Its time for Malaysians to know the truth

It has been exactly six years since the biggest financial scandal during PM ‘Flip-Flop’ Tun Abdullah Ahmad Badawi’s tenure as the fifth Prime Minister, where MOF Inc sold off the stake in then Avenue Resources Bhd to then a middle seized stock broking house ECM Libra. Now, its time for Malaysians understand why there was so much opposition to the then ‘merger of an anchovy eating a shark’.

Then “The most powerful 28 year old” and “Son-in-law”, Khairy Jamaluddin was part of Kalimullah “Riong Kali” Hassan’s posse for the takeover which was full of controversy. In on going case between Riong Kali and lawyer Matthias Chang, Khairy who previously tried to dodge himself from going on witness stand under oath has now been ordered by the court to do so.

Khairy to testify in Kalimullah-Chang defamation case

January 04, 2012

KUALA LUMPUR, Jan 4 — Khairy Jamaluddin will testify in the hearing of a defamation suit filed by businessman Datuk Seri Kalimullah Masheerul Hassan against lawyer Matthias Chang, Bernama Online reported today.

The news portal reported that High Court Judge Datuk Asmabi Mohamad today dismissed the Umno Youth chief’s application to set aside a subpoena requesting that he testify as Chang’s witness in the suit.

She also ordered Khairy (picture) to pay RM3,000 in costs to Chang.

Khairy’s counsel Rashid Ismail told Bernama later that his client respected the ruling and was prepared to testify in court.

The court in December had allowed applications by Limkokwing University of Creative Technology founder Tan Sri Lim Kok Wing as well as former second finance minister Tan Sri Nor Mohamed Yakcop to set aside similar subpoenas.

Former director of South Peninsular Industries Bhd Tan Sri Azman Hashim, meanwhile, will also be testifying after he withdrew his application to do the same.

All were subpoenaed to testify as Chang’s witnesses in the ongoing hearing of a suit brought by Kalimullah, who is also the former deputy chairman of New Straits Times Press Bhd.

The trial continues on January 10.

Kalimullah filed the defamation suit on June 29, 2006 on the grounds that Chang had allegedly made slanderous statements against him on June 13 that same year, at a press conference, a report of which was published in the Singapore Straits Times through its Malaysian correspondent, Leslie Lau.

He is seeking RM50 million in damages, costs, interest and an injunction to restrain Chang from publishing similar words in the future.

Chang, previously a political secretary to former prime minister Tun Dr Mahathir Mohamad, also filed a counter-claim against Kalimullah on July 14, 2006, seeking RM150 million in damages, among other claims.


The most important question that many should ask is why is Khairy, then the Vice UMNO Youth Chief and recently had to vacate his ultra powerful post as the Deputy Chief of Staff in the Prime Minister’s Private Office has been dodging from appearing on the stand under oath?

The merger was highly controversial. Amongst the issues are:

1. Undervaluation of Avenue shares

2. Overvaluation of ECM Libra shares

3. Unfair purchase terms on Avenue Capital to acquire ECM Libra subsidiaries

4. Improper justification by independent advisers: K & N Kenanga Bhd.

5. Improper EGM for ECM Libra for the approval of the merger

6. ‘Collusion’ of the various authorities in the whole scheme of things

ECM Libra’s shareholders account was valued at only RM 200 million was to merge with Avenue Capital which was valued at RM 800 million. As the gap is so huge, efforts were made to prop up ECM Libra’s market value and bring down Avenue Capital’s to a point where  goodwill was ‘impaired’ to the amount of RM 306 million, which is far more than the premium and reserve profit account combined. The impairment of goodwill  was not illegal, but irregular to common practice.

Post merger (which in actual fact should be called a ‘hostile take-over’), ECM Libra as the ‘smaller fish eating the larger fish’ took control of the combined company ECM Libra-Avenue and decided to drop the name ‘Avenue’ entirely. Shortly, SC issued a universal broking license and ECM Libra is now an investment bank. Naturally, Khairy by then he calls himself an ‘investment banker’.

Then another controversy happened. The manner the Avenue Capital Bhd. EGM was conducted on 17 May 2006 raised so many eyebrows. The minority shareholders raised so many questions on the ‘irregularity’  on the process of the merger, which include mandatory general offer (MGO) not conducted and ‘interested parties’ were allowed to attend and actually voted in the EGM. Minority Shareholders Watchdog Group made a protest for the minority shareholders for the irregularities.

Complaints were lodged by so many parties, especially minority shareholders to SC for the ‘irregular’ processes, EGM and eventually announcements made through media, which some considered misleading. However, SC played deaf and dumb about it, so much so that the best that anyone got as a response was just a mere acknowledgment of complaint filed. Even Police reports were made to the Commercial Crime Division,which referred the matter back to SC as the ‘subject matter expert’ and never got a response.

The take over of Avenue Capital warrants ECM Libra to be issued a universal stock broking license. ECM Libra became what it is today, a boutique investment bank. The value of the company increased when ECM Libra was able to do what it could not do without the merger with Avenue Capital.

Securities Commission Tan Sri Zarinah Anwar also must answer for this.

Never the less, a lot unanswered questions about Khairy still until present day lurks in the minds of many and becomes a hot teh tarik point of interests.These loose ends which tantamount to the perception of  ‘practice of corruption and abuse of power’ are some of the issues many urbanites and educated Malaysians. Even the perception on his ascension to the UMNO Vice Chief in March 2009 was marred with controversy.

It’s time for everyone to know the truth.

Published in: on January 4, 2012 at 22:00  Comments (27)