I’m appalled to see that the Govt. may finally give management control of Proton to a foreign company.
My points:-
* You don’t need to have a 51% stake to gain management control of a public-listed company. Just to highlight the distinction between management-control and majority–control.
* Whilst the latter automatically leads you to gaining management control through your board representation (if you so desire), the former means that you can gain management control after obtaining approval from other shareholders only if their stakes after combining with yours, makes up to more than 50% of the said company.
* Sometimes stake as low as 20% could lead you to gain management control, by virtue of you emerging as the single largest shareholder and with approval from other key shareholders. The only difference is how much share of future profits (as well as liabilities) that you get. Also if there’s room for other shareholders to collectively veto certain management decisions that you make through their board representations.
* Whilst there could be potential synergies and benefits arising from a tie-up with a reputable foreign partner like VW, this doesn’t necessary mean that the Govt through its various investment companies like Khazanah should cede management control of Proton to a foreign company. It’s like taking an easy way-out to me. Can’t the Govt. just allow them to have board representation to reflect the 40% shareholding instead of giving management control? Our locals not up for the job?
* By the way, is this 40% sell-off necessary in the first place?
* Even though the Govt’s strategy is to set-up a new company to house those key business units for this partnership with VW, I don’t see this as different as ceding management control of Proton. If you strip Proton of those key business units, what would Proton be left then that is of value?
* I could even go further by arguing that such tie-ups for those synergies to potentially materialize may not necessarily mean that a foreign partner must end up having a direct stake in Proton or this new company. Why hurry into a “marriage” if you can get similar benefits with less obligations. (pls don’t turn this into a religious issue lah…)
* It could just be a collaboration in specific areas or target markets, setting up subsidiaries, on R&D etc as a start. What puzzles me is why would the Govt. want to sell-off a company such as Proton that has remained profitable for some time and has a huge cash pile? Other options like I briefly mentioned above could be explored to begin with.
* Can the Govt. give a guarantee that selling-off part of Proton is the only way to arrest its decline in market share and improve profitability? When can we start seeing those gains? By what percent?
* Is the objective of the Govt. in Proton only to improve profitability by increasing market share and improving efficiency? What about other objectives?
* I believe the Govt. must be able to prioritise it’s objectives well. If the main objective is 100% profitability/efficiency for Proton, then why not just take the easy way out to house Proton’s manufacturing plants in Indonesia or China, or simply buy its components 100% from China. Then we all can have cheaper cars. But in the process, we will kill-off over 100,000 jobs, thus defeating other Govt’s objectives like creating employment, improving local content, creating entrepreneurs etc. Just
citing an example.
* It’s a tough balancing act for the Govt. indeed. But before we can understand the rationale for this “sell-off” of Proton, we need to first understand what is the main priority (or order of priorities) now for Proton from the Govt’s perspective?
* Does the Govt. (especially the PM) have a view at all on this matter? Or take the easy way-out to delegate to agencies like Khazanah to think and make the decisions. Is Khazanah looking at this only from their perspective (say improving returns) or isit wearing the hat of the Govt. & doing the balancing act?
* It’s not surprising for me to see the spin-doctors been busily portraying Proton as a company that has been steadily losing its market share, made loses last quarter etc to justify this sell-off.
Maybe Mahathir has seen this “sell-off” of Proton coming for some time.
When asked to comment on MAS intentions to hire a foreigner as it’s CEO a few months ago, I was completely stunned by his sarcastic reply which was aired on primetime TV3 news. He said something like “You can even hire a foreigner to be the Prime Minister. As long as he has brains!”
What is he trying to tell us?
Thursday, November 17, 2005
Tuesday, November 15, 2005
Crisis in Higher Education
On the one hand, it is great to know that substantial initiatives has been taken to assist students in our universities such as holding meets-, roadshows-, career guidance-like programmes etc
On a larger policy level, I feel the situation in our higher education institutions today are getting from bad to worse, particularly with the strict enforcement of the oppressive-styled legislation such as UUCA. The recent boycott of campus elections, issues of e-voting, altercations on campus resulting from the campus elections, akujanji, the Terence Gomez affair, Azly Rahman affair etc evidence dissatisfaction in the way our higher educations institutions are being run; particularly, when the institutions are led by political appointees rather than purely, first-class academicians.
My humble view is that we should now look at this broader picture of securing first-class graduates from our institutions to build a first-class Malaysia. Already recently a Minister has said in Parliament that the UUCA will be reviewed. We should take this impetus and press for true reform and loosen the shackes of repressive and retrogressive practices in the institutions.
Numerous complaints have been made to SUHAKAM, and memos filed. The student groups have been advised to draft a comprehensive list of complaints, and the reports taken from Malaysiakini gives dim light that the list would appear to go on for some time to come.
It is further embarrasing that the Higher Education Minister always appears unfazed or recalcitrant when questions are posed to him on these issues. In one of the cases where one student who has been suspended for more than 4 years now pending his trial of participating in an "assembly without a permit" at Masjid Negara, and where the student was acquitted, but is still now suspended due to a provision of the UUCA. The student have been writing numerous letters for a reply but have yet to receive a reply. Imagine being suspended for 4 years and then acquitted but you are still suspended because the university says you have "finished your term of education after the 4 years" (the student had only 1 year to finish his course when he was suspended) and because the UUCA says that pending an appeal against any acquittal, the student remains suspended.
Well, it’s just sad to see such situation happening in some of our local universities. I agree that our students should be given some “space” to exercise their freedom of expression and assembly. Unless the authorities wants to create a society full of “yes-men” who can’t even think on their own feet.
On a larger policy level, I feel the situation in our higher education institutions today are getting from bad to worse, particularly with the strict enforcement of the oppressive-styled legislation such as UUCA. The recent boycott of campus elections, issues of e-voting, altercations on campus resulting from the campus elections, akujanji, the Terence Gomez affair, Azly Rahman affair etc evidence dissatisfaction in the way our higher educations institutions are being run; particularly, when the institutions are led by political appointees rather than purely, first-class academicians.
My humble view is that we should now look at this broader picture of securing first-class graduates from our institutions to build a first-class Malaysia. Already recently a Minister has said in Parliament that the UUCA will be reviewed. We should take this impetus and press for true reform and loosen the shackes of repressive and retrogressive practices in the institutions.
Numerous complaints have been made to SUHAKAM, and memos filed. The student groups have been advised to draft a comprehensive list of complaints, and the reports taken from Malaysiakini gives dim light that the list would appear to go on for some time to come.
It is further embarrasing that the Higher Education Minister always appears unfazed or recalcitrant when questions are posed to him on these issues. In one of the cases where one student who has been suspended for more than 4 years now pending his trial of participating in an "assembly without a permit" at Masjid Negara, and where the student was acquitted, but is still now suspended due to a provision of the UUCA. The student have been writing numerous letters for a reply but have yet to receive a reply. Imagine being suspended for 4 years and then acquitted but you are still suspended because the university says you have "finished your term of education after the 4 years" (the student had only 1 year to finish his course when he was suspended) and because the UUCA says that pending an appeal against any acquittal, the student remains suspended.
Well, it’s just sad to see such situation happening in some of our local universities. I agree that our students should be given some “space” to exercise their freedom of expression and assembly. Unless the authorities wants to create a society full of “yes-men” who can’t even think on their own feet.
Monday, November 14, 2005
The World's Number One
The future is bright for Aramco
AMERICANS were treated this week to the spectacle of oil-company bosses, including the heads of Exxon Mobil and Chevron Texaco, being cross-examined on Capitol Hill. The bosses of big western firms stand accused of “price gouging” and other supposed crimes. What the politicians rarely say is that it is OPEC that fixes prices on the world market—and that even the biggest western firm is but a pygmy compared to Saudi Arabia's national energy company.
Aramco, which controls nearly all Saudi oil production, is 20 times the size of Exxon. The Saudis are the world's leading producers and exporters of oil today, cranking out perhaps 11m barrels per day (bpd). The company has recently unveiled a $50 billion investment plan designed to lift Saudi output to 12.5m bpd by 2009. For comparison, Iraq and Venezuela produce less than 3m bpd of oil each, and no big private-sector company produces even that much. In short, Aramco is the Goliath of the oil world.
But for how long? Critics have been attacking the firm on two fronts. Petro-pessimists, including some independent geologists, have argued that the Saudis do not really have all the oil reserves in the ground that they claim, and that the world is nearing the peak of oil production. Matthew Simmons, an energy investment banker, has argued in a recent book that Saudi fields are in such bad shape that even Aramco's current production levels are unsustainable.
Happily for the world economy, there is reason to think the critics are too pessimistic. This week, the International Energy Agency (IEA), a quasi-governmental outfit, released its annual World Energy Outlook. The focus of this hefty tome is energy from the Middle East and North Africa—especially Saudi oil. After exhaustive analysis, the IEA concludes that the sceptics are wrong: there is more than enough oil in the ground to meet expected demand beyond 2030. It argues that Saudi Arabia's production levels can not only be sustained, but expanded dramatically to over 18m bpd by 2030. Aramco's talk of sustaining an output of 15m bpd for 50 years does not seem so unreasonable.
All is not good news, however. Aramco's oil could indeed keep gas-guzzlers humming for many years yet. But if energy demand continues to soar at the current scorching pace, especially in America and China, the only place those extra barrels of oil can come from is the Middle East. That, warns the IEA, means a sharp rise in the market share and pricing power of Aramco and its neighbours in the Persian Gulf—and with it, the prospects for a future oil shock.
-The Economist Nov 10th 2005
AMERICANS were treated this week to the spectacle of oil-company bosses, including the heads of Exxon Mobil and Chevron Texaco, being cross-examined on Capitol Hill. The bosses of big western firms stand accused of “price gouging” and other supposed crimes. What the politicians rarely say is that it is OPEC that fixes prices on the world market—and that even the biggest western firm is but a pygmy compared to Saudi Arabia's national energy company.
Aramco, which controls nearly all Saudi oil production, is 20 times the size of Exxon. The Saudis are the world's leading producers and exporters of oil today, cranking out perhaps 11m barrels per day (bpd). The company has recently unveiled a $50 billion investment plan designed to lift Saudi output to 12.5m bpd by 2009. For comparison, Iraq and Venezuela produce less than 3m bpd of oil each, and no big private-sector company produces even that much. In short, Aramco is the Goliath of the oil world.
But for how long? Critics have been attacking the firm on two fronts. Petro-pessimists, including some independent geologists, have argued that the Saudis do not really have all the oil reserves in the ground that they claim, and that the world is nearing the peak of oil production. Matthew Simmons, an energy investment banker, has argued in a recent book that Saudi fields are in such bad shape that even Aramco's current production levels are unsustainable.
Happily for the world economy, there is reason to think the critics are too pessimistic. This week, the International Energy Agency (IEA), a quasi-governmental outfit, released its annual World Energy Outlook. The focus of this hefty tome is energy from the Middle East and North Africa—especially Saudi oil. After exhaustive analysis, the IEA concludes that the sceptics are wrong: there is more than enough oil in the ground to meet expected demand beyond 2030. It argues that Saudi Arabia's production levels can not only be sustained, but expanded dramatically to over 18m bpd by 2030. Aramco's talk of sustaining an output of 15m bpd for 50 years does not seem so unreasonable.
All is not good news, however. Aramco's oil could indeed keep gas-guzzlers humming for many years yet. But if energy demand continues to soar at the current scorching pace, especially in America and China, the only place those extra barrels of oil can come from is the Middle East. That, warns the IEA, means a sharp rise in the market share and pricing power of Aramco and its neighbours in the Persian Gulf—and with it, the prospects for a future oil shock.
-The Economist Nov 10th 2005
Subscribe to:
Posts (Atom)
