Tan Sri Halim Saad
Tan Sri Halim Saad, chairman of Malaysia's biggest debtor, Renong, said three years ago that any government pressure for him to quit would be deemed as 'interference in the private sector'.
He may have been tempting fate. A state investment arm yesterday offered RM3.7 billion (S$1.78 billion) to buy Renong shareholder United Engineers Malaysia (UEM), wresting control from him.
The outcry he had predicted has been absent. Malaysia's stock index rose 10 per cent this month on speculation that Prime Minister Mahathir Mohamad would step in at Renong. Tan Sri Halim's fortunes, which rose on favours the prime minister had granted to promote the corporate aspirations of ethnic Malays, may decline from the loss of them.
In 11 years, Tan Sri Halim built an empire of 13 listed companies worth RM17 billion in market value with interests in areas such as telecommunications, construction, hotels, banking, newspapers and oil and gas.
The pace of Renong's growth was the undoing of Tan Sri Halim, 47. Demand for its businesses slowed following Asia-wide currency devaluations in 1997 and the group struggled to repay debts of RM20 billion.
Tall and boyish-looking, with a penchant for expensive suits, he began his career in 1980 at Peremba, a government-owned property developer run by former finance minister Daim Zainuddin - then a lawyer and a confidante of Datuk Seri Dr Mahathir, who was then the Deputy Prime Minister.
It was in 1981, when Dr Mahathir became prime minister that Tun Daim, who later became the ruling party's treasurer, began shaping the party's business interests to break the dominance of the Chinese minority.
In 1985, Tan Sri Halim, then 32, took control of UEM, an ailing machine equipment supplier, which three years later won a contract to build a 462-km toll road snaking the length of half of Peninsular Malaysia.
The award was criticised by opposition leader Lim Kiat Siang, who alleged that UEM had gotten the contract unfairly and corruptly. While he took UEM to court and lost, the impression that Tan Sri Halim had profited from favours persists among some investors.
His star rose even higher in November 1990, when Renong was picked as the vehicle to take over a large amount of the assets owned by the ruling party, in a stock swap transaction worth RM1.2 billion. The assets included UEM.
That plan saw him gain control of Renong.
He was heralded for completing key infrastructure projects on time, such as the Second Link between Singapore and Malaysia - assets critical to Malaysia's development.
But he was caught out by the baht's plunge in July 1997. The ringgit lost more than one-third of its value in 12 months and interest rates soared, crimping demand for Renong's businesses and raising the burden of repaying debt.
In November 1997, UEM bought 32 per cent of parent Renong for RM2.34 billion, which investors saw it as a bail-out of Tan Sri Halim and his associates.
He tried to appease UEM investors the following year by agreeing to buy 32 per cent of Renong later on. This month, he put off, for a second time, repaying part of some RM3.2 billion owed to UEM.
The demise in his fortunes may be related to the resignation of his mentor, Tun Daim, from the post of finance minister last month.
Tan Sri Halim's future now depends on whether he will be able to pay his debts, said Worldsec Securities Adviser research manager Loke See Ooi.
'It'll be quite a sad ending for the flamboyant tycoon. It will be difficult for him to come back' into the corporate scene, he said.
Source:Copyright Bloomberg News