The head of Malaysia's national carmaker Proton has dismissed a report of a bid to oust him and restructure the company, local newspapers said Saturday.

Proton chief executive Mahaleel Ariff was quoted by The Star as saying he was unaware of an attempted coup by chairman Abu Hassan Kendut, who reportedly aimed to take control of the company and its assets including a RM3.4 billion (US$895 million) cash pile as at end-December.

"I am still around," Mahaleel told the newspaper.

"I have served the company for nine years although my contract is due to expire... I will continue to work for the country as long as I am needed."

Some 80,000 people, comprising Proton workers and dealers, depend on the national car company for their livelihood and Mahaleel pledged to "safeguard" Proton because it was an important national asset.

"We must be proud that we are the first Islamic nation to produce a car with our own design and the first developing country to produce our own cars," he added.

Abu Hassan was nominated to the board by state investment arm Khazanah Nasional, which owns a 35 percent stake in Proton and is the single largest shareholder, followed by national oil firm Petronas.

Khazanah managing director Anwar Aji told the newspaper that he did not know of any moves to oust Mahaleel or sell Proton's assets, including its British unit Lotus.

Mahaleel has been Proton chief executive since 1997 after joining the company a year earlier as vice-chairman of strategy and operations.

Disagreements

The newspaper quoted sources as saying there have been disagreements over the way the company should be run, and there may be some board changes in the coming weeks but the priority at this stage was to complete Proton's restructuring.

Trade on Proton's shares has been suspended since March 24 to facilitate the group's internal restructuring plan.

Proton has been grappling with poor sales amid intense foreign competition ahead of market liberalisation under the Association of Southeast Asian Nations (Asean) Free Trade Area (Afta).

Its domestic market share tumbled to 49 percent last year from 60 percent in 2002, with car sales falling 27.5 percent to 155,420 units last year. But Proton is pinning its hopes on its new GEN-2 and two other new models expected to be launched this year to revive sales.

Under Afta, import tariffs for most products in the region were cut to below five percent from last year. Malaysia obtained a two-year reprieve for its auto industry until 2005 but it recently said it would further defer reducing duties to the required level until 2008. - AFP