Aug 11, 2006

PAC Accepts Explanation On ECM Libra-Avenue Merger

Extracted from BERNAMA
KUALA LUMPUR, Aug 10 (Bernama) -- The Public Accounts Committee (PAC), which had a meeting with the Finance Ministry and Securities Commission (SC) Thursday, said that it is satisfied the procedures were followed in the merging of Avenue Capital Resources Bhd and ECM Libra Bhd.

PAC chairman Datuk Shahrir Abdul Samad said that the exercise was done legally and in accordance with the relevant procedures.

However, he said, PAC was not as convinced by the explanation given on the issue of control of the merged entity -- ECM Libra Avenue Bhd.

This is because Avenue is a Minister of Finance Inc-linked company, he said.

"Although the government's equity in the merged entity has gone up following the merger, this has yet to be reflected in effective participation by the government in the management of the company," he told reporters after the meeting which lasted more than four hours at Parliament Building Thursday.

The Finance Ministry was represented by Secretary-General Tan Sri Izzuddin Dali and the SC by Chairman Datuk Zarinah Anwar.

Shahrir said PAC would have a second meeting with the Finance Ministry on Aug 25 to get further clarification concerning the government's control in the finalising of policies for the new entity.

Meanwhile, Second Finance Minister Tan Sri Nor Mohamed Yakcop said that the Finance Ministry will continue to provide the information required.

"Our officials will continue to provide whatever information needed by the Public Accounts Committee on Aug 25," he said when contacted by Bernama Thursday.

He said that the ministry's officials and the SC are "transparent" in providing the information.

Nor Mohamed said that, among other things, the ministry's officials informed him that the merger transaction was approved by the SC after a thorough and vigorous evaluation.

Shahrir said that the PAC believed that the SC had carried out its duties well in the supervision and monitoring of the processes involved.

Asked why PAC was keen to take up the merger issue, Shahrir said that the merger involved public funding and several issues raised were controversial as they involved two personalities.

"One of them is Datuk Kalimullah (Masheerul Hassan) and the other is Khairy Jamaluddin (who is also the son-in-law of Prime Minister Datuk Seri Abdullah Ahmad Badawi).

"It is also the first time that we have heard that a company in which the government has equity has been bought by a private company," he said.

He said that PAC had also come to know that the merger was approved at the Finance Ministry officials level without involving the Cabinet.

Asked if a merger between a government-linked company and a normal company required the Cabinet's approval, Shahrir said: "I am not sure."

Khairy has a three per cent stake in ECM Libra while Kalimullah is ECM group of companies executive chairman and co-chief executive officer, as well as deputy chairman of New Straits Times Press.

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