A group of Malay businesspersons and industrialists wants the authorities to probe the sale of Shell Refining Company which was sold to a private Chinese refiner on Monday.

Urging regulatory bodies to do so, the Malaysian Malay Businessmen and Industrialists Association of Malaysia (Perdasama) wants the Securities Commission (SC) in particular to investigate the “highly under-priced” sale of the company.

“Perdasama is surprised that in the two days since the announcement of the sale to Malaysia Hengyuan International Ltd (MHIL) of China, there was no reaction from the SC, Bursa Malaysia and the Minority Shareholders Watchdog Group although under normal circumstances such an unusual deal would have set off alarm bells,” said Perdasama president Moehamad Izat Emir in a statement today.

He added that Royal Dutch Shell - which is selling its entire 51 percent stake to the Chinese company for US$66.3 million (RM276 million) - had valued the transaction of the refinery at RM551 million or RM1.80 a share when the market capitalisation of the company as at Friday's close was RM1.48 billion or RM4.94 a share.

“The counter closed limit-down in early trading today, plunging 29.9 percent to RM3.48; this is seen as a sign of protest by investors against the selling price,” said Izat.

Regulatory authorities as well as NGOs, he said, must therefore probe deeper into the transaction especially since the company is owned by key institutions like Permodalan Nasional Bhd (PNB), Employees Provident Fund (EPF) and Kumpulan Wang Amanah Pencen (KWAP).

“It is also questionable because just one month before the announcement of the sale, Shell Refining Company’s shares on Bursa Malaysia were traded at RM6, which came down to RM4.93 a day before the announcement and dropped further to RM3.46 just a day after the announcement.”

Perdasama, added Izat, regarded the refinery as a national asset as it refines some 150,000 barrels of crude oil daily out of the country's total production of 700,000 barrels and therefore should not be sold to a foreign entity.

“We understand that a Malaysian bumiputera-owned company had made a much higher bid for Shell Refining Company at about RM420 million for the 51 percent stake but was rejected.

“This raises a lot of questions. Why price the stake so low, why was it sold to foreigners instead of locals thus highly shortchanging Malaysian investors like PNB, EPF, KWAP and the public?” he said.