Disclose consultancy costs for MAS-AirAsia turnaround deal, Pakatan tells Putrajaya
KUALA LUMPUR, May 8 — Pakatan Rakyat (PR) today demanded a full public disclosure of the millions allegedly paid to consultants and advisers during Putrajaya’s pursuit of the “poorly thought-out” MAS-AirAsia share swap deal.
The now-abandoned deal, claimed PR lawmakers, had left the already ailing flag carrier MAS (Malaysia Airlines) with an even greater loss while its other financiers and GLC CIMB had profited greatly.
“CIMB must also have earned hefty consultancy fees running into millions of ringgit,” they said in a statement signed by DAP’s Liew Chin Tong, PKR’s Nurul Izzah Anwar and PAS’s Dr Dzulkefly Ahmad.
They added that they would be demanding answers during Parliament’s next session in July of the total amount of fees and commission paid to bankers, consultants and advisers in the pursuit of the share swap exercise.
Apart from the GLCs, the lawmakers said that the exercise had also turned AirAsia, led by CEO Tony Fernandes, into a winner.
“AirAsia, which previously faced competition from Firefly (MAS’s low budget carrier), is now the sole player in the domestic low-cost segment,” they pointed out.
Fernandes, who took over AirAsia for RM1 and debts in 2001 when it was a two-plane operation, had turned it into Asia’s biggest low-cost carrier within a decade.
His success prompted Malaysian sovereign wealth fund Khazanah Nasional Berhad to finally agree to work with him to turn around MAS, which lost RM2.52 billion last year.
But the share-swap signed last August faced fierce opposition from some politicians and the flag carrier’s unions, who represent the majority of the 20,000 airline staff, pushing the government to abort the deal on May 2.
The unwinding of the share swap saw Khazanah transfer its 10 per cent, or 277,650,600 ordinary shares, in AirAsia back to Fernandes’ Tune Air Sdn Bhd, while Tune Air transferred its 20.5 per cent, or 685,142,000 ordinary shares, in MAS back to Khazanah.
It was a cashless transaction and based on the same swap ratio of 2.05 based on the prices when the share swap was announced in August 2011, where MAS was valued at RM1.60 per share and AirAsia’s share at RM3.95.
OSK Research had pointed out that AirAsia was to benefit more with the unbundling of the deal, saying, “As Malaysia is predominantly a low-cost passenger market with a penetration rate of over 57 per cent, this gives AirAsia the upper advantage given its low-cost structure and vast route network, hence limiting the pressure from MAS in view of its ailing financial condition.”
Pointing out that the share swap deal had been opposed from the start, the PR MPs said that the government must now take a firmer and better-calculated stand for MAS.
“MAS must be stewarded by a professional board, and run by professional managers with operating experience.
“Most importantly, there will be no further bailouts by the government,” they said.
“No more taxpayer money must be wasted, especially on consultants and bankers.
“All stakeholders must work together for the betterment of the airline and our country.”