Telekom to seal control of TRI with tycoon's ouster
Telekom Malaysia will seal control of mobile phone operator Technology Resources Industries (TRI) tomorrow with the ouster of tycoon Tajudin Ramli after a bitter power tussle.
In a statement late yesterday, TRI said it would hold a board meeting tomorrow where Tajudin and three other directors aligned with him were expected to be replaced with four Telekom nominees.
"The incumbent directors are committed to facilitating a smooth transition and to expeditiously conclude the negotiation and valuation process by end August 2002," it said.
TRI said an independent committee would be established to evaluate the proposed merger of its Celcom unit, the country's second biggest mobile phone operator, and Telekom's mobile arm TM Cellular.
Telekom, the single largest shareholder with a 31.25 percent stake, was also "committed" to launch a general offer for the remaining TRI shares at a minimum of RM2.75 each, it added.
The move would see the exit of Tajudin, a close associate of former finance minister Daim Zainuddin, from the corporate circle after he sold his stake in loss-making Malaysia Airlines last year.
Tajudin lost control of the last bastions of his empire in April when bad-debt agency Pengurusan Danaharta foreclosed on his pledged shares in TRI and aviation firm Naluri after he defaulted on loan payments.
Fight to the last
But the tycoon had refused to go without a fight and last week created an uproar when he barred proxies of Telekom and the Employees Provident Fund (EPF) from attending TRI's annual meeting on technical grounds.
EPF, a party seen as friendly to Telekom, is the third largest shareholder in TRI with an 11 percent stake after Germany's Deutsche Telekom AG with 16 percent.
Tajudin was re-elected TRI chairman at the meeting but Telekom lodged a complaint with the stock exchange and threatened legal action.
The corporate brouhaha led to government mediation headed by Prime Minister Mahathir Mohamad's economic adviser Nor Mohamed Yakcop, resulting in a compromise reached over talks at the weekend.
Tomorrow's board meeting was likely to render unnecessary a TRI extraordinary general meeting on July 16 for shareholders to vote on Telekom's demand for four board nominees.
TRI's announcement spurred Telekom's shares higher today, closing up 15 sen at RM8 in morning trade while TRI was flat at RM2.58.
'Next stumbling block'
Analysts said the move was positive for the proposed merger of the two cellular units but the "next stumbling block" could be Deutsche Telekom AG, which was believed to have veto rights in respect to the merger.
They said there were concerns that Deutsche Telekom, which bought the TRI shares in 1996 at RM9 each, may ask for a higher price than the RM2.75 or that it may not opt to cash out.
Chief executive Mohamad Khir Abdul Rahman reiterated yesterday that Telekom would only make a general offer for TRI after a merger agreement was reached between their cellular arms.
He said Telekom would seek to hold talks with Deutsche Telecom — seen as an unfriendly party — to convince it of the benefits of the merger.
But the general offer raised new concerns over the amount of debt that Telekom would have to take on, analysts said. It has invested RM1.7 billion to buy the 31.25 percent stake and may need to fork out another RM4 billion for the rest.
Telekom in February said it expected its mobile operations to turn around this year from a net loss of RM400 million in 2001. — AFP
For more news and views that matter, subscribe and support independent media for only RM0.36 sen a day:
Subscribe now