The proposed merger between Bank Muamalat and Bank Islam Malaysia Bhd (BIMB) has raised eyebrows in PAS, which sees this as another bailout in the making, and again using public funds.

"What is the benefit to BIMB to buy or merge with Bank Muamalat?" asked the Islamic party's vice-president Salahuddin Ayub.

NONE BIMB already has 115 branches nationwide, with 600 auto-teller machines, and therefore, Salahuddin ( left ) said, "there is something strange in the deal as there is no clear benefit to BIMB".

The worry here, the Kubang Krian MP added, was that hidden hands appeared to be at work, ordering BIMB to buy over Bank Muamalat from DRB-Hicom, which owns 70 percent of the bank and Khazanah, which owns the other 30 percent.

"I worry that this is another bailout, which is an unhealthy culture in our country and one that continues to burden the people," he said.

While there was no actual proof that the merger was a bailout, Salahuddin contended that the sudden decision of Bank Muamalat to merge with another bank was in itself an indication of a bailout.

"No bank that is stable will want to merge and lose its identity," he argued.

He urged Bank Muamalat to come clean with its financial status and explain why it wants to merge with BIMB.

"I will write to the Public Accounts Committee chairman, in my capacity as a parliamentarian, to compel Bank Muamalat to provide its financial statements. If is doing well, how well? If it is making losses, where and how much? And why does it want to merge?" said the PAS leader.

Tabung Haji funds will be involved

Salahuddin said this was important as BIMB and its parent company, BIMB Holdings, were controlled by Tabung Haji.

bank islam 081005 Tabung Haji holds a 51 percent stake in BIMB Holdings and has a further 18.5 percent direct stake in Bank Islam.

As such, any investment to buy or merge with Bank Muamalat will mean a substantial outlay of funds from Tabung Haji, which holds in trust millions of ringgit that the rakyat have invested to fund their haj pilgrimmage.

"This may impair the prospects of BIMB in the future and may make a big impact on (the money invested by) haj pilgrims," he warned.

On May 12 Bernama reported that BIMB has received notice on the possible sale of a stake in Bank Muamalat.

The news agency reported the next day that what DRB-Hicom, which owns the majority stake in Bank Muamalat, was considering was not a direct sale of its interest in Bank Muamalat but a merger with BIMB.

This May 13 report by Bernama said the proposed merger was to create a major Islamic banking player.

Salahuddin is disputing this, for he sees the move as a bailout to siphon money out of BIMB, and indirectly, from Tabung Haji as well.

Bailouts are often the practice with the BN government when companies of select individuals close to the ruling party are in trouble, opposition parties have long argued.

While the government has defended bailouts as necessary to save jobs and the economy, others, including the opposition, have argued that they are being used to make payments to ailing cronies as their golden parachute out of bankruptcy.

One of the more recent and high profile bailouts has been that of Malaysian Airlines from tycoon Tajuddin Ramli.