KUALA LUMPUR, Dec 29 (Reuters)

SINGAPORE CHALLENGES MALAYSIA'S VIEW

Malaysian Finance Minister Daim Zainuddin said on Tuesday that custody over
the shares would be transferred to the Finance Ministry unless the
impasse was resolved this week or the CDP's nominee status was extended.

If the ministry took control, it could eventually sell the shares, although
investors could later claim the proceeds, said David Gerald, president of
the SIAS.

Daim's statement was quickly challenged by Singapore's central bank, which
said ``there is no basis in law for a transfer of the CLOB securities to
the Malaysian Ministry of Finance.''

The Monetary Authority of Singapore said the KLSE and its Singapore
counterpart signed an agreement in 1998 for CLOB securities to be
transferred into accounts with Malaysia's central depository for trading
on the Malaysian exchange.

Gerald said Malaysia would hurt investor confidence and spur a law suit if
it transferred custody to the Finance Ministry.

``It would be a blatant act and would be against the spirit of encouraging
foreign investment into Malaysia,'' Gerald said.

He reiterated that SIAS would bring court action against Malaysia if the
Finance Ministry was given custodial control.

``If it does, we will ask the High Court in Malaysia to make a ruling. It
is not lawful. We will ask for specific performance to move the shares into
individual accounts.''

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