Khazanah oh Khazanah and Talent Corp 70,000

updated.

Blogger Syed is on a roll and has dug up more losing ventures by Khazanah Nasional, alamak they are also into multi million prawn rearing in Terengganu, come to think of it those "brilliant" Khazanah Managers should really stop competing against other local business men in Malaysialah, Khazanah got very deep pocket our money mind you, to spent, not fair ..read more here

Tuna Wrangling At Khazanah Nasional.

Original Post:

I do not remember Dr. Mahathir ever writing about the Khazanah Nasional and I had a feeling he would be writing about it when I saw him over in RTM 1 giving a talk on RMK-10 last Friday when he does not seemed at ease when asked about Khazanah and the so called GLCs which followed the Singapore generic term for Government Linked Companies however nowadays some of these Linked companies may stand for Government Losing Concerns.

So yesterday 13 July 2010 what do you know, Dr Mahathir come out with this gem on his simple but great blog produced here without the Grand Old Man's permission:

1.Fresh from losing three billion ringgit via its majority owned firm Sime Darby, I hear that Khazanah is buying or going to buy "Aman Resorts".

2.These are six star resorts in Bali, Phuket and other exotic places. I don't know how profitable they are but I do know that hotels and resorts are not easy to manage, even less easy to make profits. It is the management companies which make the profits because profitable or not they get their cut of the takings.

3.I am sure Khazanah is well aware of this. Perhaps it is also aware that its investments in fishing had failed. The boats, the nets and other fishing paraphernalia are now dumped in the Langkawi Boustead boatyard. I am told they are for sale.

4.It was a great fishing venture. Special nets were supposed to be used to catch young tuna fish in the Indian Ocean. The fish would not be landed but would instead be dragged while still in the net to Langkawi. There they would be fed and grown until big enough to harvest.

5.It was as innovative a way to catch fish as any and a multimillion Ringgit industry was forecast. I don't know how much Khazanah invested in this failed venture.

6.Well, as I said, the whole investment had ended with the hardware and boats dumped in Langkawi. It did not involve billions, but it must involve maybe a hundred million plus. It is peanuts by comparison to the kind of money handled by Khazanah. We should regard it as a failed experiment. Research cost money. There is no guarantee of results. But it would be interesting to know how Khazanah came upon this idea, what were the fees, who bought the boats and fishing tackle and at what price.

7.Experience is a good teacher. Has this experience taught anyone anything.


I checked Khazanah Nasional's website and found these very important words of wisdom:

Khazanah Nasional is the investment holding arm of the Government of Malaysia and is empowered as the Government's strategic investor in new industries and markets. As trustees to the nation's commercial assets, our main objective is to promote economic growth and make strategic investments on behalf of the Government which would contribute towards nation building.

Khazanah is also tasked to nurture the development of selected strategic industries in Malaysia with the aim of pursuing the nation’s long-term economic interests.

Khazanah has investments in over 50 major companies, both in Malaysia and abroad, and our companies are involved in a broad spectrum of industries.

Khazanah is also the key agency mandated to drive shareholder value creation, efficiency gains and enhance corporate governance in companies controlled by the government, commonly known as Government-Linked Companies, or GLCs.

Certainly, I think the hotel line or tuna fish catching and rearing are not strategic business by any stretch of a economist and a layman's imagination which would contribute towards nation building.

Blogger Syed of Outsyed the Box fame who have always been on a vigilant look out on Khazanah as a good citizen should be, more comments from his blog here:

excerpts:

1. So the vendor, DLF of India, will make a USD200.0 million profit in just three years. Khazanah will be the sucker? Singapore’s Temasek was originally reported as looking at buying Aman Resorts. Wherever Temasek goes, Khazanah also ends up going there. Here is an interesting point. The valuation of USD600.0 million includes the Delhi property, which however is not part of the sale. How do you explain that?

2. This is a most mind boggling venture - Capturing large quantities of live tuna and then transporting them while still inside the nets to a safe ‘farm’ is a highly risky venture which even seasoned tuna operators in the world rarely undertake. Very few companies around the world have done this profitably. National Geographic once showed some people doing this, but maybe someone paid National Geographic to make the documentary too. How much was invested by Khazanah in this foolish investment? Not less than RM250 million. I am guessing but it is not a wild guess. Everything that Khazanah does costs the taxpayers hundreds of millions of Ringgit. And we do not know how all this money is spent.

3. No Khazanah has not learnt anything. They do pay themselves fat salaries though. A young CEO of a Khazanah company may be paid up to RM50,000 per month (cash and benefits, but mostly cash). Then they hire expensive con-sultans to think up ways in which they can lose money.
Just yesterday I heard that Khazanah pays con-sultans from a company (abbreviation ‘ey’) to advise them how to save money on their procurements. This con-sultan is believed to charge Khazanah RM300,000 per month for this particular con-sultancy.
The con-sultan simply uses a manual or some book from their principals in the US, modifies the language to suit Khazanah and charges RM300,000 per month. The public needs to know just how much Khazanah Nasional Bhd and its group of subsidiaries and associate companies have paid to the con-sultans over say the past four years?

RM100 million, RM200 million, RM400 million? How much? And what are the benefits of all this con-sultancy? How much business and profits have been generated by all these con-sultans?

And if the Government is going to go bankrupt by 2019, why is Khazanah taking out USD600 million (that will be the purchase price of Aman Resorts) out of the country?
And what has happened to Khazanah’s investment in that college or university in China? How many hundred million Ringgit (or USD) was involved there? Ada untung ke tak ada untung?

How many jobs have been generated for Malaysians from investing all these hundreds of millions of taxpayers money in all thes strange projects?

I think Khazanah Board of Directors Chaired by the PM should really look at the Management Team of Khazanah led by Azman Mokhtar and his group of very costly overseas trained and experienced Managers whether they are up to the job entrusted to them, that is to "nurture the development of selected strategic industries in Malaysia with the aim of pursuing the nation’s long-term economic interests"

This is public money we are talking about. Amanah Negara tu.

The protracted battle to gain control of Parkway maybe strategic but definitely wild tuna fish rearing and owning luxury hotels around the globe is just wasting PUBLIC money which could be made to good use somewhere else in this gloomy economy this half of 2010.

Now I hear one of the Khazanah Director/EPU Minister says that Talent Corp will be wooing 70,000 overseas Malaysians back with less bureaucracy and more perks? I wonder where these high paying people would be placed? The GLC's? and they get to have more pay doing the same job that the loyal Malaysians have been doing with lesser pay...that is a recipe for major industrial relations disasterlah. Why not selectively woo Malaysian or non Malaysian researchers and PH.D lecturers experts intheir field from overseas and recruit them to teach at the IPTAs. The rakyat will get better value for money.

One good lecturer makes 10 good post graduates students. One oversea young Malaysians recruited from overseas to the GLCs will make say 5 experienced and industrious local Malaysian Managers unhappy resulting in low morale and low production and very pissed off voters .

If you recruit 70,000 overseas Malaysian young guns they probably make 70,000 x 5 = 350,000 pissed of voters. That is not good for the ruling BN Government.

I do hope the Government realise what it is doing.