It was the first of the ministerial response to points raised during the debate on the royal address but the combative spirit of the House won’t allow Tan Sri Nor Mohamed Yakcop – the Second Finance Minister who was first in line – a fluent ride towards finishing his response, such was the persistent queries bombarded by MPs on the rationale behind Malayan Banking Berhad’s purchase of the Bank Internasional Indonesia (BII).

Malaysia’s largest bank, which reportedly controls assets in excess of US$$66 billion and reportedly commands a place in the top 120 banks worldwide, is now in the process of completing the purchase of a 55.7% stake in BII from Singapore’s Temasek Holdings Bhd, according to reports. Reports also state that Maybank is buying BII, Indonesia’s sixth largest bank, for a princely sum of RM8.6 billion. Simply too much, some MPs complained.

Devoting four paragraphs on Maybank’s BII purchase in response to Azmin Ali (PKR-Gombak) and Dr Mohd Puad Zarkashi (BN-Batu Pahat), Nor Mohamed stressed the pressing need for Malaysian banks to expand as regional banks to compete long term with Singapore and that was why the Government was confident that the BII purchase would turn Maybank into a renown, solid and competitive financial entity, on top of spreading Islamic finance expertise to Indonesia’s Muslim population, the largest in the world.

Nor pointed to CIMB’s RM555 million control of GK Goh Securities, a Singapore stock brokerage policy, and also listed out AmBank, RHB and Public Bank, as banks that embraced the regional expansion policy. However, Nor Mohamed conceded that Maybank was subjected to Indonesia’s foreign investors’ regulations and the “single presence policy”.

As a company listed on Bursa Malaysia, Maybank was also subjected to stricter administrative pre-requisites, like a tight disclosure requirement. “Any equity buying process needs the agreement of stockholders, including the purchase of BII,” he said, acknowledging Maybank’s solid funding and capacity to expand overseas. “Therefore, Maybank’s volatile stock price is more tied to investors’ indeterminate perception and does not necessarily reflect Maybank’s ability and position,” he summed up.

But that was just page 7 in his 20-page reply when MPs quickly erected a road block: alluding to reports that the purchase sum may be too much, Azmin disputed the purchase’s book value, which he rated at four times, when the norm is 2.5 times. Azmin also questioned whether Maybank’s purchase followed good corporate governance.

Nor Mohamed agreed with Azmin’s book value appraisal but elucidated that book value was not always a principle to be followed when a golden opportunity beckons, and in this case the rare opportunity to buy over a regional bank.

Datuk Ibrahim Ali (IND-Pasir Mas), pointing to the Minister’s intimation of Indonesia’s regulations, questioned the probity of such laws because he had heard of horror stories of Malaysian companies doing business in Indonesia. In also questioning the risks involved, Ibrahim proposed that Maybank conduct a briefing for MPs on the soundness of the BII investment, to which Nor Mohamed enthusiastically agreed.

Gobind Singh Deo (DAP-Puchong), while recognising that the buy was wise, asked if the Government had launched an independent analysis for the buy, which Nor Mohamed replied in the negative. However, the Minister dismissed as irrelevant queries that the Government failed to control a GLC’s activity, asserting that the Government cannot and must not intervene or make decisions on behalf of its GLCs, be it Maybank or CIMB. He also refused to entertain the contention of Saifuddin Nasution (PKR-Machang) that since billions were being spent, more clarification was needed, when a comprehensive explanation had already been given.

Then, in a conspiratorial tone, Saifuddin contended that the purchase of BII, particularly from Temasek, hinted a “good buy but would falter later.” More conspiratorial overtones: one MP claimed that uncomfortable questions are being asked about Maybank’s ex-president and CEO, Datuk Amirsham Aziz, who started the BII initiative but was now a Cabinet Minister. Nor Mohamed didn’t think that the conspiracy theory merited a response.

N. Gobalakrishnan (PKR-Padang Serai) soon thundered that the banking and financial checking system was riddled with problems, pointing to the controversy behind CTOS Sdn Bhd, which he claimed provided dubious information about loan applicants.

Nor Mohamed had a ready answer: all banks and Government departments and agencies have been ordered not to use CTOS, especially in deciding on loan applications because the Government had no supervisory control over the private company. “That is why the Finance Ministry and Bank Negara are initiating a law to supervise bodies like CTOS, which is currently unavailable,” he said.

Nor Mohamed agreed with Wee Choo Keong (PKR-Wangsa Maju) that elements of data protection and a freedom of information provision would be included in the new law.

Back to his altercation with Gobalakrishnan, whose dismissive stance on the banking system included a complaint that his attempt to open a banking account at Citibank took six months, Nor Mohamed had a sarcasm-filled response: “I am sad that it took you six months to open an account but I am sadder that you chose to open an account at a foreign bank when there are nine local banks that you can chose from to open your bank account. After 50 years of independence, you still have no faith in our banks!”

That triggered a reaction from Dr Mohd Hatta Ramli (Pas-Kuala Krai) who insinuated that the faith wasn’t there because of some MPs involvement with some banks. At this point, the Speaker decided that he had allowed more than enough questions, clarifications, banter and dialogue on a Ministerial response which barely moved halfway, so it was after this that Nor Mohamed cleared the road block and concluded his winding-up.