20100219 0926 Malaysia Corporate News.

Two leading luxury carmakers have questioned plans by the Government to link the petrol subsidy to engine capacity, saying such a scheme overlooks fuel efficiency and also incentives to manufacturers under the revised National Automotive Policy (NAP).

• “As BMW Malaysia views the situation, the problem with designing a fuel subsidy programme around the engine capacity of a vehicle is that small engine capacities alone do not necessarily mean better economy,’’ said BMW Group Malaysia managing director Geoffrey Briscoe. 
• “A new structure, merely based on engine capacity, does not solve any problem,’’ said Mercedes-Benz Malaysia. Another point Mercedes-Benz Malaysia highlighted was that the upcoming petrol subsidy scheme contravenes the revised NAP. “The NAP 2009 liberalises manufacturing passenger vehicles with engine capacity of 1,800cc and above and on the road price of not less than RM150,000,’’ it said. “The implementation of two price structures for fuel may not support this new regulation.’’
• Datuk Mokhzani Mahathir, who is a shareholder of Porsche franchise in Malaysia, too believes the subsidy system based on engine capacity is flawed. "I think this is a dangerous precedent where consumers are penalised at the point of sales because of what they have chosen to purchase. The luxury car owner is already penalised via duties, high road tax, high insurance cost, etc,’’ he said. (Starbiz)

Work on the Gemas-Johor Baru dual tracking rail project awarded to a company from China will begin soon, said Transport Minister Datuk Seri Ong Tee Keat. “This project is a major step forward in developing the state further,” said Ong during his visit to the Segamat Inland Port. He said in order to upgrade the current railway services, the country should consider having wider tracks that would be able to accommodate high speed trains.

• As for the Padang Besar-Johor Baru tracking project, Ong said compensation to squatters and land owners including the state governments was settled before Chinese New Year. 
• On the Segamat Inland Port, Ong said the ministry was looking into reviving it. “We found that one of the major reasons for the closure of the port in 2006 was the management,” he said. He also added that he would be talking to businessmen in the area to gain feedback and gauge the viability of reopening the port. The cost of building the Segamat Inland Port is estimated at about RM21m. (The Star)

Alliance Bank Malaysia is close to completing its internal probe with the board meeting yesterday to discuss chief executive officer Datuk Bridget Lai’s replies to the questions posed to her as part of the probe, informed sources said. “The board has gone through Lai’s responses with legal counsel. The meeting was to deliberate on whether the answers are satisfactory,” a source said, adding that the bank might issue a statement on the outcome of the probe soon. The sources added that the board hoped to close the investigations by next month. The internal probe concerned operational matters which started with renovations done in the bank’s property department. (Starbiz)

Malaysia Airline System (MAS) along with 11 other defendants have been served with a complaint filed in the US District Court of New York on allegations of price fixing on airfreight shipping services and related surcharges. "At this juncture, no infringement has been established," said MAS. "The recently served complaint does not make any mention of the quantum of damages sought againt MAS. MAS is currently taking legal advice in relation to the complaint." (Financial Daily)

Pantai Holdings plans to sell its Malaysian government concession businesses as it seeks to focus on growing its hospital business, sources say. The group, owned by Khazanah Nasional and Singapore's Parkway Group, holds a long-term contract to provide services like laundry to public hospitals in three states and another for foreign worker health checks. It is believed that Pantai has already approached potential suitors like GLCs or government-linked investment funds for the sale. "It's hospitals that they can add value to, there's not much value to add for concessions," said one source. (BT)

There is no issue of Permodalan Nasional Bhd (PNB) holding equities of PLCs static, says president and group CEO Tan Sri Hamad Kama Piah Che Othman when asked to comment on calls for PNB to reduce its stakes in PLCs to increase market liquidity. PNB holds equities in 300 listed and non-listed companies, including heavyweights like Maybank and Sime Darby. (Bernama)

Newly appointed CIMB Thai chairman, Chakramon Phasukvanich, has set three priorities towards laying a stronger foundation for the bank and achieving a better result this year – i) reduce Non-Performing Loans (NPLs), ii) find a niche market for SME customers and iii) expand the bank's operation into Indo-China. "Coupled with the dual listing, the bank is projected to make a better profit by end of this year," he added. (Bernama)

Telenor Connexion AB, a wholly-owned unit of Telenor ASA, is in talks with Malaysian carmakers, including Proton Holdings, to offer its machine-to-machine (M2M) service. "We have engaged talks with Proton, we are still in early stage of negotiations," said Telenor Connexion global business development executive (automotive) Per Lindberg. The company is also in talks with Indian carmakers. (BT)

The finance ministry of India has said it is keen on the 3G auction in the current fiscal itself, but it is not yet counting for the proceeds from the auction in the current financial year, indicating a somewhat lower energy in the government for completing the auction before Mar 31. “We are not looking at money this year... We are not accounting for it. The auction can happen whenever the schedule permits,” said finance secretary Ashok Chawla. Finance minister Pranab Mukherjee, headed empowered group of minsiters (eGoMs), had put a target of Rs 35,000 crore from the sale of airwaves in the current fiscal. (Economic Times of India)

Khazanah Nasional has defended its decision to acquire a 10% stake in Oriental Universal City (OUCL) from Raffles Education Corp for US$44m (RM149.58m) stating that the investment fulfilled its strategic objectives and its financial returns requirement. (Malaysian Reserve)

OSK Holdings has a new indirect subsidiary to undertake stockbroking, corporate finance, underwriting, placement and other related activities in Cambodia, after obtaining approvals from Cambodia’s Ministry of Commerce. (BT)

PT Hanjaya Mandala Sampoerna Tbk (HM Sampoerna), a maker of 'kretek' or clove cigarettes, will shut down its operations in Kuala Lumpur by May to tap the low import duty following the implementation of the Asean Free Trade Agreement (Afta) from January this year. A spokesperson at HM Sampoerna, the subsidiary of Philip Morris International, said the implementation of the lower import duties means its factory in Malaysia is no longer viable. "Based on this fact and as part of our ongoing effort to enhance productivity and improve operational efficiency at the company, HM Sampoerna has made the decision to source products for Malaysia from Indonesia," the spokesperson said. (BT)

Tanjung Offshore’s subsidiary, Citech Energy Recovery Systems UK Ltd (CERS), has clinched a £5m (RM26.6m) contract from Solar Turbines of the US for the supply of a waste heat recovery package. The contract, involving the manufacturing, assembly, testing and delivery of the spare parts package, is expected to be completed within the next 15 months. (BT)

Sapura Resources has not decided on the sale of its wholly-owned subsidiary Sapura Auto's BMW dealership, the company said. Sapura Resources clarified that "no finalised decision on the matter has been made by the company" and that it would make the necessary announcement to the exchange when the time was right. (Financial Daily)