February 13, 2006 16:31 PM
Mahaleel Hits Out At Proton For Lack Of Details On Agusta Sale
KUALA LUMPUR, Feb 13 (Bernama) -- Former Proton chief executive officer Tengku Tan Sri Mahaleel Ariff has criticised Proton Holdings Bhd for not replying to his queries and that of Tun Dr Mahathir Mohamad late last year over its sale of MV Agusta for just one euro, saying they regretted Proton's stand that the company's reply to Bursa Malaysia was already sufficient."Firstly, as a matter of public interest, not all are privy to Proton's reply and secondly the reply does not answer to the questions that we posed."By not replying in itself is a transparency of falsehood contrary to the wishes of the government to be transparent for all to see," he told a media briefing here Monday.Tengku Mahaleel said that since he and former Prime Minister, who is also advisor to Proton, had raised the questions, "many public and business circles are amazed as it (the sale of MV Agusta) defies from an outsider's point of view many business practices."Tengku Mahaleel, who retired in Sept 30, 2005, also emphasised that he was speaking on behalf of Dr Mahathir, the former prime minister.He also questioned who made the decision to sell and whether it went through the proper process.Asked why was he seeking answers to the M.V Agusta sale, he said: "We are trying to clarify our positions because the inference is that we had made a bad decision (to buy MV Agusta in the first place)."Among his other queries were that whether an announcement as made that MV was for sale and if not, why did Proton approached only one bidder; who were the consultants appointed for the sale; was the MV Agusta board consulted and informed of the sale and was the chairman and chief executive officer of MV Agusta present at the Proton board meeting to argue the case for the sale.He questioned Proton's wisdom in selling the Italian motorbike maker for just one euro, saying that Proton lost of total of 75.99 million euros or RM348 million from the sale."In fact, when acquiring MV Agusta, we were also asked to look at acquiring another Italian bike maker, Ducati," Tengku Mahaleel revealed."
In conclusion, Proton has sold one of its core assets rather than non-core assets," he claimed.Tengku Mahaleel pointed out that the automotive core businesses, would among others, involve assembling and logistics, casting and machining engines and related parts, mould and dies making, styling clay and design engineering, stimulation and prototype building, vehicle testing, distribution and dealership.He said M.V Agusta "does all those activities and has the world's best designers and has won world awards and patents than all of Proton in its 20 years of existence."Asked if MV Augusta was sold because it was a motorbike company and not a car maker, he countered by saying: "In the context of assets, it's very simple. Isn't Honda Motorcycles core to Honda, yes or no? Isn't BMW Motorcycles core to BMW? The answer is there because the core is in the process."Explaining the rationale behind MV Agusta's purchase, Tengku Mahaleel said Proton faced an uncertain future in Malaysia with auto policies that were inconsistent and sometimes not transparent.To survive, it "needs a few large based markets (and) Malaysia is one of them. We were looking 10-15 years ahead," he said.Among the advantages of the MV Agusta acquisition was that the group had three top brands namely, MV Agusta, Cagiva and rights to Husqvarna.With this, he said Proton would have five brands (including Lotus) for its future market entries, four high-end premium brands and one standard.He also claimed that profits per unit from Lotus or MV Agusta was higher than each Proton car."If Proton can raise sales of Lotus and MV Agusta to 60,000 to 80,000 units, it can earn as much money as selling 150,000 Protons per year. This is why Lotus and MV Agusta are critical to Proton's future," he claimed.Proton, he said, had spent almost RM1 billion in advertising and promotions in building its brand globally "but selling Lotus and MV Agusta does not require such a heavy advertising and promotions cost, thus saving market entry cost."-- BERNAMA