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From: Our Staff From Dispatches
Date: 07 May 1999
Time: 05:04:41
SINGAPORE - Deputy Prime Minister Lee Hsien Loong said Thursday that an offer by a businessman to buy Singapore investors' frozen Malaysian shares at a huge discount had become a new source of contention between the two countries. ''The government has taken up the issue with the Malaysian government at a political level,'' Mr. Lee told Parliament.
At stake is $2.7 billion worth of shares, most of them held by about 170,000 Singaporeans or Singapore-based investors.
The Malaysian shares, formerly traded in Singapore, were thrown into limbo last September when Malaysia banned external trading of its stocks. The freeze was part of an effort to stop foreign speculators from influencing Malaysian financial markets.
Singapore investors are furious over the buyout proposal by Akbar Khan, a Malaysia-based Singaporean businessman, who offered to purchase the shares at a discount of 35 percent to 85 percent off their current prices on the Kuala Lumpur Stock Exchange.
''We have reasons to believe that Mr. Akbar Khan is acting within the endorsement of Malaysian authorities,'' Mr. Lee said.
Mr. Lee called the offer a sign that Malaysia was backing away from a pledge last year to resolve the fate of the shares as part of a broader package of problems to be tackled by the Malaysian and Singaporean governments.
The flap could further strain ties between the two countries, who have gone through a recent series of spats over military airspace, water rights, the location of a border crossing and other issues.
Mr. Lee said the government's two investment arms, Temasek Holdings and Government of Singapore Investment Corp., would not be involved in resolving the issue.
Official involvement would set a ''very dangerous precedent'' Mr. Lee said, adding ''individuals must take responsibility for their investments.''