BURSA Malaysia may have scuppered the Finance Ministry’s ambition to seize control of highway concessionaires, Singapore’s Straits Times reports.

Citing bankers close to the negotiations, the report said the bourse had laid down prohibitive conditions on the majority shareholders of the four highway companies the Malaysian government hopes to acquire for RM6.2 billion.

The bourse has forbidden the owners of the companies, public-listed Gamuda Bhd and state-owned Permodalan Nasional Bhd (PNB) from voting on the deal at the mandatory special shareholders meeting to approve the plan, the sources said.

The prohibition, issued last month, is grounded on the fact that the deal contravenes the bourse’s rules against related party transactions, and that the interests of minority shareholders could be undermined if the sale is bulldozed through. 

Approval from Gamuda and PNB would virtually guarantee the deal going through.

“This is a deal breaker,” said an investment banker who has been involved in the deal from the start.

The report said the as yet undisclosed to the public Bursa decision was an awkward challenge for Finance Minister Lim Guan Eng, who has aggressively pursued the deals he announced at the start of the year.

The Pakatan Harapan government wishes to seal the deal to be able to fulfil its election promise to banish toll charges, but critics have pointed out that a selective proposed takeover of toll operations is not a viable permanent solution.

Beginning in the 1990s, Malaysia has awarded 20 highway toll operations to private entities on varying contracts.

Gamuda and Bursa did not respond to the Straits Times’ requests for comment. – December 2, 2019.