Did SPLASH pay themselves a bumper dividend of RM2.63 billion in 2016?
Wan Azmi Hamzah is Anwar Ibrahim’s proxy in the SPLASH deal who cost the Selangor people RM3.6 billion
(LSS) – As I had explained several times before, the incredibly lop-sided SPLASH concession agreement signed during Tun Dr Mahathir Mohamad’s time meant that the concession-holder makes massive profits every year with little risk.
Imagine your investment is RM170 million but you make RM400 million every year.
This is why previous Selangor MB Khalid Ibrahim got removed as he tried to end this lop-sided deal by forcing the buyout of SPLASH at RM250 million.
And as I had stated, every one year’s delay meant that the Selangor Govt loses about RM300 million.
So, for the years 2014, 2015, 2016 and 2017, the Selangor Government would have lost about RM1.2 billion in foregone profits after forcing Khalid to resign.
The current PKR govt now wants to buy SPLASH for RM2.8 billion instead of RM250 million.
Selangor Menteri Besar Khalid Ibrahim was an obstacle to the SPLASH deal and had to be ousted, which cost the Selangor people up to RM3.6 billion
But more incredibly, the latest FY 2016 accounts filing by SPLASH shows that their shareholders reserves had suddenly dropped – indicating that SPLASH shareholders may have paid themselves a bumper dividend of RM2.63 billion – meaning PKR’s friend Wan Azmi possibly got RM788 million due to his 30% ownership of SPLASH.
So, even if the Selangor Govt manages to buy SPLASH today at RM2.8 billion, taking into account the 70% of SPLASH they do not own, they would have lost out on RM1.84 billion in dividends.
Thus, due to MB Khalid’s removal, the Selangor people would lose a total of RM3.6 billion – comprising of RM1.8 billion in dividends and another RM1.8 billion in a higher purchase payment for the 70% of SPLASH it does not own.
Correspondingly, Wan Azmi now gets RM1.035 billion instead of RM75mil for his 30% share if Khalid’s plan to force-buy SPLASH had gone through.
SUMMARY OF EVENTS
1. Former Selangor MB Khalid is critical of the lop-sided concession agreement awarded to SPLASH.
SPLASH is 30% owned by PKR associate, Tan Sri Wan Azmi and makes RM400m yearly even though its paid-up capital is only RM170mil.
2. Khalid wanted to buy SPLASH for RM250mil in Feb 2014 citing that SPLASH shareholders had already made a lot of money and have recouped their investments many times already.
3. Pakatan said this offer is unreasonably low and said this is one reason why Khalid needs to be removed as MB.
4. To force SPLASH to sell, Khalid cancelled SPLASH’s raw water license in May 2014. Without this license, SPLASH cannot operate its business.
5. Khalid was then removed as MB and the new Selangor Govt immediately renewed SPLASH raw water license.
6. The new Selangor Govt then said they want to buy SPLASH for RM2.8 billion instead of RM250mil and gave a Nov 2015 deadline to resolve the purchase of SPLASH.
7. The Nov 2015 deadline was then extended by Selangor govt to Nov 2016. It was then extended again to March 2017. And then extended again to 7 Oct 2017.
8. Every year of delay means the Selangor Govt loses RM300mil in lost profits.
9. For the financial year 2016, SPLASH seemed to have paid its shareholders a dividend of RM2.63 billion – money that would have gone to the state govt if Khalid’s original RM250mil forced purchase had been completed.
10. The Selangor has blamed Federal Govt for the extensions and delays but Federal Govt pointed out that it was not the buyer of SPLASH but merely the financier.
11. Selangor Govt must be the party to make an official offer to SPLASH shareholders but strangely, it has not done so.
12. To this end, the water minister had issued public statements twice – in Aug 2017 and Sept 2017, urging the Selangor Govt to not be shy and make the offer to SPLASH.
Both statements were ignored by the Selangor Govt and no reply was given.
13. Even if Selangor Govt makes that offer for RM2.8 billion, the years of delay, dividend payments and increased offer price would mean the Selangor Govt would have lost RM3.6 billion compared to if Khalid was allowed to complete the deal.
14. Although this SPLASH deal had become controversial over the years with many allegations of corruption, the Selangor State Govt had repeatedly rejected holding a SELCAT probe into it.
Selcat will not probe Selangor water deal
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