WONG SAI WAN - The Star, 17 Mar 2012

KUALA LUMPUR: The Malaysia Airlines board is standing firm behind the co-operation with AirAsia as well as the share swap between Khazanah Nasional Bhd and Tune Air and has asked that the deal be given a chance to work.

MAS chairman Tan Sri Mohd Nor Yusof also expressed the board's “commitment and support for the management team of Malaysia Airlines, led by group CEO Ahmad Jauhari Yahya”.

“Malaysia Airlines is a very sick patient, and its condition is quite critical. Indeed, there are a full range of prescriptions available. Judge us by the result, not by the choice of prescription,” he said in a statement issued here yesterday.

Mohd Nor's backing for the deal follows a meeting between MAS unions with Prime Minister Datuk Seri Najib Tun Razak earlier this week to express their opposition to the Comprehensive Collaboration Framework (CCF) involving a share swap between Khazanah and Tune Air.

Time to soar: Mohd Nor says the share swap with AirAsia is not part of the problem, but part of the solution.

It was learnt that Najib had also summoned Mohd Nor and Ahmad Jauhari to his office where the two airline men argued for the deal.

Saying that passing judgment on the CCF and share swap now was premature, Mohd Nor said people should judge the team by the results under their new business plan.

The airline announced last month that it recorded a huge loss of RM2.5bil last year but expected to make a turnaround this year when its new aircraft, including five super jumbo Airbus A380, come into operation.

In August, Khazanah took up a 10% stake in AirAsia while Tune Air, the investment vehicle of AirAsia founders Tan Sri Tony Fernandes andDatuk Kamarudin Meranun, bought a 20.5% stake in MAS.

On top of the share swap, a collaboration agreement was signed simultaneously by MAS, AirAsia and AirAsia X, which would effectively see MAS concentrate on being a full-service premium carrier, AirAsia on being a regional low-cost carrier and AirAsia X, a medium-to-long haul low-cost carrier.

“The Board is confident that the CCF will benefit both Malaysia Airlines and AirAsia by promoting synergies in many areas. I would like to be very clear in stating that the share swap is not part of the acute financial problems at Malaysia Airlines; it is part of the solution,” said Mohd Nor.

MOL may have dual listing in Malaysia and Singapore, says Vincent Tan

KUALA LUMPUR: Billionaire Tan Sri Vincent Tan plans to list the chain of 7-Eleven convenience stores, under a company called 7-Eleven Malaysia Bhd, and also MOL Global Bhd which has shares in Internet giant Facebook, within the next two years.

“I think 7-Eleven and MOL will be worth more than RM1bil (combined) when they are listed,” he told reporters during the recent Berjaya Founder's Day celebration held at Berjaya Times Square.

Tan, the founder and controlling shareholder of Berjaya Corp Bhd (BCorp) group of companies, also said telecommunications service provider U Mobile was expected to be listed on Bursa Malaysia in the third quarter of 2012.

The listed entity would be called U Mobile Communications Bhd.

Tan says 7-Eleven will seek a listing on the local bourse in 2013 or 2014.

“U Mobile might be worth RM4bil or RM5bil when it is listed,” said Tan.

Meanwhile, 7-Eleven would seek a listing on the local bourse in 2013 or 2014, according to Tan.

However, MOL might have a dual listing in Malaysia and Singapore.

“We can list MOL in Malaysia or Singapore, or in both countries. Definitely, the plan is next year. MOL is doing well. It is fairly profitable, and has very good growth.”

Tan said MOL had a lot of international businesses.

“MOL operates in Malaysia, Singapore, and also Thailand, India, the Philippines, and Indonesia. It is looking forward to Vietnam, Turkey and Brazil.

According to Tan, 7-Eleven and MOL could each raise RM200mil to RM300mil in the initial public offerings (IPOs).

He said part of the proceeds from the IPOs of both companies would be used to repay debt. “I had borrowed money to privatise them.”

To recap, MOL went public in 2003 and was privatised in 2008 by Tan.

Recently, MOL was in the limelight due to the 3.5 million shares it owns in Facebook, the world's largest social networking service company.

Based on an assumption that Facebook shares start trading at US$40 after the company's much anticipated IPO in the United States, MOL could stand to pocket US$140mil (RM420mil) for its shares.

As for the 7-Eleven convenience stores' business, it was part of Berjaya Retail Bhd, which was listed on the local bourse for only about eight months before it was privatised in April last year.

It should be noted that Tan had stepped down as chairman of BCorp last Thursday, and said he wanted to devote more time and energy to promote more charitable initiatives and social programmes.

Tan said he would like to donate at least 10% (of 7-Eleven and MOL), after the companies are listed, to his Better Malaysia Foundation (BMF).

“So, the foundation will be better funded to carry out charitable efforts,” he said.

BMF was founded a few years ago by the tycoon, and was formerly known as the Vincent Tan Chee Yioun Foundation.

Tan also pledged to donate RM600mil in the form of securities and shares to BMF this year.

The RM600mil donation will be in the form of BCorp's 10-year, 5% irredeemable convertible unsecured loan stocks valued at RM200mil, and RM400mil worth of shares in the upcoming listed U Mobile entity.

Tan had called the donation his “first installment” to fulfill his pledge to give away at least half of his wealth to charity. - Star Business 27 Feb 2012

JAKARTA: Malaysia's state oil and gas company Petronas has resigned from a consortium exploring Indonesia's East Natuna gas project, Asia's biggest untapped gas reserve, Indonesia's state oil and gas company Pertamina said on Monday.

"We received confirmation from our upstream director Muhammad Husen that Petronas has backed down as our partner in East Natuna," Pertamina spokeswoman Wianda Pusponegoro said to Reuters on Monday.

Pusponegoro declined to give further details or a reason for the resignation and there was no immediate comment from Petronas.

In December 2010, Pertamina signed agreements with Exxon Mobil, Total and Petronas as partners to develop the Natuna gas field.

The project is expected to cost Pertamina and its partners between $20 billion to $40 billion, depending on the gas delivery and production methods.

East Natuna has approximately 46 trillion cubic feet of gas reserves and contains 71 percent carbon dioxide. It is considered the biggest untapped gas reserve in Asia. - Star Business 27 Feb 2012

Eugene Mahalingam, Star Business 6th Feb 2012

PETALING JAYA: The year 2012 is expected to be an eventful period for the local automotive industry. The following are just a few questions to consider over the months to come.

Record high?

Industry players and analysts have forecast a modest growth for vehicle sales in Malaysia this year, with the Malaysian Automotive Association expecting it to hit 615,000, which is a 2.5% increase from the 600,123 units achieved in 2011.

Sales boost: A sales adviser explaining Honda Insight, a hybrid vehicle, to potential buyers. The Government’s decision to exempt excise duties on hybrid cars below 2,000cc is expected to drive hybrid vehicle sales to record highs this year.

For now, analysts and industry players believe that economic indicators such as interest rates and fuel prices will have a limited impact on vehicle sales this year.

“OPR (overnight policy rate) is likely to stay at 3% to 3.25% (and have) minimal impact,” according to research from Frost & Sullivan. It also said that fuel prices were expected to remain range bound, with minimal impact on total industry volume (TIV).

An analyst with a local bank-backed brokerage said vehicle sales could be impacted if there was a sudden surge in fuel prices.

“But even if that happened, people will likely downgrade to cheaper or more fuel-efficient cars, as vehicles are a necessity,” he said.

Barring any unforeseen circumstances, the general consensus is that vehicle sales will surpass 2010's all-time high of 605,156 units.

It is important to note that 2011 was set to be a record-breaking year for car sales in Malaysia, despite positive economic indicators during the year.

Vehicle sales were instead affected by production disruptions caused by the March earthquake in Japan and the floods in Thailand towards the end of 2011. “Whether another natural disaster will occur is anyone's guess,” said one industry observer.

According to reports, Japan experiences between 1,500 and 2,000 earthquakes per year ranging from minuscule tremors to devastating quakes of seismic proportions.

“What car companies, which are exposed to earthquakes or floods, should do is to know how to manage and protect their inventory in the event of future natural disasters,” said an analyst.

Meanwhile, the claims that banks were moving to clamp down on auto financing with an emphasis on luxury carbuyers is unlikely to have a significant impact on car sales should the clampdown actually happen.

“While the measures, if implemented, would make for negative headlines, it would likely not have a significant impact on auto sales, given that the majority of hire-purchase borrowers have only one car loan,” said RHB Research in a recent report. “In addition, luxury marques only form a small proportion of TIV, with buyers of such vehicles also likely to be able to afford a higher downpayment,” it said.

Hybrid year?

The Government's decision to exempt excise duties on hybrid cars below 2,000cc, a policy that has been extended until 2013, is expected to drive hybrid vehicle sales to record highs this year, according to analysts and industry observers.

“There has been rising awareness of hybrid vehicles. But more importantly, it's the tax exemptions, which means cheaper cars, that is driving consumers in droves to showrooms that sell hybrids,” said one industry observer. “And why not? It's a good bargain, seeing as hybrids offer better fuel economy compared with other cars within the same price range,” he added.

Total hybrid vehicle sales jumped over 2,000% to 8,334 units in 2011 from 328 a year earlier due to the ongoing excise duty exemptions on such vehicles.

With rising awareness and better fuel economy, demand for hybrids will be boosted further by new models introduced into the market this year. MAA president Datuk Aishah Ahmad has said that new players are keen to introduce hybrid vehicles into the market.

Furthermore, International Trade and Industry Deputy Minister Datuk Mukhriz Mahathir has confirmed that the Government is talking to several multinational automotive companies on the possibility of having them assembling hybrid cars in Malaysia for the Asean market.

“More cars means more competition and more value-for-money choices for consumers,” said an analyst.

What will NAP bring?

All eyes will certainly be on the revised National Automotive Policy (NAP), which is expected to be announced some time this year.

According to reports, the new NAP is expected to streamline the NAP that was reviewed in 2009 to facilitate the technological advancements and trends of the global automotive industry.

It is strongly speculated that the new NAP will focus on environmental-friendly initiatives, such as the push to promote hybrid and electric vehicles.

One industry observer reckons that efforts should be made to expedite the liberalisation of the local automotive industry to make national car companies Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua) more competitive.

He also said the NAP should provide incentives that would attract foreign direct investments (FDI) into Malaysia.

“To make Malaysia a hub in Asean, they need to make business in the country attractive. There is no better time than now.

“With the way natural disasters are going on all over the world, it is timely to attract players into countries like Malaysia, which doesn't have floods the proportions of those experienced in Thailand or earthquakes,” he added.

An analyst pointed out that with the popularity of hybrid vehicles in Malaysia, incentives such as the current tax exemption for such vehicles should be extended indefinitely to attract new players into the country.

“The current exemptions for hybrids ends in 2013, when Proton launches its own hybrid cars. After that, buyers will have to pay the full price with excise duty if they want to buy such vehicles.

“This will kill the businesses of foreign car companies (that are selling hybrids) and deter potential hybrid players who want to invest in Malaysia for the long term,” he said.

A new Proton?

With the acquisition of Proton's 42.7% stake by DRB-Hicom Bhd, it is inevitable that changes will be made to turn around the ailing national car company.

The questions are how soon will the changes be announced and how quickly will they be implemented?

“Proton needs to minimise its costs and do what it was created to do manufacture reliable, mass market vehicles,” said an industry observer.

Many believe that the first thing that DRB-Hicom needs to attend to is Proton's unit Lotus turnaround commitment, which has been a drag on the national car company's earnings.

And with the global automotive industry moving at break-neck speed, can it cope with the competitive global environment?

The solution is one that Proton's own managing director Datuk Seri Syed Zainal Abidin Syed Tahir has mentioned many times at press conferences to be able to come up with cars with European designs, Japanese technology but at Malaysian prices. A feat that is easier said then done, unfortunately.

“With the liberalisation of the automotive industry, changes need to be made to make Proton more competitive. It needs to beef up its export base as the Malaysian market can only buy so many Proton cars.”

Industry observers reckon the best option for Proton is to form an alliance with a foreign strategic partner and improve its brand appeal and product offering.

Time is of the essence and after a quarter of a decade, the national car company could finally be on the right track to new heights.

“It will take some time to turn around Proton. You can't change over 25 years of history overnight,” said one industry observer.

Star Business -Behind the news - By Choong En Han

NOW that the dust has finally settled on who will own Khazanah Nasional Bhd's 42.74% stake in national carmaker Proton Holdings Bhd, the focus will shift over to the merits of the deal.

This is important to shareholders of DRB-Hicom Holdings Bhd, the conglomerate which is not only buying the stake but also making the mandatory general offer for the rest of Proton. And it is important for shareholders of Proton as well.

There will be questions whether Khazanah has struck a fair deal, given that the stake was bought at roughly RM8 per share over several years and in various tranches from different shareholders.

We can expect the picture to become clearer when DRB-Hicom group managing director Datuk Seri Mohd Khamil Jamil meets the press today.

Proton has a list of well-known problems, including its extremely underutilised Tanjung Malim plant, its Lotus turnaround plan and its need for a strategic global partner to drive future growth.

The controlling stake in Proton has come full circle and is finally back to DRB-Hicom. And it looks like it will be the turning point for the national carmaker and this is where all the hard work begins for DRB-Hicom. Words like partnerships, collaborations and strategic joint ventures have been the more favoured keywords recently for Khamil to relate to Proton.

People looking at Proton Exora multi-purpose vehicle at a Proton showroom. The question now is whether DRB-Hicom can lift Proton out of its financial doldrums.

No stranger to these keywords himself, indeed Khamil has led DRB-Hicom to greater heights by associating the automotive and industrial conglomerate to other global automotive marques and establishing its presence throughout the entire value chain of the automotive industry.

The question now is whether DRB-Hicom can lift Proton up from its financial doldrums after being dragged down by provisions made for its Lotus turnaround plan.

Despite being a domestic-centric car manufacturer, Proton needs to bank on its export base to increase its sales volume and drive the next phase of growth, as the local market seems to be reaching a saturation point with the total industrial volume hovering around 600,000 units.

Collaborating with a foreign strategic partner seems to be the obvious choice for Proton to become a global brand or, maybe, in the nearer term, an Asean brand.

Analysts and observers alike have touted Volkswagen to be the best suitor for Proton, with the latter's significantly underutilised Tanjung Malim plant fitting Volkswagen like a glove to meet the German marque's ambition for a manufacturing hub in Asean.

Excess fat: ‘Proton cars at a logistic centre in Kuala Langat. CIMB believes DRBHicom is well positioned to reap significant low-hanging fruits.’

There is also another potential collaboration on the cards with long-time partner Mitsubishi Motor Corp to assemble Mistubishi cars and the possibilities of engine development.

However, with the entry of DRB-Hicom, the Mitsubishi deal might be scuttled in favour of a more muscular foreign strategic partner like Volkswagen.

Meanwhile, questions also arise about Proton's upcoming launch of “P3-21A”, which is touted to be the model that will make Proton's presence felt in the global car scene. The sudden entry of DRB-Hicom would definitely have an impact on the planned launch of the new car in March.

Currently, DRB-Hicom derives almost 60% of its automotive revenue from business ventures with the national carmaker. It is also the biggest distributor of Proton cars under EON Bhd, besides Proton Edar. The group's manufacturing and engineering companies are all first-tier vendors to Proton, accounting for RM600mil to RM700mil worth of business.

No doubt synergistic gains and operational benefits abound in this link-up between DRB-Hicom and Proton but there will be questions on how Proton's current plans can gel up with DRB-Hicom's future direction.

Fintan Ng, Star Business, 14 Jan 2012

Industry players say there are issues including compliance with banking laws

PETALING JAYA: With the merger plans of RHB Capital Bhd (RHBCap) and OSK Holdings Bhd coming closer to being realised, the question arises again as to whether the former will contemplate a takeover of Malaysia Building Society Bhd (MBSB), a non-bank lender to civil servants.

This talk arose from speculation last October that the Employees Provident Fund (EPF) was mulling over a move to merge both businesses following an announcement by RHBCap last September that it had written to Bank Negara seeking permission to start talks with OSK.

The EPF holds a 44.84% stake in RHBCap and a 65.5% stake in MBSB.

However, industry sources and analysts said this merger or privatisation would likely not see the light of day simply because of the complexities involved in the exercise including compliance with banking laws.

Alliance Research Sdn Bhd vice-president of equity research Cheah King Yoong told StarBiz that there were many issues to iron out even on the surface and the process might be more trouble than it was worth.

“The acquisition does not make sense, the process will take too long and so will getting the operations of both companies to work in a seamless manner post takeover,” he said, adding that banks should only merge or acquire other banks.

Furthermore, Cheah pointed out that since MBSB did not come under the Banking and Financial Institutions Act 1989 (Bafia), there were concerns that some of the loans would not make the cut post acquisition.

“MBSB complies with Bafia at its own discretion and while the EPF has done a lot to transform the company, there may be problems with Bank Negara tightening loans criteria,” he said.

Industry observers also said that the acquisition would increase the EPF's stake in RHBCap at a time when the fund should be looking at decreasing its stake in line with the government-linked company divestment policy put in place in the last few years.

They said RHBCap would not proceed with any plans for a takeover as the acquistion would be a risky bet.

“The Government may open up lending to civil servants to other banks, bringing increased competition and thinning margins for MBSB,” a banker said.

Currently, civil servants who take loans from MBSB, RCE Capital Bhd or any of the 450-odd credit cooperatives and government-owned financial institutions such as Bank Rakyat, Bank Simpanan Nasional and Agrobank have their salaries deducted via a monopolistic interface the National Cooperative Movement of Malaysia have with the Accountant-General's office.

The banker said instead of paying a premium for MBSB and facing intergration issues, RHB should just enter into the business of providing loans to civil servants.

Cheah as well as industry observers said the EPF would prefer to see the impact of the positive changes in MBSB before selling its stake in the company.

According to these observers, MBSB chief executive officer Datuk Ahmad Zaini Othman, who has overseen changes in the company in the last three years, wants a portfolio balanced between corporate, mortgage and personal finance loans for sustainability.

The changes that have taken place have also borne fruit with MBSB's third-quarter ended Sept 30, 2011 net profit soaring 135% to RM95.1mil year-on-year due to higher income from Islamic banking operations, higher conventional business net interest income and higher other operating income.

PETALING JAYA, The Malaysian Institute of Planners (MIP) is tapping the best brains in the world to design a Bandar Malaysia that can be the future model for sustainability and livability.

The MIP, which is organising the competition independently for the Master Developer, 1MDB (1Malaysia Development Berhad),will invite the best of ideas for a holistic and sustainable master plan for Bandar Malaysia towards creating the right environment for a better quality of life.

MIP President Prof Dato’ Dr. Alias Abdullah said: “MIP is well connected to an extensive network of global consultants. We’re confident of getting the top talent to pitch their ideas in this competition.”   

Dr. Alias added:  “The competition processes will mirror 1MDB’s own stringent procedures to ensure that the selection of Master Planner for Bandar Malaysia is done in the most transparent manner.”

The competition is governed by the best global practice in every aspect including transparency and key criteria will include value creation for a better living environment and sustainability.

The 484-acre Bandar Malaysia project is the redevelopment of the old Sungai Besi airport into a new and vibrant landmark reflecting the Greater Kuala Lumpur aspiration.  It will consist of residential areas and a range of commercial and lifestyle facilities as well as livable space for work/life balance.

1MDB has adopted the same rigorous process for the selection of Master Planner for its other development project, the Kuala Lumpur International Financial District (KLIFD) which was concluded recently.

The Bandar Malaysia International Master Plan competition, which comprises three stages of selection process, is open to all local and international design consultants. Entries for the pre-qualification stage will close on 15 November 2011.  A total of 10 will be shortlisted to proceed to the second level, with five vying for the top spot in the third and final stage.  The winner is expected to be announced in July 2012.

1MDB Real Estate SdnBhd Deputy Chief Executive Officer (Operations) Dato’ Azmar Talib said: “We are confident MIP and its international partners can attract the best of ideas in this competition.”

He added: “We want to ensure that Bandar Malaysia is driven by people passionate about designing a livable city that can inspire the world.”

Business Times, 15 Oct 2011       Viewpoint by Kumar Tharmalingam

WHEN the Kuala Lumpur International Financial District (KLIFD) was announced, I was quite pleased at its location at the other end of Bukit Bintang as that part of the city was long the purview of dilapidated civil service residences which degenerated to car wash premises and some unsavoury practices on premises built nearly 100 years ago. All that is a memory now as the land is finally cleared and a new master plan began to emerge.

Kuala Lumpur is sorely in need of a financial district such as Connaught Place in Hong Kong or Raffles Place in Singapore or even Canary Wharf in London, a location that every international financial institution would have to be in to be counted as a world leader.

The KLCC location could have been ideal but Petronas is not property centric and preferred to surround itself with the oil and gas services industry. There are still a number of vacant sites after 15 years.

Malaysia has now a worldwide reputation as a sukuk platform and a halal platform both valuable commodities if you want to do business in the Middle East and be in the running for a syariah compliant financial service. Or if you want to sell your food products to the Middle East.

With the tsunami of change in North Africa and the continued instability in that region for some time, more and more banks and funds will want to relocate to safer locations and it's Malaysia and not Singapore or Hong Kong that will be the first port of call if we have the right product and the right location.

But after that announcement and the setting up of a great office and hiring people in 2009, there was a long period of silence. In the current gossip-laden environment there was not a peep from the company in explaining anything.

Then suddenly after a long lull the KLIFD project is in the news again, with a slew of appointments being made recently for the RM26 billion development.

To be fair, from the beginning its master developer 1MDB has made it clear it would let action speak louder than words. But in doing so it had had to resolve issues raised by several parties, transparency being one of the major ones.

Now though, more pieces are being put together and the picture is beginning to get a little clearer.

For a project of that scale, it is understandable that many will want to have a piece of the action and concerns of fairness when it comes to awarding contracts are bound to arise. From the outside looking in, some may say that not much effort has been done to allay these concerns and curiosity.

But it could also be said that 1MDB maintained its own pace in conducting the selection process. The company certainly remains either unaware or impervious, which is necessary for a project like this.

Given the 20-year timeline of the project, wouldn't any developer want to ensure all its vendors have the necessary resources and ability to deliver?

Early August, it had announced Akitek Jururancang Malaysia Sdn Bhd and US-based Machado Silvetti & Associates as its master planners, chosen for a "highly functioning, interesting, innovative, and aesthetically pleasing urban district that will establish KLIFD as a financial centre of choice".

A few weeks ago, it followed with 11 more appointments consisting international and local outfits in various fields of expertise, from infrastructure engineer to traffic experts to sustainability consultant.

This is quite a pleasant change, and redeemed 1MDB from some of its detractors' criticism of being unable to make decisions.

1MDB reiterated that its selection process adopted best global practices, including at pre-qualification and request for proposals (RFP) stages.

1MDB also said it had engaged all potential vendors in numerous discussions to ensure all parties are able to work together to realise its vision for KLIFD.

The need for keeping information close to the heart of the matter is, of course, understandable for fearing it will jeopardise negotiations and project's progress. However, 1MDB should still be aware of the public's curiosity and allow certain details to be available on a regular basis.

For one, this action will keep speculations to a minimum and at the same time it enables the public to make up their mind better on whether KLIFD is indeed a beneficial project or otherwise.

KLIFD is currently in its master planning phase, with a detailed plan set to be delivered early next year. Construction is scheduled to start in June next year.

According to news reports, the first phase of the development is expected to be operational by 2016, when the first line of Malaysia's mass rapid transit system is set to be up and running.

When fully complete, KLIFD aims to bring together leading financial institutions and top companies from all over the world into one place. With Malaysia's edge in Islamic finance as well as the country's location in Asia, it should well attract major players, complementing other financial centres in the region.

If the project is indeed going to be one of the main drivers of the economy, the public would want to know what kind of animal it would be, or how the project could boost the surrounding areas with incentives to complement KLIFD.

1MDB perhaps is ready to shift gears. It should continue with its initiative to be more forthcoming, and assume the spotlight it has always been put under. Besides KLIFD, 1MDB is also the master developer for Bandar Malaysia, the urban redevelopment project where the old Sungai Besi airport is located.

It has said that the selection of consultants for Bandar Malaysia, as the project is named, will undergo the same rigorous selection process with a mix of international and local companies. That should be a good thing.

The writer is the chief executive officer of Malaysia Property Incorporated

Maxis Communications Berhad (“MCB”) notes media reports today suggesting that a First Information Report (“FIR”) has been registered by the Indian Central Bureau of Investigations (“CBI”), commencing formal investigations in relation to, among other things, the purchase by MCB of Aircel Limited (“Aircel’) in India in 2006.  Whilst the FIR has not been provided yet to MCB, MCB understands that it is expressly named in the FIR, along with other nominated persons, and that the FIR relates to allegations of coercion and corruption surrounding the Aircel purchase.

MCB has been aware of investigations being made by the CBI for some time now and has extended its full co-operation.  Whilst disappointed that the FIR has been filed, MCB will continue to co-operate with the CBI in its investigation in full confidence that the allegations against it will prove to be unfounded and without basis.

MCB absolutely denies any wrongdoing.  The acquisition of Aircel was a commercial, arms length transaction between a willing seller and a willing buyer.  Indeed, MCB paid the asking price demanded by the seller, Siva Ventures Limited (“Siva”).

Furthermore, MCB recently fully successfully defended international arbitration proceedings brought against it by the former owner of Aircel, Siva, whose claims against MCB were dismissed in their entirety.

MCB will continue in its commitment to the Indian telecommunications market in which it has invested more than US$8 billion since it acquired Aircel to establish and develop a pan Indian mobile telephony business, along the way building a subscriber base of more than 50 million customers.  This investment includes US$2.5 billion invested in the 2010 Indian 3G/BWA spectrum auction and in respect of the deployment of 3G network over Aircel’s licence areas.