Malaysia rules out political initiative to resolve CLOB

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MALAYSIA'S deputy premier Abdullah Ahmad Badawi on Tuesday ruled out a political initiative to resolve a dispute over billions of dollars worth of frozen Malaysian shares once traded in Singapore.

Abdullah was quoted by the official Bernama news agency as saying it was the private sector's responsibility to resolve the problems of investors in the city-state stuck with the shares.

Abdullah said the National Economic Action Council, established to put the crisis-hit economy back on track, had not met with the private sector to discuss the issue.

Singapore was forced to stop over-the-counter trading in the shares after eight years when Malaysia imposed capital controls in September, leaving in limbo tens of thousands of Singaporeans who still owned Malaysian shares.

Some 100 Malaysian issues were traded under Singapore's now-defunct Central Limit Order Book International (CLOB) until September 15, when trading ceased.

After being left in the cold for eight months, Singapore investors with frozen Malaysian shares worth some 10 billion ringgit (2.6 billion dollars) are now being wooed by two suitors.

Bintang Melewar Sdn. Bhd., headed by Tunku Abdullah Tuanku Abdul Rahman, a prince from Negeri Sembilan state, announced details Friday of a closed-end fund to mop up the CLOB shares.

Effective Capital Sdn. Bhd., linked to Singapore businessman Akhbar Khan, immediately countered with plans for its own closed-end fund to run concurrently with a cash offer made three weeks ago to buy all CLOB shares at a discount.