Perkasa seeks review of decision on Affin-EONCap merger talks

Published: 2010/06/14Share PDF




Malay rights group Perkasa says Bank Negara Malaysia should not have rejected Affin Holdings Bhd's (5285) bid to start merger talks with bigger rival EON Capital Bhd (EONCap).





Its president Datuk Ibrahim Ali said the central bank was hasty in rejecting the application from Affin that was backed by a major shareholder, the Employees Provident Fund, without any reason given.



"The decision is puzzling as it seems to deny Affin an opportunity to enhance its banking capabilities through a merger," Ibrahim told a news conference in Kuala Lumpur yesterday.



Perkasa requested Bank Negara to reconsider its decision and called on Prime Minister Datuk Seri Najib Razak to intervene.



Ibrahim said Perkasa was willing to demonstrate in front of Bank Negara's headquarters if needed.

He claimed that Affin had made a better offer than Hong Leong Bank Bhd, EONCap's one and only formal bidder, but did not give further information.



Hong Leong has offered to buy all of EONCap's assets and liabilities for RM5.02 billion, or RM7.30 a share.



Ibrahim also claimed that an EONCap-Hong Leong merger might cause an overlapping of 45-50 branches, or some 30-40 per cent of EONCap's network.



Furthermore, about 1,500 out of some 6,000 EONCap employees might lose their jobs if such a merger materialised, he further claimed.



A merger between Affin and EONCap, however, would only cause about 15 branches to overlap, he said.



"It may not cause so much branch overlapping as the managerial and personnel expertise of the two banks complement each other," he added




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