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Statement by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on minority shareholder suing MMC over privatization of MMC Engineering. 12.8.2003.

The Malaysian Government awards projects to many companies. For instance, it gives the flood mitigation project in Kuala Lumpur to Gamuda and Malaysian Mining Corporation (MMC). What would happen if any of these companie is sued?

The Government should explain to the people especially Kuala Lumpur city folks whether the court case against MMC would affect the flood mitigation project called SMART project. After the flash flooding in KL recently, the Prime Minister Dato' Seri Dr Mahathir Mohamad tries to placate the people by mentioning the SMART tunnel as performing dual functions, mitigating floods and dispersing traffic.

Apparently, on 25 July, 2003, the minority shareholder of MMC filed a suit against the corporate giant over the privatization of MMC Engineering. We don't know the actual situation. It seems that the plaintiff claims that the valuation of MMC Engineering shares was not fair as it had not considered the SMART project and that MMC did not have 90% of MMC Engineering shares. (One report shows that MMC owns 97.8% of MMC Engineering.)

We are concerned because MMC has been awarded projects such as the SMART project. One estimate of the SMART project is RM1 billion. It has been given to Gamuda and MMC at RM2.1 billion. Why is the cost so high? Does it mean that the two giants will not only deliver the goods but also ensure the quality?

The cost of public projects is especially important to the people. Some may maintain that the marking up of the cost is not as harmful as direct corruption such as someone demanding direct payment.

As MMC is big, would the above-mentioned legal action have any effect on it? Presumably, it has the means to engage experts to complete the projects. We hope the Government can enlighten us on this.

Dr Tan Seng Giaw