Proton loan puts spotlight on Mokhtar's RM34b debts

Kuala Lumpur: Tycoon Tan Sri Syed Mokhtar Bukhary's RM34 billion in liabilities made him one of the country's biggest holders of corporate debt, according to Singapore's The Straits Times.The newspaper said the billionaire's high leveraging has begun to concern lenders and investors, even as Proton Holdings Bhd - one of many brands in his stable - secured a RM1.5 billion soft loan from the government in April.

But senior executives from Syed Mokhtar's firms downplayed the concerns, saying that the debt levels remained manageable.

"Many of our businesses require huge capital outlays and our infrastructure projects are largely project-finance debts that are ring-fenced by cash flows," one executive told The Straits Times anonymously.

A banker with a state-owned lender also dismissed worries about the tycoon's finances, saying he was in "far better position" than a decade ago.

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Opposition lawmaker Tony Pua raised concerns about Syed Mokhtar's debts last year, saying it could force the government to bail out the tycoon should his businesses founder.

Prime Minister Datuk Seri Najib Razak stressed during the launch of Proton's new Perdana that the RM1.5 billion loan was not a bailout of the firm.

Syed Mokhtar is regularly viewed as the poster boy of the pro-Bumiputera affirmative action policies that were put in place by the now-defunct New Economic Policy (NEP) introduced after the 1969 race riots.

The tycoon is prominently involved in a wide range of industries, leading critics to accuse the government of aiding his domination of the private sector.

Syed Mokhtar holds the local monopoly on rice through PadiBeras Nasional Bhd (Bernas) and sugar via Central Sugars Refinery (CSR) and Gula Padang Terap (GPT).

He also controls POS Malaysia, DRB-Hicom that owns national carmaker Proton, various ports across the country via MMC Corp, and the country's largest independent power producer Malakoff Corp.

A joint venture between his MMC and Gamuda is also the main developer of the Mass Rapid Transit project, the biggest infrastructure undertaking in the country's history.

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An analyst told the Singapore paper that one reason for concern was Syed Mokhtar's elusiveness and secrecy.

"He has the reputation of injecting his private businesses into his listed assets at the expense of minority shareholders and that is why his stocks don't have a strong following and trade at a discount," the head researcher of a bank-owned stockbroker told the Singapore newspaper.

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