Sarawak Chief Minister Abdul Taib Mahmud broke his silence on Sunday after much speculation on the current negotiations for a merger between Sarawak-based Utama Banking Group (UBG) owner of Bank Utama and RHB Bank.
I have not asked the government of Malaysia for any advantage for Bank Utama or made any suggestion in favour of Bank Utama, he said.
His family-controlled listed company Cahya Mata Sarawak Berhad (CMSB) is a major shareholder of Bank Utama.
Last week, Prime Minister Dr Mahathir Mohamad, who is also finance minister, apparently unhappy with Bank Utama for dragging its feet in the deal with RHB after two earlier unsuccessful merger attempts with other anchor banks, more or less gave Bank Utama a last chance by allowing its directors a little more time to close a deal. Failing that, he was quoted as saying, Bank Utama risked losing its licence.
Business weekly The Edge reported in its latest issue that Taib had recently met Bank Negara to plead for more time and also gave an undertaking that a merger deal would be forthcoming.
Mahathir had said that there would not be more than 10 anchor banks meaning that Bank Utama, even if it raised its paid-up capital to RM2 billion could not expect to become the 11th anchor bank in the country.
PMs blessings sought
In an interview with Sarawak English daily The Sarawak Tribune , Taib acknowledged having met Mahathir together with RHB Bank executive chairperson Rashid Hussain some time ago to seek the prime ministers blessings for Bank Utama and RHB Bank to start negotiation for a merger.
Taib described the negotiations as complicated as well as protracted.
The chief minister told the Sarawak Tribune editor-in-chief Toman Mamora that he had taken great care to keep his politics completely separate from the business involving his relatives.
"I have great faith that in our system, relatives of politicians generally can do well on their own, and can conduct their business quite smoothly following good business practices and on principles of good governance," Taib was quoted as saying.
He added they should not expect more than what was due to them, but they could anticipate fair treatment from the parties they were dealing with, including authorities such as the state government of Sarawak.
Maintaining his neutral stand on the Bank Utama merger issue, Taib said emphatically: "I have not engaged in the formulation of stand in the Bank Utama negotiation nor engaged in its negotiations."
Last one
Bank Utama is the only bank still left out of the merger process after the rest of the country's banks merged to form the existing 10 anchor banks.
The Sarawak government wants Bank Utama to be an anchor bank and to do that it has to buy into a bank and hold a controlling stake. It hopes to achieve that by taking over the combined stakes from Rashid Hussain and Malaysian Resources Corporation Berhad for a reported RM1.8 billion.
But some shareholders of CMSB think this is much too high a price to pay, not when expectation of profit margins is different than from the past.
However, both Rashid and MRCB want out of the banking business, offering Bank Utama possibly the only opportunity left for an anchor bank status by taking a controlling stake in RHB Bank.
