Sunday, July 02, 2006

Buying Over Of UDA Holdings Bhd - Is It A Wise Move Khazanah Nasional Bhd?

On paper it sounds like a good buy and fits into the 'Malay agenda', which the government now prefers to call it. 'Agenda' somehow sounds more 'sophisticated' than merely saying 'tolong orang Melayu'.

But this so-called agenda has been bruised, bashed and battered so many times by mismanagement, corruption and cronyism, one has to be extra careful when another 'brilliant' idea in the name of this agenda is proposed. There have been many half-baked ideas in the past which have bit the dust.

It is hoped that in buying over UDA Holdings Bhd the mistakes of the past are not repeated and it does not end up as a cash-cow for some lucky crony only to be bailed out at some later date at great cost.

Agendas are just that, agendas, unless something positive is done to turn it into reality. This requires a high level of competence, skill and dedication. Are our chaps up to it? Let us not be subjected to yet another whoppingly expensive lesson.

The proposal for Khazanah Nasional Bhd to buy over UDA Holdings Bhd and take it private is aimed at positioning the property company to play a more effective role in implementing the Malay agenda in towns.

Entrepreneur Development and Cooperative Minister Datuk Seri Mohamed Khaled Nordin said that by making UDA a private entity, it would no longer be bound to make profits for shareholders and instead focus completely on its social responsibility to help the Malays. "UDA will be returned to its original objective," he told reporters after opening an entrepreneur seminar organised by Umno Tanjung division here Saturday.

He said UDA, since its listing on Bursa Malaysia in November 1999, had been caught in a dilemma between promoting its commercial interests while upholding its social responsibility, which undermined its potential. UDA owns land assets valued at about RM1.3 billion in the country, including in Kuala Lumpur and Penang. Among some of the major projects it developed are BB Plaza and Pertama Complex in Kuala Lumpur.

Khaled said the government hoped the privatisation of UDA Holdings by Khazanah Nasional, the government's investment arm, would be completed by the end of this year.

The deal involves Khazanah Nasional buying the remaining 49.9 per cent of UDA Holdings shares which it does not own at an offer price of RM3 per share, for a total cost of about RM500 million. UDA Holdings made the announcement to Bursa Malaysia on Wednesday.


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