Malaysia

Malindo part-owned by JJ’s kids, MP alleges

KUALA LUMPUR, Oct 24 ― The children of senior Barisan Nasional (BN) politician Datuk Jamaluddin Jarjis have an indirect stake in Malindo Airways, a newly set-up airline that has been criticised for the lack of clarity surrounding its financial and safety records, a lawmaker alleged today

Petaling Jaya Utara MP Tony Pua (picture) drew the link through a search with the Companies Commission of Malaysia (CCM), which showed that one of Malindo’s investors ― Malaysia’s National Aerospace and Defence Industries Sdn Bhd (NADI) ― is part owned by DZJJ Sdn Bhd, which in turn lists Jamaluddin’s two children as directors.

Pua added that according to CCM’s information on NADI, the firm had failed to file is audited accounts from 2007, casting even more suspicion on the state of its finances.

Documents obtained from CCM showed that for the year 2007, NADI reported revenue of RM307.3 million and post-tax profit of RM90.5 million.

It also had RM684 million in current assets and RM496 million in current liabilities in 2007.

He repeated his earlier allegation that NADI’s partner in Malindo ― Indonesia’s Indonesia’s PT Lion Grup, which operates Lion Air ― has also run afoul of the industry authorities numerous times over its failure to comply with safety guidelines.

Pua had previously pointed out that Lion Air is on the list of airlines banned in the European Union since 2007 due to safety concerns.

According to previous media reports, Lion Air has also been denied membership in the International Air Transport Association (IATA). A search on IATA’s website confirmed that Lion Air is not a member.

“These issues were raised before but until today, no response has been given,” Pua said.

The Malaysian Insider reported analysts as saying on September 14 that the lack of clarity surrounding the financial and safety records of Malinda Airlines’ backers may make it difficult for it to challenge AirAsia’s supremacy in the budget airline skies.

Analysts said that the new joint venture airline could be facing years of losses as it tries to take market share away from both AirAsia and Malaysia Airlines so much will hinge on the robustness of its two investors — NADI and Indonesia’s PT Lion Group.

CIMB noted that there is a lack of clarity about the financial position of NADI since it has not filed its financial statements with the CCM since 2007, as is required.

“If NADI cannot inject sufficient capital to cover the losses for the first few years, we are unclear if Malindo will be able to execute its expansion plans,” said CIMB.

CIMB added that Berjaya Air would have been a far more potent partner for Lion in Malaysia, as it has a vast and profitable business empire and the ability to raise finance but Lion and Berjaya could not agree on terms.

CIMB also said that Lion Air does not offer any public financial disclosure but from discussions with sources, it suspects that Lion has a very high gearing level due to its massive aircraft order book and that its core domestic Indonesian business may also not be very profitable.

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