What was the true nature of the RM2.3b Renong share acquisition?

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The RM2.3b Renong Share Acquisition Was an Open Market Purchase by UEM, Not a Government Bailout

Tan Sri Halim Saad has refuted claims that United Engineers (Malaysia) Bhd's (UEM) RM2.3 billion acquisition of Renong Bhd shares in November 1997 constituted a government bailout or involved his personal embezzlement. He asserts that UEM utilized its own financial resources and banking facilities to purchase the shares from the open market at prevailing prices through six nominee companies, a transaction later confirmed as not being a Related Party Transaction (RPT) by regulatory bodies. Halim further clarified that the acquisition was initiated at the finance ministry's request to safeguard Renong and its assets, such as the North-South Expressway, from potential foreign hostile takeovers, and that his personal stake in Renong was not part of this transaction.
UEM Acquired Shares Through Its Own Means

Halim Saad explained that UEM funded the purchase of Renong shares using its own capital and secured banking facilities. He contested the notion of a "government bailout," stating that such a label would only apply if government funds were directly used for the acquisition. The transaction involved UEM acquiring a 32.6 per cent stake, comprising 722.9 million shares, in Renong Bhd during the Asian financial crisis.
Transaction Occurred on the Open Market, Not by Private Treaty

The acquisition of Renong shares by UEM was conducted through the open market and not via a private treaty. Halim specified that the shares were bought at the market price through six nominee companies. This method of acquisition was subsequently investigated and confirmed by the Kuala Lumpur Stock Exchange and the Securities Commission as not constituting a Related Party Transaction (RPT), a crucial distinction in corporate dealings.
Acquisition Aimed to Prevent Foreign Control

According to Halim Saad, the finance ministry had requested UEM to undertake the purchase of Renong shares. The primary objective was to prevent foreign entities from gaining control of Renong and its significant assets, including the North-South Expressway, through hostile takeovers. This directive underscored a strategic national interest in maintaining domestic control over critical infrastructure.
Halim Saad's Personal Stake Was Not Included

Halim Saad explicitly stated that the Renong shares acquired by UEM did not include any from his own 23 per cent stake in the company. He clarified that his personal shareholding was never sold to UEM as part of this transaction, thereby refuting any implication of personal enrichment from the deal. Furthermore, UEM shareholders provided overwhelming approval for the acquisition at an extraordinary general meeting held in February 1998.

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What was the true nature of the RM2.3b Renong share acquisition?

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