A new direction for the ‘new Malays’ in new Malaysia

December 27, 2018

A new direction for the ‘new Malays’ in new Malaysia

by  Dr .Rais Hussin


COMMENT | A paradigm, according to science philosopher Thomas Kuhn, is based on consensus. He showed that science was not a mere accumulation of facts through trial and error, but what scientists agreed to be correct.

But Kuhn also argued that all paradigms can be disrupted. And, when they are, the previous paradigm collapses. Sociologist Daniel Bell called this the “end of ideology.” This means when an old paradigm has lost its explanatory and prescriptive value, a new one will naturally supplant and displace it.

In a way, policy makers here have been attempting the same since the country came into being, by revising and challenge each five-year plan. Of late, this can be seen in the midterm review of the 11th Malaysia Plan. One can also include the Bumiputera Empowerment Congress in September.

Since the National Economic Policy formed the backbone of economic planning, the review of any plans or vision documents tends to echo its gold standard. However, this has been corroded by Umno; all that glittered turned out not to be gold, so how can the NEP be trudged out to create a new paradigm?

Under the rule of Abdullah Ahmad Badawi, all GLICs were allowed to improve their balance sheets by going abroad. Once there, however, instead of harnessing FDI into the country, these GLICs tried to find greener pastures for themselves.

Felda Global Ventures and Mara went on a buying spree of hotels in the UK and Australia. Even fugitive financier Low Taek Jho did the same in the US until the kleptocratic ruse was uncovered by Sarawak Report and the Wall Street Journal.

When Najib Abdul Razak took over from Abdullah in 2009, he created 1MDB to borrow heavily  with the financial guarantees of the government to make a success out of Bandar Malaysia. By building it in an already congested section of the city, Najib was crowding out other good investments and making them more costly.

To the degree 1MDB was affected by controversy its debt and liabilities were absorbed by the Finance Ministry. When it could no longer handle the toxic assets and balance sheets, Tabung Haji and other GLICs, even Bank Negara, were brought in to bail it out. Even the National Audit Department was said to have altered its report on the investment firm.

The Umno paradigm

Regardless of what was done and how, and by whom, Umno’s larger justification has always been the self-serving agenda to protect the party elite, rather than the Malays. By focusing on themselves, Umno lost touch with its roots, and failed to protect the provisions of Article 153.

Then Umno resorted to importing cheap labour into Malaysia to keep wages down. Malays were the first to be affected. But Umno couldn’t have cared less, and allowed more and cheaper labour to swarm in, depriving Malays of the right to enjoy liveable wages.

The fact is this though: neither the administrations of Badawi, with his “fourth-floor boys”, or Najib, with his “kitchen cabinet”, knew how to protect the Malays. If they did, several oddities would not have pervaded in the system from top to bottom.

First, a select few controlled most of the financial liquidity of Permodalan Nasional Berhad. These were fair-weather investors, who would bail at the slightest smell of trouble. This is how Malays betray Malays, when plutocrats look after their own material interests, and not that of the Malay laity.

Indeed, if PNB did not offer yields at above market rate, the elites of Umno would have parked their cash elsewhere, even if such a move would destroy the fund’s financial liquidity. The modus operandi of these investors was “me first”, and the rest of Malays last.

Secondly, there are 94 bumiputera development agencies, which spawned 1,137 companies. Yet to date, aside from Mara, there is no telling of these agencies’ annual returns. These agencies clearly have become dishevelled, disorganised and disrupted.

Third, research seems to suggest that since the introduction of the NEP in 1970s, Malays only own 18 percent of corporate entities. Remove the equity participation of institutional investors, and this falls to an abysmally low five percent.

Nor is the goal of 30 percent going to be reached, since Malays tend to want to sell their shares and equities as and when they have made a profit. This is the proverbial moving of goalposts – a weak measure of what Malays can achieve or truly own in perpetuity.

And when the goal cannot be reached, Malays assume others are sticking a knife in their corporate portfolios, when in fact it is Umno cheating them, bringing to mind the Malay saying, “Harapkan pagar, pagar makan padi”. Umno embodied the worst form of this, which is why Malaysia devolved into a kleptocracy, before Pakatan Harapan managed to stop the rot.

Fourth, an NEP-centric document that is numerically tagged to 30 percent may not be a good thing – especially with Umno’s manipulations, which includes keeping the wealth among the elite. By creating a false positive balance sheet economy, Umno was pulling the wool over the people’s eyes, at least until May 9.

Globalisation a must

The fact of the matter is, Malays and Malaysia must globalise. And the economic conditions must become more varied and complex, and not driven by how Umno pads the accounts.

For example, the World Economic Forum listed the top ten risks of doing business in the current international economic system. The United State has its lowest unemployment in 49 years, the European Union in 43 years and Japan in 25 years. But the midterm review of the 11th Malaysian plan seems oblivious to the external situations abroad.

Malaysia has come a long way form 1957 with its US$314 billion GDP, and it can go further. But this is premised on good governance and nimble, effective and strong economic statecraft–not just within the country, but in consonance with the world.

The US Federal Reserve Bank, for instance, has approved eight interest hikes in the last two years alone. The era of cheap money can and will disappear in the next one to two years, if interest rates in Washington continue to rise.

The global economy is also going through more revolutions in apps, algorithm, analytics and automation, which will lead to more Sino-US trade rivalry as both compete to become dominant in these fields.

None of these is apparent in the NEP, the 11th Malaysia Plan nor its midterm review. Yet, Malaysia is right in the thick of these disruptive technologies, as it is the 17th largest trading state in the world, as well as China’s One Belt One Road initiative.

New Malays in a new Malaysia must take these disruptions into account instead of insisting on perpetual protection from the state. In a honeycomb economy, any app can theoretically disrupt old supply chains – Airbnb allowing tourists to circumvent the front desks of hotels, BMW’s DriveNow dismantling notions of ownership, and EdX allowing students to bypass enrolment in formal universities.

A new country

If Malaysia does not try to think of new ways to become a new country, one that can adapt to the latest digital disruptions, a mere fetish with NEP – which has become a vehicle for rent-seeking and corruption to enrich the Umno elite – will only cause resentment among the other 99.5 percent of Malays.

If anything, May 9 was an indication of how mad the rakyat can get when wealth does not trickle down.

As things stand, there are 113,000 Felda settlers, of which 32,000 have been receiving cost of living aid. While they wait, the prices of palm oil will not go up anytime soon, since China has agreed to buy US soybean in order to prevent the collapse of Donald Trump’s presidency.

Little wonder palm oil is doing badly. Workers from Felda have to think of new ways to make a breakthrough. It is also important to diversify new markets for palm oil, including, but not limited to, Russia, Eastern Europe, and South Asia.

New Malays must have the strategic mentality to go where returns are highest, even before GLCs have found the first breakthrough. There are four ways Malays can change. As rudimentary as it may sound, they have to assess strengths, weaknesses, opportunities and threats.

Strength can be derived from the willingness to defend their honour, after years of being spoiled by Najib. Nothing is more powerful than the will and tenacity to change or turn over a new leaf.

But just as some are committed to turning over a new leaf, weaknesses lie in certain quarters like Umno and PAS luring people back to the racial and kleptocratic ways of old in time for the 15th general election.

Now that Malaysia has ditched the kleptocracy and kakistocracy, new opportunities are opening up for the likes of Bersatu to field more qualified and capable candidates in GLCs, GLICs and even thinktanks. The party must not lose this once in a lifetime chance. Appointing qualified and capable candidates, rather than mere politicians, is key towards recalibrating Malay minds.

The threats come in the form of the pseudo-Islam peddled by some in PAS, and increasingly, Umno – evident in the PAS Youth Chief’s dictate against the celebration of Christmas.

When Malays can engage, and work with those from any race across the aisle, there is no stopping Malaysia from becoming a major strategic power in Asean.

RAIS HUSSIN is a supreme council member of Bersatu. He also heads its policy and strategy bureau.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.



Cambodia: The extraordinary journey of a resilient banker

December 23, 2018

Cambodia: The extraordinary journey of a resilient banker

By: Eric Ellis
Bun Yin, CEO, CIMB Bank_780

CIMB’s boss in Phnom Penh, Bun Yin, is the only Cambodian to run an international bank anywhere, but that’s not the only remarkable thing about him: the fact that he’s alive to do so is another.


Few international bankers can claim to have learnt their deal-making skills during a genocide. But Bun Yin, chief executive of Malaysian-owned CIMB Cambodia, is not your average banker – and his homeland is no normal financial market.


Yin, 62, is a veteran of Phnom Penh’s fast-developing banking sector, a genial man nearing the end of a 37-year career that neatly tracks Cambodia’s recovery from the terror of the Pol Pot years. The only Cambodian to run an international bank.

Yin is regarded by peers, competitors and staff as a pioneer of modern Cambodian banking, a tribute he modestly waves away. As for CIMB Cambodia, Yin tells  Asiamoney that he is “quite pleased” with how business has developed since 2010, when he first joined from Campu Bank, and since 2015 when he took over as CIMB Bank’s Chief  Executive.


CIMB Cambodia’s net profit rose 23% to $7.8 million in 2017, of which 44% was derived from commercial banking; the bank expects pre-tax profit for 2018 to reach $14 million, up about 40% from the previous year’s figure of $10.1 million. Yin’s family, too, seems to be thriving, and is influential in Phnom Penh.

An adult son and daughter have their own businesses, while another US-educated son runs one of Cambodia’s leading law firms and is an authority on the country’s banking code. Though the bank is part of Malaysia’s CIMB Group, all of the 340 staff working across 14 branches and business centres are Cambodian, with an average age under 30. That youthfulness reflects the country generally because so few of Cambodia’s older generation survived the Pol Pot era. Yin’s talents, such as his education and a capacity for foreign languages, were considered a death sentence under the Khmer Rouge.

To be a banker was my inspiration since my school time – Bun Yin, CIMB Cambodia


CIMB Cambodia has financed a range of local and foreign companies in construction, engineering and commodities. Some of Cambodia’s biggest companies bank with CIMB.


Yin has known some of them since their early days: when he worked at Campu; he provided some of these then-small and medium-sized enterprises with their first loans. “There are many companies in Cambodia, in trading, importing and construction, who started with me when they were small and now they have become big companies,” Yin says. “When I came to join CIMB, all these clients supported me.” Cambodia’s banks have coined it during two decades where average annual growth has been 7.6%, the world’s sixth-fastest-growing economy, according to the World Bank. Cambodia’s biggest domestic bank Acleda, which is part-owned by Japan’s Sumitomo Mitsui Bank Corp, reported taxed profit of $91.68 million in calendar 2017. The number two bank, Canadia, which has close ties to the government, earned a net profit of $72 million in 2017.

Outlook positive


The IMF gives a qualified forecast that the good times will continue, although the European Union has warned that Cambodia could lose its $6 billion-a-year privileged trading access to the bloc if the country’s autocratic strongman Hun Sen, Asia’s longest-serving leader and a former Khmer Rouge communist commander, doesn’t address growing human rights concerns. “Cambodia’s economic outlook is positive, although there are downside risks,” the IMF noted in a recent statement, highlighting macro-financial risks and governance issues. “Bank credit, increasingly concentrated in the real estate and construction sectors, is expected to grow around 20% in 2018,” it says, adding that “concerns about credit quality, external funding, increasing concentration in the real estate sector and unregulated lending by real estate developers and high credit growth and growing systemic importance of microfinance institutions continue to pose risks to financial and macroeconomic stability.” While CIMB Cambodia has seen strong growth in consumer lending (up 30% year-on-year as of the end of September 2018) and commercial lending (up 35%), its non-performing loan ratio has fallen from 0.27% to 0.19% in the same period and compares with an industry average of 2.4%, according to the bank’s figures.
Image result for From CIMB’s office high in the Hong Kong-built Exchange Square tower in Phnom Penh
EXCHANGE SQUARE lies at the heart of Phnom Penh’s emerging financial district, overlooking one of the city’s best parks. Construction began in September 2013, with completion by end of 2016.


From CIMB’s office high in the Hong Kong-built Exchange Square tower in Phnom Penh, it’s easy to see evidence of the boom. Cambodia’s sprawling riverine capital reveals new construction in all directions.


A decade ago, it took barely 15 minutes to drive the 10 kilometres from Phnom Penh’s airport to downtown; now it can take more than an hour in gridlocked traffic. Phnom Penh has become an apprentice Bangkok as Cambodians have leapt enthusiastically from Lenin to LinkedIn. Billions of dollars of Western aid and, more recently, state-directed financing from China, have helped. “Cambodia has changed a lot from where we were,” Yin says. Flashback to the ‘killing fields’ madness between 1975 and 1979: the Khmer Rouge seized control of Cambodia in the regional power vacuum at the end of the war in neighbouring Vietnam. Yin was in his late teens, recently married and with hopes of a banking career. “To be a banker was my inspiration since my school time,” he says.



But in Pol Pot’s ‘new society,’ banking, finance, indeed all business was abolished, and money too. The central bank was looted and then symbolically blown up as redundant. Schools and colleges, factories and industry were shut down.





The National Bank of Cambodia was symbolically destroyed by the Khmer Rouge after it abolished money.


Private property was seized, and agriculture collectivized. Borders were closed to seal off Cambodia from foreign ‘cultural pollution.’ Entire cities were depopulated as millions of urban ‘parasites’ were marched to the countryside for ‘purification’. Yin was one of them. This was the dystopia of Pol Pot’s ‘Year zero’. Yin was one of those at risk: he was educated and from a relatively well-to-do family in Phnom Penh, with some ethnic Chinese ancestry. His family owned a Volkswagen car, a luxury at that time. His wife taught French and Yin also spoke the language of Indochina’s former colonial rulers, as was mandatory at school.



Khmer Rouge classified city-dwellers such as Yin as expendable ‘new people’, innately opposed to the agrarian revolution and in need of ‘re-education’ or worse. A chilling slogan of the day directed at new people stated that ‘to keep you is no benefit, to destroy you is no loss.’

In early 1976, the Khmer Rouge came for him. Yin’s crime was that he spoke French, and he was thus condemned as an intellectual.


Like millions of his countrymen, Yin was marched to the rice fields outside Kratie in the remote north east of Cambodia, about 300 kilometres from Phnom Penh. He toiled there for two years, pulling rice and cutting bamboo, sometimes working beside the remains of those who had died from exhaustion, malnutrition or a cadre’s bludgeoning.


“My wife and I were talking about something and someone heard from the street,” he says. “The Khmer Rouge said I was a puppet of foreign powers. I didn’t know what that meant. We were considered as intellectual people as we were able to speak another language.”


Like millions of his countrymen, Yin was marched to the rice fields outside Kratie in the remote north east of Cambodia, about 300 kilometres from Phnom Penh. He toild there for two years, pulling rice and cutting bamboo, sometimes working beside the remains of those who had died from exhaustion, malnutrition or a cadre’s bludgeoning.



After Vietnam finally overthrew the Khmer Rouge in 1979, Yin recovered from his ordeal in his mother’s home village for a year before returning to Phnom Penh to look for a job. But many in his wider family were not so fortunate. An estimated two million Cambodians, or a quarter of the population, died during one of history’s most gruesome genocide.

Four decades on, Yin’s lingering memory of his time in Kratie is of the unbearable bugs in the rice fields there. He had noticed local peasants smoked a tobacco that kept insects away, so he started smoking too.


“The tobacco became a very important commodity,” he recalls.  Field work would begin at 4am, but Yin would rise earlier to tend a secret tobacco patch. Trading the cheroots with Khmer Rouge cadres helped save his life.

Yin remembers Cambodia’s riel banknotes re-appearing around 1980, when the central bank had to virtually give them away, such was the lack of confidence in the old currency.


Field work would begin at 4am, but Yin would rise earlier to tend a secret tobacco patch. Trading the cheroots with Khmer Rouge cadres helped save his life. “Three times they were going to kill me,” he says, “and three times I survived. I gave tobacco to others in the field in order to gain friendship with them. With that generosity, I managed to have many friends who were helping me when I had trouble.” When Vietnam ousted the Khmer Rouge, it replaced Cambodia’s Mao-inspired autarky with Vietnam’s Soviet model.



Yin remembers Cambodia’s riel banknotes re-appearing around 1980, when the central bank had to virtually give them away, such was the lack of confidence in the old currency.


The central bank was rebuilt from scratch in 1979. Yin started his career in an arm of the bank in 1981.


His first job in banking started in 1981 under the communist systems of the Phnom Penh Municipality Bank, an arm of the central National Bank of Cambodia which had been re-opened only 18 months earlier. The current governor of the central bank, Chea Chanto, was Yin’s boss at the municipal bank. From 1984 to 1987, the central bank sent him to study at the ministry of finance’s faculty of finance, accounting and banking.


“The system was socialist,” remembers Yin. “There were no private banks. All the capital came from the central bank. It’s a bit different than the commercial banks now. We did the payroll for all the government civil servants.”


The UN administration ushered in a boom for Cambodia. That legacy remains evident today: the dollar is still preferred over the riel, despite repeated entreaties by the authorities to favour the local currency. Awash with foreigners and their aid dollars, the country’s first private banks opened in the run-up to the UN’s arrival. Malaysia had been a signatory to the 1991 peace accord and, at Kuala Lumpur’s urging, Teh Hong Piow’s Public Bank began Campu Bank in Phnom Penh in 1992, among the first foreign banks to enter the market.


Through the 1980s, Vietnam-backed Cambodia was in a civil war with Khmer Rouge guerrillas and remained Hanoi’s client state until 1991 when an international peace agreement installed the United Nations as Cambodia’s government ahead of democratic elections in 1993.


The new banks were desperate for competent local staff; in the absence of a conventional banking sector, the central bank was an obvious place to look. Yin was hired in Public Bank’s first intake, joining as a credit officer and steadily rising through the ranks to become deputy general manager. In 2010, he was headhunted by CIMB.




Today, the avuncular Yin is something of an industry treasure in Cambodia’s small banking community. “He’s a legend,” says Joe Farrugia, an Australian who runs the local offshoot of Hong Leong Bank, CIMB’s Malaysian rival. “Bun Yin is a charming man, very straight and a very good operator.”


Image result for cimb's nazir razak


At Campu, deputy general manager Ong Ming Teck says Yin “was born and bred here, about 20 years with us. When he first came, he could hardly speak English.” Yin also became a minor social media sensation after CIMB’s visiting former chief executive, Nazir Razak, posted a selfie with him on his Instagram account, describing his “incredible personal journey.”


The thread under the image was swamped with emojis, requests to meet ‘Uncle Yin’ and comments like “inspiring,” “determination” and “awesome.”

Says Razak: “Watching him thrive today as a banker shows how we should never give up hope.” So what makes a good banker in Cambodia, according to Yin?

He says his years in the rice fields taught him a valuable lesson, one that saved his life then and would make his career.


Says Razak: “Watching him thrive today as a banker shows how we should never give up hope.” So what makes a good banker in Cambodia, according to Yin?


He says his years in the rice fields taught him a valuable lesson, one that saved his life then and would make his career. “I learned my principle that everything must be two ways,” he says. “When you help people, people will help you back. It’s good to be friendly, for mutual benefit. That builds a trust, and that has always served me well in my career, even up to today, after 37 years as a banker.



You must learn to control yourself, to have discipline. As a leader, you must set an example for your staff.”


Four decades later, the Khmer Rouge still casts a shadow over Cambodia’s emergence to normality.  The day after Asiamoney meets Yin, Phnom Penh is in a reflective state; two senior Khmer Rouge leaders, Pol Pot’s deputy Nuon Chea and Cambodia’s former head of state Khieu Samphan, are finally convicted of genocide.



It’s taken almost four decades to bring these old tyrants to account. But memories of the time remain fresh for some. “This was an unaccountable madness for all Cambodians, including myself,” Yin says. “It became a history that everybody should not forget, to prevent its recurrence. The most important thing for our new generation is to look forward.”

Sabu’s smelling roses compared to those crooked UMNO Ministers

August 5, 2018

Sabu’s smelling roses compared to those crooked UMNO Ministers at Defence Ministry

by Phar Kim Beng@www.malaysiakini.com

Image result for Mat Sabu as pilot

Dapper looking Mat Sabu

COMMENT | It is odd that former premier Najib Razak has reportedly called Defence Minister Mohamad Sabu a “joker,” who talks about “fish curry” while on board a warship.

Having lost the 14th general election (GE14) badly on May 9 and is now caught in a legal imbroglio over 1MDB and potentially many “mini 1MDBs,” the last thing Najib wants to be doing is to cast the first proverbial stone in a glass house.

Imagine the shards of glass that will come crashing down. In fact, the cracks are already there to see.

The Defence Ministry has been helmed twice by Najib. No one has had that privilege. Not “King Ghaz,” the late Ghazali Shafie, who is known as a foreign policy maestro.

Not even Dr Mahathir Mohamad, the Seventh Prime Minister, who is known to take the bulls by the horns; as he did when he ripped UMNO and PAS apart in GE-14.

A double stint of Najib, therefore, should have allowed the Defence Ministry to stay clear from any unfortunate controversial issues. Yet, neither tenure did, despite a combined service of some 14 years clocked by Najib.

In fact, when one is in the military barracks, there are jokes galore about the ineptness of Najib but potentially Hishammuddin Hussein too, his cousin, who too donned the mantle of Defence Minister.

Image result for hishamuddin tun hussein at Lahad Datu

The Joker of Lahad Datu–Hishamuddin Hussein

Wasn’t the latter who tweeted that the terrorists in Lahad Datu were clad in “slippers” and “sarongs,” and not to be deemed a threat?

Yet precisely a day later the terrorists went on a rampage, resulting in the first armed invasion of Malaysia since the end of Konfrontasi in 1965. Najib and Hisham, for the lack of better word, appeared to have muck things up when they were at the top of the food chain.

If the joke is on Mat Sabu, so far still a well-regarded Defence Minister, Najib has to be mindful of his legacy both as a Defence and Prime Minister. They reek of indolence (the lack of oversight) and insolence insofar as basic supervision is needed.

Indeed, what the ministry faces now is a litany of issues that remain unresolved. Be it the French submarine Scorpene scandal, or the plea of Shaariibuu Setev that the murder case of his daughter, Altantuya, be reinstated (for a thorough reinvestigation), the echoes from the past seem unrelenting.

Cancer of corruption

If one cares to listen, the cancer of corruption has seeped deepest into the marrows of the ministry. A tile at a military hospital, for example, can allegedly come at a quote of RM13,000, according to reliable sources. Drugs and pharmaceuticals that are supplied to the hospital are allegedly 300 percent more expensive than the regular tender.

If the invoices of these items are compared side by side with other genuine tenders, it would expose the scams and more shenanigans that have manifested in cooking the books.

The best services at such hospitals go the military supremos and top guns, and not the rank and file, who bore the scars of their service.

Indeed, contracts and tenders that are non-competitive have given to the same company over and over. For example, when a tender requires eight items to be scrutinized or supplied, those companies with close political connections to the previous regime continue to win the bids time and again, even though they offer nine of 10 exhibits, thus inflating the cost and breaching the terms of the tender.

Image result for Najib as Minister of Defence

The legacy of Najib appears to be anything but spotless. Thus Mat Sabu is right that Najib has tried to “hit him below the belt” by choosing to raise the issue outside of the Parliament.

If Najib wants to critique the Defence Ministry, an institution that can be redeemed by Amanah, he better find a stronger excuse than hurling abuse at Sabu.

PHAR KIM BENG is a Harvard/Cambridge Commonwealth Fellow, a former Monbusho scholar at the University of Tokyo and visiting scholar at Waseda University.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.


Getting a share of the Khazanah Cake–Here’s How

July 26, 2018

Getting a share of the Khazanah Cake–Here’s How

by P. Gunasegaram@www.malaysiakini.com


Image result for khazanah nasional Board of Directors resign

Apart from Khazanah Managing Director Tan Sri Azman Mokhtar, Tan Sri Md Nor, former banker Mohamed Azman Yahya; Datuk Mohammed Azlan Hashim; former central banker Andrew Sheng Len Tao, who previously served as the deputy chief executive of the Hong Kong Monetary Authority; Tan Sri Raja Arshad Raja Uda, former chairman and senior partner at PriceWaterhouseCoopers in Malaysia; Datuk Nazir Razak, chairman of financial group CIMB Holdings and brother of former premier Najib Razak; Datuk Nirmala Menon, a highly respected insurance sector executive; and banker Yeo Kar Peng have tendered their resignations.–July 26, 2018


QUESTION TIME | Can members of the public, instead of just the connected bigwigs, get a slice of the corporate cake, if all or part of Khazanah Nasional Bhd’s realisable value of about RM160 billion at the end of last year is disposed of?

This is about 57 percent of total assets under national unit trust management company Permodalan Nasional Bhd or PNB with RM280 billion of assets managed as at end 2017.

The unequivocal answer is “yes”, a unit trust scheme can be easily devised for Khazanah’s assets and you and I and millions of other Malaysians could become beneficiaries – provided the new Pakatan Harapan government under Dr Mahathir Mohamad shunts Malaysia Inc aside in favour of a partnership with the public. It really can be done and it will earn plenty of credit for Harapan..

When Prime Minister Mahathir accused Khazanah Nasional of deviating from its original objective of helping the bumiputera, what did he mean? Was he confusing this with Permodalan Nasional Bhd which was set up specifically to increase and retain bumiputera participation in the corporate sector?

“But along the way, Khazanah decided it should take all the shares for itself and if they are good shares well why not acquire the shares at the time of listing when the price of shares was very low and so they forget entirely about holding the shares for the bumiputera. They decided that they should be holding the shares forever as a part of the government companies owned by the government,” he said.

But an examination of its corporate profile shows no such objective for Khazanah. Here is its mandate: “Khazanah strives to create sustainable value and cultivate a high-performance culture that helps contribute to Malaysia’s economic competitiveness. Utilising a proactive investment approach, we aim to build true value through management of our core investments, leveraging on our global footprint for new growth, as well as undertaking catalytic investments that strategically boost the country’s economy. We also actively develop human, social and knowledge capital for the country.”

Yes, under the previous government it was to divest some of its stakes in investments gradually, but not necessarily to bumiputera. Increasing the bumiputera stake in the corporate sector fell squarely upon the shoulders of PNB which was set up for that purpose.


Its first chairperson, former Bank Negara Malaysia Governor the late Tun Ismail Ali, Mahathir’s brother-in-law, set up PNB in 1978 and came up with the structure of PNB and its unit trusts to increase and retain bumiputera corporate interests.

Surely Mahathir knows that as he was Prime Minister and chairperson of PNB’s holding company from 1981 up to 2003 during his previous term.

Image result for Mahathir Mohamad--Whats your game?

What is Mahathir’s game? And is the seeming pressure that appears to be put on Khazanah and its staff, alleging high salaries etc, an attempt to justify the selling of Khazanah’s investments to others?

Is this fair on Khazanah executives who have done a pretty good job of transforming Khazanah after Abdullah Ahmad Badawi took over as Prime Minister in 2003 from Mahathir and instituted wide-ranging reforms to make it a professional organisation run according to strict rules of governance and accountability?

Few who have followed Khazanah closely over the years will deny the tremendous improvement Khazanah has undergone since 2003 compared to the first 10 years of its existence after its establishment in 1993 during Mahathir’s previous tenure when it had been associated with some questionable investment decisions to bail out crony companies.

Image result for tan sri azman mokhtar

Tan Sri Azman Mokhtar and his Board colleagues deserve a lot of credit for remaking and re-imaging Khazanah Nasional Berhad into a model of good corporate governance for Malaysian GLCs.–Din Merican

In fact, Khazanah led the transformation of GLCs (government-linked companies) through various initiatives which included systematic strengthening of board and management, a system of key performance indicators and a series of rules for good corporate governance. If 1MDB had followed the measures instituted, it would not be where it is because its mismanagement and theft would have been discovered and exposed a long time ago.

A revolutionary scheme

Khazanah’s investments include some of the largest companies on the stock market which have a respectable amount of management expertise with them. These are listed companies and salaries must be competitive with others to retain and build a good staff.


Among key companies, four of whom are among the top 10 in terms of market value, are Axiata Group Berhad, CIMB Group Holdings Berhad, Tenaga Nasional Berhad, Telekom Malaysia Berhad, Malaysia Airports Holdings Berhad, IHH Healthcare Berhad and UEM Sunrise Berhad.

If Mahathir wants to sell major stakes in these companies, perhaps to raise funds or perhaps to increase bumiputera participation, or perhaps to sell to favoured people, he must remember two things – there may not be enough bumiputera with the means to acquire these companies and as in the past, unscrupulous investors may sell down their stakes for profits or cut costs so much that businesses become unviable.

There is another way to do it – spread the wealth around. PNB and Ismail Ali showed the way a long time ago – unit trusts. Put good investments into a unit trust and sell the units to the general public. Give them a better deal than current unit trusts which have exorbitant entry and exit fees and a high management fee to boot.

With some RM160 billion under its management, just a 0.25 percent management fee and with no other charges, Khazanah can get RM400 million a year which should be more than enough to cover staff operating costs. The government gets RM160 billion or thereabouts if all investments are put into the unit trust, and the public gets to invest its excess funds in quality assets at zero entry and exit costs and a low management fee.

But it has to be prepared to pay market costs for subsequent sale and purchases as with any other unit trust, which is fair. You could even allow EPF withdrawals for purchases.

To keep it within reach for as many people as possible, cap the maximum amount of investments by anyone Malaysian at RM50,000, same as for PNB units. This could mean an investor base of probably at least 3.2 million people (160 billion divided by 50,000) and perhaps much more than that as many people can’t afford to invest RM50,000 in one go.

You can set bumiputera allocation at 30 percent at least and allocate other parts of it to other disadvantaged communities. You can issue the units in stages.

Khazanah’s track record has been pretty good and mimics quite closely the main index tracking of the Kuala Lumpur stock market. Its value, adjusted to accurately reflect performance, increased annually by 9.3 percent on a compounded basis between 2004 and 2016 which is very much in line with the FBM KLCI index growth of 9.4 percent over the same period.

This also means that despite divesting the shares, the government will still have control over the companies through the unit trusts, and ensure that both their social as well as profitability roles are fulfilled. It actually is the road to greater corporate social responsibility.

There you have it, a simple but revolutionary scheme, easily implemented, and shall we say, the most inclusive deal that anyone can come up with.

Over to you Harapan, and if you want a catchy name for this, here are two:

Government-People Partnership (GPP) or Public People Partnership (PPP).

Take your pick.

This is the fifth in a series of six articles on Malaysia post GE14. The next and final part: What Harapan should prioritise going forward.

Part 1: Mahathir’s patently unfair cabinet

Part 2: Did Mahathir win the general election?

Part 3: Do we really need a council of elders?

Part 4: Proton, Khazanah, Malaysia Inc and Mahathir

P GUNASEGARAM  E-mail: t.p.guna@gmail.com

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

Nazir Razak ready to leave CIMB Group?

June 30, 2018

Nazir Razak ready to leave CIMB Group?


When an Outstanding Banker like Nazir Razak decides to leave before his term of office ends, there’s bound to be speculation. In this particular case, the man who is at the center of this Star newspaper report happens to be  the younger brother of  former Malaysian Prime Minister Najib Razak.


Image result for CIMB Banking Group in Cambodia

“In six years, we have expanded from two branches to 12 branches as well as 14 off-site self-service terminals. We presently have over $450 million in assets, making us the 13th largest commercial bank in Cambodia. We intend to be in Cambodia for the long term and we feel it is important to grow sustainably and to invest in developing our local talent pool. Regionally, CIMB Group is ASEAN’s fifth-largest universal bank. Over the past decade, the group has been one of the fastest-growing banks in the region”. Bun Yin, CEO of CIMB Bank, Cambodia


A Cambodian friend of mine who heads CIMB Bank operations (pic above) in Cambodia alerted me of this possibility a couple of days ago. My response was that he should not listen to rumours.  Chairman Nazir is well known in the Kingdom where CIMB Bank operates a very successful and profitable network of bank branches.

I am not privy to what is happening in the Malaysian corporate scene post May 9 GE-14. I have been away from the country since 2014.  But I hope that the impending departure of Chairman Nazir has nothing to do with politics.  Ideally, I would like him to either remain with the CIMB Group, or be given some key appointment elsewhere so that his talent,  professional  competence, reputation for integrity, and wide experience can be used for  the benefit of the New Malaysia.–Din Merican


Image result for CIMB Banking Group Chairman Nazir Razak

CIMB Group chairperson Nazir Razak will leave the banking group when his term ends next March, reported The Star today.

The youngest brother of former Prime Minister Najib Razak has informed the CIMB Board of Directors that he will not seek re-election as chairperson, a post he has held since 2014.

He has also served as CIMB chief executive officer (CEO) for 15 years. “He (Nazir) has told the board that he will leave and not seek re-election. The board is already searching for a successor,” said the source.

Malaysiakini has contacted Nazir for his response. Speculation has been rife that Nazir could leave earlier than March. The source however said thus far, there has been no indication of him being “told to go”. “He has not been called in by the Council of Eminent Persons (CEP) or anyone else,” the source was reported as saying.


The CEP is headed by former Finance Minister Daim Zainuddin, and was set up to advise the new Pakatan Harapan government on how to achieve its economic promises in 100 days as per its election manifesto.

CEP is also looking into the performance of government-linked companies (GLCs) and reviewing the appointments of key executives. Several CEO at GLCs as well as government-linked investment companies (GLICs) have already vacated their positions following the change in government.

Nazir is prepared to go earlier than the expiry of his term if he is told to do so, according to another source.

The Lavish MAVCOM –A Common GLC Problem

June 2, 2018

The Lavish MAVCOM –A Common GLC Problem

by R. Nadeswaran@www.malaysiakini.com

Taxpayers expect at least a semblance of practicality, pragmatism and realism when their hard-earned money is expended. People are willing to pay RM1 for peace of mind when they travel, but certainly not for fat cats to pay themselves high salaries. –R. Nadeswaran aka Citizen Nades

COMMENT | The Malaysian Aviation Commission (Mavcom) has been making headlines for all the wrong reasons. Just after the elections, AirAsia boss Tony Fernandes made a serious charge against the commission, questioning its integrity.

Fernandes claimed that the airline was pressured to cancel an additional 120 flights during the 14th General Election period. Mavcom said it viewed the claim seriously and lodged a police report against Fernandes over the allegation.

“The Commission has never issued such a directive to any airline, including AirAsia, to reduce or cancel any flight where regulatory requirements have been met,” it said.

Mavcom also said that it had commenced an investigation into the claim. “We will keep members of the public informed,” said a spokesman in a statement on May 14. A police report was also lodged.

Image result for General (Rtd) Abdullah Ahmad

How does Mavcom justify paying this retired General RM85,000 per month? He must be a management genius. The Directors must be held accountable for this irresponsible decision. Unconscionable .–Din Merican

Today, more than two weeks later, we have not been informed of the outcome of the investigation. Instead, we are told that the salary of Mavcom’s Executive Chairperson General (Rtd) Abdullah Ahmad is a whopping RM85,000 – more than four times the salary of the Prime Minister.

Image result for board of directors of malaysian aviation commission

Entrepreneur Tan Sri Tony Fernandes–A Victim of Politics. It is time we recognise his contributions to the Malaysian Economy and for building AirAsia into an award winning global brand, in stead of demonizing him. I am glad that Prime Minister Tun Dr. Mahathir Mohamad and former MITI Minister Tan Sri Rafidah Aziz have come to his defense.–Din Merican

It is also pertinent to ask when the results of the probe will be made public. It is not rocket science. Fernandes says he has the evidence to prove it. Has Mavcom requested for it – or is it too embarrassed that the cat will now be let out of the bag?

More importantly, is this kind of salary for the Mavcom executive chairperson justified? Who approved the salary? How did the board, in this instance the other commissioners, approve this? How did they conclude on the salary scale?

What is the basis for such a humongous salary? Other commissioners have to answer to the taxpayers on how they arrived at their executive chairperson’s salary. Do they actually need an executive chairperson? Why not ask the CEO to report to the board?

The Board Members are:

  • Secretary-General of the Transport Ministry Saripuddin Hj Kasim;
  • former Director-General of the Economic Planning Unit, Nik Azman Nik Abdul Majid;
  • Lawyer and Suhakam Commissioner Mah Weng Kwai;
  • former Housing and Local Government Minister Chor Chee Heung,
  • former Transport Ministry Secretary-General Long See Wool,
  • retired civil servant Fauziah binti Yaacob,
  • Deputy Chairperson of the Penang Regional Development Authority (Perda) Shaik Hussein Mydin, and
  • Nungsari Ahmad Radhi, Managing Director of Prokhas Sdn Bhd, a Ministry of Finance Inc. company.

At this juncture, it is pertinent to explain how a traveler’s RM1 is spent. According to its latest available Annual Report on its website, from March 1 to Dec 31, 2016, Mavcom incurred staff costs of RM8.7 million.

Big task ahead

It further paid RM570,000 in Directors’ Fees. Mavcom had 11 board meetings during a 10-month period. Calculated loosely, each of the eight directors earned RM5,100 for attending each of the 11 meetings. The accounts also show that RM770,000 was spent on travel and accommodation.

Image result for Anthony Loke, minister of transport

Minister of Transport Anthony Loke–Fix the MAVCOM nonsense

Mavcom is not the only one that pays its directors lavishly. The Human Resource Development Fund (HRDF) pays each of its 18 directors RM2,000 per month and a one-off tuxedo allowance of RM3,000. (The Malaysian Anti-Corruption Commission pays members of it advisory panel RM300 each for attending monthly meetings.)

HRDF’s funds come from employers who have to contribute one percent of their monthly payroll. The money is supposed to be used for the training of their respective staff but in the past, HRDF was involved in dubious diploma courses from the UK.

It also spent RM25,000 on an advertisement congratulating its then Minister Richard Riot on being conferred a ‘Datuk’ title!

Taxpayers expect at least a semblance of practicality, pragmatism and realism when their hard-earned money is expended. People are willing to pay RM1 for peace of mind when they travel, but certainly not for fat cats to pay themselves high salaries.

Similarly, employers expect their one percent levy to be used for training their own staff and not for directors to benefit at their expense.

There’s a big task ahead for the new ministers to the review unrealistic salaries, allowances and perks to organisations under their purview. Mavcom and HRDF are just two examples.

There are scores of other agencies and a review will help save the government millions of dollars. Let not history repeat itself. It was the negligence of the board that led to colossal losses in the Port Klang Authority and the Port Klang Free Zone scandals.

Also, the government-appointed directors of the National Feedlot Corporation board were oblivious to the fact that monies meant for cattle farming were used to buy luxury condos.

R NADESWARAN has been campaigning for good governance for oer 30 years and expects the new government to emphasise on its cornerstones – transparency and accountability. Comments: citizen.nades22@gmail.com