Monday, June 21, 2010

Betting licence: Here's the proof, says Pua

By Rahmah Ghazali

KUALA LUMPUR: Although the government has repeatedly denied that it has awarded a sports betting licence to a company, an opposition MP today furnished a “documented proof” that it has indeed done so.

DAP Petaling Jaya Utara MP Tony Pua provided two documents, including a “strictly private and confidential” information memorandum by Berjaya Sports Toto Malaysia Sdn Bhd, the company that was supposed to operate the betting activities.
Shedding more light on the controversy, Pua said that Ascot Sports Sdn Bhd is the company that has been given approval to run sports betting.

"Ascot Sports was sold by (tycoon) Vincent Tan and 70 percent of it is to be owned by (his company) Berjaya Corporation Bhd.

"Berjaya Corporation owns a stake in Berjaya Sports Toto, which was supposed to operate the betting. So there are three different companies," said Pua.

According to him, Berjaya Sports Toto would not have issued the memorandum if it was not given green light by the government.

"On June 11, four days after the Finance Ministry denied issuing the licence, Berjaya Sports Toto issued the memorandum to raise up to RM800 million on medium-term notes for 10 years," said Pua.

He said that there should be some truth in the document as the adviser was Maybank and the lead managers, AmInvestment Bank and Maybank Investment Bank.

"In this 20-page document, they (Berjaya Sports Toto) reiterated that Ascot Sports has been given approval to carry out betting operations upon certain terms and conditions...” he said.

In the document, Pua revealed that 220 Sports Toto outlets will be used as distribution points, with more outlets coming up in the future.

"The plan was to be carried out in August or early September in time for the English Premier League," he added.

However, on June 7, Prime Minister Najib Tun Razak, who is also the Finance Minister, said that the government has not issued any licence to Ascot Sports.

But on June 12, Ascot Sports issued a statement to Bursa Malaysia, saying that it has received approval. On June 15, Najib persisted that no licence has been awarded, saying that he would not be making any more statements.

MARC document revealed, too

Pua also showed a document from Malaysia Rating Corporation Bhad (MARC), which gave a rating to Berjaya Sports Toto.
He said that rating is usually needed when a company receives a loan of RM800 million in order to determine the quality of the loan.

"MARC has signed 'AA-' rating to this exercise to raise money by Berjaya Sports Toto... " said Pua.

The document stated that "following a recent announcement by Berjaya Corporation on its RM545 million acquisition of a 70% stake in Ascot Sports, a licensed sports betting operator, MARC understands that Sports Toto outlets will be used as a conduit for placing sports bets.

"Sports Toto is expected to receive an agency fee based on the sales generated from betting activities at its outlets. The details, including the timeframe for the rollout of the sports betting games, are yet to be finalised," the document stated.

"This clearly shows that Ascot Sports has been given the licence to operate the betting scheme. The denial by the Finance Ministry makes a complete mockery of our financial system and stock market," said Pua.

"If I am an investor, what do I do? Do I trust the memorandum which has been verified by MARC, Ambank and Maybank or do I trust the statements issued by the PM's office?" he added.

PM 'may be techincally correct'
Pua also believed that Maybank and MARC have done their homework and verified that Berjaya Sports Toto, Berjaya Corporation and Ascot Sports have been given the nod."Otherwise, they would not have issued the document to raise up to RM800 million... " he said.

However, he said, Najib may be "technically correct" when he said that no licence has been issued, giving the impression that approval has been given but the actual physical licence has not.
"It is becoming a stupid play of words and hiding the truth. The prime minister is destroying confidence in our financial market. As prime minister and finance minister, he needs to rectify this immediately," said Pua.

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