Prime Minister Abdullah Ahmad Badawi today denied any knowledge of on-going merger talks between investment outfit ECM Libra and Avenue Capital Resources Bhd, a government-owned financial services company.

The proposed merger sparked off criticism following the recent acquisition of RM9.2 million shares or a three percent stake in ECM Libra by Umno Youth deputy chief Khairy Jamaluddin, who is also the premier's son-in-law.

Asked on the conflict of interest arising from his position as finance minister who has to approve the merger, Abdullah said: "Well, I'm not involved in any way with the deal that ECM Libra has with Avenue Capital."

"I don't even know (anything) about it," he told a press conference in Kuala Lumpur.

ECM Libra, of which Khairy is a director, had through a letter of demand threatened to sue PAS vice-president Husam Musa (l eft ) for defamation earlier this month. The party's online organ Harakahdaily also received a similar legal notice.

In a press statement published by Harakahdaily on Dec 29, Husam had questioned Khairy's purchase of the shares.

The PAS leader has since challenged ECM Libra and Khairy to a face-off over the issue, either in or outside court.

Noting the prompt announcement of the proposed merger less than a month following the ECM Libra share purchase, Husam claimed that the link between Abdullah and Khairy was slowly becoming clearer.

One of the questions he raised was the future management of the merged entity where he cited a prevailing rule which bars shareholders from managing government-linked companies.

Metramac scandal

On the Metramac Corporation Sdn Bhd fiasco that was revealed in a Court of Appeal judgment this week, Abdullah said the government will investigate if there is a report.

"It's not a question of whether or not the government wants to probe. We will do so if we find that there is something wrong," he added.

The judgment implicated business tycoon Halim Saad and ex-finance minister Daim Zainuddin in the siphoning off RM32 million from toll concessionaire Metramac Corporation.

Both have since denied the allegations through press statements.

Deputy Inspector-General of Police Musa Hassan was quoted in Chinese-language Sin Chew Daily today as saying that the matter was under probe by the commercial crime department.