the intricacies of investment practices involving the purchase and sale of shares. He cited successful examples involving Permodalan Nasional Bhd and even Boustead itself.
In 2020, PNB sold its 56.3% stake in Chemical Company of Malaysia Bhd to Batu Kawan Bhd for RM292.8 million while in 2021, Boustead-owned Royale Chulan Bukit Bintang Hotel in Kuala Lumpur was sold to Singapore-listed Hotel Royal Ltd for a reduced price of RM177.3 million.
“No matter how much capital we have, every time we buy, we suffer losses. Then, when we want to sell, we can’t,” Johari said. “In the end, the government ends up owning all these assets that do not provide benefits.”
Johari was speaking during Question Time after the defence minister, Mohamad Hasan, gave his response to a question from Ahmad Tarmizi Sulaiman (PN-Sik).
Tarmizi had wanted the minister to state the financial and investment position of LTAT to ensure that it remains committed in carrying out its function as a retirement savings scheme for former members of the military services.