Inside Story of the Telecom Deal - by Sonali Samarasinghe
Controversy surrounds the sale of Sri Lanka Telecom (SLT) shares purportedly to a Malaysian company, orchestrated by none other than President Mahinda Rajapakse himself, with allegations highly placed individuals stand to gain from the pointless private transfer that would bring no revenue to the state.
With even top government officials and politicos surprised and silenced by the audacity of the Rajapakse clan, allegations also abound President Rajapakse forced NTT to sell out a large number of its shares to a company of his choice.
In fact when NTT Communications Chief Suzuki, former CEO Shuhei Anan and CEO Shoji Takahashi were to pay a courtesy call on President Rajapakse last year during a visit to Sri Lanka, they were in for a rude shock.
Unimpeachable sources told The Sunday Leader Rajapakse had inquired of the NTT team if they had plans to sell the shares. On receiving a negative answer Rajapakse allegedly strongly advised them they should sell their shares and followed this advice by triggering off a series of unfortunate events that eventually forced the hand of NTT.
Forced to Sell
Following Rajapakse's advice to sell and leave, NTT were allegedly subjected to harassment that included arbitrary decisions on hiring and firing SLT personnel by the government, and decisions on certain issues taken over the head of the NTT appointed CEO in violation of the management agreement. SLT CEO Takahashi was out of the island and couldn't be contacted.
With a disgusted NTT now willing to sell its shares in SLT, all President Rajapakse had to do was table a cabinet memorandum and gain cabinet approval. This he easily did by his curious style of 'one a minute' without even consulting the minister in charge of the subject, Rauf Hakeem.
Even a blue chip company like John Keells that showed an interest in getting into the business could not get a look in for reasons that will not be gone into here because of the fears entertained by its top management.
The controversial deal between GTH and GOSL is expected to be closed this Thursday, May 31 according to documentation in our possession.
GTH a Green Horn
The sale is to be made by NTT to Global Telecommunications Holdings (GTH), a company recently incorporated in Netherlands solely for the purpose of buying out a large chunk of NTT shares in Sri Lanka Telecom. It is to be done contravening sale conditions including that a company doing so must have been established for a minimum 25 years and have at least 15 years experience in telecommunications. GTH is hardly a few months in existence without a single employee in its pay roll.
That the Public Enterprises Reform Commission (PERC) no less has raised eyebrows at this deal in written comments speaks volumes for the behind the scenes goings on.
The present shareholding structure has the government with 49.5 % shares, NTT with 35.2 percent and the public representing some 28,000 shareholders with 15.3 percent.
The present deal is for NTT to divest 25.3 percent holdings to GTH leaving a minority stake of 9.9 with them.
Allocation of Directors
The question naturally arises why NTT will sell only 25.3% and hold on to 9.9%. The answer is simple. In terms of the termination clause in the current shareholders agreement signed in November 2002 between NTT and the government, the agreement lapses if the shareholding of either party drops below 10 per cent and therefore to give GTH full management control, NTT's stake must drop below the magical 10%.
Furthermore for every 10% of shares held a shareholder is entitled under the current Shareholder Agreement to one director and if there is a part thereof over 5% again the shareholder is entitled to one director.
Technically however if NTT holds less than 10% they are not even entitled to a director on the board. However GTH with 25.3 % shares will be entitled to four directors in terms of the deal struck with the President, and the government with 49.5 % will be entitled to five directors.
However nowhere in this agreement did it state that if NTT wanted to sell its shares it had to get prior approval from the Government of Sri Lanka.
Coming Events Casts their Shadows
There is of course another consideration. If perchance at a later date GTH is able to buy the remaining NTT shares (possible under the new Draft Shareholder Agreement in terms of the exit clause) bringing their share of this high profile public quoted company upto 30% then they would trigger the mandatory provisions of the Takeovers and Mergers Code and will have to make a mandatory offer to the rest of the shareholders. GTH can therefore easily increase its share in this national asset.
However the government in reality holds well over 50 % of the shares with the Treasury owning 49.5 % and small percentages held by EPF 1.98%, Bank of Ceylon 0.27% etcetera from the 15.3 percent. Therefore with the annulment of the existing Shareholder Agreement and management contract with NTT which would come into effect upon the share transfer, the government has the opportunity to take back full control of Sri Lanka Telecom - especially as many of the SLT officials themselves had gained enough managerial and skills experience during the NTT period of control.
But that is not to be and therein lies the multi million dollar question.
Instead Rajapakse has opted to have NTT transfer 25.3 percent to a company that compared extremely poorly with NTT in terms of management skills and commercial performance and grant full management rights.
Ironically it is Mahinda Rajapakse, who came to power on a bhoomiputra anti privatisation platform in keeping with the policies of the Marxist socialists that now single handedly closes the deal with GTH and paves the way for it to take full management control. Mind you the new company is entitled to a TV channel - a privilege not afforded to NTT - all for just a 25% stake.
Maxis of Malaysia, the name bandied about in the media as being the company buying into SLT is in fact far removed from GTH in the company family tree, though closely connected if not in terms of assets in terms of key personnel.
UNP Vows Action
The UNP has already vowed to take action to get the government to come clean with UNP Parliamentarian Lakshman Seneviratne calling it the country's biggest fraudulent deal. Seneviratne last week told The Sunday Leader Basil Rajapakse is allegedly involved in the deal and 'everybody knows what that means.' He also said the UNP was investigating allegations that the LTTE had links to GTH and Maxis Telecom.
Meanwhile last Tuesday Rajapakse ally and JVP Parliamentary Group Leader Wimal Weerawansa accused a 'powerful person in government' of accepting a US $ 10 million commission to facilitate the sale of SLT shares to a Tamil businessman from Malaysia.
Hundred Million Smackers
The talk in the market is that the broker of the deal will make more than US$ 100 million.
Connected to GTH is one Augustus Ralph Marshall, a Malaysian of Sri Lankan Tamil descent from Jaffna, who interestingly was in Japan recently at about the same time Basil was on an official visit to Japan.
Maxis of Malaysia is controlled by a wealthy Malaysian tycoon, Ananda Krishnan Tatparanandam who is also of Sri Lankan Tamil descent, hailing from Jaffna. He is said to have an indirect holding of 47.05 % of Maxis. The reclusive Krishnan whose net worth is estimated at some US$ 4.3 billion has interests in oil, power, entertainment, property and gaming.
The website www.boi.lk/famous/ananda.asp states the 68 year old made his fortune from property, gaming and oil trading and was looking to position himself as South Asia's communications baron.
Though Krishnan's first entrepreneurial venture was in oil trading he quickly moved on to gambling in Malaysia and a quarter of his wealth comes from the gambling business, lottery, horse racing and wagering.
Be that as it may, the cabinet paper to approve the share sale was signed by President Rajapakse and presented in March while Minister of Ports and Telecommunications Rauf Hakeem had earlier claimed he was not even aware of the contents.
Although on Tuesday Weerawansa called on Treasury Secretary P.B. Jayasundera to take responsibility for the deal, on Wednesday, Jayasundera washed his hands off the deal stating it was a private sale between NTT and Global Telecommunications Holdings and the Treasury would get involved only with regard to the management contract. The facts below will prove otherwise.
Furthermore economic experts told The Sunday Leader Sri Lanka Telecom is a high profile public quoted entity that is also regulated and therefore it is unusual the sale of shares was not informed to the large number of public shareholders.
One cannot merely decide to sell off a large number of shares bypassing the market place and at a price one wants, as the share is already public. Sources at the Colombo Stock Exchange said such shares will have to be traded on the floor of the exchange.
Meanwhile posters accusing the government of selling Sri Lanka's premier stock to Tiger operatives have blistered the walls of Colombo even as former presidential confidant and cabinet minister Sripathi Sooriyaarachchi earlier accused President Rajapakse of having struck a deal with the Wanni terrorist group during his election campaign. It is in this backdrop that the deal to sell the high profile SLT shares have to be viewed.
And it is in this backdrop The Sunday Leader now investigates this deal. Here are the details.
Let's start at the beginning for sake of clarity.
Cabinet approval was granted on July 31, 1997 to divest 35% of shares in Sri Lanka Telecom at the value of US$225 million together with the management of SLT to Nippon Telegraph & Telephone Corp. (Japan). (NTT)
The selection of the strategic investor was conducted through a competitive bidding process and the Technical Evaluations Committee at the time evaluated the bids on a set of strict criteria including
a minimum 25 years of establishment of the company,
minimum 15 years in telecom operations,
more than 7000 employees to be engaged in telecom marketing in a single market,
More than one million main telephone lines in operation in any single market
10 per 100 teledensity in any single market,
more than 20,000 public phones including those operated by a subsidiary company
Accordingly NTT was selected and 35 % shares divested under a set of divestiture conditions that included that GOSL shall retain 51% of the shares and the investor shall retain at least 20% of the shares during the first five years, the rationale being that minimum ownership requirements will safeguard the GOSL and public as well as management interest.
It was also a condition that after five years the GOSL and the investor may sell their shares, with first option offered to either party; the rationale being that the shares held by the investor is not transferred to a party not approved by the GOSL.
On November 13, 2002 a new shareholder agreement was signed between the Government and NTT under the UNP administration giving certain rights to both parties with no clause calling for the NTT to obtain approval for a transfer of its shares to another party.
However the proposed draft shareholder agreement to be finalised end May between GTH and GOSL is alarming in that it is extremely wide in scope and confers a great deal of power to GTH.
But More on that Anon
Now let us focus on recent events that led the Rajapakse family down this particularly dangerous path.
In 2006 President Rajapakse forces the hand of NTT Japan and a series of events related to the management of SLT compels NTT in disgust to take the path of least resistance and agree mildly to sell out a large number of its shares.
Meanwhile interestingly enough Basil Rajapakse visited Japan in the third week of February to brief the Japanese government on the current political situation in Sri Lanka, bypassing Foreign Minister Rohitha Bogollagama. Curiously in Japan at about the same time is one Ralph Marshall, the key player in Global Telecommunications Holdings.
With Rajapakse forcing NTT to bend to his bidding, on March 14, 2007 Vice President of Corporate Planning, NTT Communications Corporation, Jun Sawada wrote to Treasury Secretary P.B. Jayasundera providing him with a profile of Global Telecommunications Holdings NV (GTH) along with their assessment and recommendation.
The letter states, "GTH is a special purpose investment vehicle incorporated in the Netherlands Antilles and is an indirect wholly owned subsidiary of Usaha Tegas Sdn Berhad (UTSB). Given that GTH is an unlisted special purpose vehicle set up to acquire our NTT Communications Corporation (NTTCom) stake in Sri Lanka Telecom (SLT), it shall not have any employees or a CEO until the proposed transaction is completed. UTSB shall fund GTH to meet its obligations under the terms of the proposed transaction. Currently Mr. Ralph Marshall (director of UTSB) and other UTSB group executives are managing GTH."
What is UTSB
This letter copied to Ralph Marshall is vital in that it gives details of GTH and its parent company UTSB. The letter informs that UTSB incorporated in Malaysia is an investment holding company with control equity positions in entities involved in telecommunications, broadcast and media, energy, commercial property development and leisure, and entertainment.
In the 2006 fiscal year UTSB both as a group and parent company posted a total revenue of US$186 million and US$ 19 million respectively and a net profit of US$161 million and US$ 16 million respectively. Total assets in the year ended 2006 as a group and parent were US$2.7 billion and US$1.2 billion and total shareholders' equity as a group and parent was US$1.9 billion and US$1.1 billion respectively.
There are four publicly listed companies namely, Maxis Communications Bhd (Maxis), Astro All Asia Networks plc, Tanjong plc and MEASAT Global Bhd.
NOTE: PERC itself states in its report that even though NTT says UTSB has control equity positions in entities operating in various sectors, they have not stated whether Maxis is a direct subsidiary of UTSB.
In fact a look at the corporate structure (see elsewhere on page) clearly shows it is not.
PERC also points out the following with regard to the revenue of the companies as stated in the letter:
With regard to UTSB as a group and a parent company posting US$186 million and US$ 19 million respectively for 2006, PERC points out that the revenues of the unqualified bidders in phase 1 of the 1997 bids posted far higher revenues as far back as 1996 and 1995 with Hutchison Telecom posting US$ 4,525 million and Malaysia Telecom posting US$2,118 million.
Even with regard to UTSB assets PERC points out that the total assets of the losing bidders in 1997 was far higher, some as much as US$ 16.3 billion
What is Maxis
Maxis claims in its website to be Malaysia's leading telecommunications company with more than 13 million subscribers that offers a portfolio of voice and data services across wireless, fixed line and internet platforms. According to the NTT letter, Maxis revenues in 2006 before tax, depreciation and amortisation was US$2.2 billion and Maxis has acquired a 51 % stake in PT Natrindo Telepon Selular (NTS) Indonesia and a 74% stake in Aircel India.
However the only connection GTH has with Maxis is that it is a totally separate company in a large corporate structure (see box). The relationship is so far removed Maxis will almost certainly have no dealings whatsoever with GTH.
Nevertheless, the NTT Vice President in his letter to the Treasury Secretary states, "Having had extensive discussions with GTH, we feel confident that GTH could enhance the existing partnership between GOSL and NTTCom. GTH has a good understanding of NTTCom's role in the development of SLT and is supportive of our objectives in Sri Lanka. Further GTH has assured us that they will be able to meet the expectations of GOSL."
Sawada also states "We believe that GTH by having Maxis as one of its group companies, has a solid track record as a telecommunications operator with a leading position in Malaysia and strong mobile operations in India and Indonesia." (See elsewhere for copy of letter.)
PERC dismisses the NTT assertions on the suitability of GTH with one fell sweep. Commenting on the NTT letter PERC points out that the same letter in only its second paragraph has stated that GTH was incorporated recently in the Netherlands Antilles and GTH has no employees and CEO.
"It is questionable," says PERC, "as to what extent NTT's assessment and recommendations are reliable.
Therefore it is clear that GTH is an unlisted company incorporated hurriedly and recently for the sole purpose of acquiring NTT shares in SLT, will not have any employees or a CEO until the transaction is complete and is an indirect wholly owned subsidiary of UTSB. According to the NTT letter GTH will also be funded by UTSB to meet its obligations under the terms of the proposed transaction.
So pray why was President Rajapakse's personal choice, GTH, incorporated in Netherlands Antilles and not in Malaysia since the parent company UTSB that has undertaken to fund GTH is a Malaysian company?
It must be noted that GTH also has no business operations nor a CEO and does not have any employees or an address in the Netherlands. Its letterhead gives a c/o Menara Maxis address in Malaysia.
Nevertheless on March 21, 2007 cabinet approved President Rajapakse's Draft Memorandum on 'Sale of Shares of Sri Lanka Telecom Limited belonging to NTT Communications Corporation to Global Telecommunications Holdings NV' and the decision was communicated to the Treasury Secretary.
On March 27, 2007 President Rajapakse tabled a cabinet memorandum as Minister of Finance.
Which stated inter alia that;
1) NTT has sought consent from the Government of Sri Lanka (GOSL) to a partial divestiture of its stake in SLT to Global Telecommunications Holding NV (Malaysia)
Note : However GTH is not even incorporated in Malaysia
The memorandum also states,
2) That SLT is currently a public listed company managed by NTT in terms of the Shareholders Agreement between NTT of Japan and GOSL. The CEO is appointed from among NTT directors as provided in the agreement.
3) That NTT has sought consent of the GOSL to divest 25.3% of the holdings to GTH leaving them with a minority stake of 9.9% with a right for NTT to nominate one of the GTH directors to be appointed to SLT board to represent NTT.
4) That the Shareholders Agreement should be renegotiated
5) That the Shareholders Agreement including provisions relating to the appointment of Chief Executive Officer and other management aspects and ownership issues will have to be renegotiated with the recommended party acceptable to GOSL.
6) That a committee be appointed comprising secretaries to the Ministries of Finance, Post and Telecommunications, Defence, Chairman Public Enterprises Reform Commission (PERC), Chairman Board of Investment (BOI) and the Director General, Securities and Exchange Commission (SEC).
7) The committee will go into the acceptability of GTH and negotiate a new Shareholders Agreement and approve the transfer of 25.3 percent of NTT shares.
8) PERC would facilitate this exercise and prepare the agreement subject to the approval of the Attorney General. (See elsewhere on this page for copy of Cabinet Memorandum.)
In the meantime on March 30, 2007 Ralph Marshall, the man who was in Japan at about the time Basil was, had an extensive discussion with President Mahinda Rajapakse at Temple Trees where he fully briefed the President on the progress of the negotiations between GTH and NTT. So much for the deal being between two private parties with no government involvement.
Marshall quickly follows up the meeting with a letter dated April 3 in which he confirms four specific undertakings given by Rajapakse to him. The letter on a GTV letterhead bears no designation for Marshall. Throw you mind back to the letter sent on March 14 by NTT to Treasury Secretary Jayasundera where they state that until the transaction is complete it shall not have any employees or a CEO but that Marshall, a director of the UTSB group and other executives of UTSB will manage GTH. Hence the absence of a title.
The President according to Marshall agrees inter alia to NTT retaining a 9.9% interest in SLT, which is subject to exit provisions exercisable by both parties at the end of the second year following the initial divestiture by NTT and that the combined 35.2 interest of GTH and NTTC be entitled to four directorships on the board of SLT as a consequence of the exit provisions referred to in (1) above. (See box for full letter.)
Therefore, it is proved beyond doubt that the President was intimately involved in negotiating this deal and not a mere silent partner coming into play only at the time of finalising the management contract after the private share transaction between NTT and GTH is concluded as made out by the government.
A Cabinet Appointed Committee meeting is subsequently held as per cabinet decision on 17.04.2007.
The minutes of the first meeting were circulated by Director PERC, E. Arumugam with another meeting scheduled for 26.04.2007.
Matters vital to the SLT in particular and to the national interest in general surfaced at this meeting according to its minutes. They are inter alia as follows:
(1) The original agreement in 1997 between NTT and GOSL was signed as part of a divestiture where the country received a major investment and where ownership and management had to be given in order to obtain the required skills and management expertise.
(2) With the GTH there is no investment or benefit to the country in monetary terms. Therefore giving the CEO position to GTH must be based on a benefit to GOSL alone.
GTH to Get More Powers and Benefits than NTT
Mind you even though the GTH deal will not benefit the state at all and is merely a private transaction albeit orchestrated by Rajapakse, it is proposed that they will get more benefits such as appointment of key management staff like Chief Financial Officer and Chief Operations Officer and choice of Chief Executive Officer as well.
(3) In fact Chairman, SLT, Asoka de Silva pointed out according to the minutes that SLT had already received a draft Shareholders' Agreement (SHA) from the Malaysian party with more powers than those included in the present Shareholders Agreement such as the appointment of Chief Financial Officer (CFO) and Chief Operations Officer (COO) in addition to the CEO of SLT and its subsidiaries which they opposed. Subsequently SLT had received an amended SHA which was studied by them as well as by two external lawyers and forwarded to the Attorney General's Department.
PERC Shocked by Proposed Deal
A copy of a report prepared by PERC was also tabled at this first meeting where PERC had in writing submitted a number of reservations over the deal and pointed out why such a deal not only contravened well established conditions of sale in the public interest but also why the deal would be detrimental to Sri Lanka Telecom (see box for extracts of PERC observations).
PERC also observed that Maxis itself whether linked to GTH or otherwise is not suitable as a stakeholder in SLT. The company commenced commercial operations only 11 years and nine months ago and its fixed line operations are marginal. In fact a comparison of revenues in US dollars of SLT, NTT and Maxis in the table below as per the PERC report, will only prove that Maxis has no value to bring to Sri Lanka Telecom.
In millions of US$
SLT NTT Maxis
Fixed line 273 33,440 53
Mobile 34 30,057 1,606
Total 306 63,497 1,659
New Shareholder Agreement
Meanwhile the proposed Draft Shareholder Agreement (SHA) between GTH, NTT and GOSL is to be signed at the time 25.3 % of NTT shares are transferred to GTH with management rights.
(1) Clause 'D' of the new agreement states that "NTTC and GTH have agreed to the partial sale of NTTC's equity holding in SLT to GTH in order to maximise the synergies and expertise offered by both companies (particularly in light of the fast growing mobile telecommunications market in Sri Lanka) for the substantial benefit of SLT's shareholders and the people of Sri Lanka."
However one will see by its own letter signed by Marshall sent to President Rajapakse on April 3, that the reason for GTH's primary entry to SLT is to provide their own expertise in the growing mobile market.
SLT however is essentially a fixed line operator and Mobitel is only a very small part of its business. Perhaps say business experts, if GTH is coming in specially for mobile phone industry experience, then SLT should have considered divesting part of Mobitel to GTH rather than Sri Lanka Telecom itself and instead grant them a management contract to resuscitate Mobitel.
(2) The Draft clause 'F' states that NTT's retained shares are subject to certain exit provisions exercisable by either of NTT and GTH towards the expiration of the second year following the share sale and purchase transaction under the share sale agreement.
This is alarming given that the exit clause grants the right to GTH to purchase the balance of NTT shares though there is no provision for GOSL to exercise its right of first refusal which in fact was embodied in the original SHA of 1997. This clause will in effect permanently bar GOSL from taking control of SLT.
The management of SLT as proposed is also detrimental to SLT and to GOSL, its largest shareholder.
With regard to the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer the Draft at clause '9' states that the GOSL and GTH must exercise their voting rights to appoint a GTH director nominated by GTH as the CEO of SLT.
Extensive Powers to CEO
The appointment of CEOs to any of SLT's key operating subsidiaries and associate companies and the appointment of the CFO and COO of both the SLT and its operating subsidiaries and associate companies shall come under restricted matters and will thus require the consent of both the GOSL and the GTH.
Furthermore the SLT CEO has been conferred with extensive powers and full control over the appointment or removal of all employees of SLT unless it is the removal or appointment of a senior executive coming under restricted matters.
The CEO could also incur any expenditure or enter into any commitment on behalf of SLT on matters not included in the business plan up to an aggregate of US$500,000.
And in one sweeping clause in Schedule 3(4) it states that notwithstanding anything to the contrary in the agreement including in the restricted matters, the CEO is authorised to incur any expenditure and enter into any commitment without limit or cost provided the details of the commitment have been disclosed in the relevant approved annual business plan.
Note: By making the appointment of CEO, CFO and COO a restricted matter GTH has acquired the right of veto over key management positions although they own even less than NTT did, that is only 25.3 percent of the shares.
The position of the CEO was offered to NTT in 1997 as there was a huge investment into the country. In this case it is merely a private transaction between two foreign entities and the money will be generated outside Sri Lanka and will also remain outside of Sri Lanka.
GTH is not compelled to make any contribution or investment to Sri Lanka or SLT. There will be zilch foreign exchange inflow into the country.
However this draft SHA hands over unlimited management control to GTH with no fall back option or even a limitation clause. Therefore even if the majority shareholders including the GOSL desire to change management they will be held in a binding clasp by a minority foreign body unable to move. Mind you these sweeping powers which are much more than those enjoyed by NTT with a 35 per cent stake are to be given to GTH which will have only a 25 per cent stake. Pray why?
Rajapakse must answer why GTH is given unlimited powers when even NTT which is obviously the superior commercial enterprise did not get it. Is GTH bringing in some unusual expertise? Why hand over everything on a platter to GTH if it is a private transaction between two outside parties when the government could have taken full control of the management with the lapsing of the existing SHA? Intriguing eh!
Furthermore handing over complete management control to a minority shareholder who will not be bringing a cent into the SLT coffers will invariably lead to abuse of power with all procurement decisions to be decided by the GTH appointed CEO as well.
Experts in the field livid over the government's subterfuge point out that handing over management control of state owned entities to private companies is privatisation and totally against the Mahinda Chinthana policy.
Clause 9.2 (b) refers to Schedule 3 which lists out the CEO's powers. Again the powers are limitless, giving a minority shareholder unlimited powers for an unlimited time.
Clause 9.3 of the Draft titled Management Agreement states the GOSL and GTH agree to enter into good faith discussions with a view to entering into a separate management agreement (together with SLT) within (3) months of the date of this agreement that details the roles of GTH and the establishment of board sub committees (if appropriate) in relation to the operation, management and governance of SLT and similar processes such as limits of authority, procurement and investment committees and technology strategy.
Pray what is the purpose of this clause other than perhaps to extract a separate management fee from Sri Lanka Telecom for no value addition at all.
Clause 11(a) deals with universal service obligation and states that during the terms of this agreement GOSL represents and warrants that there shall be no universal service obligation imposed on SLT and the procurement and tender procedure for SLT will be determined by the board of directors of SLT.
Therefore by this the Government of Sri Lanka loses all rights to direct SLT to play a role in national development for instance with regard to rural infrastructure. And mind you it has over a 50% stake. Mind boggling, what!
The question is why President Rajapakse is relinquishing the right of the state to harness its own resources towards national development. Why is it that a foreign body is being given limitless powers over a state even though there is absolutely no benefit to the state since it is essentially a private transaction of NTT wanting to sell its shares.
That readers is perhaps the hundred million dollar question.
Questions PERC has Raised
(1) Why is GTH incorporated in Netherlands Antilles and not in Malaysia, particularly when UTSB has undertaken to fund GTH.
(1) GTH is recently incorporated and thus violated two of the requirements for the 1997 bids namely that the age of the bidding company should be more than 25 years and that the company should have been in telecom operations for more than 15 years.
(2) The proposed investor UTSB is stated as having revenue and assets far below the revenue and assets of all three unqualified bidders in the 1997 bid. GTH does not even have a website for themselves.
(3) Question on the suitability of GTH by comparing contravening paragraphs in its own letter to Treasury Secretary and calls NTT's assessment questionable.
(4) According to NTT, the GTH claim to fame is its link to Maxis. PERC states even if this were so Maxis itself is more a mobile operator and not a fixed line operator and therefore unsuitable to the needs of SLT