On 28 March 2006, Proton chairman chairman Datuk Mohd Azlan Hashim said that Proton Holdings Bhd's board was not given full details of the acquisition of the debt-laden MV Agusta Motors SpA (MVAM) when the deal was executed in 2004. He said that the board was not aware that the MVAM minority shareholders had veto powers on 57.75% stake in MVAM was acquired for RM367.6 million (70 million euros) on Dec 1, 2004.
How can a director of the company treated a deal amounting to RM367.6 million that likely that they do not aware of there is a veto power imposed by minority of MV Agusta. Apparently they are negligent in performing their duty as a director and should tender resignation as director of the company.
Actually, such material event should be disclosed to all minority shareholder of Proton before the deal go through. Not disclosed only after the company has disposed off the shares at controversy 1 Euro. However, Proton has stated under clause 3.2 on Proton statement on the disposal of interest in MV Agusta Motors SpA that :
In so far as the regulatory obligations of a public listed company are concerned, Proton has complied with all necessary requirements of Bursa Malaysia. However, addressing the matter publicly was not an option until now, as the agreement to dispose of the interest in MVAM was conditional and restricted the ability of Proton to fully address the uninformed speculation in the public domain.
In addition, it was also felt that responding to the allegations prematurely would have detracted from the main issue at hand, which was to resolve the MVAM issue and avert the potential liability. All this is part of acting in the best interest of the shareholders.
Minority watchdog, can you accept such explanation?
Even minority watchdog willing to accept such explanation. Can directors just claim that they are not aware there is a veto power on a deal that amounting to million and disclaim responsibility. It look like any person walking on the street is more brilliant and competent than Proton's director. What is the point of Company Commission of Malaysia or Suruhanjaya Syarikat Malaysia (SSM) required directors to attend course but director need not resigned from their position after a negligent has occur?
Other that the veto power. The founder of MV Agusta also has an anti-dilution clauses that protect the founder's interest. This was not disclosed to minority shareholder of at the time of acquiring MV Agusta. Only disclosed to the public on 28 March 2006 after disposed off the investment at controversy one Euro.
No disclosure make to minority shareholder when Proton exposure to bankruptcy risk cause by unique legal framework of Italy, where debt of subsidiary MV Agusta can cause a holding company Proton bankrupt.
Of course, Proton advisor Tun Dr Mahathir Mohamad is not convinced on the explanation.
However, can we just close off the issue like this?
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