February 15, 2012
‘Cowgate’ scandal highlights Najib’s faded reforms
by Stuart Grudgings, Reuters
Shahrizat has denied any personal wrongdoing and has filed a defamation suit against two opposition members, including Zuraida. Wan Shahinur Izmir Salleh, Shahrizat’s son and NFCorp’s chief executive, has said the company was allowed to use the loan at its discretion and that the properties were bought to earn rental income. Even some UMNO members are not convinced by the explanation, however, and have called on Shahrizat to quit. Influential former prime minister Mahathir Mohamad has added his voice to calls for her dismissal. Reuters
elections will be delayed and highlights Prime Minister Najib Abdul Razak’s stuttering efforts to reform the corruption-prone South-East Asian nation.‘Cowgate’, as it has inevitably been dubbed, is providing rich fodder for the opposition as it digs up dirt on a publicly funded cattle-rearing project that it says was used as a personal fund for the family of one of Najib’s ministers.It is not the first corruption scandal to hit Najib and his long-ruling United Malays National Organisation (UMNO), but the farmyard connection makes it a potentially damaging one because rural Malays – the bedrock of UMNO’s support – may relate to it more easily than to more obscure financial matters.
“The cow issue is God-given,” Zuraida Kamaruddin, the head of the women’s wing of the opposition People’s Justice Party, told Reuters following a speech at a recent rally, which she punctuated with the occasional “moo” for comic effect.This time we have real evidence that proves their mismanagement.”
The family of Women, Family and Community Minister Shahrizat Abdul Jalil is accused of using RM250 million (US$83 million) in soft government loans meant to develop the cattle project to buy luxury apartments, expensive overseas trips and a Mercedes.
Meanwhile, the National Feedlot Centre project was found by the Auditor-General to have done little to reach its initial goal of making the country 40 percent self-sufficient in beef production by 2010.
Najib last month froze the assets of the National Feedlot Corporation (NFC), which is under investigation by Malaysia’s anti-corruption commission. With fresh allegations appearing almost daily on the country’s lively Internet news sites, the scandal adds to growing temptations for him to delay elections that must be called by April 2013.
The 58-year-old son of a former Prime Minister had been expected to call the polls around April, before a looming global slowdown risked hurting Malaysia’s trade-dependent economy. But with the US economy showing signs of recovery and the euro zone not yet imploding, he may feel he can wait and hope for the scandal to blow over while recent government handouts to poorer families take effect.
Gross domestic product figures out today are expected to show South-East Asia’s third-largest economy slowed in the last quarter of 2011 but still grew at a brisk annual pace of 5 percent.
The risk for Najib is that the scandal could balloon further or set off other allegations of graft, implicating other members of his government and giving a further boost to opposition leader Anwar Ibrahim. Anwar was acquitted on sodomy charges last month, leaving him free to campaign.
The ruling Barisan Nasional coalition is expected to hold on to its parliamentary majority after historic gains by the opposition in 2008. But the NFC scandal adds to the difficulty Najib faces in recapturing the coalition’s once impregnable two-thirds majority and winning a mandate to keep up with his tentative reforms.
That could set off an internal power struggle, with many expecting Najib’s more conservative, less reform-minded deputy Muhyiddin Yassin to launch a bid for the UMNO leadership.
“There are people within UMNO who don’t want any change at all,” said a Kuala-Lumpur-based fund manager who asked not to be identified. “If Muhyiddin comes in… he’s an old fashioned sort of politician and the market won’t react well.”
Fading reforms
Malaysia, once mentioned in the same breath as South Korea and Singapore as an Asian “tiger” economy, has mostly disappointed since the region’s financial crisis of 1997 as it struggles to revamp an economy centred on commodities and low-end manufacturing. Corruption has worsened, with the country sliding to 60th in Transparency International’s global ranking of graft perceptions last year compared to 33rd in 2002.
Najib has reached out to Malaysia’s middle class as a reformer, promising to replace repressive security laws and wean the country off a race-based economic system that has alleviated poverty but increasingly stunted growth, fuelled corruption and turned off foreign investors.
But he has watered down or backtracked on many of his key pledges, encountering opposition from within UMNO and its network of corporate interests that benefit from the system of ethnic Malay privileges.
Najib announced a significant overhaul of the system in 2010 named the New Economic Model (NEM), most of which has not been implemented. “The NEM is not only dead but has also been effectively buried under a new avalanche of preferential policies and contracts that run against the open, transparent and accountable system promised,” said Lim Teck Ghee, the Director of Malaysia’s Centre for Policy Initiatives.
Cowgate is a gift for critics who say little has changed on Najib’s watch since 2009 other than the rhetoric. In the first major red flag over its operations, the auditor-general said in a report last year that the NFC had failed to set up a network of satellite farms and produced less than half of its target of 8,000 head of cattle by 2010.
Whistleblowers, the opposition and Malaysia’s irreverent blogosphere then took up the baton. The opposition has cited accounting and property documents, the authenticity of which has not been disputed, showing that around RM62 million was spent by family members on – among other things – several up-scale apartments in Kuala Lumpur and Singapore, land and a US$180,000 Mercedes.
The NFC company that runs the centre is undeniably a family affair, which critics say epitomises the cozy relations between UMNO and well-connected families and businesses. Its chairperson is Mohamad Salleh Ismail, Shahrizat’s husband, and all three of their children are directors.
Shahrizat has denied any personal wrongdoing and has filed a defamation suit against two opposition members, including Zuraida (left). Wan Shahinur Izmir Salleh, Shahrizat’s son and NFC’s chief executive, has said the company was allowed to use the loan at its discretion and that the properties were bought to earn rental income.
Even some UMNO members are not convinced by the explanation, however, and have called on Shahrizat to quit. Influential former Prime Minister Mahathir Mohamad has added his voice to calls for her dismissal.
“It looks ugly,” said Shahrir Abdul Samad, an UMNO member of parliament for the southern state of Johor and a former cabinet minister. “This was an opportunity for him (Najib) to show he could handle a crisis.”
– Reuters
Din Merican: the Malaysian DJ Blogger 
Habis liau. Cowgate has hit international wire through Reuters. Najib and Mydin jadi malu dalam dunia. Dua dua balek kapong jagah pokok kelapak. Go on change your western attire to sarong to air your testicales and wait for the coconut to fall. No need to govern the State. Leave the governing to LKS and Anwar.
The bloghost missed headline news earlier regarding statements issued by the executive officer (son of the husband) and executive chairman(husband of the wife) of NFCorp. Projects farmed out to family members with connection to a Cabinet Minister is something you don’t expect to see in a country which has for years been reeling under the scathing criticism by the opposition for its discriminatory practice of awarding out contracts in closed tenders – especially when this family has no more claim to cattle breeding expertise than a race jockey has to the riding skills of a Don Juan.
When I read statements issued by NFCorp’s executive officer and chairman that they had a free hand in the use of taxpayer money of some RM250 million (at subsidised rate of interest) so long as interest is paid in a responsible manner, I almost fell off my chair. The Board of Directors of this company felt it makes good commercial sense if money left idle in bank accounts are put to profitable use – construction of abbatoirs by the state government having been delayed – and so why not invest it in some prime properties such as the one valued at some RM17 million in Singapore? This they say is not in breach of the agreement entered into between the company and the UMNO led government. Really?
And so are we supposed to think that having signed a syndicated loan for working capital with a group of lending institutions at the fine margin of .075% above KLIBOR that we then could go open a chain of hen house all over the Klang Valley?
“This was an opportunity for him (Najib) to show he could handle a crisis.”
Wrong, YB. It seems that FLOM is propping up the Cow, with one hand squeezing the Right gonad. The other is being squeezed by Octo. I don’t know what happened to the centerpiece, except that it’s no longer visible. Any questions?
The centerpiece? The centerpiece is safely and securely in the bloghost’s hands.
“Shahrizat has denied any personal wrongdoing and has filed a defamation suit against two opposition members, including Zuraida. Wan Shahinur Izmir Salleh, Shahrizat’s son and NFCorp’s chief executive, has said the company was allowed to use the loan at its discretion and that the properties were bought to earn rental income.”
Let’s see the details regarding the transaction or transactions.
Was the property bought in Singapore for RM17 million purchased in the company name, a company whose line of business according to its Articles and Memorandum of Association is the breeding of cattle for the domestic industry and has nothing to do with purchase of prime property in a foreign country for the short term purpose of earning investment income? Was the check made payable to a director who then purchased the said property in his name ostensibly as trustee? Let’s see the director resolutions authorising him to act as trustee for the company since it is not in the usual course of business of the company.
——
Embattled Cabinet Minister Shahrizat Jalil was hit by fresh allegations on Wednesday that her family had bought two luxury condo units in Marina Bay Suites, Singapore for over $7 million each. (Singapore $ 7X2 is more than RM17 million) Bean.
UMNO is caught between a rock and a hard place. To let Shahrizat Abdul Jalil resign her Cabinet position ostensibly to facilitate investigation would be to admit wrongdoing on her part and that of the Cabinet. To do nothing would be to send the wrong signals to the electorate.
Okie dokie. Misread it as RM rather than Sing $. Which translates to … ? What’s the current exchange rate between Sing $ and ringgit?
Why.is. it. so. hard. for. Sharizat. to. resign? Is she taking us for idiots by telling us she knows nothing of what her family does? Don’t these people have “kemaluan”?
Robert,
JFK said no such thing. But he did say, “Ask not what your country can do for you. Ask what you can do for your country”. I was there when he said those words.
Why.is. it. so. hard. for. Sharizat. to. resign? Is she taking us for idiots by telling us she knows nothing of what her family does? Don’t these people have “kemaluan”? – didi
Memang kemaluan shahrizat sangat besar.
1Malaysia, GTP, ETP and what not, are no more than spin.
All we end up receiving is a convoluted picture with no real change.
And basically insulted by the BS.