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Thursday, 23 December 2010

PLUS buyout: What is Jelas Ulung?

As the battle to buy out PLUS Expressways Bhd heats up with the sudden appearance of Jelas Ulung Sdn Bhd, all eyes are on this relatively unknown company.

According to Kuala Selangor MP Dr Dzulkefly Ahmad, who had checked with the Companies Commission of Malaysia, Jelas Ulung is a RM2 company that was registered only last month.

The company has two shareholders, Shaharuddin Abdullah and Sumami Kiman, who own one share each in Jelas Ulung, which also has two directors, Ibrahim Mohd Zain and lawyer Ghazali Mat Ariff.

Putting the spotlight on the company, Dzulkefly (right) raised more questions about Jelas Ulung that he said government investment holding arm Khazanah Nasional Bhd would also have to answer.

"Will Khazanah be obliged to accept, or will it have to match the offer? Will an unknown or no-track-record-of-financial-history entity again be allowed to own a strategic asset of the nation?

"More importantly, will a tax waiver be granted as a hand-out to business entities, thereby creating a bad precedent that can be costly to the government later?" Dzulkefly asked in a press statement today.

Jelas Ulung, with the support of Bank of China (BOC), on Tuesday offered RM26 billion to buy out PLUS and all its assets and liabilities, just before the highway concessionaire's extraordinary general meeting that was due to be held today.

The offer was a good RM3 billion more than the only other formal contender, a joint bid from the UEM Group Bhd and Employees Provident Fund, which offered RM23 billion.

Halim Saad behing Jelas Ulung?

It is speculated that former Renong chairman Halim Saad is behind Jelas Ulung, as well as Asas Serba Sdn Bhd, another company previously in the running for the PLUS buyout, which had made a whopping RM50 billion offer back in May.

The EGM today to decide on the buyout was postponed, and the deadline for offers to take over PLUS extended to Jan 10.

Dzulkefly also pointed out that the UEM-EPF's request for tax waiver for the rest of the concession period, which expires in 2030, to restructure the toll charges could be at the expense of the government.

Foolhardy to offer tax waivers

"It must be strongly reminded that should the exemption for a tax waiver be given, the government will have to give up on taxes that average RM430 million a year... this will amount to a whopping RM9 billion loss in tax revenue over the next 20 years of the concession.

"Of utmost concern is the fear that should a blanket tax waiver be given, it would set a dangerous precedent for others, with the likes of Tenaga Nasional Bhd and other utility concessionaires that are being deprived of passing their costs on to consumers.

"What would stop them from asking for tax waivers too? The precedence may encourage other major players in mega mergers and acquisitions in the property sector to ask for tax waivers as well. This may very well open-up floodgates for endless tax-waiver applications. Where would that lead to?" Dzulkefly asked.

"At a time when the government is on an 'austerity drive', selectively depriving the people of subsidies due to them, it would not be deemed as business-unfriendly to regard this exemption as really foolhardy!"

(Source: Malaysiakini)

My own take on this issue is that, seeing the name Halim Saad makes my blood shiver. He tried (but failed) to bid for QSR Brands (which owns KFC, Pizza Hut, Ayamas, etc...) early this month. And QSR Brands for your information is Kulim Berhad's subsidiary.

Also, I've never even heard of Jelas Ulung. How on earth can a RM2 company only registered last month bid for PLUS at an offer of RM26 billion??? Just imagine the headlines if that bid is eventually accepted...