PKR questions proposed sale of ‘lucrative’ state-owned Sacofa to Taib family-linked CMS

Sarawak PKR questions the proposed sale of a 50% stake of state-owned Sacofa Sdn Bhd to Yang DiPertua Negeri Tun Abdul Taib Mahmud's family-linked Cahaya Mata Sarawak Berhad (CMS). – The Malaysian Insider filepic, April 15, 2015.Sarawak PKR today questioned the proposed sale of a 50% stake of state-owned Sacofa Sdn Bhd to Yang DiPertua Negeri Tun Abdul Taib Mahmud's family-linked Cahaya Mata Sarawak Berhad (CMS), saying it went against Chief Minister Tan Sri Adenan Satem's pledge to uphold the integrity of the state government.

State party vice chairman See Chee How said Adenan should bring up the matter concerning the telecommunications infrastructure company to the state legislative assembly for discussion.

Sacofa in 2002 was granted a 20-year monopoly by the state government to build, manage, lease and maintain telecommunication towers in the state.

Presently, the company has erected more than 600 telecommunication towers, which are then leased to the telco companies, in the state.

See described Sacofa as “lucrative” as records showed that in 2012, the company registered revenues of RM155.28 million and in 2013, RM153.41 million.

Its profit before tax was RM84.59 million, while profit after tax was RM66.93 million in 2012.

In 2013, the corresponding figures were RM62.77 million and RM51.64 million.

“For the disposal of such a prized asset substantially owned by the state, I appeal to the chief minister to table the proposed deal of disposing the 50% equity in Sacofa to CMS at the coming state assembly sitting to seek the approval of the legislative assembly to keep up with the state government’s pledge to uphold the integrity of the state government,” See said in a statement.

“There is simply no reason for the state government to sell one of its most lucrative business ventures so cheaply, to a substantially private owned public company,” See said.

“What is the rationale behind disposing this business that is making money for the state all these years?

“Will there be an end to Sacofa’s monopoly of the installation of mobile network facilities after the concession of 20 years expires in 2022?” he asked.

The Batu Lintang assemblyman asked if the state government had informed the other shareholders “which are owned or substantially owned by Sarawakians” of the government's plan to give up its equity interest in the profitable venture, and why the sale was not put through a tendering process “to ensure that the state will derive the best value and benefits from the disposal of the shareholdings”.

“The Sarawak state government has reared or brought up a goose from its hatch, with Sarawakians’ public money.

“Now that the goose is laying golden eggs, the state government has decided to share the golden eggs with others and lose the state’s controlling interest in the goose.”

See said not only does it not make good business sense, but it also left Adenan, who is also the finance minister and chairman of Yayasan Sarawak, “facing a huge test of maintaining his pledge of integrity for his administration if he allows this deal to go through”.

Under the proposed sale announced on April 2, the state government agreed to dispose its 50% share to CMS for RM186.79 million, a deal See described as “an extremely good deal for the company (CMS), at the expense of the state”.

“With Sacofa’s net profit at 33% of its revenue every year, the purchase price of the 50% equity based on earning, amounting to seven times, is certainly too low.

“Comparing with the valuation of all other telco infrastructure companies which have earnings in single digit, their shares are traded more than 30 times on Bursa Malaysia.,” he said.

Presently, the state government owns 70.5% of the equity in Sacofa, through the State Financial Secretary Incorporated.

Yayasan Sarawak holds 6.8% equity in the company, while Celcom Axiata Berhad and Sarawak Information Systems Sdn Bhd have 15.1% and 7.6% shareholding respectively.

Whistle-blower website Sarawak Report, wading into the questionable sale, said it was now left wondering “just how much of Sarawak is still controlled” by the Yang DiPertua Negeri Tun Abdul Taib Mahmud, whose family controls CMS.

Sarawak Report said CMS was a company that was “originally privatised” into the hands of Taib, when he was then chief minister, and his family in the 1980s.

- TMI