Khairy Jamaluddin has disposed off all his shares in ECM Libra Avenue Bhd - a move believed to be an attempt to fend off claims of nepotism against him and his father-in-law, Prime Minister Abdullah Ahmad Badawi.

Khairy sold his entire stake of 10.2 million shares - representing 1.23 percent of ECM Libra Avenue - for 65 cent a share yesterday, Bernama reported. He had bought them at 71 cent a share last December.

The 31-year-old Umno Youth deputy head, married to Abdullah's only daughter Nori, first took a loan last year to acquire a RM9.2 million three-percent stake in ECM Libra, an investment advisory group.

Less than a month after Khairy's direct stake in ECM Libra, the government approved a proposed merger between the company and government-owned financial services company Avenue Capital Resources Berhad. The merged entity is known as ECM Libra Avenue.

The deal raised eyebrows and has since led to questions of whether conflict of interest took place since Abdullah is also the finance minister who oversees government-linked companies.

Among them, ex-premier Dr Mahathir Mohamad questioned the merger as he said it was inappropriate while the Parliamentary Public Accounts Committee (PAC) has launched a probe on the matter.

'Better move'

Contacted for immediate response this evening, PAC chief Shahrir Samad said the development is a "better move" when asked whether it will help stop people from criticising Abdullah's integrity.

"It is a better move if he (Khairy) is not involved in business at all, he is the (Abdullah's) son-in-law and Umno Youth deputy head, he is put under the microscope," Shahrir, who is also Johor Baru MP, told malaysiakini.

"Even if he is not in business with links to the government, people can still say there is proxy and all that, isn't it?" he responded to a question whether Khairy should be denied the opportunity to do business.

The seasoned politician felt that Khairy had made a political decision rather than a business one, since the shares were disposed off at a loss.

Nevertheless, Shahrir said the PAC would continue to look into whether the decision-making process in approving ECM Libra Avenue merger was a conflict of interest at the committee's meeting on Aug 25.

"(PAC's investigation) is not because of Khairy (stake), it is about whether the merger was a good move or not to the government. If it has not involved public funds, we can't be bothered," he stressed.

Major shareholding changes

Meanwhile, ECM Libra Avenue chairperson Kalimullah Hassan ( right ) has also reduced his stake in the company to 40 million shares, or 4.8 percent, and is now no longer deemed a substantial shareholder, Bernama quoted a report in The Edge .

Kalimullah, a founders of the company and NSTP deputy chairperson, also sold 16.26 million shares at 65 cent a share yesterday which he said was to "protect the interest of the company and its shareholders".

The 26,467,220 shares belonging to Khairy and Kalimullah were bought by Hikkaya Jaya Sdn Bhd, a subsidiary of AmcorpGroup Bhd, for RM17.2 million in total.

AmcorpGroup now holds about 61,534,284 shares or 7.41 per cent of ECM Libra Avenue through various subsidiaries.

Another founder of ECM Libra Avenue, chief operating officer David Chua, sold his entire stake of 56.26 million shares to a foreign fund management company on Thursday at 57 sen per share.

However, co-chief executive officer Lim Kian Onn, also a founder of the company, remains a substantial shareholder.