Maybank Briefing

May 28, 2008

Today (27 May 2008) at 12:30 pm, Maybank’s CEO, Datuk Wahid and two other high ranking officers of the bank, came to Parliament to brief MPs on Maybank’s proposed acquisition of Temasek Holdings’ (a company owned by the Singapore government) shares in Bank Internasional Indonesia (BII) for the total price of RM8.6 billion (i.e. 4.6 times the book value of the shares.)

On 20 May 2008, I asked the Minister of Finance about this Maybank’s proposed purchase of BII shares and part of the Minister’s answer was:

Sungguh pun terdapat saingan yang begitu hebat dari bank negara-negara maju seperti HSBC, Bank of China dan South Korea Kookmin Bank, Maybank telah Berjaya membeli BII.”

Please see Parliamentary Question & Answer for full details.

The above answer of Minister of Finance was most misleading as it gave the impression that all the banks mentioned were fighting tooth and nail for the purcahse and Maybank won the bid.

Datuk Wahid also told us that Maybank appointed a consultant in Indonesia to advise them on the purchase. The consultant gave Maybank a range on the price of the shares. Datuk Wahid admitted that Maybank’s offer to Temasek was on the high side of the range given.

I also asked Datuk Wahid whether it was a coincidence that when he was the CEO of TM (Telekom), TM sold 10% of its shares to Temasek Holdings and now when he is the CEO of Maybank, Maybank is buying BII shares from Temasek Holdings. Of course, Datuk Wahid did not reply to this point.

When I questioned Datuk Wahid this morning about the bidding, his answer was:

“During the initial stage of the bidding, all the above mentioned banks took part and thereafter some withdrew and the remaining bidders were HSBC, Bank of China and Maybank. Finally, HSBC also withdrew, leaving Bank of China and Maybank to fight and the bid by Bank of China was 505 Rupiah per share and Maybank’s bid was 510 Rupiah.”

Gombak MP, YB Azmin Ali also questioned on the rationale of the purchase. Parit Salak MP (BN) was questioning whether ECM Libra was involved in the transaction. MP for Pasir Mas, YB Ibrahim Ali, was also questioning whether ECM Libra was involved in the transaction and that whether there was any payment of commission.

You will observe that the Minister of Finance’s reply and Datuk Wahid’s reply were totally different from one another. I do not know who is telling the truth on the bidding exercise.

I am not convinced that the purchase was in the best interest of Maybank. I hope that Bank Negara will not allow Maybank to purchase BII shares from Temasek Holdings.

Incidentally, MP for Rembau, Tuan Khairy Jamaluddin only came for the meeting after it has begun and he was not noticed.