Japanese pullout feared if UMW takes over Perodua

Shareholder warns federal government of the risk of losing Perodua's partners if proposed takeover is not stopped.

National carmaker Perodua dominates the car market with its popular models. (File pic)

PETALING JAYA: The Pakatan Harapan federal government has been urged to halt a proposed takeover of national carmaker Perodua by UMW Holdings Sdn Bhd. as it might result in the departure of Perodua’s two Japanese partners.

Perodua, which is highly profitable, dominates the Malaysian car market with a 40% market share from sales of more than 200,000 cars.

UMW Holdings, a government-linked company, owns 38% of Perodua but seeks to gain majority control by acquiring a stake of 22.5% now held by Med-Bumikar Mara subsidiary, MBM Resources.

A shareholder of Med-Bumikar said: “The current arrangement we have works, everyone can see it by Perodua’s dominance in the country. Why try to fix something that isn’t broken?”

The proposed takeover by UMW may result in the loss of Perodua’s two Japanese partners, Daihatsu Motor Co Ltd and Mitsui & Co Ltd, who provide key technical expertise and access to technology. The two companies were against the proposed UMW takeover, said the shareholder, who wished to remain anonymous.

He said there might also be a possible conflict of interest as former Mara chairman Awang Adek Hussin had been on the board of Permodalan Nasional Berhad, parent company of UMW, when moves began for the proposed takeover.

The takeover would be a breach of the shareholders’ agreement, he said, and could cause a loss of confidence among foreign investors.

Mara owns a 30% stake in Med-Bumikar, while the remainder is held by six founding families of the company with an 11.6% stake each. Med-Bumikar shareholders had agreed to sell but feel the UMW offer undervalues their stake, and they want a higher price.

Two Perodua union groups, representing nearly 8,000 employees, have also objected to the proposed takeover

Perodua is Malaysia’s second national carmaker and began by producing the supermini Kancil. It has dominated the market since 2006 when it brought out the popular MyVi hatchback, taking over market share from Proton. -FMT

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