...so says Yasmin Ahmad, director of Sepet.
Read her blog post on Jan 21, titled "HOPE. Is it in the hands of China's industrialists, America's foreign policy-makers, or India's village women?"
She describes her encounter with two Chinese businessmen while filming her documentary in India, and uses that to discuss social values. I found it quite insightful, and since the wisdom comes from an artist, not an economist, its more emotional.
http://yasminthestoryteller.blogspot.com/
Saturday, January 28, 2006
Friday, January 27, 2006
Metramac Scandal
Below is an interesting observation on the Metramac issue.
http://malaysia-today.net/reports/2006/01/metramac-scandal-no-light-at-end-of.htm
Friday, January 20, 2006
Metramac scandal: no light at the end of the tunnel
Kim Quek
Court of Appeal Justice Gopal Sri Ram's damning judgment on the Metramac Concessionaire case is a sad reminder of the Mahathir era cronyism and abuse of power under an opaque system of governance - a dubious system of dishing out government largesse that regrettably still persists today.
In vivid language, Gopal lashes out in no uncertain terms at the connivance between former Finance Minister Daim Zainuddin and his protégé Halim Saad in wresting the Cheras Toll concession from its then concessionaire, Syarikat Teratai K.G.Sdn Bhd (STKG), when the latter was ordered to suspend its toll collection for not fault of its own. The occasion was the continuous public demonstrations against such toll collection soon after it started in September 1990. To quell such demonstrations, Kuala Lumpur City Hall (DBKL), which awarded the concession, asked STKG to suspend the toll collection. DBKL later accepted in principle the option of terminating the concession agreement with compensation to the concessionaire. However, finance minister Daim was adamant that the Federal Government could not afford to pay any compensation.
At such hour of desperation for STKG, in came UEM Bhd, which in November 1990 offered to buy over STKG for RM 97.5 million. Facing huge debt and without the prospect of resuming toll collection or compensation, STKG shareholders had no alternative but to accept UEM's offer and the sale was sealed in an agreement (dated 23 January 1991) with UEM nominee Metro Juara Sdn Bhd whose only two shareholders were Halim Saad and Anuar Othman. STKG was later re-named Metramac Corporation Sdn Bhd.
Lo and behold. Soon after the takeover, a silver lining appeared for the Halim owned Metramac. The government, hitherto claiming to be impoverished, suddenly and explicably found itself flush with funds to compensate Metramac - the latter received compensations that eventually totalled a whopping RM 756 million, in addition to resuming toll collection.
Thus the concessionaire underwent a complete reversal of fortune, changing from a hellish pit to a goldmine after the takeover, and all it took was for the government to wave its magic wand over its subject before and after the takeover. Keeping in mind that the new owners of the concession were intimately linked to the power that be, can anyone be blamed for sensing foul smell in the entire episode?
HALIM'S QUESTIONABLE STATEMENT
The man in the eye of the storm, Halim Saad, released a statement on January 16, protesting his and Daim's innocence. Unfortunately that statement aroused more questions than it provided answers.
Halim claimed that the government, through a Cabinet decision, "ordered" his company to take over STKG, because the latter was in a "serious mess" and the government wanted to "move on". This statement is dishonest and is blatantly unfair to STKG.
The so-called "serious mess" was entirely the handiwork of the government. Which concessionaire wouldn't be in the same predicament if it is stopped from collecting tolls and denied compensation? If STKG had in the first place received the same indecently generous treatment from the government as Halim had after his takeover, STKG would surely have done very well and with bumper profits to boot, keeping in mind that STKG had already demonstrated its competence by having successfully completed the project and started the toll collection. There was no need to invite anyone to takeover STKG then.
If the government had no intention to resume toll collection or pay compensation then, did it make sense to invite UEM, or for that matter any company to take over STKG? Who would have agreed to such a stupid takeover anyway, since there was no prospect of revenue or compensation and only the obligation to repay huge debts?
If on the other hand the government had decided to cancel the toll collection, then it must terminate the concession agreement and pay appropriate compensation as it must under the law. In that event, it should just simply pay STKG, and not fool around by asking someone to take over STKG.
That leaves us with no alternative but to conclude that the government did in fact intend to resume toll collection with commensurate compensation when it invited UEM to take over. In that event, why didn't the government just say so to STKG, which should then be quite happy and capable of carrying on with its obligations in the concession agreement? Why must the government drive STKG to the wall before getting UEM to come in, if there was no dishonourable intention on the part of the government? There was no possible justification for the government to invite UEM, unless STKG had defaulted or proven incapable, which was obviously not the case.
Hence, Halim's claim of STKG's incompetence and UEM's shining record as reasons for the government's "order" on UEM to take over STKG is pure nonsense!
Since Halim has alleged that the Cabinet had "ordered" for the take over, the latter is now duty bound to declare its stand. Did it or did it not give such order to UEM? If it did, why?
The next big question is: why did the government awarded such a disproportionately stupendous compensation of over RM 700 million, when Metromac was already allowed to resume toll collection and the original construction cost could not be far from RM 100 million, considering that the toll road was constructed with a capital infusion of RM 65 million and debt of RM 40 million?
Halim claimed that the money was not for compensation but for financing the "expanded additional works". What kind of gigantic works is he talking about when the toll road was already completed and in operation? What "expanded additional works" could these be when they required expenses many times the costs for completing the entire toll road? Will Halim please furnish the details of these "expanded additional works" with a breakdown of their costs, together with the total costs for completing the original toll road prior to the "expanded additional works"?
In view of Halim's above allegations, the government must now justify its decision to award these huge compensations with full details.
Halim complained of injustice against him as he had not been accorded a hearing. Complain no further, Opposition Leader Lim Kit Siang had just proposed that Halim, Daim and Elyas Omar (Kuala Lumpur Mayor then) appear themselves in the first public hearing of the Parliamentary Select Committee on National Integrity on Feb 13 to air their views on this controversy. There is no reason why Halim should not jump at this opportunity to exonerate himself if he has told the truth in his statement.
DUBIOUS AWARD OF CONCESSION
When I said earlier that STKG was a competent contractor that could fulfil its contractual obligations, it was not the case when it tendered and when it was awarded the concession. The STKG that completed the toll road project was a transformed company that bore little resemblance to the one that tendered and won the contract - a Kuala Lumpur City Hall privatisation project to design, construct, finance and operate certain roads.
At the time of tenders in 1986/87, STKG was run by a businesswoman Fauziah, who together with her mother were the only two shareholders in the company. STKG was chosen in spite of the fact it was hopelessly unqualified financially and lacking in management expertise to undertake such a major project. This was evident from the fact that after being awarded the contract, it engaged a leading foreign consultant to help in re-structuring the company and in securing investment from several reputable local and foreign institutions of sound financial standing, including Bank Pembangunan Malaysia and Lembaga Urusan dan Tabung Haji. The resultant infusion of RM 65 million in capital saw Fauziah and her mother losing majority share and management control. It is noteworthy that this transformation of STKG was only completed more than a year after it was awarded the concession, when an agreement was sealed among all the shareholders on 29 December 1988.
Question is now asked why City Hall had chosen STKG among other more competent competitors when it was obvious that STKG had no capacity to complete the project and should probably not even have been pre-qualified in the first place? Surely, City Hall's professionals couldn't be that inefficient as to have committed such a blunder. What conclusion can we draw other than there had been improprieties of a criminal nature?
NO HOPE OF NAILING THE CULPRITS
Since Gopal delivered his judgment on Jan 12, there have been public indignation and outcries for investigations by law enforcing agencies. Opposition, NGOs and others have called for independent commission of enquiry, investigation by the Attorney General (AG) and by the Anti-Corruption Agency (ACA); and police reports have also been lodged. Will these lead to anything? Let us hear some of the responses from the relevant government agencies:
Director General of ACA said on Jan 16: I will not make any comment at this stage, as we have not studied the case yet. We will only decide whether to investigate after we have completed our study.
AG said on Jan 17: We have no authority to investigate. It is up to the police and ACA to do so. With regards to the controversy arising from Gopal's judgment, I will comment on it only after I have studied the judgment.
Deputy Inspector General of Police said on Jan 17: Please be patient. The investigation is in the preliminary stage. Not expecting any new development soon, nor do we know when we will question the parties concerned. This is a case that requires long term investigations.
Malaysians should have no difficulty in deciphering the hidden messages from the above responses. Where it comes to high level corruption, especially those involving top UMNO leaders, the chances of nailing the culprits is almost nil. It was the case in Mahathir's reign, and it is the same now, in spite of all the ballyhoo of integrity and transparency by the current Prime Minister.
As happened to numerous high level scandals in the past, the present one will fizzle out without any clue - a well preserved Malaysian tradition that sees no end in sight yet.
http://malaysia-today.net/reports/2006/01/metramac-scandal-no-light-at-end-of.htm
Friday, January 20, 2006
Metramac scandal: no light at the end of the tunnel
Kim Quek
Court of Appeal Justice Gopal Sri Ram's damning judgment on the Metramac Concessionaire case is a sad reminder of the Mahathir era cronyism and abuse of power under an opaque system of governance - a dubious system of dishing out government largesse that regrettably still persists today.
In vivid language, Gopal lashes out in no uncertain terms at the connivance between former Finance Minister Daim Zainuddin and his protégé Halim Saad in wresting the Cheras Toll concession from its then concessionaire, Syarikat Teratai K.G.Sdn Bhd (STKG), when the latter was ordered to suspend its toll collection for not fault of its own. The occasion was the continuous public demonstrations against such toll collection soon after it started in September 1990. To quell such demonstrations, Kuala Lumpur City Hall (DBKL), which awarded the concession, asked STKG to suspend the toll collection. DBKL later accepted in principle the option of terminating the concession agreement with compensation to the concessionaire. However, finance minister Daim was adamant that the Federal Government could not afford to pay any compensation.
At such hour of desperation for STKG, in came UEM Bhd, which in November 1990 offered to buy over STKG for RM 97.5 million. Facing huge debt and without the prospect of resuming toll collection or compensation, STKG shareholders had no alternative but to accept UEM's offer and the sale was sealed in an agreement (dated 23 January 1991) with UEM nominee Metro Juara Sdn Bhd whose only two shareholders were Halim Saad and Anuar Othman. STKG was later re-named Metramac Corporation Sdn Bhd.
Lo and behold. Soon after the takeover, a silver lining appeared for the Halim owned Metramac. The government, hitherto claiming to be impoverished, suddenly and explicably found itself flush with funds to compensate Metramac - the latter received compensations that eventually totalled a whopping RM 756 million, in addition to resuming toll collection.
Thus the concessionaire underwent a complete reversal of fortune, changing from a hellish pit to a goldmine after the takeover, and all it took was for the government to wave its magic wand over its subject before and after the takeover. Keeping in mind that the new owners of the concession were intimately linked to the power that be, can anyone be blamed for sensing foul smell in the entire episode?
HALIM'S QUESTIONABLE STATEMENT
The man in the eye of the storm, Halim Saad, released a statement on January 16, protesting his and Daim's innocence. Unfortunately that statement aroused more questions than it provided answers.
Halim claimed that the government, through a Cabinet decision, "ordered" his company to take over STKG, because the latter was in a "serious mess" and the government wanted to "move on". This statement is dishonest and is blatantly unfair to STKG.
The so-called "serious mess" was entirely the handiwork of the government. Which concessionaire wouldn't be in the same predicament if it is stopped from collecting tolls and denied compensation? If STKG had in the first place received the same indecently generous treatment from the government as Halim had after his takeover, STKG would surely have done very well and with bumper profits to boot, keeping in mind that STKG had already demonstrated its competence by having successfully completed the project and started the toll collection. There was no need to invite anyone to takeover STKG then.
If the government had no intention to resume toll collection or pay compensation then, did it make sense to invite UEM, or for that matter any company to take over STKG? Who would have agreed to such a stupid takeover anyway, since there was no prospect of revenue or compensation and only the obligation to repay huge debts?
If on the other hand the government had decided to cancel the toll collection, then it must terminate the concession agreement and pay appropriate compensation as it must under the law. In that event, it should just simply pay STKG, and not fool around by asking someone to take over STKG.
That leaves us with no alternative but to conclude that the government did in fact intend to resume toll collection with commensurate compensation when it invited UEM to take over. In that event, why didn't the government just say so to STKG, which should then be quite happy and capable of carrying on with its obligations in the concession agreement? Why must the government drive STKG to the wall before getting UEM to come in, if there was no dishonourable intention on the part of the government? There was no possible justification for the government to invite UEM, unless STKG had defaulted or proven incapable, which was obviously not the case.
Hence, Halim's claim of STKG's incompetence and UEM's shining record as reasons for the government's "order" on UEM to take over STKG is pure nonsense!
Since Halim has alleged that the Cabinet had "ordered" for the take over, the latter is now duty bound to declare its stand. Did it or did it not give such order to UEM? If it did, why?
The next big question is: why did the government awarded such a disproportionately stupendous compensation of over RM 700 million, when Metromac was already allowed to resume toll collection and the original construction cost could not be far from RM 100 million, considering that the toll road was constructed with a capital infusion of RM 65 million and debt of RM 40 million?
Halim claimed that the money was not for compensation but for financing the "expanded additional works". What kind of gigantic works is he talking about when the toll road was already completed and in operation? What "expanded additional works" could these be when they required expenses many times the costs for completing the entire toll road? Will Halim please furnish the details of these "expanded additional works" with a breakdown of their costs, together with the total costs for completing the original toll road prior to the "expanded additional works"?
In view of Halim's above allegations, the government must now justify its decision to award these huge compensations with full details.
Halim complained of injustice against him as he had not been accorded a hearing. Complain no further, Opposition Leader Lim Kit Siang had just proposed that Halim, Daim and Elyas Omar (Kuala Lumpur Mayor then) appear themselves in the first public hearing of the Parliamentary Select Committee on National Integrity on Feb 13 to air their views on this controversy. There is no reason why Halim should not jump at this opportunity to exonerate himself if he has told the truth in his statement.
DUBIOUS AWARD OF CONCESSION
When I said earlier that STKG was a competent contractor that could fulfil its contractual obligations, it was not the case when it tendered and when it was awarded the concession. The STKG that completed the toll road project was a transformed company that bore little resemblance to the one that tendered and won the contract - a Kuala Lumpur City Hall privatisation project to design, construct, finance and operate certain roads.
At the time of tenders in 1986/87, STKG was run by a businesswoman Fauziah, who together with her mother were the only two shareholders in the company. STKG was chosen in spite of the fact it was hopelessly unqualified financially and lacking in management expertise to undertake such a major project. This was evident from the fact that after being awarded the contract, it engaged a leading foreign consultant to help in re-structuring the company and in securing investment from several reputable local and foreign institutions of sound financial standing, including Bank Pembangunan Malaysia and Lembaga Urusan dan Tabung Haji. The resultant infusion of RM 65 million in capital saw Fauziah and her mother losing majority share and management control. It is noteworthy that this transformation of STKG was only completed more than a year after it was awarded the concession, when an agreement was sealed among all the shareholders on 29 December 1988.
Question is now asked why City Hall had chosen STKG among other more competent competitors when it was obvious that STKG had no capacity to complete the project and should probably not even have been pre-qualified in the first place? Surely, City Hall's professionals couldn't be that inefficient as to have committed such a blunder. What conclusion can we draw other than there had been improprieties of a criminal nature?
NO HOPE OF NAILING THE CULPRITS
Since Gopal delivered his judgment on Jan 12, there have been public indignation and outcries for investigations by law enforcing agencies. Opposition, NGOs and others have called for independent commission of enquiry, investigation by the Attorney General (AG) and by the Anti-Corruption Agency (ACA); and police reports have also been lodged. Will these lead to anything? Let us hear some of the responses from the relevant government agencies:
Director General of ACA said on Jan 16: I will not make any comment at this stage, as we have not studied the case yet. We will only decide whether to investigate after we have completed our study.
AG said on Jan 17: We have no authority to investigate. It is up to the police and ACA to do so. With regards to the controversy arising from Gopal's judgment, I will comment on it only after I have studied the judgment.
Deputy Inspector General of Police said on Jan 17: Please be patient. The investigation is in the preliminary stage. Not expecting any new development soon, nor do we know when we will question the parties concerned. This is a case that requires long term investigations.
Malaysians should have no difficulty in deciphering the hidden messages from the above responses. Where it comes to high level corruption, especially those involving top UMNO leaders, the chances of nailing the culprits is almost nil. It was the case in Mahathir's reign, and it is the same now, in spite of all the ballyhoo of integrity and transparency by the current Prime Minister.
As happened to numerous high level scandals in the past, the present one will fizzle out without any clue - a well preserved Malaysian tradition that sees no end in sight yet.
Thursday, January 26, 2006
Please Show More Respect to Tun Dr. M
I am totally flabbergasted by the way Paklah's Administration seems to continue to ignore the issues brought up by Tun Dr. M.
In my view, this is an utter mark of disrespect shown by the present Administration to our ex-leader. It' is even more disrespectful to give Tun Dr. M a veil threat to shut up or be discredited otherwise (in reference to the article ‘Pity if Dr M doesn't stay hands-off elder statesman’ that appeared in S’pore Business Times on Dec 12, assuming that that is a veil threat to Tun Dr. M).
Tun Dr. M has made an enormous amount of contributions to the country. He deserves to be accorded the appropriate level of respect. Just because he is no longer the sitting Prime Minister doesn't mean he should be treated with less dignity. It's not that Tun Dr. M has been talking rubbish all along. The issues he raised deserve immediate answers from the Administration, more so if the Administration continues to claim it is promoting transparency.
If before, Paklah can intervene publicly by instructing Rafidah to publish the list of AP beneficiaries, why can't he intervene now to get the answers to the other issues more forthcoming? The response by Proton's board on the Augusta MV Sale was a clear snub to Tun Dr. M. On the 2nd national car issue, why hasn't Rafidah responded to the allegations that she misled the ex-leader? What about Tun Dr. M’s remark that corruption is now ‘over the table’ – isn’t an investigation warranted? I believe Paklah is at fault himself if he doesn't demand those answers from his people.
If Paklah wishes to potray to the public that he is not subservient to the ex-leader, he can simply pick up the phone in private and instruct the relevant parties to come up with the answers. We just want the answers.
If the 'noise' Tun Dr. M made can be heard as far as in Europe or Alaska, it is illogical to say that the Prime Minister's office is not aware about the issues at all.
By the Administration continuing to remain silent on those issues, it gives us the impression that this transparency claim is just a mere talk, or worse it appears that there is something to hide. The public expects and deserves a higher level of accountability from our leaders.
A leader should also lead by example. So please don't fault the younger generation if we don't show the deserving level of respect to our leader. We follow his example.
In my view, this is an utter mark of disrespect shown by the present Administration to our ex-leader. It' is even more disrespectful to give Tun Dr. M a veil threat to shut up or be discredited otherwise (in reference to the article ‘Pity if Dr M doesn't stay hands-off elder statesman’ that appeared in S’pore Business Times on Dec 12, assuming that that is a veil threat to Tun Dr. M).
Tun Dr. M has made an enormous amount of contributions to the country. He deserves to be accorded the appropriate level of respect. Just because he is no longer the sitting Prime Minister doesn't mean he should be treated with less dignity. It's not that Tun Dr. M has been talking rubbish all along. The issues he raised deserve immediate answers from the Administration, more so if the Administration continues to claim it is promoting transparency.
If before, Paklah can intervene publicly by instructing Rafidah to publish the list of AP beneficiaries, why can't he intervene now to get the answers to the other issues more forthcoming? The response by Proton's board on the Augusta MV Sale was a clear snub to Tun Dr. M. On the 2nd national car issue, why hasn't Rafidah responded to the allegations that she misled the ex-leader? What about Tun Dr. M’s remark that corruption is now ‘over the table’ – isn’t an investigation warranted? I believe Paklah is at fault himself if he doesn't demand those answers from his people.
If Paklah wishes to potray to the public that he is not subservient to the ex-leader, he can simply pick up the phone in private and instruct the relevant parties to come up with the answers. We just want the answers.
If the 'noise' Tun Dr. M made can be heard as far as in Europe or Alaska, it is illogical to say that the Prime Minister's office is not aware about the issues at all.
By the Administration continuing to remain silent on those issues, it gives us the impression that this transparency claim is just a mere talk, or worse it appears that there is something to hide. The public expects and deserves a higher level of accountability from our leaders.
A leader should also lead by example. So please don't fault the younger generation if we don't show the deserving level of respect to our leader. We follow his example.
Wednesday, January 25, 2006
Same Game?
Below is a transcript of the Q&A with PM as appeared in the STAR.
A blogger by the name of 'aisehman' made an interesting observation on PM's response when he was asked if he'll approve the Avenue-ECM merger. You can access the blog at www.aisehman.org and the piece is entitled "Laughable Denial".
Have we been led to believe that the 'game' has fundamentally changed since the last Administration? Or is it just the 'actors' and the 'script'?
PM: No need to amend Article 121 (1A)
This is the full transcript of the question and answer session between Prime Minister Datuk Seri Abdullah Ahmad Badawi and reporters after a function at the National Archives.
On the memorandum sent by Cabinet ministers and Article 121(1A) of the Federal Constitution
Is it appropriate for 10 Cabinet ministers to submit a memorandum to you asking for a review of laws affecting the rights of non-Muslims?
They gave it to me after the Cabinet meeting.
By right, if there is any problem it should be brought up in the Cabinet meeting rather than submitting their views in the form of a memorandum. I would prefer it that way.
Since they have submitted it to me, and if necessary, I will raise the discussion at the Cabinet meeting.
What is the content of the memorandum?
I did not have time to read it. I am busy with the preparation for the Ninth Malaysia plan.
Do you think it was not done in the spirit of Barisan Nasional?
I don't know why they acted that way. Probably they wanted to give their combined opinion.
Do you think the memorandum has created an uncomfortable situation?
It is not ordinary. It has never happened this way. It is not a normal procedure.
I prefer it to be discussed at the Cabinet meeting.
But I did not say I do not accept it. I accept it. I said: "Ok-lah".
You said earlier that the laws in the country have to be made clear with regards to conversion.
I did not say that. I said other laws that seem to create problems and could be misinterpreted should be looked at to see whether amendments should be made.
I did not touch on any specific law.
Is there a need to amend Article 121(1A)?
To me there is no need. Maybe other provisions under related laws should be looked into.
Is it possible for Article 121(1A) to be amended?
It is not possible anymore.
But at the moment the law is being studied by the Attorney General.
That is true. Right now it is under consideration by the Attorney General.
He is meeting various parties to discuss the matter before forwarding it to the Cabinet ministers through me.
Does that mean that the status of the civil court is higher than the Syariah court?
The status quo of the civil court and the Syariah court will remain. The jurisdictions of the civil court and the Syariah court are clear.
Does that mean that their status are equal?
It is not a question of status. It is two separate branches.
The issue of having the same level does not arise.
So what is the option since Article 121(1A) would not be amended?
If there are related laws that need to be amended, we will consider.
Will the matter affect the peace and harmony under your leadership?
The controversy can be controlled. There are limits to discussions in an objective manner.
It is important to consider views. We should not be emotional and raise things that create sensitivity in a multi-racial and multi-religious society. It is a matter of how we act and speak.
If we act and speak wrongly and incite emotions by raising matters unnecessarily, we can create an environment that is not conducive.
If we raise matters that can pose a threat to the nation's political stability, it will affect efforts to develop the country and achieve success.
We should give priority to discussions in a peaceful, harmonious and respectful environment.
Certain quarters said that the civil court can decide on certain matters relating to Muslims. Don't do that. Don't bring that kind of argument up.
The civil court and Syariah court have their own roles and responsibilities.
Are you going to discuss the matter at this week's Cabinet meeting?
In the Cabinet meeting we will discuss contentious issues.
Wallahualam, it will depend on the Cabinet members.
On Proton and Volkswagen
Is Proton talking to Volkswagen?
Yes. There was a statement made by the Proton chief executive officer in the United States at a function.
Proton wrote formally to indicate its situation.
Does Proton talk to other parties apart from Volkswagen?
Proton talks to other people too.
On the proposed merger of ECM Libra and Avenue Capital which involves his son-in-law Khairy Jamaluddin, who is also Umno Youth deputy chief
Are you going to approve the proposed merger between ECM Libra and Avenue Capital?
I am not involved in any way. I don't know.
On the appeal for the PM's intervention made by Amica Technologies Sdn Bhd which is seeking US$200mil from the Government
Will you meet Amica?
The man (Amica Technologies president Mohammad Minhaj Khokhar) wants to meet me before he goes back tomorrow.
On the Court of Appeal judgment on toll concessionaire Metramac which mentioned former Finance Minister Tun Daim Zainuddin and prominent businessman Tan Sri Halim Saad and Datuk Anuar Othman
Will the Government intervene in the Metramac issue?
There are charges against certain parties caused by what the Court of Appeal judge mentioned.
Although it was mentioned in passing, it certainly created public interest.
Will the Government investigate the case?
The Government will only investigate based on reports or if there is any offence.
Does the Government intend to investigate the case?
It is not a question of wanting to investigate or not.
Investigation will be carried out if there is an offence and there is proof.
A blogger by the name of 'aisehman' made an interesting observation on PM's response when he was asked if he'll approve the Avenue-ECM merger. You can access the blog at www.aisehman.org and the piece is entitled "Laughable Denial".
Have we been led to believe that the 'game' has fundamentally changed since the last Administration? Or is it just the 'actors' and the 'script'?
PM: No need to amend Article 121 (1A)
This is the full transcript of the question and answer session between Prime Minister Datuk Seri Abdullah Ahmad Badawi and reporters after a function at the National Archives.
On the memorandum sent by Cabinet ministers and Article 121(1A) of the Federal Constitution
Is it appropriate for 10 Cabinet ministers to submit a memorandum to you asking for a review of laws affecting the rights of non-Muslims?
They gave it to me after the Cabinet meeting.
By right, if there is any problem it should be brought up in the Cabinet meeting rather than submitting their views in the form of a memorandum. I would prefer it that way.
Since they have submitted it to me, and if necessary, I will raise the discussion at the Cabinet meeting.
What is the content of the memorandum?
I did not have time to read it. I am busy with the preparation for the Ninth Malaysia plan.
Do you think it was not done in the spirit of Barisan Nasional?
I don't know why they acted that way. Probably they wanted to give their combined opinion.
Do you think the memorandum has created an uncomfortable situation?
It is not ordinary. It has never happened this way. It is not a normal procedure.
I prefer it to be discussed at the Cabinet meeting.
But I did not say I do not accept it. I accept it. I said: "Ok-lah".
You said earlier that the laws in the country have to be made clear with regards to conversion.
I did not say that. I said other laws that seem to create problems and could be misinterpreted should be looked at to see whether amendments should be made.
I did not touch on any specific law.
Is there a need to amend Article 121(1A)?
To me there is no need. Maybe other provisions under related laws should be looked into.
Is it possible for Article 121(1A) to be amended?
It is not possible anymore.
But at the moment the law is being studied by the Attorney General.
That is true. Right now it is under consideration by the Attorney General.
He is meeting various parties to discuss the matter before forwarding it to the Cabinet ministers through me.
Does that mean that the status of the civil court is higher than the Syariah court?
The status quo of the civil court and the Syariah court will remain. The jurisdictions of the civil court and the Syariah court are clear.
Does that mean that their status are equal?
It is not a question of status. It is two separate branches.
The issue of having the same level does not arise.
So what is the option since Article 121(1A) would not be amended?
If there are related laws that need to be amended, we will consider.
Will the matter affect the peace and harmony under your leadership?
The controversy can be controlled. There are limits to discussions in an objective manner.
It is important to consider views. We should not be emotional and raise things that create sensitivity in a multi-racial and multi-religious society. It is a matter of how we act and speak.
If we act and speak wrongly and incite emotions by raising matters unnecessarily, we can create an environment that is not conducive.
If we raise matters that can pose a threat to the nation's political stability, it will affect efforts to develop the country and achieve success.
We should give priority to discussions in a peaceful, harmonious and respectful environment.
Certain quarters said that the civil court can decide on certain matters relating to Muslims. Don't do that. Don't bring that kind of argument up.
The civil court and Syariah court have their own roles and responsibilities.
Are you going to discuss the matter at this week's Cabinet meeting?
In the Cabinet meeting we will discuss contentious issues.
Wallahualam, it will depend on the Cabinet members.
On Proton and Volkswagen
Is Proton talking to Volkswagen?
Yes. There was a statement made by the Proton chief executive officer in the United States at a function.
Proton wrote formally to indicate its situation.
Does Proton talk to other parties apart from Volkswagen?
Proton talks to other people too.
On the proposed merger of ECM Libra and Avenue Capital which involves his son-in-law Khairy Jamaluddin, who is also Umno Youth deputy chief
Are you going to approve the proposed merger between ECM Libra and Avenue Capital?
I am not involved in any way. I don't know.
On the appeal for the PM's intervention made by Amica Technologies Sdn Bhd which is seeking US$200mil from the Government
Will you meet Amica?
The man (Amica Technologies president Mohammad Minhaj Khokhar) wants to meet me before he goes back tomorrow.
On the Court of Appeal judgment on toll concessionaire Metramac which mentioned former Finance Minister Tun Daim Zainuddin and prominent businessman Tan Sri Halim Saad and Datuk Anuar Othman
Will the Government intervene in the Metramac issue?
There are charges against certain parties caused by what the Court of Appeal judge mentioned.
Although it was mentioned in passing, it certainly created public interest.
Will the Government investigate the case?
The Government will only investigate based on reports or if there is any offence.
Does the Government intend to investigate the case?
It is not a question of wanting to investigate or not.
Investigation will be carried out if there is an offence and there is proof.
Tuesday, January 24, 2006
Proton Agusta - A New Spin?
Article below for your info. I refer to the following sentence taken from the article.
“These include who took the lead in company’s decision for the investment, how the board was convinced to make the the collective decision and how the company’s 57.75% stake in MV Agusta costing 70 million euro (RM315 million) had suddenly turned sour.”
Notice the word ‘INVESTMENT’ is used (instead of ‘DIVESTMENT’).
Only a difference of two alphabets i.e from DI-vestment to IN-vestment but adds a totally new dimension to the issue! Might be a new spin? I don’t know. But it seems that the two people who queried Proton about the deal earlier on have to now provide the answers instead! Very subtle eh?! Haha…..This can only happen in Malaysia!
P.S: I acknowledge the fact that MSWG is entitled to ask Proton whatever questions they deem fit. They’re professional in their work.
QUESTIONS POSED BY THE 2-Ms ON PROTON (Notice focus solely on DIVESTMENT issue)
1. Who offered to sell or who offered to buy at one Euro?
2. Were there other bidders?
3. Was there an attempt to get the buyer to pay a higher price?
4. Was there an announcement that M.V. Agusta was up for sale?
5. If not did Proton approach only one bidder?
6. If other bidders were offered, did they reject?
7. Who in fact made the decision to sell?
8. Can Proton explain how selling an entity bought at Euro 70 million for one Euro would not cause Proton to lose money as is claimed?
16-01-2006: Proton should explain MV Agusta deal to shareholders: MSWG
By Ashwin Raman
Proton Holdings Bhd's board of directors should answer queries raised on its decision to dispose of its stake in MV Agusta to avoid more adverse comments or trenchant criticism, said the Minority Shareholder Watchdog Group (MSWG).
In a statement on Jan 16, MSWG chief executive officer Abdul Wahab Jaafar Sidek said the board’s silence has made it more vulnerable to criticism.
The board has to be prepared to demonstrate its role as gatekeepers of the company’s conscience and corporate morality, he said.
“Whatever the reasons, the shareholders need to know and the board has to respond quickly. Without credibility, the board cannot operate accountably,” he added.
Abdul Wahab said Proton’s shareholders would never know the true picture behind the company’s decision on the MV Agusta deal unless the board came forward to publicly disclose certain details.
These include who took the lead in company’s decision for the investment, how the board was convinced to make the the collective decision and how the company’s 57.75% stake in MV Agusta costing 70 million euro (RM315 million) had suddenly turned sour.
Abdul Wahab said Proton needed to explain to shareholders if an informed analysis or due diligence was done before it made the investment and whether an independent review, second opinion and expert advice were sought before making the decision to dispose of the stake for one euro (RM4.50).
He said shareholders also wanted to know if the investment was a case of theoretical assumptions that led to an error of judgment or a corporate aberration that confused the strategy for core businesses.
Abdul Wahab added that there was also concern that the case was not in line with the government’s call for government-linked corporations to transform, practise corporate governance and deliver shareholder value.
“These include who took the lead in company’s decision for the investment, how the board was convinced to make the the collective decision and how the company’s 57.75% stake in MV Agusta costing 70 million euro (RM315 million) had suddenly turned sour.”
Notice the word ‘INVESTMENT’ is used (instead of ‘DIVESTMENT’).
Only a difference of two alphabets i.e from DI-vestment to IN-vestment but adds a totally new dimension to the issue! Might be a new spin? I don’t know. But it seems that the two people who queried Proton about the deal earlier on have to now provide the answers instead! Very subtle eh?! Haha…..This can only happen in Malaysia!
P.S: I acknowledge the fact that MSWG is entitled to ask Proton whatever questions they deem fit. They’re professional in their work.
QUESTIONS POSED BY THE 2-Ms ON PROTON (Notice focus solely on DIVESTMENT issue)
1. Who offered to sell or who offered to buy at one Euro?
2. Were there other bidders?
3. Was there an attempt to get the buyer to pay a higher price?
4. Was there an announcement that M.V. Agusta was up for sale?
5. If not did Proton approach only one bidder?
6. If other bidders were offered, did they reject?
7. Who in fact made the decision to sell?
8. Can Proton explain how selling an entity bought at Euro 70 million for one Euro would not cause Proton to lose money as is claimed?
16-01-2006: Proton should explain MV Agusta deal to shareholders: MSWG
By Ashwin Raman
Proton Holdings Bhd's board of directors should answer queries raised on its decision to dispose of its stake in MV Agusta to avoid more adverse comments or trenchant criticism, said the Minority Shareholder Watchdog Group (MSWG).
In a statement on Jan 16, MSWG chief executive officer Abdul Wahab Jaafar Sidek said the board’s silence has made it more vulnerable to criticism.
The board has to be prepared to demonstrate its role as gatekeepers of the company’s conscience and corporate morality, he said.
“Whatever the reasons, the shareholders need to know and the board has to respond quickly. Without credibility, the board cannot operate accountably,” he added.
Abdul Wahab said Proton’s shareholders would never know the true picture behind the company’s decision on the MV Agusta deal unless the board came forward to publicly disclose certain details.
These include who took the lead in company’s decision for the investment, how the board was convinced to make the the collective decision and how the company’s 57.75% stake in MV Agusta costing 70 million euro (RM315 million) had suddenly turned sour.
Abdul Wahab said Proton needed to explain to shareholders if an informed analysis or due diligence was done before it made the investment and whether an independent review, second opinion and expert advice were sought before making the decision to dispose of the stake for one euro (RM4.50).
He said shareholders also wanted to know if the investment was a case of theoretical assumptions that led to an error of judgment or a corporate aberration that confused the strategy for core businesses.
Abdul Wahab added that there was also concern that the case was not in line with the government’s call for government-linked corporations to transform, practise corporate governance and deliver shareholder value.
Monday, January 23, 2006
3 Important Lessons in Life
Looks like Miss AP is alive and well despite her long absence from the media spotlight! Article below.
Maybe we all can learn 3 important lessons from this AP scandal.
1. It's OK to mislead your boss, as long as you make sure that when he finds out he has no power over you.
2. It's OK to preach others about upholding the good virtues in life, but when it comes to you, you can always say you have your own style.
3. It's OK to apply delay tactic, as long as you figure others will eventually forget about it and won't hold you accountable.
Slow implementation of NAP affects auto FDIs
By Alfean Hardy
The slow implementation of the national automotive policy (NAP) has caused two multinational corporations (MNCs) to set up assembly operations in a neighbouring country, said International Trade and Industry Minister Datuk Seri Rafidah Aziz.
The NAP, which was widely anticipated to have been released last September, is now slated for implementation early this year. The government announced the NAP framework last October.
"Unfortunately for us, because we delayed in our decision to put into place the mechanisms that would make Malaysia attractive to the big players, they (MNCs) have gone off to a neighbouring country," she said.
"We lost one big partnership earlier on in the mid-90s and I know of one very big multinational (corporation) also, because we couldn't decide on the arrangements, they went to a neighbouring country. So I know of two in the last decade," she told reporters in Kuala Lumpur on Jan 17.
However, Rafidah said despite the delay in the implementation of such mechanisms, Malaysia was still an attractive destination for foreign direct investments (FDIs) keen on making the country an assembly hub in the region.
She said the NAP would make Malaysia an attractive destination for automotive investors. "I know of several (companies) who are interested and who have approached me and my ministry and Proton (Holdings Bhd)."
Rafidah said MNCs knew the government was serious about making Malaysia an automotive manufacturing and assembly hub because of support facilities and incentives that have already been put in place.
"Whether or not they want to latch up with Proton does not matter. What matters is that they look at Malaysia as a base from which they can operate to cover the region to take advantage of Afta (Asean Free Trade Area) and to cover the world as well. It's not too late for us," she said.
Commenting on Volkswagen's (VW) announcement last week that it had scrapped plans to cooperate with Proton to build and sell VW brand cars for the local market, Rafidah said: "We do not look after Proton. Proton is under Khazanah (Nasional Bhd), PM's (Prime Minister's) department. Don't ask me. You should ask the chairman (of Proton)."
The minister said there would continue to be negotiations on possible Free Trade Agreements (FTAs) with other countries and trading blocs this year.
"We have given ourselves until the end of the year to do studies and evaluations and, for some FTAs, we hope to begin negotiations this year."
She said the cabinet has agreed in principal that MITI could start FTA talks with the US when both sides were ready but did not say when negotiations would actually begin.
She hinted, though, that a new FTA would be announced by the end of the week. "Tomorrow or Thursday, there will be a news release on a new FTA, so you wait for that. I won't tell you."
On whether the stronger ringgit was affecting trade and FDIs, Rafidah said recent figures showed that the impact was "very marginal".
Maybe we all can learn 3 important lessons from this AP scandal.
1. It's OK to mislead your boss, as long as you make sure that when he finds out he has no power over you.
2. It's OK to preach others about upholding the good virtues in life, but when it comes to you, you can always say you have your own style.
3. It's OK to apply delay tactic, as long as you figure others will eventually forget about it and won't hold you accountable.
Slow implementation of NAP affects auto FDIs
By Alfean Hardy
The slow implementation of the national automotive policy (NAP) has caused two multinational corporations (MNCs) to set up assembly operations in a neighbouring country, said International Trade and Industry Minister Datuk Seri Rafidah Aziz.
The NAP, which was widely anticipated to have been released last September, is now slated for implementation early this year. The government announced the NAP framework last October.
"Unfortunately for us, because we delayed in our decision to put into place the mechanisms that would make Malaysia attractive to the big players, they (MNCs) have gone off to a neighbouring country," she said.
"We lost one big partnership earlier on in the mid-90s and I know of one very big multinational (corporation) also, because we couldn't decide on the arrangements, they went to a neighbouring country. So I know of two in the last decade," she told reporters in Kuala Lumpur on Jan 17.
However, Rafidah said despite the delay in the implementation of such mechanisms, Malaysia was still an attractive destination for foreign direct investments (FDIs) keen on making the country an assembly hub in the region.
She said the NAP would make Malaysia an attractive destination for automotive investors. "I know of several (companies) who are interested and who have approached me and my ministry and Proton (Holdings Bhd)."
Rafidah said MNCs knew the government was serious about making Malaysia an automotive manufacturing and assembly hub because of support facilities and incentives that have already been put in place.
"Whether or not they want to latch up with Proton does not matter. What matters is that they look at Malaysia as a base from which they can operate to cover the region to take advantage of Afta (Asean Free Trade Area) and to cover the world as well. It's not too late for us," she said.
Commenting on Volkswagen's (VW) announcement last week that it had scrapped plans to cooperate with Proton to build and sell VW brand cars for the local market, Rafidah said: "We do not look after Proton. Proton is under Khazanah (Nasional Bhd), PM's (Prime Minister's) department. Don't ask me. You should ask the chairman (of Proton)."
The minister said there would continue to be negotiations on possible Free Trade Agreements (FTAs) with other countries and trading blocs this year.
"We have given ourselves until the end of the year to do studies and evaluations and, for some FTAs, we hope to begin negotiations this year."
She said the cabinet has agreed in principal that MITI could start FTA talks with the US when both sides were ready but did not say when negotiations would actually begin.
She hinted, though, that a new FTA would be announced by the end of the week. "Tomorrow or Thursday, there will be a news release on a new FTA, so you wait for that. I won't tell you."
On whether the stronger ringgit was affecting trade and FDIs, Rafidah said recent figures showed that the impact was "very marginal".
Sunday, January 22, 2006
PM: I have my own style
Monday January 16, 2006
BANGKOK: Datuk Seri Abdullah Ahmad Badawi says he has a different style of running the country compared to his predecessor Tun Dr Mahathir Mohamad.
“We’re two different persons. We have our ways of doing things, of what needs to be done and how things should be done. I am not concerned about that. I have been given the biggest mandate ever obtained by any Malaysian leader,” Abdullah said in the column “Global Viewpoint” in the Bangkok Post yesterday.
The Prime Minister said this when asked about his philosophy of leadership by a group of foreign journalists attending a programme organised by the Institute of Strategic and International Studies in Putrajaya last month.
However, he said, the nation was moving towards becoming a developed country by 2020, the vision of Dr Mahathir, and added that his Government was a continuation of the previous administration.
Abdullah, who took office on Oct 31, 2003, said although his Government held a strong majority of more than 90%, he allowed backbenchers in parliament to come up with very tough questions for members of the Government.
“I told them that your role is to be constructive in your criticisms. This is not only the role of the Opposition,” he added.
Although many have said he was taking Malaysia back several years by returning to agriculture, he said the possibilities of making agriculture a full growth sector existed with the introduction of biotechnology.
On corruption, Abdullah said it must be curbed although it was not easy as evidence and facts must be established before a person could be prosecuted.
On the main economic challenges to Malaysia, Abdullah said it was the competitiveness and the ability to compete for everything, including the markets and the resources.
Although China has emerged as a competitor and is seen as a threat by many countries, he said Malaysia regarded China as a friend and an opportunity.
He said Malaysia had to find a niche for itself and something that could do favourably vis-a-vis China and not the same as was being done by the country, like going for production in low-cost industries using low-cost labour.
As for Asean, Abdullah, who chaired the Asean Summit and the East Asia Summit in Kuala Lumpur last month, said Malaysia wanted to see it as a group and a single unit that could face the competition and position itself favourably vis-a-vis China and India. – Bernama
http://www.thestar.com.my/news/story.asp?file=/2006/1/16/nation/13122042&sec=nation
BANGKOK: Datuk Seri Abdullah Ahmad Badawi says he has a different style of running the country compared to his predecessor Tun Dr Mahathir Mohamad.
“We’re two different persons. We have our ways of doing things, of what needs to be done and how things should be done. I am not concerned about that. I have been given the biggest mandate ever obtained by any Malaysian leader,” Abdullah said in the column “Global Viewpoint” in the Bangkok Post yesterday.
The Prime Minister said this when asked about his philosophy of leadership by a group of foreign journalists attending a programme organised by the Institute of Strategic and International Studies in Putrajaya last month.
However, he said, the nation was moving towards becoming a developed country by 2020, the vision of Dr Mahathir, and added that his Government was a continuation of the previous administration.
Abdullah, who took office on Oct 31, 2003, said although his Government held a strong majority of more than 90%, he allowed backbenchers in parliament to come up with very tough questions for members of the Government.
“I told them that your role is to be constructive in your criticisms. This is not only the role of the Opposition,” he added.
Although many have said he was taking Malaysia back several years by returning to agriculture, he said the possibilities of making agriculture a full growth sector existed with the introduction of biotechnology.
On corruption, Abdullah said it must be curbed although it was not easy as evidence and facts must be established before a person could be prosecuted.
On the main economic challenges to Malaysia, Abdullah said it was the competitiveness and the ability to compete for everything, including the markets and the resources.
Although China has emerged as a competitor and is seen as a threat by many countries, he said Malaysia regarded China as a friend and an opportunity.
He said Malaysia had to find a niche for itself and something that could do favourably vis-a-vis China and not the same as was being done by the country, like going for production in low-cost industries using low-cost labour.
As for Asean, Abdullah, who chaired the Asean Summit and the East Asia Summit in Kuala Lumpur last month, said Malaysia wanted to see it as a group and a single unit that could face the competition and position itself favourably vis-a-vis China and India. – Bernama
http://www.thestar.com.my/news/story.asp?file=/2006/1/16/nation/13122042&sec=nation
Friday, January 06, 2006
MV Agusta Sale by Proton
I just got in Ithaca, and as usual the whether is like crap! Been snowing since last night and due to jet lag I'm forced to finally write what I think about the recent sale of MV Agusta by Proton to Geneon for $1 Euro.
Let's clarify the issue here. Note that Dr M and TM have sent their letter to the Securities Commission. What they have challenged are the actions of Proton's current Management, or rather the Proton Board (more on this later) in terms corporate governance of the deal more than anything else.
Dr M and TM have noted that much of the financial aspects of the MV Augusta sale have been only skimmed over by the board and current management.
Though they have touched on where MV Augusta would have fit the Proton strategy, this is not the main issue.
The issue here is that the MV Augusta sale by Proton looks fishy! It comes off the back of the Proton CFO and close senior finance guys quiting (in disgust) after TM's departure. The sale was to a single party, at a massive discount. In addition, despite Proton being given a "debt holiday" of 3 years when they bought Augusta, the Proton board is declaring that the recent losses were due to MV Augusta? How have the Augusta debts come into Proton's books in the first place?
The mass media in Malaysia have been very careful in not stating that Proton's car sales have begun its recovery after TM's dismissal, in line with TM's contention that Proton will regain market-share when the AP and tax-under-declaration were cracked down on. However, the current management and board, in their desire to prove TM wrong, had embarked on an expensive sales drive by cutting price (which any fool can do), not realising the poor price elasticity of car demand for such low % price cuts, hence resulting in Proton making lower profits despite selling slightly more cars since TM's departure! This is incompetence in management that the board has been trying to hide!
Using MV Augusta as an excuse and then selling it cheaply as further justification is a mark of poor corporate governance by Proton! Note that, as Proton seems to be Board-driven rather than Management-driven, there is already a major governence issue and this was the crux of the clash between TM and the board in the past, where Proton's board was, even from before TM's time, more interested in Executive action than Board action.
The Proton Board obviously is incapable of valuing MV Augusta properly. On tech alone - MV Augusta tech was applicable for cars, the engine tech would have been adapted for at least the Savvy in < 1 year with significant value added and there is other tech that is cross-purposes between cars and motorbikes - Honda has always integrated it tech - its called Synergistic Innovation in technology. And I beg to differ when people suggest more tech has no value - more tech reduces IP costs and
increases profit margins, with the added value being higher when you're a new car company - e.g. Korean companies are still importing tech even 50 years into the business! Own IP also allows tech sales as was being negotiated by TM with Iran.
But even if you exclude tech as a value of MV Augusta, there is additional value to MV Augusta, specifically its brands, its stocks in hand and its 'debt holiday' for 3 years! Proton could have made more than 1 Euro and debt recovery by doing exactly what the Genoan financiers are now likely to do, break up MV Augusta and sell it off piece by piece! With so many merchant bankers in Khazanah, one wonders if the Proton board consulted any of them in leu of their decision, as breaking up Augusta is a basic option that has been proven viable value recovery since KKR's work in the 80's! BMW did it to Rover just a few years ago!
Now the Proton Board and Management are trying to pull a fast one! Hence Dr M and TM's letter to the SC is to instigate an investigation against Proton for what may well be corporate corruption and shenanigans similar to Enron!
People. Proton is a 20 year investment by the Malaysian people. The jury is still out on whether it is or going to be a long term success. But even if the powers that be now decide it needs to be sold off, it is incumbent on them to ensure that Proton does not sell our investment so cheaply! Proton's value is even higher than its book-value NTA, due to land that has not been re-valued since the 80's, a ready distribution network in Malaysia that is the largest car market in SEA, an international brand in Lotus that is never properly book-valued and IP that is also never properly book-valued. Even the Tanjung Malim plant has strategic value that is higher than book value for any purchaser!
If the Proton Board has managed to sell MV Augusta CHEAP and is now crying success, they are shortchanging the Malaysian people, Proton's biggest investors, and hence they must be made to answer NOW! Not in 10 years! If the purchase of MAS shares from TR by Daim led to Daim's resignation and TR's hounding by Dr M via Khazanah due to strong public outcry, we should demand the same dismissal of irresponsible parties, be it in Proton, Khazanah, or the MOF, if indeed the MV Augusta deal is tainted!
Proton must answer the 7 questions NOW, before we can even dream of letting them risk destroying our investment over another 10 years!
Let's clarify the issue here. Note that Dr M and TM have sent their letter to the Securities Commission. What they have challenged are the actions of Proton's current Management, or rather the Proton Board (more on this later) in terms corporate governance of the deal more than anything else.
Dr M and TM have noted that much of the financial aspects of the MV Augusta sale have been only skimmed over by the board and current management.
Though they have touched on where MV Augusta would have fit the Proton strategy, this is not the main issue.
The issue here is that the MV Augusta sale by Proton looks fishy! It comes off the back of the Proton CFO and close senior finance guys quiting (in disgust) after TM's departure. The sale was to a single party, at a massive discount. In addition, despite Proton being given a "debt holiday" of 3 years when they bought Augusta, the Proton board is declaring that the recent losses were due to MV Augusta? How have the Augusta debts come into Proton's books in the first place?
The mass media in Malaysia have been very careful in not stating that Proton's car sales have begun its recovery after TM's dismissal, in line with TM's contention that Proton will regain market-share when the AP and tax-under-declaration were cracked down on. However, the current management and board, in their desire to prove TM wrong, had embarked on an expensive sales drive by cutting price (which any fool can do), not realising the poor price elasticity of car demand for such low % price cuts, hence resulting in Proton making lower profits despite selling slightly more cars since TM's departure! This is incompetence in management that the board has been trying to hide!
Using MV Augusta as an excuse and then selling it cheaply as further justification is a mark of poor corporate governance by Proton! Note that, as Proton seems to be Board-driven rather than Management-driven, there is already a major governence issue and this was the crux of the clash between TM and the board in the past, where Proton's board was, even from before TM's time, more interested in Executive action than Board action.
The Proton Board obviously is incapable of valuing MV Augusta properly. On tech alone - MV Augusta tech was applicable for cars, the engine tech would have been adapted for at least the Savvy in < 1 year with significant value added and there is other tech that is cross-purposes between cars and motorbikes - Honda has always integrated it tech - its called Synergistic Innovation in technology. And I beg to differ when people suggest more tech has no value - more tech reduces IP costs and
increases profit margins, with the added value being higher when you're a new car company - e.g. Korean companies are still importing tech even 50 years into the business! Own IP also allows tech sales as was being negotiated by TM with Iran.
But even if you exclude tech as a value of MV Augusta, there is additional value to MV Augusta, specifically its brands, its stocks in hand and its 'debt holiday' for 3 years! Proton could have made more than 1 Euro and debt recovery by doing exactly what the Genoan financiers are now likely to do, break up MV Augusta and sell it off piece by piece! With so many merchant bankers in Khazanah, one wonders if the Proton board consulted any of them in leu of their decision, as breaking up Augusta is a basic option that has been proven viable value recovery since KKR's work in the 80's! BMW did it to Rover just a few years ago!
Now the Proton Board and Management are trying to pull a fast one! Hence Dr M and TM's letter to the SC is to instigate an investigation against Proton for what may well be corporate corruption and shenanigans similar to Enron!
People. Proton is a 20 year investment by the Malaysian people. The jury is still out on whether it is or going to be a long term success. But even if the powers that be now decide it needs to be sold off, it is incumbent on them to ensure that Proton does not sell our investment so cheaply! Proton's value is even higher than its book-value NTA, due to land that has not been re-valued since the 80's, a ready distribution network in Malaysia that is the largest car market in SEA, an international brand in Lotus that is never properly book-valued and IP that is also never properly book-valued. Even the Tanjung Malim plant has strategic value that is higher than book value for any purchaser!
If the Proton Board has managed to sell MV Augusta CHEAP and is now crying success, they are shortchanging the Malaysian people, Proton's biggest investors, and hence they must be made to answer NOW! Not in 10 years! If the purchase of MAS shares from TR by Daim led to Daim's resignation and TR's hounding by Dr M via Khazanah due to strong public outcry, we should demand the same dismissal of irresponsible parties, be it in Proton, Khazanah, or the MOF, if indeed the MV Augusta deal is tainted!
Proton must answer the 7 questions NOW, before we can even dream of letting them risk destroying our investment over another 10 years!
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