Maybank is Malaysia’s largest domestic bank. It is also a government linked company with the government having close to 60% control of the banking group’s assets.
Recently Maybank has disclosed that it intends to buy over Temasek Holdings’ (a Singapore government linked company) shares in Bank Internasional Indonesia (BII) for a premium of 4.6 times above its book value for a total sum of RM8.6 billion.
One of the reasons given for Maybank’s proposed purchase of Temasek Holdings shares in BII has been to give Maybank a foothold in the financial sector in Indonesia.
The Government or Bank Negara in particular has to weigh heavily on the following controversial issues with regard to the purchase and they are:
1. Maybank is buying the shares at a premium of 4.6 times above the book value;
2. This transaction is benefiting Temasek Holdings, a Singapore government linked company (and Singapore has just recently been given sovereignty over Pulau Batu Puteh by the International Court of Justice in The Hague);
3. Temasek Holdings will be making a capital gain of RM2.6 billion;
4. This transaction would likely be benefiting a consultant company with millions of RM in consultancy fees.
The question for this week then is:
Should Bank Negara stop Maybank from its proposed acquisition of Temasek Holdings’ shares in Bank Internasional Indonesia at a premium of 4.6 times above the book value to protect the minority shareholders, rakyat and country’s interest?
