Is Something Big Hatching On Malaysian Rail Involving Scomi

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Tun Daim sent to China in July 2018 as "special envoy" for "special purpose" 
Blogger Captain M picked up the news on the appointment of Van Chiang Lum as member of the Board of Directors of Scomi Group Berhad (Scomi) in his analysis of Destini Berhad's MRO deal with KTMB (read here and here).   
Van is a member of the senior management team at Destini. 
Conveniently, Captain M linked the appointment to this blog's reveal that Destini is on the hunt for companies to acquire for operational support of ETS, a 70% recently acquired subsidiary of KTMB for MRO

While this was happening, media reported Scomi's CEO, Sammy Tse Kwok Fai tendered his resignation yesterday. 
Earlier, Sammy and three others Directors of Scomi retired from the Board. Sammy and another Director was voted out, while two Directors subsequently resigned. 
Two new Directors were appointed to the Board of Directors, namely, Van and a Dato Wan Shahruddin bin Wan Mahmood. 
They will join the two remaining and non-independent Directors, Shah Hakim Zain and Tunku Azlan Tunku Aziz.  
Scomi has been under PN 17 since December 2019 and has until September 2021 to submit a regularisation plan. It had recently applied for judicial management from the High Court in mid-April. 
To quote NST here, "Scomi said the rehabilitation could potentially include reviving existing businesses in which the company had experience".  
Destini-Scomi energy collaboration

A simplistic guess would be a "merger" or at least collaboration between Destini and Scomi is in the making. 
Both companies are involved in the oil and gas industry. Unfortunately, Scomi Energy Berhad (Scomi Energy) is in almost the same predicament as Scomi. 
Energy was one of the sector explored by Shah Hakim and Dato Kamaluddin Abdullah when they both took over Subang Comercial Omnibus & Motor Industry through Kaspadu Sdn Bhd back in 2000. It was the oil tool business that got them into the unfortunate international scandal in 2004.  
Scomi Energy faced six straight quarterly loss back in 2015. Subsequently, a proposal to merge with Scomi was rejected by the EGM in 2018. By early last year, Scomi Energy was also confirmed under PN17.  
Former Renong CEO, Mohd Zakhir Siddiqy ended up with 18% stake in Scomi Energy. Tan Sri Wan Azmi and Gelombang Global Sdn Bhd (controlled by Zakhir Siddiqy) issueded a letter of demand for failure to repay by January a RM22 million loan given to Scomi.   
Scomi's expertise in rail

Another area fitting the bill of business Scomi has experience is in rail business. This has been this blog's interest for more than a month in the pursuit of  KTMB and MRO deal with Destini. 
Destini could be eyeing the rail assets of warehouse, workshop, equipment etc. of Scomi Rail. Since the intellectual property on their Monorail technology was apparently sold off earlier, what would Destini be seeking from Scomi? 
Is Destini looking at Scomi's management experience in rail, particularly that of Shah Hakim for the acquisition or at least collaboration?  
According to blogger Captain M, Destini neither have the experience nor expertise in rail to carryout MRO for KTMB. It will not be as competitive against CRRC which operates a Rolling Stock Centre in Batu Gajah. 
The blogger suspect Destini could merely be fronting for the Chinese or eventually sell the MRO business to China interest. 
The suspicion is based on a tip-off that the MRO venture is financed by an East Malaysian investor and its finalised structure will have a minority shareholder with strong past link to CRRC.         
Last ditch effort

To quote from Edge Online here, "Scomi currently has total liabilities of about RM250 million, compared with RM112 cash. The accumulated losses of the group, which has been loss making since the financial year ended June 30, 2017 (FY17), stood at RM469.02 million as at end-2020."
The current snapshot of Scomi does not look hopeful unless there is sufficient money in KTMB and government has the money to plow into KTMB to contribute to the rehabilitation of both Scomi and Destini. 
Scomi is in no position to repay the loan of Wan Azmi and Gelombang Global. It could only mean white knight, Wan Azmi and Zakhir Saddiqy will end up playing a more active role in Scomi. 
Hereon it is speculative and the financial numbers need to make sense. 
Wan Azmi is known to be cash rich following the sales of SPLASH back to the Selangor government. It is widely suspected that Tun Daim Zainuddin is the invisible partner to Wan Azmi in the privatisation of a strategic Selangor state government water asset. 
Before the takeover by Kaspadu, the market talk then was that Daim or any of his men was the original shareholder of Scomi. 
Privatisation of National Rail System? 

With the ingredients of possible past and present links in Scomi, and stock market interest in Scomi a month prior to judicial management, could there be something big to happen involving the national rail infrastruture involving Scomi? 
As one veteran energy man said, the important transportation link for Pengerang's RAPID is more rail than sea. He felt RAPID would have been better located up north. Rail transportation will have a bigger role than sea the moment the Asean rail link to Kunming China is put together

In July 2018, Daim was sent to China by second time Prime Minister, Tun Dr Mahathir to meet China's Foreign Affair Minister, Wang Yi. 
Among the matter discussed was the resumption of stalled China-led infrastructure and ECRL renegotiation has relevance to rail. Is it possible the subsequent conversation advanced beyond that

Whatever the plan, it need to take into account the situation Tan Sri Muhyiddin said in passing as "government has no more money" and the interest of shareholders in the venture. 
Do not discount the possibility the whole national rail system will be privatised. It is another possibility to the conspiracy theory of Destini being a front to CRRC. Instead, China would be invited to take up stake in the privatised National Rail System.   
One could only wish stakeholders such as the workers in the Railwaymen Union of Malaya is taken care off and financially benefit from such a plan. 

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