MOKHZANI Mahathir surprised everyone when in April 2001 he declared that he was giving up his business interests in a bid to protect the family name in response to people who had accused his father’s administration of nepotism. Mr Mokhzani’s father is Malaysia’s fourth prime minister Mahathir Mohamad, now 82, who stepped down on Oct 31, 2003.
Mr Mokhzani informed the stock exchange that he was selling his interests in two listed concerns – Pantai Holdings and Tongkah Holdings – which were then involved in healthcare, manufacturing, financial services and property development. He sold at a time of depressed stock market prices and couldn’t have made much out of those transactions.
It was clear from his tone during that period that he was tired of repeated attacks from his father’s political opponents that his corporate climb had been due to family ties. ‘I am fed up with all these allegations,’ he told a newspaper then. ‘In this political climate, everything these companies do is construed as favouritism, and it’s unfair to other shareholders.’
The onset of the Asian financial crisis deepened tensions between Dr Mahathir and his deputy Anwar Ibrahim, who was sacked in September, 1998, accused of ‘moral misconduct’. Political temperatures soared and, in the process, the scrutiny over the business interests of Dr Mahathir’s children intensified, hurting the premier’s prestige.
Now Mr Mokhzani is back and enjoying favourable investor attention again through his company Kencana Petroleum which he took public late last year. But he’s not about to forget those dark days. ‘In 1999, the political temperature was quite hot,’ says the businessman. ‘And there was the economic crisis. And so for me, it was one step forward and several steps back.’
Is there anything he will carry over from the Asian crisis? Mr Mokhzani does not hesitate: ‘With 20:20 hindsight, I guess I was far too diversified, I spread myself too thin and geared up too highly.’ The moral for the businessman is simple. ‘Don’t borrow too much,’ he says. ‘I geared up personally so I should know. You know, Pantai Holdings was a gem of a company, it had cash and it had a good, viable business with concessions. But we had to sell, you have to be able to survive so you step away and wait to come back another day.’
At the height of the crisis, Mr Mokhzani was reported to have racked up debts of close to RM200 million.
He sold his interest in hospital specialist Pantai Holdings to Malaysian businessman Lim Tong Yong who controversially sold it to Singapore’s Parkway Holdings last year. That caused a brouhaha as Pantai had two lucrative government concessions. In the end, state investment agency Khazanah Nasional stepped in and took up a majority interest in Pantai.
‘I didn’t have much of a surplus after I sold everything, not at all, just sort of enough to keep the bankers off my back,’ continues Mr Mokhzani. ‘But I did the right thing. Someone once told me never to be emotional about my companies. There should be no sentiment in business.’
He does not state the extent of his debt. ‘Frankly, I’d rather not remember,’ he says, wincing. ‘It pushed me to take drastic action. We were getting letters from the banks with some threatening to take legal action against me. Not all though, one or two stood by us. Now, the bankers who stood by me are happier today than they were five years ago.’
Source: Business Times 10 Nov 07