SPLASHing in murky waters

I was intrigued when I saw the headline that the RM2.5 billion SPLASH deal was 10 times its price, according to Khalid Ibrahim, the former Selangor MB.

According to the article, Khalid “claimed the Selangor government paid 10 times the price to buy over water concessionaire Syarikat Pengeluar Air Selangor (SPLASH) when compared to an offer made in 2013.”

It seems he was asked to resign because PKR wanted him to offer a higher rate but he refused.

This seems to be congruent with what Najib has been claiming.

But it is not far off from the RM2.7 billion that I had mentioned, which is 10 times more than the RM250 million that was offered by Khalid Ibrahim (former Selangor menteri besar),” he said in a statement.

Khalid was asked to resign in 2014 due to the lower offer he had made to buy over SPLASH, said Najib.

According to Najib, a crony of a top PH leader will benefit handsomely from the purchase.

So it looks like Selangor deliberately paid 10 times more for SPLASH (and removed Khalid as MB when he refused to do their bidding) to benefit a crony of the top PH leader.

Except, of course, they were referring to an offer Khalid made of RM250 million for SPLASH, which was rejected because the offer was too low.

In an article in The Edge Markets, Khalid’s offer was characterised as “priced to fail” because RM250 million was only a tenth of the book value of the company.

Takeover offers for SPLASH in the past have been priced to fail (0.1 times price-to-book value [P/BV] or RM251 million as per the last offer in Nov 2013).

Whether or not a crony of a top PH leader will benefit from this deal, the fact of the matter is that Selangor is paying a fair price in relation to the value of the company.

Selangor Menteri Besar Amirudin Shaari had earlier said the takeover value of RM2.55 billion is after a 28% discount, based on the net book value of SPLASH as of June 30, which stood at RM3.54 billion.

It is a shame that Najib and Khalid are resorting to lies and innuendos to tarnish PH. Are they are only capable of this type of politics? And it seems to me just too coincidental that both Najib’s and Khalid’s stories supported each other’s claims and extended the notion to imply that PKR has rigged the deal to benefit its cronies.

The fact of the matter is that Najib’s administration has been urging Selangor to settle its purchase of SPLASH, before the events of GE14. And Khalid was urging the federal government to force the issue by taking over the Selangor water concessionaires.

Now that this matter is settled and the restructuring can now move forward, these two have decided to twist the facts and cast the deal in bad light.

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