The Heavy Industries of Malaysia Berhad (HICOM) was clearly at the brink of the downward spiral of its business endeavors. Tan Sri Nasruddin, HICOM’s Chairman of the Board noted on the company’s annual report for the year ended 31 March 1987 that HICOM’s lackadaisical performance was severely affected by the prevailing depressed economic condition. For one, the slowdown in the construction industry plunged HICOM’s production of steel billets and cement. On another undertaking, the passenger car market was expected to hit a short-lived trajectory which curbed the company’s volume of production below the desired level. Furthermore, the production of motorcycle engines was also reduced by a significant margin. Despite the overall operating inefficiencies and economic turbulence at hand, HICOM’s property development companies had performed relatively fair which recorded sales more than half of its industrial lots, 70% of low cost flats residential houses and 80% of medium cost houses. But these were not sufficient for HICOM to recover the losses it had incurred since the preceding year as they were not doing a great job collectively. On its Profits and Loss Accounts for the Year Ended 31 March 1987, HICOM recorded a net loss of M$ 117,753 as a group (all business interests) and had only a measly M$ 18,150 income as a company. Added to the losses of HICOM, the steep appreciation by 80% of Yen had also caused the company huge exchange losses coupled with the write-off of deferred project expenditure amounting to M$2.04 incurred in the prior years which were subsequently declared no longer feasible for implementation. All these adverse result of the group was mainly due to the losses suffered by HICOM’s subsidiaries Perwaja Trengganu Sdn Bhd (PTSB), PROTON and Kedah Cement Sdn Bhd (KCSB), where it incurred losses after tax of M$ 157.66, M$ 39.445, and M$ 68.61 respectively. Prime Minister Mahathir Mohammad was but all took the blame of creating the holding...
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