By P. Gunasegaram
Tiger takes a rapid romp through the privatisation corporate jungle, a particularly treacherous one loaded with dangers to the uninitiated and comes out relatively unscathed. In the process, Tiger discovers that our former prime minister Dr Mahathir Mohamad seems to suffer from a strange disease — selective amnesia — when he talks about taking Malaysia Airlines private and the example of Proton.
Tiger was already familiar with vehicles and especially 4-wheel drives which made the occasional foray into Tiger’s habitat and scared its wits off. But after a while Tiger realised those inside were more afraid of him than he of them.
But when those strange flying objects in the sky came, with their accompanying drone, Tiger was perplexed until he found out about aeroplanes and the new quick way of getting from place to place. And airlines came about — our buses in the clouds.
And thus was born our own airline, now known as Malaysia Airlines, owned by Malaysian Airline System or MAS, government-owned of course now through Khazanah Nasional with nearly 70%.
Dr Mahathir Mohamad
To come back to our story, former prime minister Dr Mahathir Mohamad was asked his opinion over the weekend, when news is terribly short, on privatising MAS. He said that could be the answer to the airline’s woes.
You see, he explained, if MAS remained a government-linked company, then the perception might be that it was OK to lose money. But if you privatised it well, there will be a great focus on cutting costs and making money, and presto, the airline will make money.
And horror of horrors, even for a Tiger that has seen some horrible things, he gave the example of Proton, which he said became profitable after it went to private hands, in this case presumably his crony and friend Syed Mokhtar Albukhary through DRB-HICOM.
Poor Mahathir! Either he is suffering from a serious case of selective amnesia which is in the realm of degenerative disease or he is deliberately misleading as many people as he can by a wilful and deceitful omission of vital facts. But he can’t fool Tiger, and Tiger will tell all.
But before that Tiger has its own theory of why Malaysia Airlines is doing badly. Tiger is a history buff and discovered that the airline was first nicknamed the Flying Tiger when it was formed as Malayan Airways Ltd way back in 1937 and took off some 10 years later.
To prove it, Tiger has dug up this image from the past and the logo which is unmistakably a, well, flying tiger.
What is the logo now, a kite. A kite? Buffeted by the wind and torn to shreds sometimes by the elements. But if a Tiger could fly imagine what a fearsome creature it would be, dominating the skies like it does the land. Who would dare mess around with it? If Malaysia Airlines logo was a Tiger would it not be doing far better now?
Ok, ok, Tiger’s being a little simplistic here; a mere change in the logo could not have changed MAS’ fortunes. Neither would a simple transfer of MAS’ ownership to the private sector which Mahathir seems to think is the solution.
Let Tiger jog Mahathir’s memory a bit. In case he has forgotten, he did privatise MAS — to one of the favoured cronies at that time, one Tajudin Ramli, a close associate of former finance minister Daim Zainuddin. In 1994 through his listed vehicle, Naluri, he bought a near 30% stake in MAS for close to RM2 billion from Bank Negara or around RM8 a share at a time when prices were hovering over RM6 per MAS share.
He took total management control of MAS and simply ran it into the ground. Six years later in 2000 and after three consecutive years of massive losses, the government bought back Tajudin’s stake — at RM8 a share, when the market price was less than half of that. Do you remember that Mahathir?
Is Proton a great example? No, not at all. By now all Malaysians know that Proton only survives because of huge tariff protection which makes cars in Malaysia among the most expensive in the world. To this day Proton receives huge government grants, ostensibly for research and development, without which it will certainly slip deep into the red.
Let’s get this straight once and for all: Proton’s profit comes from the blood, sweat and tears of Malaysians who pay exorbitant prices for cars which have not made a mark anywhere else in the world even after almost thirty years of production. The Koreans, the first of whom entered the car industry about the same time as us make far better cars and are major world players.
Oh, Tiger forgets – is this amnesia contagious Tiger wonders – despite Proton’s previous privatisations, the private owners continue to put the subsidies and the inflated prices into their pockets. They have not given it back to us.
For those who read carefully, Tiger did not make a mistake — it is too sure-footed for that. It meant “privatisations” because Proton has been privatised more than once. Yes, that’s true.
First, DRB-HICOM under the late Yahaya Ahmad, took over the government’s controlling interests in Proton and Proton’s distributor EON. Then the group struggled to make ends meet as it ventured into too many areas and debts built up. It sold Proton, to the national oil corporation, Petronas, which is wholly owned by the government. Petronas sold its stake in Proton to Khazanah Nasional.
Do you remember that Mahathir? What a great role your government played as a benefactor to the private sector which until this day you maintain will save MAS. What a great time to be in the private sector – take over a government asset, run it for awhile, pocket the profits, and when it fails, why sell it back to the government, of course.
Syed Mokhtar Al-Bukhary
In the meantime, Mahathir’s friend, Syed Mokhtar Al-Bukhary, took over DRB-HICOM and acquired Proton from Khazanah Nasional, the second privatisation. Somewhere in between, Proton lost an opportunity for an alliance with one of the world’s largest manufacturers, Volkswagen, which would have given it access to technology and capital.
And oh, it may be relevant to mention that Syed Mokhtar is interested in MAS too – what is it that he is not interested in? And oh, yes, it was reported that he wants a long-term fuel subsidy if he bids. As an intelligent reader, Tiger will let you join the dots.
The things that Mahathir’s forgetting or failing to mention, deliberately or otherwise. It makes Tiger want to roll around in the grass and laugh out loud. Sometimes, Tiger thinks, no one wants to really hear Mahathir’s opinion — they just want some comic relief.
Tiger is relieved to hear that the prime minister is not going to privatise MAS. That’s correct. Why sell your assets when they are at their lowest? Do some things to it to recover value and if there is a really good offer, perhaps but to the right person. Remember, like an airport, an airline is a strategic asset – it brings people in and takes them out of the country.
At the current price, even Tiger would like to make a bid. And the first thing Tiger will do is to change the logo and the Flying Tiger will dominate the skies.
Even a Tiger is allowed to indulge in some wishful thinking! Now to put selective amnesia out of the mind and take a catnap.
PURRRR!
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