Gaming profits to fund vernacular education

By Shannon Teoh
August 09, 2011
KUALA LUMPUR, Aug 9 — The consortium of tycoons set to pay RM2.1 billion to take control of Ananda Krishnan’s Pan Malaysian Pools (PMP) will channel the profits to fund Chinese and Tamil schools in the country.

The government’s cap on the number of state-funded vernacular schools has long been a source of dissatisfaction from the Chinese and Indian community.

But the Singapore Straits Times reported today that the takeover of the gaming unit under Ananda’s recently-privatised Tanjong has received the full backing of the Najib administration which has seen the Chinese continue to shun national schools in favour of Chinese-language primary schools despite the lack of funding.

Ananda Krishnan

The group of Chinese businessmen, led by Tan Sri Lim Kok Thay of gambling giant Genting, will pump RM500 million into a new company called Jana Pendidekan Malaysia that will also take bank loans to execute the purchase later this week.

Lim Kok Thay

According to the Singapore Straits Times, the transaction, which is expected to be finalised today after months of negotiations, will also see Ananda, Malaysia’s richest Indian, commit RM100 million to the trust fund.

The fund, which means “powering education” in English, will also see major contributions from Tan Sri Quek Leng Chan of the Hong Leong group, and is modelled after Hong Kong’s Community Chest, a non-profit organisation that funds community projects.

Quek Leng Chan

Other major contributors to the new trust include Tan Sri William Cheng, chairman of the Lion Group, and Tan Sri Lau Cho Kun from Hap Seng.

William Cheng Heng Jem

 

Jana Pendidekan expects to rake in RM20 million each year from PMP, which controls about a quarter of the numbers forecasting market. Analysts say that profits could surge by 50 per cent within five years with new betting games being introduced.

The Straits Times also citing financial executives involved in the plan as saying that it could improve Barisan Nasional’s (BN) standing among Chinese and Indians who swung away from the ruling coalition in the landmark 2008 election.

Datuk Seri Najib Razak, who is expected to call an election within the year, has been tasked with reversing losses that denied BN its customary two-thirds majority of Parliament and five state governments.

Racial tension has increasingly heightened and last week’s raid by religious authorities on a church dinner has been met with widespread criticism from various religious and civil society movements.

But hardline Muslim groups have defended the Selangor Islamic Religious Department (Jais) in yet another event that threatens to widen the divide between Malays and other communities.

Education has also been a long-standing sore point among the Chinese. While Malays enjoy extensive state support for education including financial grants, scholarships and enrolment quotas in public universities, Chinese and Indian schools struggle each year for funding.

The Straits Times also wrote that contributors to Jana Pendidekan will receive preferred shares, and the financial instrument will carry a 4 per cent dividend yield, to be paid when Pan Malaysian Pools lists on the local stock market.

The trust fund will control a minimum 51 per cent interest in the listed entity to ensure a steady income stream, executives close to the plan told the newspaper.