A Bailout In Malaysia: The Deal Smelled Rotten And It Was
It looked fishy from the beginning. When United Engineers Malaysia (UEM) announced in November it was paying $671 million for a 33% stake in Renong, its troubled parent, UEM shares immediately plunged by 54%. Analysts figured the deal was aimed at bailing out Renong's politically connected stockholders. Why else, they asked, would a relatively healthy builder of highways buy a stake in a floundering and heavily indebted holding company--in the midst of Asia's financial meltdown?
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