KUALA LUMPUR, July 26 (Bernama) -- Tengku Tan Sri Mahaleel Tengku Ariff's tenure as group chief executive officer of Proton Holdings Bhd was not renewed as he did not agree with the terms of the new two-year contract which he felt were inferior to his own terms, Proton adviser Tun Dr Mahathir Mohamad, said here Tuesday.

Dr Mahathir also said he was not surprised by the decision made by the board of the directors of the national car manufacturer.

Tengku Mahaleel, who joined Proton in 1996 and appointed CEO on April 1, 1997, refused to sign the contract because he claimed the terms were "inferior" to his own terms, said the former prime minister.

"Apparently there was no willingness to consider (Tengku) Mahaleel's views so he refused to sign and the board decided not to renew his contract," Dr Mahathir told a press conference here today.

He was commenting on the decision to remove Tengku Mahaleel made by the board of directors of Proton at their meeting Monday evening chaired by Datuk Mohammed Azlan.

Tengku Mahaleel is on leave from today and would retire on Sept 30 this year.

Datuk Kisai Rahmat, currently Director of Operations and Datuk Kamarulzaman Darus, currently coe Proton Tanjung Malim Sdn Bhd, have been appointed chief operating officers of Proton Holdings effective today replacing Tengku Mahaleel.

Dr Mahathir also said Tengku Mahaleel's ability to run Proton was cramped after he was removed from the chairmanship of major Proton subsidiaries.

He had been demoted to ordinary director whereas the chairmanship of these subsidiaries were assumed by the chairman of the holding company.

Asked on the automotive scene worldwide when CEOs of big car companies were dismissed because the company had failed, he said: "But I don't know whether (Tengku) Mahaleel has failed."

"Under (Tengku) Mahaleel, Proton has been profitable with an accumulated cash of over RM4 billion and had even used RM1.8 billion to build the Tanjung Malim plant without outside borrowings and without asking the government for help.

"I don't know whether that is considered as failure," said Dr Mahathir.

"I am quite sure that Proton will do better with the new management," he said.

Turning to the controversy surrounding Approved Permits (APs), Dr Mahathir said he would "make a written statement for all so that there will be no misinterpretation."

-- BERNAMA