TM reiterated that the 421-metre tall KL Tower, built initially as a telecommunications structure before it became a tourist hotspot, is owned by the government and TM is merely a concessionaire manager of the building.
PETALING JAYA: National telecommunications titan Telekom Malaysia Bhd
(TM) has reconfirmed its decision to pull out from its long-term concessionary operating and maintenance of Menara Kuala Lumpur (MKL) – more popularly known as KL Tower.
The long-term concessionary was done through its fully owned subsidiary Menara Kuala Lumpur Sdn Bhd (MKLSB) since 1996, a year after the tower itself was completed.
In a statement yesterday, TM reiterated that the 421-metre tall KL Tower, built initially as a telecommunications structure before it became a tourist hotspot, is owned by the government and TM is merely a concessionaire manager of the building.
The group said, “As part of its business transformation programme, TM is focusing its efforts and resources on strengthening its core business of telecommunications and technology.”
It also cited on the change in the business nature of MKL, from telecommunications services to tourism and hospitality, as the reason for dropping the concession renewal in October 2021 “after due consideration”, and has informed the government accordingly.
Subsequently in 2022, TM said the government had undertaken a selection process to identify a new concessionaire, with TM itself being kept up-to-date on matters.
Effectively, this has led to the group attempting to completely dispose of its holdings in MKLSB through the finalising of an equity purchase agreement on Oct 31 in a RM3.8mil consideration, which the company reported in a bourse filing in conjunction with its third quarter results release.
It has been reported that the new owner of the concessionaire is little-known trading company Hydroshoppe Sdn Bhd.
Due to the rather unusual nature of the transaction, the acquisition is being looked into by Communications and Digital Minister Ahmad Fahmi Fadzil, who revealed he would be receiving a comprehensive briefing on this matter from TM on Jan 3, after having a prior hearing on the KL Tower management concession from his ministry in the middle of this month.
TM emphasised in its statement that MKLSB shall continue to operate the concession, ensuring the continuity of operations of the world’s seventh tallest tower for the Malaysian public, including international visitors.
More importantly, the group said employees who are currently tied to MKLSB will be keeping their employment for at least another three years to ensure their welfare is protected during this transitional period.
Back in 2011, TM, through MKLSB, had inked a 10-year concession with the government to operate, manage and maintain the tower, on top of the land that MKL sits on at Bukit Nanas, which comprises five lots of federal land. TM commented then that MKLSB was awarded the contract based on its good record in tower operations which was in line with the government’s vision.
Meanwhile, there had been calls from certain quarters for the government to provide further clarity on the concession transfer, particularly as it involves the handing over of the MKL management rights from a well-known telco giant to an entity that the public is unfamiliar with, coupled with the fact that the subject matter is one of the country’s iconic landmarks.
Malaysian Corruption Watch president Jais Abdul Karim said he hopes the government would be conducting a thorough investigation and inform the public on the eventual outcome of the deal.
He opined that this would encourage the public to continue supporting the government’s good governance agenda.
There is not much to be glimpsed from a search on the web about Hydroshoppe, apart from the fact that it was incorporated in Feb 2008, and that it engages in “general trading”.
With a total issued share capital of RM1mil, it lists its two directors as Abdul Hamid Shaikh Abdul Razak Shaikh and Nazarina Mohamed Nasir, with 500,000 shares each.
Yesterday, TM’s shares on Bursa Malaysia closed 10 sen or 1.85% lower at RM5.30, giving the company a market capitalisation of RM20.25bil.
