Will Syed Mokhtar End Up Owning Everything?

What is not owned by Syed Mokhtar? His acquisition of Proton added to his already vast business empire across practically all sectors. He now controls;

(1) DRB-HICOM, which controls (or has stakes in);

Proton;

EON;

Modenas;

Honda Malaysia;

Isuzu Malaysia;

Puspakom;

Bank Muamalat;

Uni Asia insurance;

Alam Flora;

Pos Malaysia;

KL Airport Services;

Glenmarie Properties.

      (2)  Malaysian Mining Corporation (MMC), which controls (or has stakes in);

          Port of Tanjung Pelepas;

          Johor Port;

          Senai Airport

          SMART Tunnel;

          Malakoff;

          Gas Malaysia;

          MMC-Gamuda JV.

(3)  Tradewinds, which controls (or has stakes in);

          Bernas (amongst its brands is Gardenia);

          Gula Padang Terap;

          Central Sugar Refineries.

Amongst the assets controlled by Syed Mokhtar include those of national importance such as Pos Malaysia, Gas Malaysia and the various ports.  Independent power generation is almost exclusively Malakoff’s; rice and sugar is monopolised by Tradewinds; and so is waste management (save for Selangor!).

My socialist instincts prompt me to ask the question why so much wealth is concentrated in one person. No doubt he is a very generous man who shares his wealth with the ordinary people, his philanthropic activities  bears testament to that but is it wise to have one person controlling so many of the nations strategic businesses?

Halim Saad and Renong once controlled quite a big chunk of large projects via UEM, Time, CIMB, PLUS, Intria, Kedah Cement and scores of smaller companies. The 1997/98 crisis brought them to their knees and most of those assets and projects are now nationalised, bailed out by the tax payers. I’m not saying Syed Mokhtar will suffer the same fate but can his level of leverage withstand an economic downturn? I’m not a believer of debt financing. I don’t believe in businesses acquiring assets financed mainly via borrowings and over leveraging themselves.  I am after all a proponent of Shariah based finance, where risks and rewards are equitably shared.

Back to Syed Mokhtar; is it wise for the government to allow one person to control (monopolise) two of the major staple foodstuff? Shouldn’t the management of Bernas and CSR be at least partly government controlled, especially when there are subsidies involved? I hear he is also looking to buy the national railway KTM. That would complete his grip of the nation's transportation network, adding to his ports and airports.

Why Syed Mokhtar? Is there a dearth of qualified quality Malaysian entrepreneurs? What’s wrong with giving Proton to Nadzmi Salleh who has a long CV in the auto industry? On Proton, my personal view is that we should just sell it off to Volkswagen and let them do to Proton what they did with Seat and Skoda.

Many formerly state assets are back with the state after failed privatisation. Let’s hope Syed Mokhtar won’t follow Halim Saad’s and Tajudin Ramli’s footsteps.

Whatever it is, philanthropic or not, no one person should be allowed to control billions of strategic (formerly state) assets, especially when none of the businesses were built by him from scratch.

Image borrowed from Malaysian Insider and various web sources