Maika Holdings chairperson Abdul Rashid Abdul Manaff has been told to apologise for failing to pay out dividends to shareholders as promised.

DAP's Save Maika Shareholders Committee secretary A Sivanesan today said Abdul Rashid 'misled' shareholders at the company's Annual General Meeting (AGM) in December 2003 ( photo ).

The chairperson of MIC's investment arm allegedly 'promised' the more than 66,000 shareholders that Maika will declare dividends for the year 2004 even when he knew the company was making a loss and could not afford the payout.

"His announcement at last year's AGM was greeted with great applause by shareholders, MIC members and leaders including G Palanivel, S Veerasingam and several MPs, assemblymen and senators," said Sivanesan in a statement.

Contacted later, Sivanesan said he spoke to Maika's financial controller on Friday and was told the company was not in a position to declare dividends to its shareholders despite registering a profit of RM30 million this year.

Maika, created in 1984 by MIC, has only paid its shareholders cash dividends on seven occasions to date, the last being in 1995.

Bank loans

Its financial adviser KVR Balakrishnan when contacted this afternoon admitted that a profit was made but claimed it was being used to pay off bank loans.

"Yes, the chairperson said he will try to give out dividends at the 2003 AGM but even though he has succeeded in efforts to turn the company around, the profits have to be used for other factors as the banks are urging us for payments," he said.

He added that Abdul Rashid explained the position not to declare dividends to shareholders at Maika's 2004 AGM yesterday.

"The chairperson is extremely sympathetic with the plight of the shareholders but there are valid reasons why dividends cannot be paid out," he said.

Balakrishnan also revealed that Maika will not be purchasing shares from aggrieved shareholders.

Maika Holdings raised RM106 million when created 20 years ago, from its shareholders but has since been implicated in several controversies including the 1992 scandal involving RM9 million worth of Telekom shares allocated by the government for the benefit of the shareholders.