Friday, 29 April 2016

In Malaysia 1MDB fined by BNM and in Singapore two people have been charged in probe

Singapore has started to prosecute 1 MDB related offences:


The wheels of justice moves inch by inch at the place where it all started:

Malaysia's troubled 1MDB fund ordered to repatriate money

Malaysia's central bank on Thursday ordered troubled state-owned investment firm 1MDB to repatriate money that was sent overseas without approval, putting further strain on the scandal-plagued company just days after it defaulted on a bond issue.

The fund, founded in 2009 by Prime Minister Najib Razak, is teetering on the brink of collapse amid multiple investigations around the world into allegations that billions were looted from it.

Najib also has been under pressure over $681 million that he received from overseas in 2013.

A statement issued by the central bank, Bank Negara Malaysia, did not specify how much money 1MDB had been ordered to repatriate.

But the bank has been pressuring 1MDB, or 1Malaysia Development Berhad, over $1.83 billion that the company has said was previously remitted abroad.

As questions swirl around billions of dollars moved around the world by 1MDB, Bank Negara has said the company failed to prove the ultimate use of the money or comply with previous instructions to repatriate the $1.83 billion.

The bank's order requires "1MDB to repatriate monies remitted abroad", it said, adding that the company has "failed to submit evidence and documentation specified by the bank to justify its inability to fully comply with the repatriation order".

1MDB said, in a statement, it would pay an undisclosed fine for not complying with Bank Negara’s orders but it did not say if it would also repatriate the money in question.

1MDB, whose advisory board is chaired by Najib, earlier this week defaulted on a $1.75 billion bond issue after missing a $50 million interest payment, triggering fears that the government will have to step in and bailout 1MDB, which could rattle markets and hurt Malaysia's credit rating.

1MDB, which ran up more than $11 billion in debt in a series of much-questioned investments, has steadfastly denied money was stolen or that it was in financial trouble.

Read in full here.

Read this as well: Bank Negara Malaysia fines 1MDB

Monday, 25 April 2016

Arul Kanda Kandasamy sudah angkat tangan kah?

"What we cannot discount is there could actually be fraud...a massive fraud...and maybe there was collaboration from our side"
Arul Kanda Kandasamy on 1MDB loans

This is a report from The Edge Markets:

The Edge Markets
Monday, April 25 2016

Edge Weekly

1MDB's US$1b default could trigger cross default on its other debts, says Arul

By Tan Choe Choe / theedgemarkets.com   | April 25, 2016 : 8:20 AM MYT   

KUALA LUMPUR: If troubled 1Malaysia Development Bhd (1MDB) defaults on its US$1 billion loan from Abu Dhabi's IPIC, that could trigger cross defaults on the fund's other debts, including some bonds, according to the fund's president and group executive director Arul Kanda Kandasamy.

Though 1MDB has declared just four days ago that it is free of all its bank and short-term debts, it still has a RM5 billion sukuk with a government guarantee, another RM2.4 billion Bandar Malaysia sukuk, a RM800 million loan from the Social Security Organisation or Socso in short, and in his words, "the one that everyone is worried about", a US$3 billion bond the fund issued in 2013 to fund the Tun Razak Exchange development.

In an exclusive interview with The Edge Malaysia, published in the weekly's cover story for the week of April 25-May 1, a clearly frustrated Arul told the publication's Executive Editor Kathy Fong and Associate Editor Jose Barrock what had derailed the asset for debt settlement with IPIC, which he thought was a done deal and the final piece of the jigsaw to rescue 1MDB from its massive debt woes -- and what could happen next now with IPIC's declaration of default against 1MDB.

The binding term sheet 1MDB signed with IPIC in June 2015 got the cash-strapped 1MDB then the US$1 billion it needed to settle some immediate obligations, including a US$975 million syndicated loan led by Deutsche Bank AG.

There is one crucial item on the term sheet, which is that 1MDB has to transfer the amount that IPIC paid, the cash plus the interests — US$1.15 billion — by Dec 31, 2015, according to Arul. As such, he said: "actually, we were in default since December". But he questioned why IPIC waited until now to make the announcement.

"It should have been made immediately after the default as it’s a large amount. Why wait until April to say you don’t own Aabar BVI?" 

As to the US$3.5 billion worth of payments that 1MDB made to Aabar BVI (Aabar Investments PJS Ltd), the company with the near identical name to IPIC's subsidiary Aabar Investments PJS, Arul said: "What we cannot discount is there could actually be fraud...a massive fraud...and maybe there was collaboration from our side".

He also spoke about wanting to quit 1MDB, and how the issues at the fund was not his and "not what I signed up for". "I'm very tired. I'm doing over and above what I had signed up to do."

Read in full  here.

I think Arul is a professional who tries his best to make good out of an impossible situation. Heard he got paid handsomely for it too, but I think he is not suited for the mission. Best of luck in your future endeavors Arul.

Friday, 22 April 2016

Singapore is first country to charge a person following its 1MDB probe

Our prayers have been answered:



excerpts:

'Singapore authorities have charged a former private banker with money laundering, following their probe into an embattled Malaysian state investment fund, according to people familiar with the case.


Yeo Jiawei, a former wealth planner at the Singapore arm of Swiss private bank BSI SA, was charged on April 16, said the people. While the charge made no mention of 1Malaysia Development Bhd., they stemmed from investigations into the fund’s money flows, the people said. Singapore’s Attorney-General’s Chambers on Friday confirmed Yeo’s identity and the charge' 

Read in full at Bloomberg here.

Read here to find out what investigations are being done in each country related to 1MDB:


Thursday, 21 April 2016

Did you know 1MDB will settle all its debt only in 2039

2039? Well many of us would likely not be around by then or just too old to care.



Page 81 of the PAC Report
Well the debts may be paid but the criminals who conspired to defraud the Malaysian Government by transferring money out of 1MDB to illegal accounts that are not supposed to receive the Billions of Ringgits must be caught and sent to jail preferably for the rest of their natural lives. They are a threat to Malaysia's national and financial security if not the world for sure.

Read this post by Dato' Sak:

The Heist of the Century that puts Malaysia on the map of villainy.

Tuesday, 19 April 2016

Dark days for 1MDB ahead and our Country too perhaps? Pray not.

IPIC had terminated their agreement with 1MDB yesterday and the fallout would greatly affect Malaysia and Abu Dhabi certainly:





Leslie Lopez Regional Correspondent In Kuala Lumpur  

The dispute between Abu Dhabi's second-largest wealth fund and Malaysia's state-owned 1Malaysia Development Berhad escalated yesterday after the Arab emirate group declared Kuala Lumpur's fund was in default of a multibillion-dollar financial assistance arrangement.

The declaration by Abu Dhabi's International Petroleum Investment Company, or IPIC, against 1MDB immediately throws into limbo a complex US$3.5 billion (S$4.7 billion) international bond the Malaysian fund raised in May 2012 with full, iron-clad guarantees from the tiny oil-rich emirate's business entities.

And because of the protracted nature of the disagreement, financial executives tracking developments in the bitter feud say that international investors, who subscribed to the bonds that were arranged by international banking group Goldman Sachs, may have to wait a long time before they are compensated.

"This is going to be tied up (in legal fights). Neither party is going to step up to settle with bondholders because they are holding on to two very different interpretations of agreements and events," said a senior chief executive of a Malaysian-based financial institution, who has had dealings with 1MDB and IPIC.

As reported by The Straits Times yesterday, the feud between the two state investors revolves around fund transfers of roughly US$3.54 billion that 1MDB says it made to units of IPIC under obligation of the May 2012 bond agreement.

1Malaysia Development Berhad has an $18 billion debt pile, a third of which it was hoping to retire in a deal with an Abu Dhabi state firm.

But IPIC declared last week that it never received the money. That move quickly brought into focus a US$50 million instalment payment on the 1MDB bonds, which falls due at noon today and monies IPIC must honour under the bond agreement.

In a filing to the London Stock Exchange yesterday, IPIC made no mention of the US$50 million payment. It said that it had declared a default on grounds that 1MDB and the Malaysian government had failed to meet obligations under the financial assistance plan and honour payments of "US$1.1 billion plus interest" that were now in default.

The Abu Dhabi fund noted that it "was now considering all its options to remedy the default, including referring the matter to the appropriate dispute resolution forum".

1MDB issued an equally forceful statement, declaring that under an agreement in early June last year, IPIC promised to honour all interest payments under the bond agreement in exchange "for certain undertakings to transfer assets and cash to IPIC". 1MDB added that a "dispute has arisen" over obligations that both parties must honour under the agreement and "understands that IPIC has not paid the interest".

In clear reference that it would be challenging IPIC's declaration of default, 1MDB said it wished to "make clear that it and its group entities would meet all of their obligations under any other financing arrangements". Just hours before IPIC's default declaration today, 1MDB issued a separate statement claiming it stood on solid financial ground, noting that it had repaid all its bank debt and held cash surpluses of around RM2.3 billion (S$800 million).

But there are serious implications for the Malaysian government in the feud. 1MDB senior management had advised Prime Minister Najib Razak that a default on the US$3.5 billion bond issue was likely to trigger so-called cross-defaults on the fund's other commitments, which stand at about US$5.1 billion. 

Read in full from the Singapore Straits Times here.

...and finally I am guessing this is the WSJ response to the Bernama 'aware' interview with the Saudi Arabia Foreign Minister Al-Jubeir and finally the name Jho Low is mentioned for all the world to see and read:



By TOM WRIGHT and BRADLEY HOPE

In March 2013, a young Malaysian financier sent a heads-up to an employee at a Kuala Lumpur bank that “681 American pies” would soon be arriving from overseas.

The sender, Jho Low, emphasized the need for secrecy, according to a transcript of BlackBerry instant messages reviewed by The Wall Street Journal.

The employee, he wrote, should tell the bank’s chief executive that “PM” didn’t want his name, address or identity-card number to appear on the transaction.

Within days, $681 million arrived in two transfers at AmBank Bhd. to be deposited in the personal account of Malaysian Prime Minister Najib Razak, according to documents seen by the Journal.

Global investigators believe those transfers represent a portion of the money diverted from a Malaysian state economic-development fund called 1MDB over several years, according to people....


Read in full here.



Sunday, 17 April 2016

Aware means 'you are informed about a person or a situation' (example: the RM2.6B Donation)

With due respect to the debate on the 'u-turn' made by the Saudi Foreign Minister when he was met by chance by the Bernama reporter:







Tok Kadir Jasin ask:

Is the Donation Issue Really Over?

Me: No

... Anybody who thot that the person(s) who 'scripted' the chance encounter with the Saudi FM is a savior must be severely deluded.

Tuesday, 12 April 2016

'Penyelewengan 1MDB amat jelas. Jika Najib seorang yang bermaruah, dia sepatutnya meletak jawatan sebagai Perdana Menteri' - TSMY

1. Saya telah tegaskan dari awal lagi bahawa penubuhan 1MDB adalah tidak perlu. Dengan struktur modal hanya RM1 juta dan hutang RM42 bilion, model perniagaan 1MDB tidak mapan dan akhirnya menjadi beban kepada negara. Saya juga telah menasihati Dato’ Seri Najib supaya beliau tidak menjadi Pengerusi Lembaga Penasihat 1MDB kerana ia tidak wajar. Saya menyatakan agak luar biasa sebuah syarikat mempunyai Lembaga Penasihat.
2. Saya juga pernah menzahirkan kebimbangan saya mengenai masalah aliran tunai syarikat yang amat teruk sehinggakan tidak mampu membayar hutang. Juga mengenai pelaburan yang mencurigakan tanpa dibuat due diligence sebelum perjanjian dimaterai.
3. Saya juga mempersoalkan pelan rasionalisasi 1MDB yang belum tentu dapat ditunaikan. Malah penjualan aset-aset 1MDB tidak menjamin boleh menyelesaikan hutang-piutangnya yang bukan semakin berkurang tetapi meningkat kepada RM50 bilion. Saya juga telah meminta seluruh ahli Lembaga Pengarah dipecat dan tindakan undang-undang diambil terhadap mereka. Baru kini mereka meletak jawatan.
4. Laporan PAC mengesahkan segala pandangan dan kebimbangan saya mengenai 1MDB. Najib nampaknya bersedia menerima laporan PAC, tetapi malangnya dia telah menghukum saya apabila saya menyuarakan hal yang sama di dalam kabinet. Hari ini penyokong-penyokong Najib mencanang bahawa nama Najib telah dibersihkan oleh PAC dan meminta rakyat terus bergerak ke hadapan dengan melupakan episod hitam penyelewengan 1MDB. Mana mungkin? Berapa kali dalam laporan PAC disebut Perdana Menteri, Menteri Kewangan dan Pengerusi Lembaga Penasihat 1MDB, iaitu Najib.
5. Laporan Jawatankuasa Kira-Kira Wang Negara (PAC) mengenai 1MDB tidak membebaskan Najib daripada dakwaan penyelewangan. Sebaliknya laporan PAC mendedahkan mengikut Artikel 117 Memorandum dan Artikel Penubuhan 1MDB, sebagai Pengerusi Lembaga Penasihat Najib terbabit secara langsung membuat keputusan-keputusan penting berkaitan komitmen kewangan syarikat, termasuk pelaburan. Justeru, tidak hairanlah sepertimana yang dilaporkan oleh PAC, pihak pengurusan 1MDB banyak membelakangkan arahan Lembaga Pengarah syarikat dalam melaksanakan usahasama dan pelaburan kerana kuasa tersebut terletak di tangan Perdana Menteri.
6. Antaranya ialah keputusan Lembaga Pengarah meluluskan pemindahan sebanyak USD1 billion ke dalam akaun bank syarikat usahasama 1MDB Petrosaudi Ltd. Pihak pengurusan hanya memindahkan sebanyak USD300 juta ke dalam akaun bank 1MDB Petrosaudi Ltd, manakala baki sebanyak USD700 juta dimasukkan ke dalam akaun syarikat Good Star Limited milik Taek Jho Low, iaitu kenalan rapat Najib.
7. Sepertimana yang dilapor dalam hansard prosiding PAC, mantan Ketua Pegawai Eksekutif 1MDB Datuk Shahrol Azral mengesahkan pemindahan wang berjumlah USD1 bilion untuk usahasama dengan PetroSaudi Ltd telah mendapat kelulusan bertulis daripada Perdana Menteri. Saya percaya pihak pengurusan 1MDB juga menerima arahan daripada Perdana Menteri dalam membuat keputusan-keputusan pelaburan berisiko tinggi yang tidak masuk akal. Antaranya ialah keputusan untuk melabur sejumlah USD2.318 bilion dalam Segregated Portfolio Company (SPC) melalui Bridge Global Absolute Return Fund SPC, iaitu sebuah syarikat yang baru sebulan ditubuhkan, tiada lesen sebagai pengurus dana dan tiada pengalaman untuk menguruskan dana yang besar. Begitu juga dengan dana berjumlah USD3 bilion yang sepatutnya digunakan untuk projek pembangunan TRX tetapi telah dipindahkan kepada 1MDB sebanyak USD 1 bilion, kepada 1MDB Energy Ltd sebanyak USD 28.85 juta, kepada Brazen Sky Ltd sebanyak USD 1.5 juta dan pelaburan di luar negara sebanyak USD1.58 billion.
8. Penyelewengan dalam 1MDB telah menyebabkan syarikat ini gagal menjana pendapatan yang mencukupi untuk membayar hutang. Malah 1MDB terpaksa meminjam wang untuk membayar hutang yang telah meningkat secara mendadak daripada RM5 bilion pada tahun 2009 kepada RM50 bilion pada tahun 2016. 1MDB memerlukan RM3 bilion setahun untuk membayar faedah ke atas hutang sahaja. Dengan kebanyakan aset 1MDB telah dijual dan pelaburan yang mencurigakan, berkemungkinan besar kerajaan terpaksa menanggung segala hutang syarikat. Saya amat bimbang beban onar 1MDB akhirnya akan terpaksa ditanggung oleh rakyat.
9. Antara skop laporan PAC ialah untuk menentukan samada wang hasil pelaburan 1MDB di Cayman Islands berjumlah USD2.318 bilion sudah dibawa balik ke Malaysia. Malangnya, PAC gagal menyatakan perkara ini dengan jelas. Tidak dapat juga dipastikan ke mana perginya wang USD700 juta dan USD330 juta yang dimasukkan ke dalam akaun Good Star Limited milik Jho Low; USD3.51 bilion yang dibayar kepada Aabar Investment PJS Limited; USD940 juta dalam bentuk 'unit' yang dikatakan disimpan dalam Bank BSI di Singapura; dan USD1.56 bilion yang dilabur dalam 1MDB Global Investments Ltd. Kesemuanya berjumlah USD7 billion (RM28 billion).
10. Terbaharu, International Petroleum Investment Company (IPIC) yang berpangkalan di Abu Dhabi menafikan syarikat tersebut atau unitnya Aabar Investment PJS telah menerima USD3.5 bilion daripada 1MDB menerusi Aabar BVI sepertimana yang dilapor kepada PAC. IPIC juga menafikan mereka ada sebarang kaitan dengan 1MDB. Ini suatu pendedahan yang amat memalukan. Ia suatu penipuan. Jika IPIC tidak menerima sebarang bayaran daripada 1MDB, ke mana perginya wang ini? Kegagalan untuk memastikan ke mana perginya wang ini mengukuhkan lagi pandangan saya sebelum ini bahawa 1MDB sejak dari awal lagi adalah satu skim untuk menipu.
11. Jadi kepada menteri-menteri kabinet dan Najib sendiri yang menganggap penyelewengan 1MDB telah selesai dan namanya telah dibersihkan, seraya mengajak rakyat supaya bergerak ke hadapan, janganlah anda cuba bersandiwara atau mengalihkan isu. Rakyat tidak akan lupa puluhan bilion wang negara telah diseleweng. Orang yang mencuri ayam pun ditangkap dan didakwa. Masakan individu yang mencuri puluhan bilion wang negara terlepas begitu sahaja?
12. PAC telah memperakukan supaya bekas Ketua Pegawai Eksekutif 1MDB, Datuk Shahrol Azral, disiasat oleh pihak berkuasa. Saya menggesa supaya pihak berkuasa segera membuat siasatan dan Datuk Shahrol mestilah menyatakan perkara yang sebenar. Siasatan mengenai aliran keluar wang 1MDB yang masih belum terjawab juga perlu diteruskan.
13. Tanpa memperkecilkan laporan PAC, penyiasatan yang dijalankan ke atas 1MDB tidak konklusif. T maklumat-maklumat penting berkaitan pelaburan luar negara yang tidak dapat ditentukan kesahihannya. Apa lagi ia telah menyebabkan kerugian bernilai berbilion ringgit kepada IMDB seperti usahasama dengan Petrosaudi. Sebenarnya Najib bertanggungjawab sepenuhnya di atas penyelewengan 1MDB. Sebagai Pengerusi Lembaga Penasihat 1MDB yang berkuasa membuat keputusan berkaitan komitmen kewangan syarikat, dia tidak boleh mencuci tangan dengan meletakkan semua kesalahan ke atas Lembaga Pengarah dan pihak pengurusan syarikat.
14. Gesaan saya selama ini supaya Najib meletak jawatan sebagai Pengerusi Lembaga Penasihat 1MDB ternyata berasas. Mana pernah berlaku dalam sejarah negara kita seorang Perdana Menteri yang juga Menteri Kewangan mempunyai kuasa untuk membuat keputusan bagi sebuah syarikat awam. Hal ini telah diakui oleh PAC dalam laporannya yang membuat perakuan supaya Lembaga Penasihat bersama Artikel 117 M&A syarikat dimansuhkan.
15. Namun, pemansuhan Lembaga Penasihat 1MDB sahaja tidak memadai. Najib ialah orang yang terlibat secara langsung dalam penyelewengan 1MDB sehingga menyebabkan syarikat ini menanggung beban hutang yang besar dan kerajaan terdedah kepada risiko hutang RM20 bilion. Jangan pula nanti ada tindakan bail out oleh kerajaan.
17. Penyelewengan 1MDB amat jelas. Jika Najib seorang yang bermaruah, dia sepatutnya meletak jawatan sebagai Perdana Menteri.

MUHYIDDIN YASSIN
12 APRIL 2016

Monday, 11 April 2016

Dr Kua whacks DAP as he delivers a great post for Malaysian democracy

Dr Kua Kia Soong does come up with some good ideas to support old ideas like limiting the term of office of elected officials:


By Kua Kia Soong

The Citizens’ Declaration calls upon all Malaysians “… to join us in saving Malaysia from the government headed by Najib, to pave the way for much-needed democratic and institutional reforms…”

Just how serious are the politicians who signed the Declaration in wanting to see much needed democratic reforms? A party such as the DAP should not need much convincing to carry out democratic reforms because they are the only party in the Malaysian landscape with “Democratic” in their party name. Yet when DAP state assemblyperson Teh Yee Cheu proposed a motion in the Penang State Assembly to limit the office of the Chief Minister to two terms, it was soundly rejected and he seems destined to oblivion in the party. Incidentally, he had also done what the DAP has often challenged Barisan Nasional legislators to do, namely, to vote according to their conscience and not bow to the party whip. In this, Teh had also supported an opposition motion to review the reclamation projects taking place in Penang. For that politically courageous act, he has likewise sealed his fate in the party.

Let us look at this issue of term limits in perspective. We are not talking about radical democracy such as was practiced during the Paris Commune of 1871 when elected officials were subject to immediate recall. In ancient Greece more than 2000 years ago, many offices were term limited so as to limit the power of individuals, a practice that was seen as vital for the greater good of society. 

Here in 21st century Malaysia, we are merely proposing that for much needed democratic reform, the terms of ALL elected officials be limited – not just the Prime Minister, Chief Minister or Menteri Besar (to two terms) but also Members of Parliament and ADUNs (to four terms).

MP since the era of the Tunku

We are living in a rapidly evolving age of change as the DAP are so often reminding us. Yet we still see the old DAP leaders hogging their seats for more than four terms and some having been in Parliament since the era of the Tunku – half a century ago. During that time, Umno (surely not the paragon of democracy) has changed party leaders five times.

Is the DAP so bereft of capable leaders that they need these old leaders to cling onto their seats ad nauseum using the trite excuse that they are still needed? I remember when I was in the Selangor DAP, “HQ” insisted that the DAP leader of the Opposition in the State Assembly had to be an old leader who held office in the Federal Parliament as well as the State Assembly. A number of us revolted against this decision and we were proven correct when another young DAP State Assemblyperson took over as Opposition Leader and did the job creditably. We were revolting not so much against the lack of term limit as the absurdity of a DAP leader holding both a federal and state office.

The late Karpal Singh, whom DAP leaders all say they admire, was a stern opponent of this grabby practice by established leaders to hog federal as well as state seats. His famous line when a former DAP stalwart left the party was: “No one is indispensable.” That surely applies to everyone in the world. Or are some people exempt from this mortal truism?

The democratic justification to limit the term for elected officials

Many modern republics employ term limits for their highest offices. The United States place a limit of two terms on its presidency while some state governors and state legislators also have term limits. The Russian Federation also limits the head of state to two terms; any further terms cannot be consecutive.

The democratic justification for this term limit is simply that elected officials can over time obtain too much power or authority and thus make them less representative of all the citizens. The democratic principle behind term limit is that no one person should have too much power nor for too long. The concept of term limits minimises the amount of power any one person can gain over a period of time.

Preventing chances of corruption

As we have seen only recently, even within the two-term service, corporate interests including those in property and finance can provide inducements to the incumbent especially when they have developed familiar relations over time. There is clearly a correlation between the length of time a politician serves and the degree to which he/she has opportunities to engage in corruption. The principle of term limits has always been applied to the civil service which is why civil servants and police personnel are transferred every so often to prevent the acquisition of power and inducements to corruption in any one post.

Term limits would make this less likely since there is less time that a politician can be influenced by the power of the office that they hold. Corporate interests cannot become as entrenched when term limits are in place. With term limitations, corporate influence still happens, but not to the extent that it can when such interests develop unhealthy relationships with career politicians who are in office for a long time.

Preventing careerism

In a democracy, elected representatives are supposed to represent the interests of the citizens. As most politicians will tell us when they are interviewed, their work is supposed to be a service to society as a whole. Being a Member of Parliament or State Representative is not a profession even though it has become a career for many people. In fact, elected officials should operate on the understanding that they are only serving the people for a period of time until it is someone else’s turn. Term limits ensure that their representatives focus more on representing the public than on hogging the office and power.

Providing leadership opportunities for others

Democracy and organisational development are about providing opportunities to as many people as possible and especially to the young, women, indigenous people and the marginalised. In our society, there are so many individuals with untapped potential for leadership as if that is not clear for all to see. In recent years, we have seen the surge of many young capable leaders in the DAP, including women from non-Chinese origins.

Let’s face it, the number of available seats in the federal parliament and state assemblies are strictly limited. To have served four terms in parliament is a reasonable limit and allows new candidates to make themselves known to their constituents and have a go at representing the people. Term limits will create the opportunity for younger people to get elected to public office. Modern society needs service-oriented young people in different elected positions, providing diversity and strength to the citizenry. A wider pool of candidates also gives voters a bigger choice of new people and new dynamic ideas.

A long awaited democratic reform for Malaysia

Thus, this principle of not allowing any one person to hold a position of control or power for an indefinite period of time is for the common good and should be an urgent democratic reform for Malaysia. The terms of ALL elected officials should be limited, namely, that of the Prime Minister, Chief Minister or Menteri Besar to two terms, and that of Members of Parliament and ADUNs to four terms. For reminding us of this long awaited democratic reform, we have the DAP state assemblyperson for Tanjung Bungah to thank. Let’s hope he is rewarded by his party for this public service.

Kua Kia Soong is the advisor of Suaram (Suara Rakyat Malaysia).

Wednesday, 6 April 2016

'Proton' by Dr M....just for MITI Minister and the rest of Cabinet Najib

Was hoping that Dr. Mahathir come up with something on Proton that he just left, and true to form he did not disappoint:

PROTON

I feel I owe you all an explanation as to why I resigned as Chairman of Proton.

I was not expelled by Proton management or owners. I decided on my own, for the sake of Proton I should leave. I therefore have no grudge against Proton nor do I want it to fail after I left.

This is because Proton seems to be having difficulties with the Government and for some unknown reason sales of Proton cars have plummeted.

I know I am persona non grata with the Government. I do not want to be the cause of Proton’s inability to recover because of my presence.

I would in fact like to see Proton recover and do well.

So, please, Proton owners and buyers, don’t take it out on Proton because I am no longer the Chairman. Please continue to support Proton.

Proton has great ideas about introducing new models which are of good quality. This month they will launch the new Perdana. Later in the year they will launch the new Persona and Saga.

Proton cannot expect any help from the Government.

Only Proton owners and fans can help Proton. So please help Proton, your national car maker.


1. I am no longer the Chairman of Proton. However I feel a need to merely state the facts.

2. Firstly Proton is now privately owned after it was bought at RM5.50 per share (originally priced RM2.95 but bidding pushed the price up) largely from Khazanah and a few other share holders. Khazanah was supposed to hold shares for Bumiputras but is now representing the Government. Proton is not a GLC (Government Linked Company).

3. Government policy previously was to encourage local contents. All cars manufactured or assembled in Malaysia are entitled to rebates on excess duty based on the percentage of local contents used. Most foreign cars assembled in Malaysia has 30 – 40% local contents. Proton has almost 90% local content. Therefore the rebate for Proton is higher. It is not a privilege for Proton alone. All foreign and local cars enjoy this privilege. Local contents increase the cost of producing the car. This is because the deletion allowance by the foreign company is invariably lower than the cost of the local component.

4. The Government claims to have provided grants, various forms of assistance as well as tax foregone to the take of about RM 13.9 billion in total.

5. Most of this is made up of taxes foregone. Proton records show the following:
(1) RM 1,320 million as tax incentives to Proton also eligible to non-national cars
(2) RM 773.8 million in R&D Grant, Special grant, Stimulus package, eligible to all automotive manufacturers.
(3) 12,532.6 million in customized incentives also eligible to all automotive players.

Total Government contribution from 1985 – to date amounts to RM 14, 631.4 million.
Details of (1), (2) and (3) are appended.

Total contribution by Proton to Government since 1985 totals RM 24, 905 million.
These are made up of the following:
(i) Excise duty from 1985 onwards RM 11,785 million
(ii) Sales tax from 1985 onwards RM 9,470 million
(iii) Corporate tax from 1985 onwards RM 1,410 million
(iv) Import duty from 1985 to 2008 RM 1,403 million
(v) GST from 1/4/2015 RM 28 million

Total RM 24, 095 million

Clearly Proton has paid more to the Government than Government to Proton.

Capital injection by Government in 2 seed funds total RM 400 million. These have been fully paid up. On top of this, Proton had fully funded the 1.8 billion Ringgit Tanjung Malim Plant from its internal coffers which at that point had a staggering total of 4 billion Ringgit.

6. In addition Proton provides jobs for about 12,000 workers at any one time directly, and more than 250,000 souls indirectly. Proton reduced the outflow of funds probably amounting to more than 100 billion Ringgit.

7. Vendors also create jobs and reduce outflow of funds.

8. We can forget the development of engineering capability as our policy now is to encourage imports.

9. Incidentally all the countries exporting cars to Malaysia implement tariff and non-tariff barriers resulting in excluding Proton importation into their countries. This contrast with our policy of allowing foreign cars to enter Malaysia with minimal or no restrictions.

10. It should be noted that Proton has to compete in its own domestic market against the likes of Toyota (10 million cars p.a.), South Korean car makers (5 million cars p.a.), German car makers (6 million cars p.a.) and others.

11. These companies can afford to lose on their cars in Malaysia and recoup in other markets. Apart from economy of scale, Proton cannot access foreign markets except those of poor countries with low Total Industry Volume.

12. Today the Government has no pride in national products. Imports are cheap and there are more consumers than producers. In democracy numbers count. So pleasing the more numerous is more important than national capacity of develop.

I believe that in time when DrM is no more with us, Proton would be regarded as one of the best legacy that he left us for the future. Problem is the PMs after him are just vision-less idiots.

Monday, 4 April 2016

No ifs, no buts, Gomen must help Proton same as it had helped 1MDB

Not very long after Dr. Mahathir resigned as Chairman of Proton the knives were out lead by of a person which I certainly did not expect... MITI Minister Tok Pa, the gentleman from Kelantan. The chorus from Rahman Dahlan is expected lah but Tok Pa...hmm. Terribly dissapointed. 

All because Proton wanted a measly RM1.5 Billion R&D Grant and a 1.5 Billion Soft Loan from the Government or is it nak lepas geram pada Dr. Mahathir? Wallahualam.

The NST lead the attack reporting on Proton:

No more free ride for Proton?

Unfortunately for reasons unknown DRB Hicom the ultimate owner of Proton has not yet made a statement on Dr Mahathir's departure nor of their plans for Proton in the future...perhaps soon.

In the mean time Mat Rodi came out in defence of Proton with facts and figures which should convince the Gomen to accede to Proton's request for funds. 

PROTON: A NOTE TO THE CABINET MEMBERS

1-   Within 24 hours after the resignation of Tun Dr Mahathir as Proton’s Chairman, the Ministry of International Trade and Industry produced a damning assessment on Proton.

2-   It would probably be the first time in Malaysia’s history we see a senior minister giving an unfavorable feedback on a private-owned company, especially when the company is not on a collision course with the concerned minister.

3-   Nevertheless, it is mind-boggling to see at least 6 cabinet ministers being used by certain leaders for the purpose of trying to shame Proton. 

4-   According to the statement, the Government cannot continuously protect the national car maker; hence Proton needs to “graduate from protection”. Malaysia, in fact, should learn from South Korea and Japan. 

5-   In 2009, the United States of America injected USD150 billion in order to save General Motors from bankruptcy. Of course, this is not considered as protectionism and no case study should be made why the world biggest capitalist decided to take such decision.

6-   In 2014, Australia’s car industry was practically dead when the Government did nothing to save the industry. The planned exit by Toyota, Ford and Holden from the country will trigger a net loss of 200,000 jobs, with about USD29 billion wiped out from Australia’s GDP. Again, no case study has been made.

7-   A year ago, Khazanah took Malaysia Airlines private by injecting RM6 billion of public funds. It is indeed a bold and courageous move- as an introduction of the Proton 30 years ago.

8-   While Proton is bleeding by the millions of Ringgit for the past few years, it never had to resort to what MAS did where 6,000 workers being told they have to be sacrificed in order to save the national airline. It’s like telling a man being devoured by a tiger that he is really helping to preserve a treasured species.

9-   Maybe because of the failure to take such drastic measures that the minister believes Proton is being managed unprofessionally and led by incompetent team.

10- The airlines industry is never a core industry in Malaysia. The automotive sector is. The industry employs more than 550,000 people and contributes nearly RM30 Billion to a country’s GDP to date. It is because of that, the previous Government has directly and indirectly assisted Proton to the tune of RM13.9 billion since its inception.

11- However, the incentives given have not been wasted. Hopefully, this note will tell the person who made use of you to acknowledge all these facts.

12- First, Proton has fully paid off its RM800 million loans received from the Government by using internal resources.

13- Second, Proton has sold more than 4 million cars. It means that they have been taxed by the Government. Since its founding, Proton has paid approximately RM24 billion in taxes.

14- Third, by having Malaysians buy national cars instead of imported ones, the capital outflow prevented by Proton is estimated to be around RM 120 billion if we take RM30,000 as an average price per car. This money is being circulated within our economy.

15- Monetarily, Proton is a good investment for the economy.

16- How about Proton’s contribution through job creation and transfer of technology? More than 77,000 people are employed directly by Proton. Additionally, there are 400 vendors supplying to the national carmaker. Proton is the most active company in the country when it comes to Research and Development. Today, they have registered almost 2,800 of Intellectual Property Rights (IPR).

17- The minister himself admitted that when he said a number of Proton vendors have approached him. Instead of fixing what really caused Proton’s market shares to dwindle, the ministry gave soft loans to alleviate vendors’ burden. This, however, does not solve Proton’s problem.

18- How about the unfair competition in the market where foreign cars get exemptions when they do not conform to our specifications? How about the definition of national car where foreign car makers can only have 40% local content to benefit from the tax-free status of national cars? How about the decision made by the Government to allow almost unlimited import of foreign cars from countries which are the same countries that made it bureaucratically difficult for our cars to enter their market?

19- All these policies have reduced foreign car makers cost which give them advantage over proton. Is this fair? Where is the solution?

20- The only solution that the Minister had for all these problems is to ask Proton to get a strategic foreign partner. To them, the locals are deemed unfit, unprofessional and incompetent. Therefore, we must sell our controlling stakes in Proton to foreign marques.

21- Perodua runs by a different model. Although its financial performance should be commended, none of the cars are 100% built by them. Proton, on the other hand has several cars that are 100% built by Malaysians. When Proton Saga was introduced in 1985, it has 19% locally made components. 15 years later, Proton Waja was built using almost entirely by locals.

22- Every country will protect their national car even in developed countries. In South Korea, all foreign cars must be conducted under Korean testing standards which usually come at a very high cost.  In Japan, they carve out the profitable and high volume market in minicars below 660cc. In Japan’s unique driving environment, it is very unlikely that a foreign company would want to build such car. In China, all foreign car makers have to partner with a state-owned company because nothing happens without the approval of the government.

23- Here in Malaysia, protectionism is deemed a negative thing.

24- It is strange that when an unsustainable business model like 1MDB posted a net loss of RM665.36 million for the year ended March 31, 2014, and having a serious cash-flow issues, the cabinet members decided to give almost RM1 billion standby credit facility.

25- But when Proton requests for assistance to reimburse its R&D cost and soft loans, some ministers ridicule and humiliate it. It is very strange, indeed.


Mat Rodi

Read in full with BM translation at Mat Rodi's own blog here.

Well, I say if more than 77,000 Malaysians directly employed by Proton is not enough to convince the Gomen to help Proton...God help us All ...as this is indeed a useless Gomen which does not care about its own citizens.