Pemandu: No plans to sell MAS

The Performance Management and Delivery Unit (Pemandu) today stressed that the federal government has no plans to sell MAS, in response to reports quoting its CEO Idris Jala suggesting so.

In a press release late this evening, Pemandu said the earlier reports did not accurately convey the context of what he said during the agency's Global Malaysia Series talks this morning .

 

"In responding to a question whether the government should sell a company such as MAS, Idris responded to say the government should only make a decision to sell if the price is right, and certainly not at a loss or 'fire sale'.

"To give a clearer picture of what he meant, he gave the example that the government could have sold MAS at the time he served as managing director and CEO when the share price was at RM6.20," read the press release.

This morning, Idris had made it clear that the federal government should divest businesses where "it should not be involved in". However, the press release did not make clear he was referring to MAS.

What the press release did make clear was that Idris had mentioned that 33 companies were identified for divestment to reduce the government's role in business.

This was a strategic reform initiative (SRI) stipulated under the economic transformation programme.

"I wish to clarify that currently the government does not have any plans to sell MAS. Under the New Economic Model, we are currently implementing the recommendation to rationalise the government's role in business.

"As part of this SRI initiative, 33 companies have been identified but MAS is not one of them," said Idris, in the press release.

Transcript

In the interest of clarity, below is the transcript of the relevant section of the forum, based on a video of the event available on the Global Malaysia Series website .

Moderator: Should Malaysian government stay out of the airline business?

Idris Jala: I think we should but what the government should do is we should not sell it at a loss. If you want to sell it, it has to be at the right price because public money is involved. It's a public-listed company. There should be no fire sale. They must be (sold at) the right time.

I think they should have sold it when I was there (applause) because when I went to Malaysia Airlines the share price was RM3 and it went up to RM6.20. That's when they should have sold it. What's it today?

Tony Fernandes: RM0.30.

Idris: RM0.30. That's the time you should have sold because I brought it up from RM3.00 to RM6.20. I remember when I left Shell to join Malaysia Airlines, a lot of my staff who worked with me in Shell went to buy the shares, including my secretary Tina. She put her money there.

There was one guy, who was a shareholder in Shell... he was a Japanese from one of those companies, Mitsubishi, he sold quite a number of his properties to buy (MAS shares). I think he made lots of money. In the second year, he sold at RM6.00, double whatever he put inside.

I think over time, my view is that Malaysian government should get rid of a lot of its stakes in those where it shouldn't be involved. In my mind, government should be involved in a few businesses. And these are the ones:

Number one, where we believe there is a strategic reason for us to do it, such as, in defence. Sometimes, in defence type of environment where you have build aircraft and all that, there are reasons for doing it.

Also for infrastructure. Government should continue to be involved in large infrastructure projects. There is no country in the world that has built an MRT that has made it totally private. If you name the country I would like to know. It doesn't exist for large infrastructure projects.

The government should be involved in technologies that requires long-drawn gestation period, nano technology, whatever. The government should participate, because the private sector wouldn't have the stamina to go for a long period of time for R&D.