JOHOR BARU: Johor Corp (JCorp), the asset-rich state investment arm that has been in the news, issued a rare statement yesterday, clarifying its position on rumoured asset sales within the group and asserting that former officials do not represent the views of the group.

In a written statement to the media, JCorp president and chief executive officer Kamaruzzaman Abu Kassim said that JCorp was currently “evaluating several restructuring proposals and has not made a decision yet on the matter, including the disposal of assets, if any.”

Kamaruzzaman, who was appointed CEO last December, emphasised that JCorp would “always exercise due care and consideration in formulating any restructuring plans”.

“Any restructuring proposal undertaken will be in the interest of the group and all its stakeholders, including the minority shareholders,'' he said in the statement.

Kamaruzzaman added that statements made by external parties, including those by former officers of JCorp, did not in any way represent the group's view on any potential corporate restructuring exercise.

Kamaruzzaman's appointment as CEO came after JCorp's long-time head Tan Sri Muhammad Ali Hashim left the group suddenly last August.

However, Muhammad Ali has, on a few occasions since his departure from the group, made statements about JCorp.

His most recent statement to the media, as reported by Bernama on March 14, included a claim that there was word going around that the management of JCorp was planning to sell its subsidiary Kulim (M) Bhd. He said the information came from a reliable source and that he hoped that the decision to sell Kulim would be considered thoroughly as it was the main asset of JCorp and the Malay community.

Bernama also reported Muhammad Ali as saying that he would be sad and disappointed if the plan materialised.

“I believe that the plan would see strong opposition from Malay non-governmental organisations which want to see Kulim remain under JCorp to help the Malays,” it quoted him as saying then.

Although JCorp is an asset-rich company, it is also saddled with huge debts, which totalled more than RM6bil as at Dec 31, 2009. Out of this, RM3.6bil is due for repayment next year.

While JCorp has a number of prized assets in the group, it doesn't own most of these assets directly, a legacy issue that bankers say was created by its past management.

JCorp owns 53% of Kulim, which owns 50% of London-listed New Britain Palm Oil Ltd (NBPO) and 57.5% of QSR Brands Bhd. QSR then owns 50.6% of KFC.

So if these assets were to be sold, the proceeds would be “trapped” at Kulim.

What that means is that if the money Kulim got from the sale of NBPO or QSR were to be paid out in dividends, JCorp would only get half of that, with Kulim's other shareholders enjoying the proceeds as well.

JCorp receives only a paltry amount of dividends every year. Its dividend receipts amounted to less than a total of RM10mil over the last 10 years, despite the total revenue figure of all companies in the group hitting billions of ringgit every year.

On Monday, Malay Chamber of Commerce president Tuan Syed Ali Al-Attas raised concerns about the possibility of JCorp selling Kulim to non-bumiputera parties to repay its debts.

“Bumiputeras would lose ownership of such strategic assets if that happens,” he had said, adding that the Malay Chamber of Commerce, together with its partners, would offer to buy Kulim.

He, however, did not state any offer price.