Kuala Lumpur Golf & Country Club Membership Transfer Fee: A Rip Off


April 17, 2015

Kuala Lumpur Golf & Country Club Membership Transfer Fee: A Rip Off

KlgccA few of my friends have been trying to sell their KLGCC membership since they wish to relocate overseas for reasons that have to do with the politics of our country. To their horror, they have to come to know that the club membership transfer is now RM70,000 and will be able to do so only if they are prepared to absorb this fee or share it with a prospective buyer. It would appear that in KLGCC, you can get in but cannot get out easily.

One member received this response from private agency and I quote:

There are quite a few buyers but their offer price is around RM200k to RM230k inclusive of transfer fee (TF). Unfortunately the buyers are not willing to fork out the high transfer fee RM70k which the club increased last year from RM25k.

Last year (before TF increase) there were transactions at about RM195k to RM200k incl TF, ie. sellers received RM170k to RM175k. With the increase of TF since August last year, there have been no transactions…because while buyers are willing to share part of the TF they are not willing to absorb completely the TF price increase.

Although KLGCC declares the “market price” of the membership at RM350k, we have not seen any buyers willing to pay this amount yet. If they buy at RM350k, they would need to sell at RM420k(RM350k + TF) just to break even. Perhaps they don’t expect the price to continue to increase in the near future. This is the current situation.

I am told that this  increase in transfer fee was initiated and approved by Sime Darby Berhad, the multinational company which has a big say in the management of this so-called prestigious club  ostensibly with the support of the membership body. This is a substantial increase from RM 25,000 previously. No reason is given for this change. Even rm25,000 is already a huge sum. I wonder how much work is involved by the Club, and which hot shot legal firm is being used,  to formalise the ownership transfer. How complicated can this transaction  to warrant such a cost. So isn’t any wonder that the transfer market is dead?

One would have thought that Sime Darby would understand that the objective should be to facilitate membership change and allow those who have invested in the club membership over many years to exit and realise a reasonable return on their investment. Obviously, this is not the case. It is just nothing but a ripoff.

Will  the Sime Darby  management, the Club President and the Club Captain, Dato Mustafa Ali, look into this matter and the benefits of being a member of this Club. For example, members and non-members are charged the same rates of use of banqueting facilities for events like weddings, parties and other social functions. Surely, there are other ways for Sime Darby to make money.–Din Merican

ASTRO: Customer Unfriendly Cable TV Network


February 27, 2015

ASTRO: Customer Unfriendly Cable TV Network

by Marion Tharsis (02-26-15)@www.malaysiakini.com

Logo-Astro-01

Today, ASTRO enjoys an unwavering dominance of the cable television network  in Malaysia. Consequently, we have to follow, and accept, any implementation changes to their existing packages whenever they feel like doing it.

They no longer have the courtesy to call you to seek your acceptance or offer any explanation as why these changes need to be implemented.Their current trend of operation is, just splash the news about imminent changes on television and expect us to ‘swallow’ it.Call their customer service and you will get a ‘dumb’ reply.

I just want to highlight two recent encounters that I have been subjected to. Firstly,Ananda Krishnan ASTRO increased its high-definition channels that are included in the package I subscribe to. By doing so, I have to pay more without any consent of mine or prior formal advisory. Secondly, out of the blue, ASTRO splashed a news banner on television to advise all Sports Package subscribers that the Golf Channel will no longer be included in this package, effective February 26, 2015. Pay more – if you want channel back!

And if we wish to view this popular sport, we have to pay for it as and when we want it. Here again it, this was done without any formal advice or consultation with the subscriber.One if the main reasons why I subscribe to the Sports Package is because of this Golf Channel and now I am deprived of it.

Want it back, I have to pay more – which I think is absurd and ridiculous. Logically speaking, the cost of this package should be reduced, but this is not the case. You still pay the same amount. But then again, if monopoly exists, then we are ‘slaves’ to it, without any other choice.

I am sure there are other cable television operators who want to establish their networks in Malaysia and I think they should be given an opportunity to do so, just to allow some competition and break this monopoly.

Otherwise, ASTRO will get bolder, and change and implement according to its whims and fancies, without due respect or concern for the subscribers. As it is, we are given channels that are of no use to us, but ASTRO says it is “under the package” and you have to accept it. What a rip-off!

Mariam Mokhtar on Najib and Crisis Leadership


January 1, 2015

Mariam Mokhtar on Najib and Crisis Leadership

by Mariam Mokhtar@www.malaysiakini.com

Najib and Obama in HawaiiPosing with Obama in Hawaii

Prime Minister Najib Abdul Razak has more than just the rising flood waters to worry about. He probably returned home  to stop being swamped by the efforts of Deputy Prime Minister Muhyiddin Yassin, who said that Najib need not abandon his holiday to deal with the flooding.

Few people believe Najib’s declaration that he has genuine concern for the welfare of the flood victims. Did he return for the rakyat, or to save his own skin? We will probably never learn the true reason. The truth is always suppressed by UMNO Baru.

najib and his deputyPartners or Rivals for Power?

On Christmas Day, Muhyiddin said, “The PM is overseas, but I’m in charge here. I am running the country”. His comment is insignificant if taken as a single remark, because a deputy should take control, when his boss is away.

However, when other things are taken into consideration, it is an indication of the level of animosity between the two men and the swirling discontent within UMNO Baru.

When one includes the recent barrage of verbal assaults and criticisms of Najib, 1Malaysia Development Berhad (1MDB) and his administration, it looks like a repeat of the drama at the time of the KL112 rally, dubbed the People’s Uprising Rally, two years ago.

At that time, in January 2013, one political pundit claimed that Najib, who was on a family holiday in Europe, had to rush back to Malaysia immediately after his audience with the Pope at the Vatican.

It was alleged that Muhyiddin had conspired, with other UMNO Baru warlords in Malaysia to act against his boss. Then, as now, the criticisms against Najib have been loud and unrestrained. Najib has much to worry about.

Floods, Obama and NajbNajib needs Obama

With critics lambasting Najib, for abandoning the country while it suffered from the worst flooding in decades, Muhyiddin poked fun at Najib, when he said, “The PM has worked very hard. Be fair to him…”

Muhyiddin also said, “If I can’t do the job then I will call him to come back”. So, poor Najib had to return. Perhaps, Najib should consider sacking Muhyiddin, who has made a hash of everything he has touched.

Intense rivalry between PM and DPM

There is no doubt that there is intense rivalry between the two, but Najib was being insincere when he claimed that he was glad to be with the flood victims. It had taken public humiliation, on the social media, to drag him away from Hawaii, and  his golfing buddy, the President of the United States.

NAJIB / BANJIR

Najib said that he did not mind foregoing his family vacation, in America, to deal with the flooding at home. Few of us are moved by this trite comment. We know from experience that Najib is always abroad when the nation is in crisis. He may as well form a government in exile, judging by the number of times he has issued comments from abroad.

A country needs its leader to assume control in times of disaster. Najib should also realise that his bloated Prime Minister’s Department (PMD) acts like a lumbering container ship, rather than a sleek vessel. Instructions take a long time to filter to the bottom.

With factions existing in many Malaysian institutions, the heads of department of the 45,000 civil servants in the PMD, may not want to make decisions, nor be held accountable for their actions.

The UMNO Baru cybertroopers will never understand that it is pointless asking where the opposition leaders are. The opposition does not have the authority to deploy the army to help the relief effort. They cannot tell the Treasury to allocate funds for food or medical equipment. UMNO Baru controls Putrajaya and is in charge of the resources of the nation.

Floods not a one-off incident

An aerial view of flooded streets of the National Park in Kuala Tahan, Pahang

On his return, Najib headed straight to Kota Baru, in Kelantan, and instructed cabinet members who were on holiday to return and help manage the situation.

Does Najib have to “order” them to return? Are these men and women so irresponsible and immature that they have to be told what to do? They probably own smartphones and the latest electronic gadgetry to inform them of what is happening in Malaysia. Must they be summoned like errant school children?

A leader should set a good example and this experience should tell Najib that when he absconded to Hawaii, his minsters decided to emulate him, and also go on holiday.

The floods are not a one-off incident. They are an annual occurrence. The signs that this year was going to be worse than previous years have been evident. Why ignore them?

If I had a ringgit for every insult our politicians hurl at the Malaysian rakyat, I would be a millionaire. If I were given a sen for all the lies they tell us, I would be a billionaire.

There are three mysterious allegations that Najib may want to clear up: Did he go on a private vacation using a government jet? Why did he not take the direct route home, instead of stopping off in Indianapolis? How many planes were used to fly him to Hawaii and back?

The floods are an annual occurrence, exacerbated by illegal logging, deforestation and the destruction of the mangrove swamps. The problems are not helped by development on the flood plains.

Najib should plan flood mitigation measures to prevent a recurrence of this disaster. A tiny proportion of the illegal outflow of money, from this country, would pay for dredging and widening of rivers and many other methods of water control.

So, why has Najib not mentioned anything about flood mitigation measures? He should consult Ahmad Maslan, the expert geographer and Deputy Finance Minister.

What happened to our disaster management?


December 29, 2014

MY COMMENT: 2014 has been a horrible year for ourDin N Kamsiah country. Lahad Datu and security breaches in Sabah remember? Then came MH370, MH17, Cameron Highland landslides, and now the AirAsia 8501 tragedy (One Malaysian presumed dead).

In Kelantan, Pahang and Terengganu, we have terrible floods at a cost to the nation yet be ascertained. Given persistent rain in and around Kuala Lumpur in recent days, we in the commercial hub of our nation could be in danger of  flooding on a scale possibly larger than the 1971 floods. Is the City Hall and The Federal Territory Minister prepared for this?

It gives me no comfort to read Nawawi’s article which tells us that we have not learned the lessons of our past tragedies. Why have we become so arrogant that we cannot document our experiences, and use the information we have gathered to develop a national disaster management system which can be deployed to deal with emergencies in any part of our country?

What is happening in Kelantan, Terengganu and Pahang is a disgrace. Our leaders have failed to take control. They have shown that they are ineffective in mobilising our assets and coordinating efforts to deliver relief to thousands of Malaysians who are directly affected by the floods.

Floods, Obama and NajbGolf Diplomacy and Floods

Najib’s “Rakyat didahulukan pencapaian diutamakan” is a meaningless slogan. In fact, it is shocking to learn that key ministers were on leave during this period and had to be asked to return home by our Prime Minister, who himself was on a working holiday in Hawaii to conduct golf diplomacy with US President Barack Obama. How can they all be uncaring and self-centered.

I also find it embarrassing that government agencies including the Military and Police have not acted as they used to when our country is in a crisis. Something is really wrong when our disaster management is performing below par. It makes me worry to think whether we are ready to face external enemies when they threaten our sovereignty and territorial integrity, given our level of preparedness.–Din Merican

What happened to our disaster management?

by Nawawi Mohamed@www.themalaysianinsider.com

Malaysia has experienced several natural disasters which resulted in loss of lives and properties starting back in December 1993 with the collapse of two blocks of the Highland Towers, then the tsunami in 2004, the recent Cameron Highlands landslides and the latest being the unprecedented floods in Kelantan, Pahang and Terengganu.

By the way, with so frequent flooding, we ought to be professional in facing them by now. Unfortunately, we are never ready and never prepared.

In the Highland Towers tragedy, we lacked experience such that the Japanese Civil Defence sent a team to help in the search and rescue effort. Search and rescue teams from Singapore, France, United Kingdom and the United States also came to help.

Besides helping, they also showed us the relevant techniques and the equipment they used in disasters. In fact, at the end of the search, the Japanese left their equipment and donated them to Malaysia.

From that incident, Malaysia formed its own Search and Rescue Team under the Fire Department. Our team had also been sent overseas to help disaster victims, like in Aceh during the tsunami in 2004. Naturally, every Malaysian should feel proud that we have our own reliable team and managed to help others in foreign countries as well.

Besides the elite team mentioned above, we also have several non-governmental organisations that play significant roles both at home and overseas. We have other agencies like JKR, JPA, PDRM, military and volunteers who at times have been at the forefront in the rescue efforts.

Malaysians are generally generous and we are all proud to be Malaysians in that sense. We also have the means: the equipment, machinery, resources and manpower to undertake the search, rescue and help victims in almost any natural disaster. We can do it.

But at the government and political levels, our ministers and politicians have not shown their will to improve themselves. Despite having declared that they work for the people since it is the people who put them into power anyway, at these times of need they seem to be lost and preoccupied with their own personal world.

We all know that Datuk Seri Najib Razak was holidaying and golfing in Hawaii, Datuk Seri Hishammuddin Hussein was said to be in London, loud-mouth Datuk Seri Ahmad Zahid Hamidi was quiet as a mouse, Datuk Seri Anwar Ibrahim was also said to be in Australia and Tan Sri Muhyiddin Yasin was not in control.

An aerial view of flooded streets of the National Park in Kuala Tahan, Pahang

Never mind the politicians but even if they want to have fun while the people are facing hardship, make sure that there is a system established and could run on auto-pilot.

The UMNO/Barisan Nasional government should set up a central command at the federal level with branches in every state to coordinate the various NGOs, volunteers, government agencies and above all the control of correct information should be given to the public.

Coordination is important so that every area is covered by the various teams and overlapping of efforts could be avoided. The disaster command centre will also be able to know the exact amount of resources at hand, and what kind of help is needed most.

Just look at the recent blunder as reported in the papers when TNB managed to send 45 gensets to Pahang and only 1 genset to Kelantan despite the latter being affected most.

TNB has limited logistics resources and they are not a logistics specialist either. If there had been a proper disaster management, some form of transport could be provided, may be by the military to help send the gensets where they are most needed.

The centre should only have one contact number, which will be connected to several help and information lines. Do not give the individual contact numbers of the NGOs, government departments and agencies because the central command must be the reference point. None of them should act alone, all should be under the central command and be coordinated efficiently.

Manek_Urai_floods_Bomba_251214

There must also be a website meant to cater for any disaster where everybody can reach and not depend on the social media which most of the time spread false or half-truths. The website should be interactive where applicable so that those who need to know feel more comfortable.

The UMNO/BN government must also educate the people in the flood-prone areas to be ready with survival supplies: food, drinking water, clothes, medicines, toiletries and other necessities should be carried along during evacuation.

The whole supply could be in the form of standard ration placed in a lightweight bag which could have multiple uses. For instance, it could be used as a life buoy if the victims are swept away. Add in an identification beacon for easy searching.

What we have now is the National Security Council (MKN) which is lousy but we do not feel secure. They have done nothing much except simply to exist and may be just to get paid. And nothing else except blunders in every disaster that we faced.

It seems the UMNO/BN government has not learned much, if not nothing, from the disasters that we have had. Now if Najib and all the politicians want to go elsewhere during any disaster, please do something about it.

http://www.themalaysianinsider.com/sideviews/article/what-has-umno-bn-government-learned-from-natural-disasters-nawawi-mohamad#sthash.GGZdafs0.7JLW6JAa.dpuf

1MDB Chairman Lok Wok Kamaruddin Explains


December 22, 2014

1MDB Chairman Lok Wok Kamaruddin Explains

lodin-wok-kamaruddinAs the Chairman of the Board of Directors of 1MDB, I have viewed with surprise recent statements, both in the media and by certain individuals, suggesting that the company has failed to respond to various questions that have been directed at it over the past months.

As the Board of Directors, we welcome debate, and as a company that is wholly-owned by the Ministry of Finance – and by extension, the people – we believe that public scrutiny of 1MDB is a good thing, and will only serve to strengthen the company and its governance.

In the interests of increasing the company’s transparency, I have held meetings with members of the media where I listened to and responded to their concerns.

Furthermore, the company has taken various other measures such as issuing multiple statements responding to allegations directed at the company, publishing a detailed document answering frequently asked questions, and releasing a public statement outlining key highlights from 1MDB’s last financial results – the first time 1MDB has done so since the company’s inception in 2009.

All of this information is freely available on 1MDB’s website, and we believe that these actions reflect our efforts to engage in a more open and constructive dialogue than has perhaps been the case in the past.

Despite this, issues that have previously been raised and, subsequently, addressed by the company continues to be regurgitated by certain individuals. In the interests of providing clarity, we would once again like to respond to the various concerns.

1MDB’s funding and debt levels

Contrary to claims, 1MDB is not a sovereign wealth fund but rather a strategic development company. In practice, this translates into a company that is independently run and funded, but one whose investment decisions are driven by the interests of the national economy.

Whilst a sovereign wealth fund and a strategic development company may not sound very different, there is an important distinction between the two: whereas a sovereign wealth fund is directly funded by the government and invests on its behalf, 1MDB raises and invest its own capital.

In fact, in terms of actual funding, the company has only ever received RM1 million in equity, which was provided by the Ministry of Finance at the time of its inception.

Given that 1MDB does not receiving any funding from the government, it is therefore simply not true to claim that the company is investing or worse, wasting, the state’s – or the people’s – money.

As 1MDB funds its own operations, it should not be surprising that, from time to time, the company raises capital on the international debt markets in order to finance some of its projects. However, all of this debt is backed by solid assets.

trx 2

At present, this includes the 15 power and desalination plants in five countries that comprise our energy business, as well as our extensive property portfolio which includes 70 acres of prime real estate currently being developed as TRX – Kuala Lumpur’s first dedicated financial district, 495 acres of land on the site of the old airport in Sultan Besi earmarked for Bandar Malaysia – a mixed-use urban development, and 234 acres of land in the centre of Air Itam, Penang.

The total value of the company’s assets (RM51.4 billion as at the financial year end of March 2014) comfortably exceeds the value of its total debts (RM41.9 billion for the same period). This means that the company has net assets of close to RM10 billion, representing the value it has created since its inception five years ago.

Furthermore, this does not take into account the expected benefit to be realised from the initial public offering of the group’s energy portfolio, which will help de-leverage the group and contribute towards reducing its debt profile.

Finance costs and interest rates paid by 1MDB

Like any business, 1MDB attempts to secure the lowest rate of interest and finance costs when taking out a loan or conducting a bond issue. However, in certain instances, these interest rates and finance costs have been towards the higher end of the market rate.

It has to be understood that, when it comes to raising debt on the financial markets, there is no one size fits all solution.A number of factors determine the finance costs and the interest rate applied to a loan or bond issuance. These include the length of maturity, whether the loans are underwritten or guaranteed, macro-economic factors, and many more.

To take one example, we are aware that concerns have been raised about the 5.75% interest rate assigned to a RM5.0 billion Islamic bond that was issued by 1MDB in 2009. As a comparison, it has been noted that another government-linked company PETRONAS paid an interest rate of 3.60% on a bond at the same time.

This is an unfair comparison that does not take into account a number of important factors. To highlight just one: when subscribing to a bond, lenders take on a certain degree of risk and the longer the tenure, the higher the risk for the bondholder. Therefore, bonds that have a longer maturity period typically have a higher interest rate.

To the best of our knowledge, the only PETRONAS-related bond issued in 2009 that carried a coupon rate of 3.6% was for a RM100 million bond with the tenure of only three years, whereas the 1MDB bond had a tenure of 30 years. As such, given the significant difference between the maturity periods, it should not be surprising that the bond issued by 1MDB had a higher interest rate.

More broadly, it is important to note that the bond issued by 1MDB in 2009 was the first Malaysian bond with a 30-year tenure, and the first Islamic bond to be issued with a maturity period of that length. Given the economic climate at the time, the fact that 1MDB successfully managed to raise this amount of capital reflects the support, goodwill and confidence placed in the company.

Funds regulated by the Cayman Monetary Authority

There has also been substantial debate about funds invested by the company regulated by the Cayman Monetary Authority. However, anyone familiar with the financial world should be able to confirm that there is nothing unusual about companies of this size investing their funds in the Cayman Islands, which is one of the largest registered fund jurisdictions internationally, with the Cayman Monetary Authority recognised as one of the leading fund regulators in the world.

Thousands of international blue-chip companies have funds regulated by the Cayman Monetary Authority, including over 200 Malaysian companies, many of which are household names.

To provide some background with respect to 1MDB’s investment: in 2009, 1MDB and a Saudi Arabian company entered into a joint venture to facilitate long-term economic cooperation between Malaysia and Saudi Arabia. As part of this, a joint-venture fund was set up to undertake investments on projects which would generate financial and strategic benefits to both countries.

However, due to various factors, both parties eventually decided not to proceed with these plans. As a consequence, 1MDB’s investment in the company was converted into a fixed income instrument in the form of Murahaba notes, essentially a loan, with an annual interest rate of 8.75%. This loan was paid back in full, for US$2.318 billion with a profit of US$488 million, in 2013.

Repatriating these funds to Malaysia would have exposed them to fluctuations on the foreign exchange market, as being witnessed at the moment. In order to ensure that 1MDB maintained a strong liquidity position with a truly diversified global portfolio, these funds were invested in a 1MDB subsidiary that was registered in the Cayman Islands. However, the company has already redeemed a significant portion, US$1.4 billion, of the fund and expects to redeem the remaining amount in the coming months.

Overpaying for power assets

In line with the government’s strategic aim of ensuring Malaysia’s energy security, 1MDB has acquired a number of energy assets since 2012. These acquisitions have allowed the company to diversify its fuel mix and country risks, as well as benefit from healthy cash flows and the expertise of their excellent management teams.

The claims relating to the amounts 1MDB paid for its energy assets revolve around values that were attributed to the assets at the time they were acquired and on the basis of certain assumptions made by external parties.

However, the company takes a long term view and consider broader synergies for the group, as well as the social and economic impact on the country, when we evaluate assets and forecast economic returns.

As such, it is the management team’s strong belief that the value paid for these assets, which may have involved a premium in certain instances – as is common when acquiring another business, is commensurate with their existing and future potential.

It is also important to note that since acquiring its first energy assets in 2012, 1MDB has built this into the second largest independent power producer in Malaysia, with a strong presence in international markets within three years.

In total, 1MDB’s energy business has consolidated 5594MW of net capacity, comprising both gas and coal fired plants. This portfolio provides the business with healthy cash flows and enables 1MDB to participate in bids for coal and gas fired plants, the two primary fuel source for power generation assets in the markets that the company operates in, allowing it to create further value and drive future growth.

As such, the economic benefit gained from these assets means that the company has recuperated any excess value it may have paid at the time of the acquisitions.

Overpaying for land

Any decision the company makes to invest in real estate is reached following an extensive period of due diligence, which includes the appointment of independent appraisers to determine the value of the land at the time of the acquisition, whilst also taking into account the value the company can add to it.

All of 1MDB’s investments are undertaken in line with the best interests of the business, and with a view to stimulating economic growth and prosperity in Malaysia.

We understand that there has been some speculation about the value paid by 1MDB for a land parcel in Penang. This land is located in the centre of the town of Air Itam, a much sought after area where property prices have seen a substantial increase in recent years.

This is reflected in the prices that other developers have paid to acquire land in neighbouring areas which, at over RM200 per sq ft, is substantially higher than what 1MDB paid.

In fact, in one instance dating back to 2013, approximately 9.8 hectares in Air Itam were purchased for RM267.4 million, about RM251 per sq ft, for a mixed-use development. In another, approximately RM251 per sq ft was paid for a mixed development project near the Kek Lok Si Temple.

Given the general difficulty companies face in finding sizeable plots of land in prime areas of Penang, that are suitable for carrying out large-tier development projects, the amount paid by 1MDB for this land was not only commensurate with its value but highly attractive.

Preferential treatment on power contracts

Any award takes a number of factors into consideration: the technical standards of the bid, the track record of the company, the bidding price, the urgency of the project and the whole systems cost of the bid to name a few. The projects that 1MDB have been awarded, in Malaysia and abroad, have been on this basis.

Earlier this year, a joint consortium consisting of 1MDB and Mitsui & Co, Japan’s second-largest general trading company, participated in an open and competitive tender exercise for a 2,000MW coal-fired power plant known as Project 3B. Following due consideration of the various bids, the Energy Commission announced that the joint 1MDB-Mitsui consortium had been chosen as the preferred bidder.

Subsequently, there have been suggestions that 1MDB received preferential treatment, and the basis of these claims is that the company’s bid was not the lowest offered. This rationale is flawed as it fails to take into account the fact that any award is based on a number of considerations, not just the tariff.

Whilst there was a bid that was slightly lower than the one presented by 1MDB, the fact is that 1MDB’s was the lowest compliant bid, with a proposed levelised tariff of 25.33 sen/kWh. There was a bid that was fractionally lower, of 25.12 sen/kWh, but this proposal did not comply with a number of requirements set out by the Energy Commission, key amongst which was their lack of experience operating a coal plant.

As the Energy Commission announced in a public statement, the 1MDB-Mitsui Consortium won the bidding exercise “in a fair and square manner with a well-proven technology that would enhance security of supply expected of a 2000MW coal-fired power plant operating in a grid system of our size”.

It is also important to note that there are other tenders that 1MDB has participated in where the contract has been awarded to other parties.

For example, despite 1MDB offering the lowest bid for a gas-fired plant in Prai, another company was deemed as offering a better overall package and awarded the contract on that basis. – December 22, 2014.

*Tan Sri Lodin Wok Kamaruddin is Chairman of the Board of Directors, 1MDB.

 

UMNO’s Revolt against 1MDB


December 15, 2014

UMNO Revolt Rises Against Prime Minister Najib

by Asia Sentinel Correspondent

http://www.asiasentinel.com/politics/malaysia-pm-attacked-party-member/

mahathir-siti-hasmah-umno

With the filing of a police report late last week by a member of Prime Minister Najib Tun Razak’s own political party, the long knives have appeared in Malaysia, seeking the premier’s scalp over the scandal-ridden state investment fund 1Malaysia Development Bhd.

1MDB is said to be seeking permission for an extension from Bank Negara, the country’s central bank, on nonperforming loans from the country’s Tier 1 banks out a concern that if no extension is granted, the banks could be forced to make major provisions.

Although he has made only oblique comments publicly, the man behind the move to oust Najib is former Prime Minister Mahathir Mohamad, who publicly withdrew his support for the Prime Minister via his blog, Che Det, in August.

Khairuddin Abu Hassan, a Penang-based United Malays National Organization Deputy District Chief, filed the request for a “detailed and comprehensive” investigation including the interrogation of 1MDB’s board of directors and representatives of any companies that might be implicated.

While the Penang UMNO branch distanced itself from Khairuddin’s actions and threatened to bounce him out of the party, there can be little doubt that forces aligned with Mahathir have seriously increased the pressure. Over the weekend, the 700,000-member Perkasa NGO, a Malay supremacy organization closely allied with Mahathir, denounced the Prime Minister, saying he had lost the confidence of the country.

“Realistically Najib’s situation is untenable,” a member of the Mahathir faction said. “Certainly he will fight back but whether he resigns or not point is he is he cannot function as PM.”

When Mahathir began his campaign against Najib more than a year and a half ago, it was given little chance. The former Prime Minister had been out of office for more than a decade and was regarded as a loud but irrelevant force. But political analysts in Kuala Lumpur say his campaign has been gaining traction over the 1MDB issue.

Even at 89, and reportedly seeing a physician for various ailments, Mahathir remains a formidable if flawed figure who during his 22 year reign as Prime Minister forcefully led an industrialization drive to move the county out of its plantation mentality, at the same time resulting in as much as US$100 billion in bad investments..  He forced the departure of Abdullah Ahmad Badawi, the successor he hand-picked in 2003 as premier in 2009, and set his sights on Najib in the runup to the 2013 General Election, charging behind the scenes that Najib hadn’t adequately represented the interests of the Malays.

The vehicle for his surrogates’ attack on Najib is 1MDB, the five-year-old state investment fund which as of March had amassed debts of RM49.1 billion (US$14.04 billion) against assets of RM51.4 billion, registering losses of Malaysian ringgit 63.5 billion at the end of the quarter, mainly on huge finance costs.

Mahathir and his allies have been dissatisfied with Najib’s performance for more than two years over a wide range of other issues as well, however. The 1MDB issue, described as “the mother of the mother of the mother of all scandals” by Democratic Action Party MP Tony Pua in an Asia Sentinel article on December 8, has become the vehicle with which the octogenarian hopes to skewer the Prime Minister.

It has gained additional momentum because of allegations that Jho Low Taek, a hard-partying young friend of the Najib family, may have used Malaysian government guarantees to back the making of The Wolf of Wall Street, a hit movie starring Leonardo di Caprio, and to fund his attempt to take over three of London’s most prestigious hotels.

Najib and 1MDB

Najib is the chairman of the 1MBD advisory board and the motivating force, apparently on the advice of Jho Low, as he is known, a putative whiz kid who is alleged to have steered the fund first into a disastrous alliance on oil exploration on the advice of a Saudi prince he went to school with in London.

When the exploration failed, opposition figures alleged, the money was invested in forex trades in yen. The trades were not successful and, opposition lawmakers alleged, the money disappeared. That was the first of a long string of financial disasters that put 1MDB deep in the red without adequate capital to meet obligations.

Mahathir, who rarely attacks frontally, sought to use his allies to put pressure on Najib at the UMNO Annual General Assembly in Kuala Lumpur in late November, in particular seeking to bring a vote to the floor of the body rejecting Najib’s stated plans to international leaders to dump the country’s imprecise, often-abused colonial era Sedition Act.

Najib short-stopped the plan by announcing in advance that he would not only not discard the Sedition Act, he would strengthen it “to defend Islam” and other religions. Any attempt to bring the disaster surrounding 1MDB was also turned back.

Nonetheless, despite having quelled open rebellion, the widespread feeling is that Najib emerged from the UMNO convention weakened.  A number of political observers including those inside UMNO have suggested that he will be replaced by Muhyiddin Yassin, the Deputy Prime Minister and UMNO Deputy President, sometime later this year.

Following Khairuddin’s filing of the complaint last Friday, allegingAK Jasin “questionable” business, investment and fund-raising transactions and decisions, A. Kadir Jasin, the former Editor in Chief of the New Straits Times and one of Mahathir’s closest allies, wrote on his blog that an additional report may be filed with the Malaysian Anti-Corruption Commission, a notoriously political body – ostensibly modeled on Hong Kong’s vaunted Independent Commission Against Corruption —  that tends to shovel corruption complaints under the carpet unless there is a political motivation to push them along.

The MACC, as it is known, has a long record of refusing reports of corruption or finding no cause of action after reports have actually been filed. If the MACC takes up the report filed by Mahathir’s allies, it raises very interesting questions.

1MDB, in a statement, said “We are aware that a police report concerning 1MDB was filed by a politician in Penang. We have not seen any documentation related to this, so are unaware of the nature of the complaint. However, we are confident that it will have no legal basis. We welcome any investigation into our affairs and the opportunity to rebut malicious allegations.”

lodin-wok-kamaruddinA delegation led by the 1MDB Chairman, Lodin Wok Kamaruddin, along with two other board members, met with Mahathir to vainly attempt to assuage his concerns. Apparently they didn’t deliver the answers Mahathir wanted.

In a thinly veiled entry on his blog, Kadir quoted a source – probably Mahathir himself – saying the former Prime Minister feels obliged to take up the matter and to speak openly because many parties had come to see him to inform him about the goings-on in the company and that he was disappointed that issues surrounding 1MDB weren’t seriously discussed by delegates at the UMNO General Assembly.