When the cellular phone market was opened up in 1995, Celcom upgraded to the GSM900 service and quickly grew to become the largest mobile phone company in Malaysia until it was overtaken by Maxis.
During the Asian financial crisis in 1997, Celcom’s owner, Tan Sri Tajudin Ramli suffered a debt crunch, and his shareholding in Celcom was seized by Danaharta, the national asset restructuring company. Failure to resolve his debts resulted in the controlling stake in Celcom being sold to Telekom Malaysia, the government-owned incumbent fixed line operator in 2003. Telekom Malaysia proceeded to merge Celcom with its own mobile-operator subsidiary TMTouch through a reverse takeover of TMTouch.
Celcom was originally listed on the Bursa Malaysia, but after the merger with Telekom Malaysia Berhad, it has since remained private.
Owing to the bad management of its former management Celcom was as found liable by an arbitration panel in Switzerland for infringing an agreement signed with Deutsche Telekom AG’s unit, DeTeAsia in 2002.
The tribunal ruled that Celcom was liable to pay DeTeAsia US$177.2 million in principal plus US$16.2 million in interest as well as other legal and arbitration costs. This works out to a tidy sum of about RM740 million.
Leaving Telekom to intensify its efforts at recovering monies from Celcom’s previous owners for their misdeed. Only then will TM be able to fully exorcise itself from the haunting of Celcom’s tumultuous past.