Senator Jaspal Singh raised the Maika Holdings imbroglio in the Upper House yesterday, describing it as a prime example of greed and mismanagement.

Maika Holdings was the debt-ridden investment arm of MIC, last headed by Vell Paari, the son of former party president S Samy Vellu.

NONE"Those who were credulous enough to trust in Maika's voluble promoters and entrust their savings to them underwent a bitter experience indeed over a 25-year period," said Jaspal (left).

The MIC treasurer, who is seen as a close associate of Samy Vellu's successor G Palanivel, brought up the matter when debating the Yang di-Pertuan Agong's royal address in the Dewan Negara.

Jaspal said that Maika was a company established in the early 80s, ostensibly to increase the wealth of the Indian community.

"Indians, mostly poor, became the company's shareholders. They were misled into believing that they would receive one and two thousand percent over a period of a few years.

"Many of these poor souls gave all their savings, some borrowed to invest and many pawned their jewellery to invest in Maika," he added.

Jaspal said the investment arm was, from the first, saddled with poor managers appointed for their political sycophancy rather than business skills.

"Despite land and shares and other benefits given to Maika by the government, the company would fail spectacularly," he added.

The MIC treasurer noted that in June 2010, a special purpose vehicle called G-Team, controlled by a prominent businessman, along with Maika’s management, made a general offer to buy back all Maika shares at 80 sen per share.

This meant that each shareholder would get back the original money invested by them.

However, Jaspal said the inflation rate had halved the value of the ringgit since 1981 and presented the mathematically unchallenged investor with a 50 percent loss on his investment.

"The cost of this buy back was estimated to be approximately RM103 million. G-Team was promoted to be a white knight rescuer of the company.

"G-Team also committed that it was a SPV only to buy back Maika shares and would find a new investor for the assets of Maika. This included a piece of land known as Tumbok estate and the insurance company Oriental Capital," he added.

MACC must look into the matter
Jaspal said G-Team and the management of Maika also said if there was any profit from this transaction, it would be channeled back to the Indian community through donations.

Even an analyst with pedestrian skills, the treasurer said, could see that Oriental Capital was a prize asset.

"It was therefore an unsurprising event to see in April 2012 that the company Tune announced that they would buy Oriental Capital from G-Team for RM153 million.

NONE"Sometime early this year, less than a year since Tune bought Oriental Capital, the renamed  Tune Insurance listed on the Malaysian stock market price for a market capitalisation of RM1.2 billion. Now it is worth close to RM1.8 billion," he said.

"An asset belonging to the Indian community managed so ineptly by the Maika management that its value was halved after 25 years increased 18 times its value within two years," he added.

Jaspal asked how much profit did G-Team and Maika’s management make after Oriental Capital and Tumbok estate were sold?

"This is a transaction that involves the public most of whom are poor Indians. The government needs to ensure that the transaction is above board.

"The accounts must be audited by a panel and be open to public scrutiny to ensure transparency. I recommend that the Malaysian Anti-Corruption Commission thoroughly investigate this transaction.

"What has happened to the profits from this transaction? There isn't a clear answer from either GTeam or the Maika management," he added.

Jaspal also called on Prime Minister Najib Abdul Razak to give serious attention to this matter.

"If the profits are yet to be 'donated' back to the Indian community, its best to give it back to Maika shareholders who are poor as a special dividend.

"I am sure that Maika shareholders will be most delighted with this move and the Indian community will give a thumbs up to the prime minister for this move," he added.

'Palanivel's team is desperate'          
Despite Jaspal denying that raising this issue was related to the coming party polls, Vell Paari however linked it to the escalating tension between the two camps in MIC with regard to the presidential elections.

"This is an old issue. Nobody denies that Maika incurred massive losses. The most important point is that we have returned the money to the investors. By raising this issue again, it shows the desperation of Palanivel's team.

"I wonder why Jaspal did not raise other issues such as (Perkasa leader) Zulkifli Noordin and Ridhuan Tee Abdullah's insult of Hinduism as well as the rampant custodial deaths in the Dewan Negara," he said.

NONEResponding to Jaspal's call on the MACC to look into whether the profits arising from the transactions had been returned to the community, Vell Paari (centre in photo) said this concerned the G Team as he was no longer involved.

As the clock ticks down for MIC's party polls, speculation is rife that current number two Dr S Subramamniam might vie for the top post.

It is said that Subramaniam is being backed by Samy Vellu and his loyalists.