Malaysia Airlines’ Multi-Billion Ringgit Losses

November 30, 2010

Malaysia Airlines’ Multi-Billion Ringgit Losses: Social Care Foundation’s Robert Phang urges the Attorney-General to explain

by Leven Woon Zheng Yang@

Attorney-general (AG) Abdul Gani Patail has been called to explain allegations implicating him for the lack of action over Malaysia Airlines’ (MAS) multi-billion ringgit losses.

robert phang clarify on anwar allegation 080410 01Social Care Foundation chairperson Robert Phang Miow Sin (left) said records and pictures from a whistleblower website of Abdul Gani together with an individual said to be close to former MAS chairperson Tajuddin Ramli have added a different dimension to the controversy.

Phang, who is also a member of the Malaysian Anti-Corruption Commission’s (MACC) consultative and advisory panel, said Abdul Gani may see adverse public speculation over his connection to the issue if he ignored the allegations.

Phang was responding to the emergence of photographs on news portal Malaysia Today, showing Abdul Gani together with one Shahidan Shafie during their recent haj pilgrimage to Mecca.

Abdul Gani’s relationship with Shahidan was a close one, Malaysia Today alleged further, as reflected in the former’s early exit from a Malaysia Day function last September to accompany Shahidan to the hospital when the latter’s child suffered an accident.

NONEThe website had in September and November also claimed that it was Shahidan, said to be an ex-police officer, who had convinced Abdul Gani not to press charges against Tajuddin.

Tajuddin, who was MAS’ executive chairperson from 1994 to 2001, has been blamed for the national carrier suffering losses amounting to more than RM8 billion.

MAS had also filed several reports against Tajuddin with the MACC, citing Tajuddin’s move to relocate MAS’ cargo operations in Amsterdam and Frankfurt to a single hub in Hahn, Germany, as the single biggest loss suffered under him.

The new hub operation reportedly incurred monthly losses of between RM10 million to RM16 million before it was terminated and the government took over control of MAS in 2001.

At a press conference in Kuala Lumpur, Phang said MACC is entitled to investigate the AG if there was a directive to do so by the Prime Minister’s Department.  Also the Minister in the Prime Minister’s Department, Mohamed Nazri Aziz, can appoint a panel to oversee the MACC’s investigations into the matter.

He hesitated, however, to say whether MACC would initiate its own probe. “They (Home Ministry) must form the panel first, then MACC can investigate,” said Phang.

41 thoughts on “Malaysia Airlines’ Multi-Billion Ringgit Losses

  1. A waste of public resources and a chance for the AG to act to ‘cleanse’ his name.

    For the rest of us we can take pride in being able to add his face to the Gallery of Rogues. A new wing would have to be added to accomodate the string of faces that now compete for the limited space left.

  2. Without independent investigative powers of its own, MACC is something of a lame duck. It makes nonsence of an investigative body like MACC by requiring its head to report to the PM’s Department or the Prime Minister. Head of MACC should be reporting to a parliamentary committee whose members comprise of MPs from both sides of the aisle.

    As it is MACC is a joke.

  3. Din must be a good friend of Munir Majid.
    Mongkut Bean, my friendship with Tan Sri Munir Majid goes back many years. He was a merchant banker then, and as Sime’s Treasurer I used to deposit some of our surplus cash (subject to our rules on exposure limits to individual institutions and attractive rates). I found him to be very professional and astute in his dealings.

    He is a very smart and effective MAS chairman. I must admit that I respect his intellect, his powers of articulation in speech and writing, and his insights. He has a column in The Edge Malaysia where he discusses issues of the day. Munir’s life is his own, just as my life is private and yours is too. But you are allowed to have fun at my expense, that is fine.

    Here we are talking about massive losses suffered by MAS when Tajuddin was chairman. Your comments on the incumbent MAS chairman are personal and totally irrelevant and have nothing to do with the issue which Phang is talking about. Let us not be diverted from the matter at hand–losses suffered by our national airline. I thought you would have criticised Badawi and his role as MAS Advisor, given the fact that his own brother, Ibrahim Badawi, has a lucrative catering contract with MAS.

    Tajuddin is untouchable as he protected not only by the AG but also by two Prime Ministers, Mahathir and Badawi. I was a good friend to Tajuddin until I started to write about Lawyer Rosli Dahlan and discovered the links between Tajuddin and all of the aforementioned power holders.

    Recently, Tajuddin snubbed me at the Kuala Lumpur Golf and Country Club. Well, that comes with the territory! You lose some friends and win some. –Din Merican

  4. “..Abdul Gani may see adverse public speculation over..”

    Robert Phang, besides being an underachiever, you have a gift of understating the obvious. Adverse public speculation? Hahaha.., this flur is the corpse lily of the flowering kingdom – largest and foulest.

  5. It turns out that the government you voted in will not hold your hand to see you through hard times. Instead, it will make sure to add to your suffering because that is the easiest way it can avoid going bankrupt.

    Barisan Nasional has apparently decided that the time has come to remove or cut subsidies — the kind of subsidies that poor people depend on, not the kind enjoyed by big corporations and monopolistic suppliers of utilities and infrastructural support.
    So what is the use of a government that will eagerly shake your hand during election time but will not hesitate to pull the rug from under your feet when it needs to save itself?

    Few believe that the removal of subsidies on essential food items and fuels can save the Malaysian government from possible bankruptcy. If it does go bankrupt, it will be because it has failed to cleanse a corrupt system.

    It is better for Malaysians to be rich and to control a bankrupt government than to be poor and controlled by a corrupt government. Many countries have rich citizens with bankrupt governments.

    You do not need an economist to tell you that RM100 in Malaysia today does not buy as much as it did last year.

    In what we may call the Malaysian Misery Index, we can see that food prices have been spiralling upwards for years. For example, fresh tenggiri, which was RM13.23 a kilo in 1997, now costs RM40 a kilo. A roasted duck cost RM13.47 in 1997, but is now at least RM38. And Malaysians have become used to the doubling in price of some food items during festive seasons.

    Most Malaysians do not expect the situation to improve. Food prices will continue to go up and there is little hope that they will come down again.

    Two years ago, the BN government announced that it had set up a US$1.25 billion fund to increase food production and that it was targeting 100% self-sufficiency in rice consumption. What has happened to the fund and the target?

    Double whammy

    When the GST (goods and services tax) is fully implemented in 2011, it will be a double whammy for poor and middle-income households, pensioners, the unemployed and single parents.

    Some have argued that imposing GST on Malaysian does not make much economic sense when only 6.8% of the population are taxpayers and a large majority earn low incomes. Furthermore, it is acknowledged that most of us are paying hidden taxes in highway tolls and electricity tariffs.

    Indeed, the future looks bleak.

    Yet, quite a number of us are gullible enough to think that the government will protect consumers. Are we not being stupid? Isn’t it better to be wiser and brace for tougher times ahead?

    Instead of believing the promises of a government that has a dismal performance record, we should believe the law of inflation, which says, “Whatever goes up will go up some more.”

    Ronald Reagan once described inflation as a violent mugger, a threatening armed robber and a deadly hit man. In the Malaysian context, that is an apt description not of inflation, but of the BN government’s behaviour and policies.

    So how do we fight the inflation of food prices?

    Economists generally agree that the average Malaysian household spends about 75% of its income on food. Food price hikes will therefore have an adverse impact upon disposable income and force us to make a lifestyle change.

    To fight inflation

    Here are some of the things we can do:

    – Stop eating at expensive restaurants.
    – Boycott traders, hypermarkets and hawker stalls that charge unreasonable prices.
    -Shop intelligently for value and do not be too impressed by branding.
    -Work out a budget before buying. Look out for special sales.
    – Prevent wastage by not buying more than you can eat.
    – Tell friends and acquaintances about shops that charge excessively.
    – Avoid buying expensive beverages or foodstuff and find alternatives for nutritional value.
    – Boycott chained markets and fast-food joints. They are monopolised by a few large companies and can therefore raise prices at whim.

    Perhaps economist Milton Friedman was right when he said, “If you put the federal government in charge of the Sahara desert, in five years there will be a shortage of sand.”

    Malaysians do not take the official Consumer Price Index (CPI) seriously. They know it does not accurately reflect price rises in essential foodstuffs.

    Many suspect that the government uses it as an instrument to deceive the public into thinking that things are hunky-dory when they are not. The government develops statistics so that the inflation-weary public would direct its hostility towards businesses, and not blame official mismanagement.

    The average household consumption expenditure over the last 20 years has increased by 181.8%. In 1973, it was RM412. By 1993-94, it had gone up to RM1,161. In 1999, it touched RM1,631.

    According to Prof Lim Teck Ghee, real household income has been growing, but at the snail-pace rate of 0.9% per year. More than half of the population are in the low-income category.

    Today, a family of five spends 50% to 60% of household income on food compared with 20% in 1998 and 15% in 1988.

    Not long ago, there was official acknowledgement that 95% of families are finding it hard to cope with the rise in food prices.

    In fact, the biggest failure of the Ninth Malaysia Plan is that it did not help Malaysians improve their quality of living. Inflation, whether it is imported or locally generated, raises the cost of living and lowers the quality of living.

    ‘Why not change the government?’

    In 2006, when Najib Tun Razak was Deputy Prime Minister, he asked Malaysians to change their lifestyle in the face of the rising cost of living.

    A blogger by the name of Chong wrote in response: “Perhaps, the prime minister should have done some simple calculations himself. People like us basically have no lifestyle, just merely surviving with our earnings. So how are we going to change (our lifestyle)?

    “Inflation has gone up 4.5% (and above) and the government is pushing the cost of living higher by increasing electricity tariffs, but our income remains the same.”

    Others felt it would be easier to change the government than to change a non-existent lifestyle.

    “Instead of listening to Najib asking us to change,” one critic remarked, “why not we change the government at the next general election?”

    To me, that makes a lot of sense. Any government that is willing to build air-conditioned toilets around a city at more than RM100,000 each has no business planning a national economy.

    When such a government decides to cut subsidies, many of us will wonder whether the so-called “savings” will instead go towards more majestic arches, fanciful lampposts, refurbishments of VIP residences, luxurious government bungalows and fruitless overseas trips by ministers.

    Any government that stands accused of having wasted RM320 billion in 20 years — through corruption, wastage and mismanagement — definitely does not deserve to be re-elected.

    Stanley Koh was the head of research unit at MCA.

  6. Din

    I was the one who wrote about the private life of Munir Majid. Nothing scandalous. Just a fact known to everyone. In fact was highlighted when MAS was in crisis before Idris Jala took over.
    I respect your decision not to publish it.
    I have known Munir when he just graduated from LSE and joined the NST as am executive writer. Later he took over the helm from Noordin Sophie.
    Yep. He was a good writer.
    BTW how is the former MAS MD doing? Forgot his name but son of the infamous Ustaz Dahlan.
    He’s very much my senior but he used to play marbles with my brother growing up in PJ.
    His tenure as MAS MD was short-lived. He is the first in MAS to rise up from the ranks.
    I thought he was doing good to MAS.
    lMy brother admires him because he married a former Miss Malaysia.

  7. When a country’s AG is shown to be corrupted or tainted, how would the government be able to convince the people or the voters that they are serious with reducing, if not erradicate corruption. Likewise, how could the MACC stand tall before the nation, even though the MACC chief has vowed to catch the corrupts.

  8. My dealings with MAS was when Saw Huat Lye was its GM and Aziz was company secretary (and later to be its MD) and if I remember Kamaruddin was in charge of financing. It was difficult to do business with MAS as the company was able to borrow in US dollars at a small fraction of 1% above LIBOR. Tengku Razaleigh was then Finance Minister. We tried to get management interested in leasing and that too failed. Later we tried leasing one of their aircraft a Boeing 737 to Bangladesh. That too failed.

    But MAS then was totally different from what it is today.

  9. I am pleased to welcome Pak Abu on the bandwagon of old geezers on this blog. In the bandwagon are our bloghost, Tok Cik, Shrek aka U.S. Marine ‘semper fi’ and Frank though he says he is only 18. I hesitate to add tean aka Lee Marvin and Menyalak-er. Have I missed anybody?

  10. Munir was with me at RMC. At that time he was just a budak boy like all of us. Met him again when he facilitated our class on social politics at the armed forces staff college in 1981. Yeah, he’s very articulate and sharp.

  11. It is futile calling for the AG to explain anything because he is appointed by the PM. And so if there is any explaining to do, he would be called to do so by the PM and to him. The contents of the conversation would not be made public of course; you can expect Najib to come out with a statement that he is satisfied with what he was told.

    The AG “shall have power, exercisable at his discretion, to institute, conduct or discontinue ….. : Article 145(3). No constitutional challenge has ever been mounted to test the limits of that discretion.

    You can have the AG removed the same way you would have a federal judge removed.

  12. Mr Bean

    Thank you for the red carpet. Hope Encik Din and old geezers here too received me with goodwill.
    Turning 55 this January qualifies me to be an old coot.
    Should I retire? Or should I stay on working my butts off in my small company?

  13. 55? Oh no! I would have to drop you off at the next stop. You’re in the company of tean aka Lee Marvin and Menyalak-er. You’ll have to follow on foot since you can still walk.

    But our bloghost has recently found the elixir of life. So maybe he should walk with you.

  14. Din

    I find it ridiculous that the a Special Investigative Panel needs to be set up to investigate the AG or any Minister. If the MACC is supposed to be independent, it would have done its duty by the AG (and all the corrupt Ministers) and all these guys/gals should be behinf lockers, not walking around and pontificating.

    In fact Phang should be pushing for the MACC to undertake the investigations since he is one of the special commissioners under the Act and he should use the powers vested therein even if it means he is later thrown out for being honest. If the intention behind the media conference is to put pressure on the AG, its not going to work. The mdeias will be directed not to report on the issue and that will be the end of the matter.

    It is not MAS or the othe GLCs that have lost the billuions. It is taxpayers money and the only way to hit back is through the next GE!

  15. Not bandwagon, Bean but on the back of a kerbau and on a one-way ticket into the Kedah sunset.

    Pak Abu, 55 is still young lah. Din has just passed 70, Bean and I are a few years behind. Frank is well past 60 (betul kah?). Tean is about your age. Kathy is the syt here.

    My advice is to keep working in that small company of yours. An idle mind is the beginning of bad things to come.

    I too have something going on for myself. It keeps me busy and away from domestic intrigues. Bean dispenses legal advice for a song. Tean takes care of Wat Siam. Frank dots over grandson.

    See, the old geezers here are gainfully employed.


  16. Whadda all this old geezers and syts’.. as long as ‘otak tak kering’ cukup lah. Sometimes andro/meno-pause good for health – become cynical, onery and slightly nyanyok, no one can complain.
    As long as we don’t try to rip off Bank Negara ok lah..

  17. Pak Abu
    Fuaad Dahlan was a good manager but not MD material. You must be from Kawasan Melayu orJalan Sentosa. ha ha
    Mongkut Bean
    During Saw Huat Lye’s and Tan Sri Aziz time MAS owned their aircraft but when Tajuddin took over MAS was leasing their aircraft. Now MAS don’t even own their aircrafts, they lease them from Penerbangan Malaysia. No debt, no debt servicing and still losing money.

  18. I find it all repulsive that monies are lost and there is no investigation into these fraudulent conduct. How does a country run like this?

  19. Fuad Dahlan is related to me. He is a good man, but the powers that be have other plans which did not include him. To be fair, Munir may be have nothing to do with the matter.

    Anyway, let us not get sidetracked by irrelevant issues. All I want to do in this posting is to ask the AG to personally explain why he was in the company of someone who could have been charged for corruption. Shahidan is a crony of Tajuddin who himself also could have been in the slammer if not for Badawi’s intervention.

    People who should have been charged are not while professionals like Dato Ramli Yusuff and Lawyer Rosli Dahlan have to been humiliated in court. We are talking about justice and the Rule of Law.

    I have received comments from people who are sympathetic to the AG. I deleted them because I do not accept explanations from proxies. If the AG has enough character in him, he would hold a press conference and tell us his version of what actually happened and clarify his relationship with Shahidan and Tajuddin. Speak the truth and express remorse.

    I do not expect the Prime Minister to instruct him to do so. After all, the AG is a responsible officer of the Law and should know what to do without prompting from anyone.What is there to be scared of?–Din Merican

  20. Waah …! Our bloghost is so riled up over the issue. Bad for your health, Din.

    Is that why you deleted my earlier comments about the AG which I have had to work the keyboard frantically to re-insert them before the issue becomes stale? Those are my 2-cents on the legal position of the AG as I see it, made in the hope of drawing some comments from the legal eagles flying by. Not made to encourage the guy! He doesn’t need any encouragement. Certainly not from mortals like me. The guy has to be immortal with all the secrets he holds in his palm. Anyway you wouldn’t take from a fellow traveller on the same kerbau’s back, his last two cents would you?

    I bet on whatever is left of my entire career on this one issue. This man is never ever going to have to explain anything to anyone but the very man who appointed him. In any event he has all the constitutional protection he needs. The limits of his discretion are above any public scrutiny — constitutionally speaking. Of course, pardon me for stating the obvious, he can be removed from his position the same way a federal judge can be removed. But why should anyone in the UMNO-BN run government want to see him removed? He is due for an accolade or two from the Agong for doing his patriotic duty of shoring up a government teetering on the brink of moral collapse?

    Short of a regime change through constitutional means, Tok Cik will have to hijack a T90S and drive it to the gates of Putrajaya to make a point. Perhaps then the world will take notice.

  21. “If the AG has enough character in him, he would hold a press conference … ” Din Merican

    It has never been about strength of character or anything like that. The guy has long prostituted himself, sold his soul to the Devil if you prefer, and has none of the integrity his training in an honorable profession required of him.

    If Putrajaya were to one day burn, his handlers would make sure he would be on the first plane out.

  22. “Now MAS don’t even own their aircrafts, they lease them from Penerbangan Malaysia. No debt, no debt servicing and still losing money.” U.S. Marine ‘semper fi’ aka Shrek

    So that it looks good on paper.

    Do they think financial analysts are that dumb, that their balance sheet would escape close scrutiny through window dressing of financial statements? That everything they would want to know can be gauged simply by looking at financial ratios?

    Lending institutions and fund managers would be looking at their entire operations.

  23. Din

    Oh you are related to Fuad. Small world indeed.
    I was close to his sister. But lost touch when I went to MCKK in Form One.

    Semper fi

    Yes I once stayed in Kampung Melayu. Later my parents bought a house in Section 12.
    Then Kampung Melayu boys were naughty. Do you
    know that one or two of the Strollers band boys were also staying there.
    I just got a text from an old pal that the Strollers (same group but now called Strollers 2) are performing at a Bistro in PJ.
    Will check them out next week.
    Let’s go. Can meet you there.

  24. “To be fair, Munir may be have nothing to do with the matter.” Din Merican

    Like you say maybe. But I would expect individuals who have found their niche because of, rather than despite their close ties with Mahathir to be tainted in some way.

  25. Pak Abu,

    You’re not serious about asking U.S. Marine ‘semper fi’ to take a flight all the way from L.A. to go have a beer at Bistro in PJ, do you?? But I would take a flight to go have Mee Abu in Aloq Setaq, if I could.

  26. “Pak Abu, 55 is still young lah. Din has just passed 70, Bean and I are a few years behind. Frank is well past 60 (betul kah?). Tean is about your age. Kathy is the syt here.” Gen. (Rtd) Tok Cik

    Kathy is SYT indeed. I estimate her age to be in the 20s. You’re surrounded by married and twice divorced old geezers here, Kat. Nothing close to being husband material.

  27. For us Malaysians residing overseas, lucky or unlucky to be looking at what is happening in our country from the outside, the fight is to preserve our sanity in the midst of insanity — which is the word I would use to describe the mood in the country we once called home.

    So Din, you will have to excuse your readers if they resort to humor now and then to lighten up the day or night. Humor is what keeps us going despite the madness.

  28. Yeah, Bean. I’ve to, occasionally, resort to leg-pulling and jesting to keep my head cool and above water.

    It’s a savage world out here when you have to deal with all sorts of problems, big and small, on a daily basis. You’re in Big Apple but we’re here in Bolehland where fact and fiction sometime merge to become one.

    GLCs like MAS are fiefdoms of the rich and powerful. The crooks go unpunished while minnows like Dahlan gets roughen up, all for the wrong reasons. That’s justice Al Kutty’s style.

    Our banters sometime get in the way of the bloghost and he goes ballistic. That’s expected.

    It’s difficult to put a show for the sake of decorum. I don’t know about you, Bean but I am what I am. Period.

  29. “I don’t know about you, Bean but I am what I am. Period.” Tok Cik

    If I were to say that to my wife, she would put me out on to the streets with my only earthly possession i.e. my suitcase for company faster than you can say,”Fire (meaning shoot) or Api”.

  30. “Short of a regime change….Tok Cik will have to hijack a T90S and drive it to the gates of Putrajaya to make a point.” Bean.

    We’ve a single tank regiment consisting of some over-modified Polish-made PT91M (a variant of the Russian-made T-72) main battle tanks.

    I wonder whether the tanks can take the rigors of the bumpy road to Putrajaya from their base in Kuantan.

    I don’t want a situation when I reach the gates of Putrajaya, all of these tracked vehicles are stranded along the road awaiting recovery.

    On hindsight, I might as well get my wheelchair ready in case I have to do a charge ala the Light Brigade in the Crimean War.

  31. “I don’t want a situation when I reach the gates of Putrajaya, all of these tracked vehicles are stranded along the road awaiting recovery.” Tok Cik

    What better way to create employment than to have ice cream vendors selling ice cream to tired old soldiers who never die but only fade away? Only this time they are accompanied by armor on wheels that don’t work — legacy of a corrupt regime.

  32. Pak Abu
    The Strollers 2 are playing at The Old Skool. Been there and had a gathering of sorts last November 04. Yes Amrin Majid and Billy Chang founders of Strollers were there too.
    Thanks for the invite.

  33. You not looking yet, Kat? You’re ready when you’re ready gurl. There need not be a start and a finish. Let things hang out as they used to say in the ’60s.

    I won’t dare say that to tean today cos he’ll really let things hang out and we will all have to make a run for the nearest exit.

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