PKR today asked Sarawak Chief Minister Adenan Satem why the state is selling its telecommunications infrastructure company Sacofa Sdn Bhd - a goose that lays golden eggs - to Cahya Mata Sarawak (CMS).

CMS is owned by the family members of former chief minister Abdul Taib Mahmud, who is now the governor of Sarawak.

Adenan ( left ) should have sought the approval of the state legislative assembly first, said state PKR vice-chairperson See Chee How.

“For the disposal of such a prized asset substantially owned by the state, I appeal to the chief minister to table the proposed deal of disposing the 50% equity in Sacofa to CMS at the coming state assembly sitting to seek the approval of the legislative assembly to keep up with the pledge to uphold integrity of the state government,” he said at a press conference.

See, who is the Batu Lintang state assemblyperson, was commenting on the proposed Sacofa sale announced recently by the state government.

Highly profitable company

He asked why it is selling a highly profitable company which is enjoying the monopoly of the installation of mobile network facilities including the construction of towers and structures and leasing them to the telco companies.

Presently, the company has erected more than 600 telecommunication towers operating throughout the state.

For the two years in 2012 and 2013, the company had registered revenues of RM155.28 million and RM153.41 million. Its profit before tax was RM84.59 million and profit after tax was RM66.93 million in 2012.

In 2013, the corresponding figures were RM 62.77 million and RM51.64 million.

See ( right ) said that the proposed deal announced by Cahaya Mata Sarawak Berhad on April 2, 2015 to pay the state government RM186.79 million for 50% equity in Sacofa is an extremely good

deal for the company, at the expense of the state.

“With Sacofa’s net profit at 33% of its revenue every year, the purchase price of the 50% equity based on earning, amounting to seven times, is certainly too low. Comparing with valuation of all other telco infrastructure companies which have earnings in the single digits, their shares are traded more than 30 times on Bursa Malaysia,” the PKR leader said.

Presently, the state owns 70.5% shareholdings in Sacofa, through the state financial secretary Incorporated.

Yayasan Sarawak holds 6.8% equity in the company, while Celcom Axiata Bhd and Sarawak Information Systems Sdn Bhd have 15.1% and 7.6% shareholding respectively.

“There is simply no reason for the Sarawak state government to sell one of its most lucrative business venture so cheaply, to a substantially private owned public company.

“What is the rationale behind disposing this business that is making money for the state all these years? Will there be an end to Sacofa’s monopoly of the installation of mobile network facilities after the concession of 20 years expires in 2022?” he asked.

Further, if the state government was keen to dislodge its equity interests in the profitable venture, was it made known to other companies or corporations which are owned or substantially owned by Sarawakians and through a tendering process to ensure that the state will derive the best value and benefits from the disposal of the shareholdings, he said.

“The state government has reared or brought up a goose from its hatch, with public money, and now that the goose is laying golden eggs, it has decided to share the golden eggs with others and lose the state’s controlling interest in the goose!

CM facing a huge test

“Not only does it not make good business sense, the chief minister who is the finance minister and chairman of Yayasan Sarawak is facing a huge test of maintaining his pledge of integrity for his administration if he allows this deal to go through, in the terms announced by CMS,” he said.

It is disheartening that the state government has kept quiet since CMS has indicated its interests to acquire Sacofa last year, and with a concrete deal filed with Bursa Malaysia announced on April 2, See added.

The chief minister has pledged to uphold the interests of the state and the people and ensure integrity of his state administration when he took office 14 months ago.

“However, it appears that the state administration might fail when it comes to the crunch or moment of truth, that he has no real control of the administration or maintain the integrity beyond political rhetoric.

“Since Sacofa is substantially owned by the state, funded by the state and parcels of land were given freely to the company, I am certainly hopeful that the chief minister will make known to all Sarawakians the rationale for the disposal of our prized business assets before his government allows the deal to go through," he said.

A number of state BN leaders has been refusing to comment on the issue for the time being.