Malaysia to monitor 'national' aspects of Time deal

South China Morning Post. May 3, 2000
AGENCE FRANCE-PRESSE in Kuala Lumpur

 THE government will not interfere in the tussle between a Singaporean firm and a Malaysian company for a stake in an Internet company, but will pay attention to "national" aspects.

Deputy Finance Minister Shafie Mohamed Salleh told parliament the finance ministry would not interfere provided transactions did not contravene the policies of Malaysia's stock exchange and the Securities Commission.

The official Bernama news agency, which quoted Mr Shafie, gave no details of the "national" aspect of the competing bids for Time dotCom, which is wholly owned by Time Engineering.

Analysts have said a successful bid by Singapore Telecommunications (SingTel) could threaten state-controlled Telekom Malaysia. Some see a political dimension to a rival bid from Malaysian telecoms-equipment maker Sapura.

SingTel announced on April 7 it had entered into a "non-binding conditional" agreement to buy a 14.5 per cent stake, or 108.22 million shares, in Time Engineering at M$6 per share.

The debt-ridden Malaysian firm will also offer SingTel a 20 per cent stake in the enlarged share capital of Time dotCom and in its Internet service provider.

But on Friday Sapura launched a late counter bid for Time dotCom, whose assets include a 3600-kilometre fibre-optic and 1600-km submarine cable network spanning peninsular Malaysia.

Sapura is seeking to buy 40 per cent of Time dotCom to become the single largest shareholder before the Internet company's planned listing.

The boss of the giant Renong group, which holds a 46.8 per cent stake in Time Engineering, said Time would not give up control of its Internet subsidiary. "I am not a director of Time, but nobody should expect to short-change Time," the Star quoted Halim Saad, Renong's executive chairman and managing director of Time dotCom, as saying.

Under the Sapura plan, Time Engineering would see its stake in Time dotCom reduced to 21 per cent and Time's creditors would end up with 38 per cent. Sapura is a major creditor of the Time group.

Time says that under its own scheme, involving Singtel, it [Time] would end up with a 55 per cent stake in Time dotCom and creditors would be paid in full within 30 days of its listing.

"We [Renong shareholders in Time] will not vote in favour of losing control of Time dotCom," Mr Halim was quoted as saying.

Published in South China Morning Post May 3, 2000