Wednesday, July 16, 2008


As posted by Dr. Mahathir Mohamad at on July 16, 2008 6:22 PM

It is shocking to still hear that Proton made a profit by selling M.V. Agusta which it bought for 70 million Euro and sold for one Euro.

The buyer, Gevi Spa did take over the debt of M.V. Agusta but Proton's share of the debt is 57 per cent i.e. 57 per cent of the total debt of 107 million Euro or 61 million Euro.

But M.V. Agusta also had assets in the form of;

1) factories/land/building (80 million Euro - not revalued)

2) stocks/finished products (40 million Euro)

Total is 120 million Euro.

Proton's share of these assets would be 57 per cent of 120 million Euro or 68.4 million Euro.

When Gevi Spa sold M.V. Agusta's Husqvarna division for 92 million Euro it is not known how much of the debt was taken over.

But Harley Davidson bought Cagiva, an Agusta brand motorcycle and M.V. Agusta for 70 million Euro together with debt of 45 million Euro i.e. the puchase cost by Harley Davidson is really 115 million Euro.

So how much did Proton lose?

It lost 70 million Euro in purchase price and 68.4 million Euro in assets.

By buying M.V. Agusta together with debt and assets for one Euro and selling the company, assets and debts for Euro 92 million + 70 million + 45 million (debt), Gevi Spa made a profit of 207 million Euro.

Basically Proton lost this money by selling at one Euro.

At 5.13 Ringgit to one Euro, Proton lost one billion and sixty-one million Ringgit (1,061,000,000 Ringgit).

At the time when I queried why the Securities Commission did not investigate this loss, I was told the sum was small by comparison to Proton's value and the management had every right to lose this money. The minority shareholders did not lose anything.

For reasons which I cannot understand the minority shareholders actually did not complain. I am not a shareholder but I complained because the deal questioned my integrity and that of Tengku Mahaleel, the CEO.

The Government talks about going for the big fish in our campaign against corruption.

Are people who deliberately lose RM 1 billion small fish or big fish?

If indeed we have an independent Anti-Corruption Agency, shouldn't it institute a full investigation of this case?

I am told Credit Suisse First Boston advised the management to sell at one Euro. And the chairman did not examine the advise carefully and implemented it.

Both the CSFB and the chairman should be investigated for a very shady deal especially as the buyer was not a welll-known automotive company but an unknown and unlisted company.

Could somebody mysterious be behind Gevi Spa?

The stench is very bad.