Fears have been expressed that the current confusion over Berjaya Corporation’s sports betting licence could erode confidence in Malaysia’s business climate.

dap economy forum 260906 lim teck ghee The government appears to have reneged on its issuance of a licence to Ascot Sports Sdn Bhd, a subsidiary of the Berjaya group, although the circumstances are still far from clear.

Centre for Policy Initiatives director Lim Teck Ghee (left) said the deal “smells of political intrigue” and that it will be taken very badly by the investment community.

“The whole affair stinks to high heavens. If this is symptomatic of the way the government is doing business, it will not instill confidence,” he said when contacted.

“If this (sets a) precedent, it will lead the business community into thinking that deals can be undone or repackaged. There are lots of questions that have to be answered.”

He foresees a split in opinion as to who has misled whom, referring to the uproar over the sports betting licence and whether it has really been issued.

RAM Holdings Bhd group chief economist Yeah Kim Leng said he thinks the business community will be more forgiving.

azlan “(The business community) may think that this is a localised issue which may not be reflective of the investment policy because it involves a specific area of investment, which is gambling, and it is considered unique to each country’s political setting,” he said.

“Given the sensitivity of this activity, which has huge socio-political ramifications, you would think that the government would have been more careful than (to) give (the licence) without consulting the public.”

Berjaya chairperson Vincent Tan has made public statements and informed Bursa Malaysia, that the licence has been approved.

However, premier and Finance Minister Najib Abdul Razak said in a parliamentary written reply yesterday that the government has yet to issue the licence, pending public feedback.

Ascot Sports had reportedly received a ‘letter of approval’ in January from the Finance Ministry and had said it would invoke its right to first refusal after having unsuccessfully made a bid for the sports betting licence in 1987.

No legal status

Asked what he thought about the letter of approval, Yeah said it is quite likely that it does not mean anything.

“We have seen a lot of letter of approvals, letters of support or letters of intent. But generally these kind of letters have no locus standi , especially if given by the previous administration,” he said.

As to whether Berjaya could take the government to court over breach of contract, Yeah said this is unlikely.

“First, the letter has to be legally binding because suing the government could mean burning bridges forever for existing businesses. The more obvious win-win solution is for arbitration or consultation. Suing can be very damaging for both sides,” he said.

He noted, however, that the government would be put in a tight spot if Ascot Sports or Berjaya were to produce the letter of approval.

“But at the end of the day, any company will still have to abide by the government’s wishes,” he said.

NONE Ascot Sports recently sold all of Tan’s 70 percent stake to Berjaya as stated in an announcement to Bursa Malaysia on May 12.

The tycoon then held a rare press conference last Saturday, pledging to donate his stake worth RM525 million to his Better Malaysia Foundation, renamed two years ago from VTCY Foundation.

Berjaya had planned to roll out sports betting facilities in 220 selected Sports Toto outlets by September.

It is expected to intensify phone betting services, given the prospect of premise licences being withheld in states ruled by Pakatan Rakyat - Penang, Kedah and Selangor.