KINIBIZ A shares acquisition worth RM2.3 billion in November 1997, which led to the KL Composite Index plunging by 20 percent, has been linked to former finance minister Anwar Ibrahim as more facets of the mysterious deal surfaced last week.

In a statutory declaration dated July 18, 2013 — though only released last weekend - former UEM director Syed Amin Al-Jeffri, who was a UEM director between May 29, 1997 and Sept 27, 2001, said Anwar (right) had requested UEM buy shares of Renong Bhd.

Syed Amin said in the declaration that during a UEM board meeting “between late 1999 and early 2000 or thereabout”, the late Ramli Mohamad who was then managing director of UEM proposed that UEM buy shares of Renong to create a cross-holding between UEM and Renong.

"The managing director informed the board that the proposal came about as a result of a request from the then minister of finance, Anwar Ibrahim, to prevent UEM being taken over by foreign parties through hostile takeovers as there were quite a substantial (number of) foreign shareholders in UEM and also to push up the share market which was then facing a difficult time," said Syed Amin about the proposal when its rationale was queried by the UEM board.

UEM board approved UEM’s 32.6pct buy

UEM’s board, after sighting Anwar’s letter on the proposal circulated by Ramli - although Ramli took it back after all board members have read it - voted in favour of the proposed transaction, except for Abu Hanifah who abstained.

The acquisition of 32.6 percent or 722.88 million shares for RM2.3 billion in Renong by UEM in 1997 raised eyebrows, not least of which is because it remains unclear where the shares came from.

When the purchase was done, two UEM independent directors - Earnest Zulliger and Thomas Lee - resigned, fuelling speculation that the purchase was not approved by the UEM board, though this is now disproved by Syed Amin’s declaration which revealed otherwise.

Among the conditions of the board’s approval of the transaction was that it must gain shareholders’ approval during a UEM extraordinary general meeting (EGM); that Halim Saad (left) and his corporate vehicles with interest in UEM must abstain from voting; that Halim was to get a put-and-call option on the Renong shares at a price to be fixed later; and that Halim was to address shareholders during the EGM as to his commitments on the option.

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