Petronas PR in Pengerang must learn from Iskandar

Petronas PR in Pengerang must learn from Iskandar

Sometimes I don't understand why people need to be so arrogant just because they are working for some big organisations.

This is especially true among those who are from KL, placed in "small towns" like JB.

Several years back, a friend who is a journalist told me about his constant struggles with PR people of Iskandar Regional Development Authority (Irda) and Iskandar Investment Bhd (IIB).

He told me of how these PR people do not seem to really care to engage the local Press nor do they seem to care about the Iskandar Malaysia's main stakeholders - the local people.

My friend said these PR people rather deal with the "higher class" media people such as big time editors and top journalists in KL. They also hardly care to meet the local stakeholders among the orang-orang kampung. They always feel that if they want something done, they can always get their friends among the Press bosses in KL to squeeze their subordinates in JB to do it.

At that time, I thought my friend was exaggerating. Well. this friend of mine is a bit of a diva and has a knack of being over dramatic from time to time.

But later on, I found out that he was actually telling the truth (eerrr, with slight kuah tambah la, of course). The ding dong battle between the JB Press and these PR people went on for quite sometime until things started to improve after direct intervention from none other than Khazanah boss Azman Mokhtar and Johor MB themselves.

My friend had then stopped bitching about the Irda and IIB PR people for quite awhile.  In fact, he became good friends with some of them and started writing glowing reports about the two organisations. The Irda and IIB PR people also improved a lot by making lots of engagements not only with the local Press but more importantly with the local people through their CSR programme and development briefings.

The honeymoon  lasted for quite a while until around the end of 2010 when Irda and IIB overhauled their PR teams. My friend said things are now back to square one. The new PR boys and girls are mostly from KL and quite snotty, he said. They simply refuse to learn from their predecessors.

Looks like they have to learn it the hard way.

The new IIB Comms team recently made a major blunder by getting the Star's "top editor" BK Shiddhu to interview their boss instead of giving such a privilege to the newspaper's highly experienced JB-based business writer Zazali Musa. The outcome of the disastrous interview I heard could be quite severe for the IIB CEO.

You cannot offend the Arabs like that la. That's what happen if you get a 'top editor' who are out of touch with sensitive issues to write for you.

Well, I don't even want to bitch about the even worse new Irda Comms team, as I may end up not addressing the real issue I want to bring up, which is the attitude of the Petronas PR team handling the petroleum hub project in Pengerang.

I heard they are even worse than their peers in Irda and IIB.

Well, they better change their attitude, and they better do so NOW.

GET OFF YOUR KL HIGH HORSES AND ENGAGE THE LOCALS.

The Pengerang project will come under attack as the general election draws near. I had written about it here
Cooking Lynas-style nonsense for Pengerang 

These Petronas PR people better have a plan not only to counter but also pre-empt the coming attacks. Win over the locals. Get down and dirty. You all are no longer high up in the cloud at the glittering twin towers in KL, ok?

And don't send some lowly lackeys, who can talk endlessly but can't decide without management say so, to do the work down here. Decisions on what needs to be done must be made fast, so if your decision making process takes days if not weeks, die la for sure.

Two in One : SC and Medini (UPDATED)

Two in One : SC and Medini (UPDATED)

 UPDATED

Sin Chew Daily had today came out in defence of Zarinah Anwar in light of the article on her by pro-Pakatan Malaysian Insider.

I translated the key points of the article here -

Zarinah could stay due to her active contribution to promote regulatory reform/ Sin Chew Daily.

Speculations on Zarinah leaving the SC due to the E&O saga could make a dramatic turn due to her contribution to promote regulatory reform in the capital market. Analysts believed that Zarinah's work should not be underestimated and she could be asked to stay to continue the reform.

An SC spokesperson, however said they would not comment on this matter as the decision will solely be determined by the Ministry of Finance. "We would not have a clear answer until the end of May," said the spokesperson.

The Straits Times (of Singapore) had reported that Zarinah will leave SC at the end of her contract, ending her six years at the helm of the commission.

The Straits Times said government officials and financial executives close to the situation told the newspaper that Prime Minister Najib Razak will decide on Zarinah's replacement in the comming weeks. According to the Singaporean daily, candidates to replace Zarinah include deputy central bank governor Datuk Muhammad Ibrahim and the SC's managing director Datuk Ranjit Ajit Singh. It also said that Datuk Johan Raslan, executive chairman of Pricewaterhouse Coopers, has repeatedly turned down the offer to head the watchdog agency.

Areca CEO Huang De Ming said no matter what, the outcome will not affect the SC as a new management will continue to lead the organisation.

Analyst Feng Ting Siew said, "Frankly  speaking, Zarinah's stepping down is not the ideal solution to solve some regulatory loopholes. The authorities  should instead focus on how to manage the potential conflict of interests when any staff (or any related parties) from the regulators were involved in any corporate transactions.

"Zarinah has been actively promoting corporate governance and perhaps things would take a dramatic turn - with her contract being renewed at the end of the day! And the regulators could concentrate on formulating some policies to manage this area (conflict of interests) better," said Feng.

He further stressed that the development of guidelines to avoid a regulatory staff involved in business transactions is due to the market decipline, as in the case of the Sime Darby-E&O deal and how things have evolved today, it just goes to show that the regulators need to enhance its system and enhance its system and to be extra cautious when handling business transactions that involved any of its internal staff.

He admitted that the fact that a minority shareholder (of E&O), who brought the case to the court has no doubt indirectly fuse the exit of Zarinah, if it eventually happened.

"This is an unexpected outcome. She should leave in dignity in view of her contributions to the capital market of this country. Her exit is not going to help the governance issue in the Malaysian capital market."

Feng said the fact that Zarinah's husband is the chairman of E&O has apparently put her in an awkward position.
"But we can't deny the fact that she is a very professional regulator and has contributed a lot to the capital market." 



ORIGINAL POSTING

SC

I wrote about the latest attack against Zarinah Anwar and her Securities Commission here How the "credible media" was manipulated - SC case.

And today, the pro-Pakatan Malaysian Insider came out with this story which I am cutting and pasting here. Hope my friend Jahabar don't mind too much about me taking his story without his permission. Don't be angry bro, promoting you what.

Jahabar Sadiq
Editor

February 09, 2012

KUALA LUMPUR, Feb 9 — The Securities Commission (SC) will revamp its top post with retiring Treasury chief Tan Sri Dr Wan Abdul Aziz Wan Abdullah taking over as non-executive chairman from current executive chairman Tan Sri Zarinah Anwar when she steps down at the end of March, sources say. 

   The Malaysian Insider understands that Zarinah’s regulatory duties will be taken over by Datuk Ranjit Ajit Singh, who is now the executive director of market supervision in the commission. It is learnt that Putrajaya felt Ranjit was most capable for the top job but there was concern the right wing in Umno may jump if a non-Malay took the post, leading the government to split the job to provide cover for any non-Malay getting such a post and placate the Malay ground.
“Dr Wan Abdul Aziz will come on board as non-executive chairman and Ranjit will be the top regulator,” a government source told The Malaysian Insider.

Another source said the government will make the announcement soon, including naming a replacement for Wan Abdul Aziz in the Treasury. “They’ve decided to split the SC post for accountability purposes and to provide cover for any non-Malays getting such a job while placating the Malay ground,” he said, adding that Zarinah was both chairman of the commission and also head of the senior management in the SC.
“So now, the top regulator reports to the commission,” the source said.
Singapore’s The Straits Times reported last week that Zarinah was stepping down as the SC chief next month after six years at the helm of the capital markets watchdog.
Her contract ended amid pressure over the market regulator’s role in conglomerate Sime Darby Bhd’s acquisition of a 30 per cent stake in E&O Berhad last August, where her husband was chairman of the property developer.
The Straits Times said government officials and financial executives close to the situation told the newspaper that “Prime Minister and Finance Minister Najib Razak will decide on her replacement in the coming weeks.”
“The E&O deal has put Tan Sri Zarinah in a tight spot. The reason is that her husband, who is E&O chairman, had raised his personal stock holdings in the company just days before Sime Darby’s announcement,” it reported.
State-controlled Sime Darby purchased its 30 per cent interest from three major shareholders — E&O managing director Datuk Terry Tham, Singapore’s GK Goh Holdings and a group of investors led by businessman Tan Sri Wan Azmi Wan Hamzah — at the end of August last year in a deal that valued E&O shares at RM2.30 a piece.
The purchase price represented a 60 per cent premium over the value of the shares in the company on the open market when the deal was announced.
The RM776 million deal triggered unease over the widely perceived coddling by the agency of large state-controlled companies at the expense of minority shareholders when exercising its authority on corporate takeovers.
The SC ruled six weeks after the deal that the plantation-based conglomerate did not have to make a general offer, prompting E&O minority shareholder Michael Chow to sue the SC for failing to compel Sime Darby to make a general offer for the rest of the shares, which would cost an additional RM1.8 billion.
This came despite a SC task force finding that Sime Darby was obliged to make a general offer for E&O shares after acquiring a 30 per cent stake in the property developer.
Singapore’s The Straits Times reported last week that the task force was of the view that a general offer obligation had been triggered as a new “concert party” was created between Sime Darby and Tham, who jointly controlled more than 33 per cent in the property concern after the deal.
Malaysia’s takeover rules stipulate that any party that acquires more than a 33 per cent interest in a public-listed entity must carry out a general offer for the remaining shares.
A general offer can also be triggered if a new party buys less than 33 per cent, but secures management control of the target company.

Apparently pro-BN bloggers, who had all these while been hantaming Zarinah seems to have started rejoicing at the news. Here is Big Dog's take on it, Another one bites the dust.
Opening up the Pandora Box, you said Big Dog?
Well, I would not be too quick at being happy if I were you.

Then again, Big Dog and the gang probably do not really know who is this person Malaysian Insider said is going to be the real one in charge of SC after Zarinah is gone - Ranjit Ajit Singh.

Jahabar's source was quoted as saying, “They’ve decided to split the SC post for accountability purposes and to provide cover for any non-Malays getting such a job while placating the Malay ground,”
Zarinah was both chairman of the commission and also head of the senior management in the SC.
I wonder, who is that Jahabar's source, who seems not totally happy about a non-Malay having only half of Zarinah's job after she stepped down.

Have the pro-BN bloggers ever wonder why the last three attacks on Zarinah and SC came from the pro-Pakatan Malaysian Insider and Singapore Straits Times?

Have they ever wonder where ST correspondent Leslie Lopez got his materials on SC from?

I smell something rotten all the way from the top-level of SC itself and all the way up to the MOF, causing those info leakages.

Then again a cat probably have a better sense of smell than a dog.


MEDINI

OK, now moving on to the Medini of Iskandar Malaysia issue.

Yesterday, another friend Asuki Mohd Abas, a Khazanah vice-president wrote a long long article denying any hanky panky in the Medini deal.

It took a whole broadsheet page of Utusan Malaysia to fit it. I had in Dec 2011 posted some stuff on the matter similar to those which appeared in the letters to the editors of Utusan which prompted Asuki's article. Good also lah, it gives credibility to Utusan.

Well, anyway, sorry bro Asuki, your article too long leh. I read halfway and got pening kepala. Since Malaysian Insider seems to be on the roll now, I'm again cutting and pasting their shorter version of Asuki's answer to the queries on Medini here.


By Lee Wei Lian

February 09, 2012

KUALA LUMPUR, Feb 9 — Khazanah Nasional Berhad yesterday denied allegations of questionable deals in the development of the ambitious multi-billion ringgit Medini integrated development in Johor. The questions were raised in two letters to the editor published in Utusan Malaysia and revolved around the decision of a Khazanah- and EPF-linked company to lease land to Middle Eastern investors in Medini in 2007 and the subsequent buy-back of the land by the state asset manager from the same investors — purportedly at a higher price just a few years later, enabling the investors to flip the land for a profit despite not having paid for it in full.
The letters also alleged the existence of a complex web of related party transactions, with the Khazanah subsidiary partnering with a foreign investor to lease Medini land to other Middle Eastern companies in which the same foreign investor has a stake.
Other allegations raised were that the Khazanah-linked company in charge of developing Medini had paid out massive dividends of RM475 million in 2008 despite facing cash flow issues, 25 per cent of which went to the foreign partner even though it did not deliver satisfactory results.
The company at the heart of the controversy is Iskandar Investment Berhad (IIB), in which Khazanah holds 60 per cent equity. The rest of the shares are held by EPF and Kumpulan Prasarana Rakyat Johor
IIB had partnered with UWI Capital Ltd, which is registered in the British Virgin Islands and an associate company of Dubai’s Jumeirah Capital, to created Medini Iskandar Malaysia Sdn Bhd (MIMSB). This was then tasked to develop Medini.
IIB has a 75 per cent stake in MIMSB with UWI Capital holding 25 per cent.
At the same time, IIB signed a deal worth US$1.2 billion (RM3.6 billion) with a consortium of Middle East entities led by Abu Dhabi based Mubadala Development Company and Kuwait Finance House (KFH) to develop Medini.
One of the letters claimed that the controlling stakeholder in UWI Capital also owned a 10 per cent stake in Mubadala and KFH, which allowed him or her to realise profit from both the seller (MIMSB) and the buyers (Mubadala and KFH), and questioned the wisdom of IIB partnering with the foreign entity.
Khazanah said in its statement that it was normal for investors in large scale projects to ask for land to be returned if the schemes failed to deliver the desired returns, adding that it was an important feature to attract first mover investors.
“It also gives flexibility to investors to change their commitment levels and appetite for investments for long-term projects like Medini, which will take 25 years,” said Khazanah.
Khazanah said UWI Capital was invited to help develop Medini based on their track record of structuring, promoting and large infrastructure projects in the Middle East.
The state asset manager said that UWI was asked to be an equity partner and was not just a land broker, and also entered the deal with land valued at RM10 psf (per sq foot) as compared with RM7.30 psf as valued by CH Williams Talhar and Wong in 2006.
Khazanah noted that the letter raised questions as to why it would deign to partner with a company that was registered in the British Virgin Islands as if such companies had something to hide, and said that registering in tax havens was standard practice for all serious investors, including Khazanah.
It also defended UWI, saying that the company only received a net dividend of RM43 million after reinvestment.
Khazanah said that a large part of the land that had been returned or bought back from the investors was later resold by IIB at a 23.7 per cent premium.
In December last year, Sunway Bhd teamed up with Khazanah to buy 276.4 hectares of land in Medini for RM745.3 million.
Khazanah added in its statement that as a result of the global financial crisis, IIB and MIMSB had chosen to restructure rather than postpone projects in Medini but the Middle East consortium remained investors.
Noting that the letters had called for tighter monitoring of Khazanah, the state investor said that it had always practised the highest standards in corporate governance, including the establishment of independent executive and audit committees.
IIB was also in the news last month when it was reported that a former senior vice-president of an IIB subsidiary pleaded guilty to soliciting for bribes related to the Iskandar Malaysia development project.
Mohd Amin Suhaimi, husband to former IIB chief executive Arlida Ariff, was also charged with three counts of soliciting and taking bribes from a construction company to secure a tender worth RM40.8 million to build a boarding school in Pulai.
Arlida, who was headhunted by Khazanah, was removed from her position in 2010 amid speculation of alleged irregularities in the award of infrastructure contracts.
Medini is a 2,230-acre international mixed-used development, which is one of the core components of the Iskandar Malaysia special development zone in south Johor.
Among the major projects in Medini are Legoland, which is slated to open later this year, and a RM3 billion iconic wellness township to be developed by E&O and Khazanah and Singapore’s Temasek.

I'm now going to sit back and see how this thing developed.....err, MACC boys and girls....do your job properly ya.....don't let me down, ok?

Hsien Loong the handsome

Hsien Loong the handsome

Last month I wrote this
Bridge to happiness

That posting was actually prompted after PM DS Najib Razak's visit to Iskandar Malaysia earlier on the day.

I was full of hope for the "crooked bridge" project to be revived when Najib during the visit did not rule out the possibility of the project to be discussed in his next meeting with Hsein Loong, which took place several days ago.

It turned out that the bridge project was not discussed. At least that was what appeared in their joint-statement.

Instead they mentioned about the possibility of building a tunnel.

I am happy that Malaysia and Singapore seems to be on good terms. By the way, I kinda like Hsien Loong. He seems to be genuinely friendly and smiles a lot.



Well, at least he is more handsome than Lim Guan Eng lor....I think.

Eh...sorry....back to the tunnel.

Ok, I am all ok for Malaysia and Singapore to built the tunnel. Very good, I said. But will it replaced the Causeway? Will the water of  Tebrau Straits be freely flowing ever again?

Hmmm... here I promise to Hsien Loong that I will forever be a supporter of the Singapore football team if ever the answer to all that is yes. Of course except when the team is playing against Malaysia lah.

A daring flying squirrel

A daring flying squirrel

I am going to concentrate on finishing my KPRJ story over the next few days.

Meanwhile, you all may ponder on this challenge by Mr Flying Squirrel About to Fall which he send on my previous posting.

Flying Squirrel About to Fall said...

The Medini Scam and Sri Lankan Connection

On the Medini deal, the multi-layer get rich scheme works like the following. Can Khazanah deny any of this?

1. IIB sold Medini land of 2,200 acres to Medini Iskandar S/B (75% IIB, 25% UWI Capital (One) Ltd) for RM 1 billion.
2. Medini Iskandar S/B later sold most of the land (2,120 acres) to Global Capital Devt S/B (60% Mubadala, 30% IIB, 10% Alpha (Five) Ltd) and Medini Central S/B (60% KFH, 30% IIB, 10% Alpha (Four) Ltd) for RM 4.2 bil (let's call them the Arab Consortiums).
3. Medini Iskandar S/B appoints Terra Lumina S/B as marketing agent to sell a section of 80 acres of Medini land, where Terra Lumina gets 30% commission on sales revenue. It is not known if the company has actually able to sell any land plot to foreign investors.

The questions are:

1) UWI Capital (One) Ltd, Alpha (Four) Ltd and Alpha (Five) Ltd are all domiciled in British Virgin Island. They are controlled by a person called Imran Markar, who sits on the Board of Medini Iskandar S/B, Global Capital Devt S/B and Medini Central S/B. Terra Lumina S/B is registered in Malaysia and is also controlled by Imran Markar.

Now the question is - who is Imran Markar? Why the need for offshore companies? Is he a proxy to some people who are supposed to get the kickback from Medini land sale?

2) Why is KNB itself investing in Medini when the land was supposed to attract Middle Eastern investors?

The initial purchase of Medini land by Arab Consortiums were supposed to attract investment from Middle East. But what happened now is that most of the lands acquired back by Khazanah JV and associate companies (eg. KNB-Temasek JV, KNB-Sunway JV etc, Gleneagles, UEMLand-IIB JV).

If Khazanah were to eventually buy back the Medini land from these Arab Consortiums, then there was no need to sell the land to them in the first place.

Why go convoluted ways (ie. KNB->IIB->Medini Iskandar->Global Capital Devt->Khazanah/SunwayJV) when you can just have direct transaction KNB->Khazanah/SunwayJV. By having multiple layers, you are creating profit leakage vehicles, which ultimately benefitting people like Imran Markar.

As an example, didn't Medini Iskandar S/B pay a dividend of almost RM 500 mil in 2008? Didn't this mean UWI Capital (One) Ltd's portion of 25% equivalent to a cool RM 125 mil? Guess who was the accounting auditor? It is E&Y!! The same culprit who went in to dig all procurement files of IIB!! And this is only the tip of the iceberg. Who knows probably the real figures could escalate up to RM BILLIONS when we sum up the total laundered money for all middlemen vehicle companies.

Compare that to the petty theft that Khazanah is pointing at IIB Management - they looked so pariah in comparison.

Now, who is that foreign agent Sri Lankan Imran Markar again? Isn't he the one bossing around in Iskandar and telling people that he has direct connection to Azman Mokhtar?

3 January 2012 01:03

A little chirpy bird and the IIB-gate

A little chirpy bird and the IIB-gate

When I read what rockybru posted in his Friday intermission, I was kinda curious about how such a story could be leaked from a supposedly highly confidential board meeting.  So I began digging around, but in a leisurely manner, you know, it was a Friday after all, and a long weekend at that.  But when A Voice posted this, my digging became a bit more urgent as I see that the speculative nature of that piece will adversely affect the diligent work done by BN Johor to ensure BN victory in the coming election.

After a bit of arduous digging, I got access to a little chirpy bird. 

This little bird (who does not represent KPRJ, by the way) told me that the matter on how to handle the "IIB-gate" was indeed discussed in the board meeting and that it was an open discussion, more in the nature of "how do we handle this?... if we do this, what will happen? ... if we do that - what will be the implications?" etc.  

Apparently it was an open discussion, but what was minuted was that the final decision was made unanimously, with no one dissenting.

Turned out the KPRJ representative was not the only one who had reservations about the option of making a police report, there were 2 or 3 others (the little bird couldn't remember the details as it wasn't minuted, more of a discussion, and it wasn't that recent, etc.) who shared the same concerns.

Mostly these people were concerned about how such a decision will affect IIB day-to-day operations, the image thing, etc. ... probably because these people were not involved in the operational management and decision-making within IIB.

It was therefore strange  when the story that came out in rockybru's was very particular about the representative of KPRJ, and of him being a representative of the Johor State, or probably in this case Johor MB, I suppose.  What about the other board members who shared his concerns?  Why no mention of which organisations they represent?  Was it because they are all based in KL? What about the board member who was adamant about not involving the MACC?  The way it was worded looked like it was also made by the same KPRJ rep, as there were no other board members identified, wasn't it?  In fact, A Voice more or less stated in his article that it was so.  Was it?

What got me curious was, that the Haji Johar Salim that I had the pleasure to have encountered, does not at all reflect the corporate shark potrayed here.  Maybe my gut feel is wrong, for once, but it just felt wrong.


Further on, in his article, A Voice then linked Johar Salim with Lim Kang Hoe, and then to Abdul Ghani Othman.  Aha!  That was just too convenient guys, but all the same, very revealing.  They will then link this with the Utusan and Berita Harian story, and people will jump immediately and say ya la, that must be true, so and so is an Umno politician, so he must be corrupt, kan?  Then people will begin to demand for independent audits of these Johor institutions.  So the corruption matter will stay in Johor and the "corrupt" Johor politicians/state GLC heads/IIB rogues/etc., and will not touch any of the "pristine" pure-as-snow Khazanah people in KL kan?  Can you people who leaked and spun the confidential board meeting discussions be a bit less obvious?

And another thing, if you do a bit of proper digging, you would know that Dato Lim Kang Hoe serves a different political master/partner lah, definitely not a Ghani Othman proxy.

As for the Kulim Board appointments, you should read Benchmark and make your own conclusions.  I have sorta made mine.

In the matter of QSR and KFC being sold to CVC, and being backed by CIMB Investment, which is deemed to be bad news by A Voice, I was planning to write about the rationale of that move (my own speculative insinuations will be at work here, hehehe), but I must first confirm some of my facts with sources within JCorp and of course PMO.  After all, CIMB Investment is controlled by you know who.  In short, I personally think the move is a sensible one for JCorp in the long run and should have been done a long time ago, but what do I, a curious cat, know about corporate wheeling and dealing?

For example, if I were an ambitious person in a position of decision-making for a GLC investment arm, I would structure all the investments in such a way that if I were kicked out of the GLC, I can still be in control within the public-listed entity that control all the businesses, provided I fight tooth and nail to stay in control of the public-listed entity of course, or keeping it intact while I fight to get control.  I don't have to worry about liabilities, because the investments were made by the GLC, which will have very little benefit from its investments because the corporate entity will be under my control.  Hmmm ... maybe I should not write about it as my tiny brain is incapable of thinking of all that complicated corporate stuff.

Instead, maybe  I should complete that little article I was working on about KPRJ and its role in fast-tracking rural development as well as the many social projects it does for the public and how their assets have now grown to billions over the last few years, while maintaining a very low operating cost and a very small team.  However, if I were to write about this, I may be accused of being a mouthpiece of whoever.  Hmmm ... maybe I should not finish that article after all.

Personally, I feel sorry for poor Haji Johar Salim and the few (about 12 I think) KPRJ staff in general - never mind guys, KPRJ may not have huge sophisticated offices, or super duper vice presidents running around earning 5-6 digit salaries, or massive PR budgets to waste on newspaper pull-outs, or multi-million ringgit consultants producing impressive-sounding blueprints, but KPRJ has done good for many ordinary folks in Johor and I for one have no major complaints about KPRJ.

In any case, I am going to sit back for now and see how this whole thing unravels, unless of course I come across more insinuations/speculations/etc. that perk my curiosity.  Eh, what exactly did they say about curious cats?

Tai-chi masters and my dream car

Tai-chi masters and my dream car

UPDATED

Please read this posting again CAREFULLY for better perspective

One brave blogger and three interesting comments

Thanks

ORIGINAL POSTING

Thought of going on an all out offensive against the Pakatan gang as the new year begins, but now it looks like I will have to tighten up a few things first.

Now, out of the blue there are people who tried to link Johor MB Datuk Abdul Ghani Othman and Johor Umno with the Khazanah-IIB corruption mess.

This I have to check as some of the allegations, though without any solid evidence could potentially damaged not only Ghani's reputation but also Johor Umno's and BN's efforts to defend the State in the coming general election.

I strongly believe that this is the work of some tai-chi masters from KL.

Well, I will try to get the truth on this as fast as I can, so that I can go back to the urgent business of going on the offensive against the Pakatan folks. This, I think going to involve some serious research works on my part. Actually, such a waste of time and effort having to defend from an internal attack with the general election just around the corner, But what to do....this is Johor.

For the time being, I will leave you all to admire my dream car.

Yup, that is my dream car. Cute isn't it?  Don't telll me you don't know what car is that.  I know, I will never get it, but no harm in dreaming , right? Cheers.

One brave blogger and three interesting comments

One brave blogger and three interesting comments

I always want to believe that I am brave but compared to this Benchmark fella, I am nothing lah. His/her take on the Khazanah-IIB fiasco was really an act of...

I was at awe when I read this posting

  Save the Sultan, Nab the Boys.

There was a mention of one Datuk ZZ being up to no good in that posting...it reminds me of this previous posting of mine A very sad day .

Suddenly, I feel that  I need to apologise to Johor MB Datuk Abdul Ghani Othman for doubting him.

You all connect the dotted line yourselves la. But do be careful. Don't end up being seditious ya.

Meanwhile, my postings on the Khazanah-IIB corruption issue have so far resulted in three very interesting comments -

FIRST COMMENT -

Anonymous said...

Funny enough BigCat...you put the map of Medini in this writeup. Perhaps you might want to find out more on how the Medini land deals were structured with the Arab Consortiums and a Sri Lankan individual, who hides behind few companies registered in British Virgin Island. How the hell Khazanah signed the deal with these suspicious companies is a mystery.

You will find out that the deal involved:

1) I sell to you Medini land at x dollar, but you can sell back to me at x+y dollar. (Never mind if you make profit y dollar from me atas angin).

2) When I sell to you at x dollar, you pay me in many INSTALLMENT over few years. But when you sell back to me at x+y dollar, I IMMEDIATELY pay you cash. (Never mind if you actually RECYCLE my money to pay me as the original land owner).

3) In addition, if you feel that you cannot make 20% profit from the land plots, you can return the land back to me, and I pay you higher at x+z dollar. (Never mind if you actually pass all the business risks to me because I am stupid).

3) Together we create many vehicles to undertake projects on Medini, we use government money to fund those projects, either using grant of soft loans. (See, the government cannot let us fail).

Let's not kill the excitement BigCat. You need to do some investigative journalism. Ask MACC if they are aware about this. By the way, all these agreements were signed by Khazanah people on behalf of IIB.

28 December 2011 21:31

SECOND COMMENT

IIB Watch said...

MACC PROBES ISKANDAR KICKBACKS -

The Khazanah people, especially Azman Mokhtar, should know that MACC is hinting something - they are now going through the files of all agreements signed by Iskandar Investment Berhad with foreign 'investors'. All these deals were signed by Khazanah Nasional on behalf of IIB.

Those who were called by MACC over the last 6 months were not only IIB staff in charge of procurement, but also staff who are in charge of corporate matters. And boy, MACC themselves were shocked on how much were revealed to them. Can't blame those IIB people, they were interrogated like criminals.

Many of IIB deals were lopsided, giving advantage to foreign investors. And yes, what MACC meant with "foreign agent" is a guy by the name of Imran Markar - a Sri Lankan who lives in Dubai and London. He claims to be a good friend of Azman Mokhtar, and he sits in the Board of three companies - Medini Iskandar Malaysia S/B, Global Capital and Development S/B and Medini Central S/B. And he also the benefiary of Terra Lumina S/B. All these companies are vehicles of Medini land sale. With the profit sharing, dividends, marketing commission being schemed up in the agreements between these parties, no wonder MACC called this 'legalised corruption'.

If any of the Khazanah people - those in the inner circle of Azman Mokhtar - read this, they should be afraid. Especially people like GS, ZKA and HZM. MACC knew this. Good luck and see you guys in jail.

29 December 2011 23:21

THIRD COMMENT

Silhouette said...

Bigcat and IIBWatch,

Amazing how detailed other people knew about Khazanah's debacle on Iskandar Msia. What I can add here is that GS has schemed things up far beyond anyone's thought - with his connection to the powers-to-be, he planted his allies in IIB through British graduate connections:
GS is a friend to Datuk ZZ (advisor to PM-5) Datuk OM (advisor to PM-6) and KJ (the son-in-law).
OO and ZA went to Oxford together.
ZZ, OO and SM were same batch studying at Bristol, Oxford and Imperial College respectively. Forgot to say GS was from Kings College.
AY in EPF Investment Division was a friend to ZZ, OO and SM. He studied at Southampton.
Whatever investment deal GS was about to conclude, he will refer to ZZ, OO and KJ. GS will then instruct SM to prepare papers for submission to IIB Board. ZA will prepare budget allocation for the investment deal. GS will then go to AY to get EPF support.
As far as Azman Mokhtar is concerned, as long as the powers-to-be and EPF are ok with the investment deal, he as Chairman of IIB will approve the paper.
Guess who will then has to follow up and implement the deal? Arlida lo...
Guess who will then be blamed for the mess? Arlida lo...

This is how Khazanah played their game. Planting spies, leveraging on connections and collude with powers-to-be. No wonder they cannot be touched.

30 December 2011 08:36

The good people of IIB and some questions

The good people of IIB and some questions

A friend called me this afternoon and among others we chit chatted about what is happening to his former work place; Iskandar Investment Berhad (IIB).

My friend, who is among the pioneers of IIB sounded quite sad.

"I feel sorry for our friends who are still in there (IIB). They must be quite anxious now. It's so unfair. Now every one of us are tarnished by this corruption case," he said.

"Looks like I have to take out IIB from my CV," he half jokingly added.

My friend was among the large group of mid-level management staff who left IIB last year. At that time he told me that he can't stand anymore the antics of a group whom he called "the inner circle".

"If only Arlida had stood up to them," he said, in reference to former IIB CEO Arlida Ariff whose husband was charged with alleged IIB-related corruption several days ago.

Then my friend pointed out something which have been bothering me all along.

"How come no one really linked all this with Khazanah?" he asked before proceeding with several other questions.

"All those people in the inner circle, aren't they appointed to their position by the Khazanah board of directors? I know one of them who started as an assistant vice president and within just over two years had become a director and heading one of IIB's major projects. The guy is just a marketing person and has no technical background. What were the Khazanah BOD thinking when they appointed him? Or was there something else behind it?"

"Another thing is that the E&Y people were send in by Azman (Mokhtar). How sure are the MACC that they did not cover up for Khazanah?"

Seriously, I had these doubts also about Khazanah back then, especially when I observed the manner of how Arlida was told that her services were no longer required by IIB. The way Khazanah distanced themselves from IIB at that time piqued me. I still remember how the Khazanah people washed their hands off the whole thing. What actually made me angry with them at that time is the fact that everytime IIB did well previously, they would had always been there to share the limelight.

Only the valiant effort of the small IIB corporate comm team at that time actually saved the day. Otherwise the whole thing could had been a media feeding frenzy with severe consequences on the whole of Iskandar Malaysia. The present IIB comm team (and Irda's too) should learn a thing or two from their predecessors in handling the current situation.

For instance, they should already have a plan to counter the front page "sources" stories on the IIB issue which appeared on several newspapers today. They should know by now where the sources of those stories came from and whether they are real or insidiously planted to confuse the public into believing that the whole corruption case is just confined within IIB.

As it was with my friend, I am actually symphetatic with the rank and file of IIB. I had the previlage of working closely with them once and I found them to be good people. Most were genuinely passionate about the development effort they are part of.

"We are building a whole new metropolis for Johoreans, how nuch more exciting it can be," said a bubbly young IIB lady as I had lunch with her team members at a riverside restaurant in Pendas Laut, Gelang Patah. That was about three years ago.

Honestly, at that time I found them to be very professional and much easier to work with than most people of other government agencies, including their "sister" Irda.

I really hope the best for these honest workers of IIB, present and past. If you all are reading this - please be strong and believe that God is fair. You all need not worry if you have done no wrong. Cheers guys and gals.

The big fishes are not just in the south la

The big fishes are not just in the south la

Prominent blogger Rockybru seems quite confident about a Johor assemblman to be charged soon in connection with the IIB corruption matter.

This is his latest  posting -
Next change: A big fish in the South

Well, Rocky, if you are right, then things will really get very exciting. If the MACC boys go after that BN assemblyman, then definitely they will also have to go after some very funny characters in Khazanah too.

Don't tell me those Khazanah directors supervising IIB do not know what were going on?

Those IIB head honchos were after all appointed by the Khazanah BOD. Don't tell me they did not check the background of those they appointed to become head of IIB's major projects such as Medini?

 Eh, I would not have let those characters within 50 yards of my little piggy bank la.

I remember cringing when I found out about some of the appointments back then. Heard it caused the same effect on MB Datuk Abdul Ghani Othman too.  

Ok, who among you Khazanah directors and big time officials are golfing buddies of IIB people back then? Hah, you all think people don't know ka? Your laptops and Berries kena confiscated by the E&Y people or not back then?

You all think, people do not know the real reason why Azman Mokhtar had to send in the E&Y team ka? Well, definitely not because the Khazanah directors supervising IIB recommended it.

Back to the assemblyman said to be implicated by this IIB thing, well, his constituency is a major battle ground in Johor for the coming general election. The Pakatan people are gathering their forces there. If he is indeed going to be charged with something, then Datuk Ghani may have to adjust Johor BN's strategy. That will be a major headache, I think.

Really, if any Pakatan people say in my face that the latest round of crackdown against several BN people is just a political ploy, I think I will smack their mouth off. How can it be a ploy if you go and undermine your own people manning the most crucial constituency so near the general election ? Even if he is not to be charged, a suggestion of corruption against the assemblyman is enough to undermine BN in that constituency. So, people, get real lah.

P.S Irda people, see, this is what I meant by you all need to clean up your house. It started with bad running of the organisation, then hanky panky, then things blew up and get stinky and in the end the  BN State government people have to bear with the mess in the general election. Now you all got it or not? Want to lodge a police report against me some more....sheesh....

No scapegoat please in Iskandar Investment case

No scapegoat please in Iskandar Investment case

UPDATED

My bet for now is that I am going to be disappointed.

This report by Star indicates that some are to snitch and some are to burn..

JOHOR BARU: A former senior vice-president of an Iskandar Investment Berhad (IIB) subsidiary was fined RM20,000, in default two months' jail, after he pleaded guilty to a charge of corruption at a Sessions court here Wednesday.
The 51-year-old man's identity has been withheld as he is assisting the Malaysian Anti-Corruption Commission in several other cases involving the IIB.
He was charged under Section 132(2)(b) of the Companies Act, and paid the fine.

Why is Star reports on this is so short one? Is it because of  this "exclusive" ?

KUALA LUMPUR: Two former directors of Iskandar Investment Berhad have been arrested for alleged graft as the Malaysian Anti-Corruption Commission stepped up its investigation of the company's RM2bil package.
The duo, in their 40s, are expected to be charged in the Johor Baru magistrate's court today with corruption involving about RM5mil in connection with the construction of a highway and a boarding school in the Iskandar region.
The RM124mil highway and RM40.8mil school are part of the 3B package and the two were chief executive officers of IIB subsidiaries involved in the projects.


ORIGINAL POSTING

Innocent until proven guilty.

Yet, what happened today must have really signaled a warning to those involved in the development of Iskandar Malaysia - do not mess around.

This was what had happened -
JOHOR BAHARU -- The husband of former Iskandar Investment Bhd (IIB) chief executive officer pleaded not guilty at the Sessions Court here today to three counts of soliciting and accepting bribes to help a company secure a school construction tender last year.

 On the first count, Mohd Amin Suhaimi, 52, a private company director, was charged with soliciting RM816,900 in cash from Detect Engineering Sdn Bhd director Mohd Hassan Madon, 48, through middleman Mohd Iskandar Fahmi Abdullah, 52, as inducement to help the company secure a tender from IIB to build a secondary boarding school on lot PTD 154971 in Mukim Pulai.      

 He was alleged to have committed the offence at the Grand Paragon Hotel in Taman Century about 5 pm on April 22 2010.

 The second and third counts involved accepting RM500,000 and RM316,900 in cash from Mohd Hassan, through Mohd Iskandar Fahmi at two different locations, as fees for securing the same tender from IIB for the RM40.8 million project, on June 4 and 9 respectively.     

 The charges, under Section 16(a)(A) of the Malaysian Anti-Corruption Commission Act 2009 provides for up to 20 years imprisonment and a fine of not less than five times the bribe amount or RM10,000 whichever was higher, upon
conviction.

 Judge Mohd Nasir Nordin allowed a bail of RM100,000 with one surety, ordered Mohd Amin's passport to be impounded and fixed Jan 27 2012 for remention and March 5 to 16 for the trial.

Malaysian Anti-Corruption Commission DPP Abdul Ghafar Abdul Latif prosecuted and the accused was represented by Shamsul Sulaiman.  -- Bernama

What is going to happen to IIB former CEO Arlida Ariff? Honestly, I don't know.

When rumours of serious corruption within IIB first came into the open middle of last year, I remember worrying about it. Things within the organisation at that time had started to sour with various allegations of favouratism and victimisation with the culprits being a bunch of people identified as "the inner circle".

My checks then indicated that the allegations were really serious, and true enough, several weeks later Khazanah send in the E&Y people to do an independent audit.

It was believed that Khazanah had done so due to pressure from "higher up". I had at that time suspected that the Johor State government got something to do with it. MB Datuk Abdul Ghani Othman was known to be worried about what were happening.

That was when IIB middle management staff started to bail out by the dozens. These people were not guilty of anything, but simply want to get a fresh start as things seems to have reached an intolerable level in the organisation. These are the core workforce of IIB at that time.

When Azman Mokhtar called for the IIB town hall session at Persada in October last year to announce Arlida's departure, it confirmed my worst fear.

One of the things which caught my attention about Azman's speech that day was that he had not shown any sympathy towards Arlida, which was so different compared to when he announced the departure of Arlida's predecessor Dr Iskandar Ismail. He had at that time literally shed tears for his Macoba buddy (I am not kidding you). Arlida is by the way an alumni of Tengku Kurshiah College.   

If not for the superb handling of the issue by the then IIB's corporate comm team at that time, the whole thing could had been a major PR disaster for Iskandar Malaysia. I remember cursing the Khazanah media handlers for tai-chiing the whole thing to their IIB counterparts and pretended that their bosses got nothing to do with the mess.

Arlida had since joined Karambunai. IIB, under their new CEO Syed Mohammed Syed Ibrahim have been very quiet. Honestly, I am not really sure what they have been doing the past one year. Most of their activities and important annoucements were apparently decided and made in KL In fact, if you are to google Iskandar Investment Berhad CEO, the search result may initially make you think that Arlida is still heading IIB.

It's almost a year now since Arlida left IIB. Many believed that the whole thing had gone cold. Apparently not so, based on what happened to her husband today.

Personally, I like Arlida. She knows her stuff well, a friendly person and known to be ever willing to help those who are in trouble. Despite the allegations, IIB had done considerably well, especially during the early period of her tenure as CEO. My two favourite IIB's initiatives started during that time were the EduCity and Legoland projects.

But, the law must be above everyone. If there is any evidence against her, then Arlida need to answer for it. So does others who are implicated in the alleged wrong doings. I hope the investigations go all the way to even the level of Khazanah BOD. Let every single guilty person be punished.

I pray that no one be turned into a scapegoat so that others who are guilty may escape the law.

This case should be an opportunity for the government to prove that Iskandar Malaysia is a place of good governance and that investors as well as the locals there need not worry about any hanky panky among the authorities. 

To my friends who are still with IIB, do not despair due to this, continue to do your honest hard work and all the best.

To those at Iskandar Regional Development Authority (Irda), please learn from this.  

A message from Irda and my reply

A message from Irda and my reply

Received a message from Iskandar Regional  Development Authority (Irda) last night.

1. No witch hunt

2. Will leave things be

3. Engage media - new and old - better

My reply.

Walaikum-salam En Ismail. Thanks for the effort. Sorry that I can't meet you personally for obvious reasons. Here is my reply -

1. It's none of my business if you want to have a witch hunt. It's your organisation, so, you do what you want with your people. But I can assure you, that those who are send for DI, suspended or sacked will have their names posted here along with the real reasons why they suffered such fate.
Well, you are already witch hunting me, complete with police report etc etc, but I am fine with that. You do what you feels need to be done. I will do the same over here.

2. Leaving things be will not do you any good. You need to improve things. Your aides cannot go around bullying their collegues or be perceived as doing so. You need to clean up your house. No more wasting tax payers' money paying huge sums to useless consultants and some of your HOD conmen. I wouldn't care what you want to do if Irda is your parents' company, but it actually belongs to the people and therefore should have good governannce. I think you know that. The MB had said good things about you to me and I believed him. Please don't let the good MB down. He got the general election to deal with and can do without your people creating nonsense and pissing off the orang kampung.

3. Being nice to the Press is good. For starters, you can ask your corporate comm head to be in JB more than in KL. Do proper engagements with the locals. If she don't want, then get someone else to do it. Do me a favour please, ask your corporate comm people,  when was the last time they have direct interaction with the locals. You will be surprised by their answers.

Ok, that's all. I got other things to do for now.

En Ismail, you want to fix or not fix things, that's up to you. If you decide to let things slide, then that's too bad.

What ever it is, all the best...as I had said previously, you are not such a bad dude, Hopefully I don't have to kacau you and your people again. Cheers.

Iskandar Malaysia doing well after 5 years

Iskandar Malaysia doing well after 5 years

Well, Irda people may hate me, but that's besides the point.

Went through the speech delivered by Irda (Iskandar Regional Development Authority ) CE Ismail Ibrahim at the 5th anniversary celebrations attended by PM DS Najib Razak in Puteri Harbour yesterday.

Saw some good stuff and here there are  (I like the last one at number 19) :

8. The Federal Government also committed RM6.3 billion to fund critical enabling infrastructure in Iskandar Malaysia, including road infrastructure, drainage and river-cleaning projects, as well as development of public housing. Under the Ninth Malaysia Plan, a total of RM1.26 billion was allocated for highways and roads within the region. The road works include the Coastal Highway from Johor Bahru city centre in Flagship Zone B, New interchanges and bridges, as well as road upgrades to improve traffic flow and dispersal in and around Johor Bahru. Eleven drainage and six river cleaning projects have also been completed, and later this afternoon, we are honoured to have Yang Amat Berhormat the Prime Minister to officially launch the Iskandar Malaysia public housing at Lima Kedai, Gelang Patah, within Nusajaya.

9. During Iskandar Malaysia's first phase of development, which ran from 2006 to 2010, we had secured committed investments of about RM69.5 billion. This was approximately 148 per cent higher than the target of RM47 billion that had been set for that period. It is a commendable achivement given that the global economy underwent severe financial distress in 2008 and 2009. We are pleased to share with Yang berhormat Dato' Sri, that as at the third quarter of 2011, the committed investment total in Iskandar Malaysia have further increase to RM77.8 billion.

10. Of the total committed investments for the first phase, 59 per cent were domestic investment while foreign direct investment (FDI) make up the remaining 41 per cent, making for a healthy mix of sources of funds. About RM38 billion of the RM77.8 billion in committed investments have been actualised. This has seen a number of important developments getting off the ground, with several completed or approaching completion, across the five Flagship Zones in Iskandar Malaysia. They include catalyst projects in the education and leisure and tourism sectors, key infrastructure such as upgrading works on existing roads and new highways, and other projects in sectors such as healthcare.

12. Over the current five year period from 2011 to 2015, Iskandar Malaysia is expected to more than double the number of employment opportunities to an estimated 55,730. This is in line with the operationalisation of a number of key catalyst projects within the period concerned in the various Flagship Zones. In particular, the creative and ICT sectors are expected to be key employers, with 18,000 jobs to be generated through the coming on stream of projects such as MSC Cyberport City and Pinewood Iskandar Malaysia Studios. The electrical and electronics, leisure and tourism, and education sectors are expected to continue offering numerous employment opportunmities, also as a result of more key developments being lunched and operations ramped up in the sectors concerned.

19. Out of the total cumulative committed investments of RM77.8 billion to date, only RM6.3 billion are funds provided by the Government of Malaysia, to fund the development and enhancement of critical enabling infrastructure in Iskandar Malaysia. However, the Government's investment in the region has helped attract and generate an increasing sum of private investments over the last five years. As of today, this translate into a ratio of 1 to 11, meaning that for every RM1 that the Government invests in Iskandar Malaysia, it helps to bring in RM11 of private investment.

Well, if Irda's corporate comm people were not too busy chasing shadows in the form of an insignificant anonymous blogger, they would probably had got all these good points about Iskandar Malaysia highlighted by their boss to be published by the Press.

Friendly Singaporean, really...

Friendly Singaporean, really...

Something strange is happening - Singapore is suddenly so friendly with Malaysia.

They are in fact defending our country, really, I am not kidding you.

Saw an article by Singapore Straits Times journalist S. Jayasankaran, who is based in KL. He rubbished a report by a so-called economic expert who predicted a dire future for Malaysia. I know for a fact that editors of that paper had in the past only published bad things about our country.

But not anymore. I had previously seen some nice stories about Iskandar Malaysia in Singapore's Press. So, this is most likely not a one off thing.
Maybe things are really going to be good between our country and them.

Well, there is that bridge thing.....hmmm, next month ya....

Ok, Singapore Straits Times are very kedekut. I can't cut and paste their articles. But never mind lah, at least they tried to defend us. So the next best thing I can do is to reluctantly cut and paste the one by the pro-Pakatan Malaysian Insider on the ST article.

There are two stories here - the first one is about Singapore ST defending us while the second one is an earlier report by Malaysian Insider which was proudly linked by Lim Kit Siang in his blog to show show how bad our country is.


FIRST MI STORY
Experts too downbeat on Malaysian economy, says Singapore BT
By Yow Hong Chieh
December 12, 2011

KUALA LUMPUR, Dec 12 — Malaysia is vulnerable to a sharp Western slump but not as much as experts suggest, the Singapore Business Times said in a commentary today.

Calling downbeat views of the economy “overdone”, the paper’s Kuala Lumpur correspondent noted that Malaysia has so far maintained steady growth in the face of pessimistic market expectations.

“No one country, save perhaps those with very large domestic economies like India, Indonesia or China, is immune from a sharp Western slump.

“But to suggest that the country is in imminent peril of falling from a cliff may be something of an overstatement,” S. Jayasankaran said.

He pointed out exports grew almost 16 per cent year-on-year in October — more than double the seven per cent forecast for the month — on soaring commodity exports and improved production, which offset the impact from falling electronics output and exports.

Malaysia’s newly diversified portfolio of trading partners, including China and India, also continued to support growth even as demand from the developed markets slowed, he also said.

“If the Eurozone and the US were struggling, other emerging economies have stepped into the breach to take up the slack,” Jayasankaran said.

Shipments to China grew by 37.1 per cent to RM8.66 billion in October, while exports to India jumped 76.9 per cent that same month on the back of a new trade agreement.

Exports to Japan also rose 29.6 per cent to RM7.52 billion, mainly to meet post-tsunami and earthquake reconstruction needs and new demand arising from supply chain disruptions cause by floods in Thailand.

Jayasankaran also downplayed a warning by a Nomura International economist that Malaysia would be hit harder than its Asian peers by an economic crisis in Europe due to relatively weaker public finances and dependence on commodities.

Nomura chief economist for Asia ex-Japan, Robert Subbaraman, said last week that unlike most Asian countries, Malaysia will be negatively affected by an expected drop in commodity prices while the government will also find it difficult to keep up stimulus policies.

He said Malaysia ranked third in Asia ex-Japan in terms of exposure to European bank claims, after Hong Kong and Singapore, which could mean a drying up of liquidity should European banks start to cut their exposure to the region.

Figures provided by Subbaraman showed that European bank exposure to Malaysia amounted to US$50 billion (RM155 billion), or about 19 per cent of GDP, double that of the Asia ex-Japan average of nine per cent.

“That is something of an exaggeration,” Jayasankaran said.

“Since the early 1990s, the central bank has pushed foreign banks to incorporate locally which means they actually have capital here and aren’t just representative offices that actually derive their funds from their overseas parents.”

He said this meant there were risk management practices in place to protect local depositors, implying less exposure.

Bank Negara Malaysia (BNM) governor Tan Sri Zeti Akhtar Aziz has also dismissed the US$50 billion figure as “exaggerated”, he added.


SECOND MI STORY
Malaysia among most vulnerable to euro crisis, says Nomura

By Lee Wei Lian
The Malaysian Insider
Dec 07, 2011

KUALA LUMPUR, Dec 7 — Malaysia will be hit harder than its Asian peers by the economic crisis in Europe due to its relatively weak public finances and dependence on commodities, said Nomura International today.

Its chief economist for Asia ex-Japan, Robert Subbaraman, said that unlike most countries in Asia, Malaysia will be negatively affected by an expected drop off in commodity prices while the government will also find it difficult to keep up stimulus policies.

“Malaysia is one of the economies that will weaken the most; it is in the weaker group of economies,” said Subbaraman at a media briefing here today.

Nomura economist for Southeast Asia Euben Paracuelles said Malaysia’s growth in the first three quarters of this year was largely led by government spending, but as public finances were relatively weak, he doubted that it would be sustainable.

Subbaraman also noted that Malaysia ranked third in Asia ex-Japan in terms of exposure to European bank claims, after Hong Kong and Singapore, which could mean a drying up of liquidity should European banks start to cut their exposure to the region.

Figures provided showed that European bank exposure to Malaysia amounted to US$50 billion (RM155 billion), or about 19 per cent of GDP, double that of the Asia ex-Japan average of nine per cent.

Commodities would dip by 15 per cent if a slowdown hits, says Paracuelles.Only the financial centres of Hong Kong and Singapore had higher exposures, at 77 and 55 per cent of GDP respectively.

“As European banks pull back exposure, it will show up as net capital outflow and availability of funding will start to dry up,” said Subbaraman.

He noted, however, that Malaysia still has a large current account surplus at 13 per cent of GDP, which should help support the ringgit against hefty depreciation against the US dollar, due to its trade performance.

Paracuelles said that if a global downturn happens, there would be a 15 per cent decline in commodity prices.

Malaysian government economists earlier said their economic projections were bolstered by expected continued high rubber and palm oil prices, which would help boost rural area spending.

Petronas said in a briefing last week that it expects oil prices to decline to US$85-87 per barrel next year, from US$110 currently.

In its November Asia Economic Monthly report, Nomura noted that Malaysia faces the prospect of unsustainable fiscal support.

“Given the public debt to GDP ratio of 55 per cent, the second highest in Asia, scope to continue with a very expansionary fiscal policy next year could prove to be limited,” said the report.

The report forecast a growth of 3.6 per cent for the first quarter of next year but rising to 7.3 per cent by the fourth quarter to give a full year growth of 5.1 per cent.

Subbaraman also said the risk of a hard landing in China is “not trivial” although the threat is greater after 2013-2014, following the handover of power to the next generation of leaders.

Nomura expects growth in Asia to drop to 6.6 per cent next year, from 7.5 per cent this year, and revised its 2012 global growth forecast from 3.8 per cent to 3.2 per cent.

Birth of Iskandar Malaysia - for non-Johoreans

Birth of Iskandar Malaysia - for non-Johoreans

When Datuk Abdul Ghani Othman took up the mantle of leadership in Johor, he clearly displayed his balanced outlook, by introducing the holistic development approach in his first budget speech in 1996.

  In essence, his holistic development approach ensures that economic development of the state must be balanced with the development of its people's well-being.

  With that, Johor embarked on upgrading its clean water processing and distribution to provide clean water to as many people as possible.

  They also embarked on the rural road programme "Jalan Kampung" through state GLC KPRJ, that finally saw thousands of kilometers of rural roads getting the tarred treatment, creating better accessibility to rural produce and services.

  The arts in the form of music and dance were also added to schools' extra curricular activities to ensure students with such inclination has an outlet within a controlled environment and minimise the truancy problem.  It brought "Zapin", a folk dance particular to Johor, into international attention such that Johor kids are now performing the dance internationally.  It is also in a way part of Ghani's effort to maintain the "jati diri" (identity) of the Johor Malays.

  In balance, mosques throughout the state were also encouraged to hold frequent and regular community activities to ensure that they stayed relevant as part of the spiritual fulfillment for muslims and the communities they served.  State-sponsored religious education continued being strengthened with linkages to enable a promising advanced education and career options for students while more schools were built.

  State-sponsored community colleges were also introduced throughout the state to equip less academically-inclined youngsters with employable skills that will improve their future potential.
  A number of forest reserves and natural heritage sites were also identified and gazetted to ensure that the state's dwindling natural forests are preserved and allowed to grow back up to the 30% mark set by the state planners while natural sciences research centres were encouraged to set up operation in the state's national parks.

  Despite the 1997/98 financial crisis which was highly detrimental to Johor institutions, and with a number of its public commercial initiatives facing ruin, Ghani managed to steer not only these Johor institutions out of bad weather, but ensure they continue to grow stronger in the aftermath.  

  He was even more convinced that Johor's holistic approach towards development, will be the key sustaining factor that will be its defence against a recurrence of similar crisis as evidence in his 1999 budget speech.

  Economics, afterall, consists of peaks and trenches, and no doubt that dips will happen again.

  Johor and its people must be made fundamentally strong to ensure that it will be able to weather such crises with minimal damage and with that came the requirement to re-position Johor as a top investment destination that will rival the best in the region.

  Core to the plan will be making the most of Johor's ideal location, existing logistics facilities, abundant resources and industrious locals to attract would be investors that will spur development of new industries, and ensure industrial resilience by re-structuring its economic growth drivers.
  Firstly, Johor is blessed with a coastline that continues from the east to the west of the peninsular.  It has three international seaports and an international airport, many industrial parks, in addition to being located on one of the world's busiest shipping lanes.  What is required is a good road network or highway systems connecting them all, that will also facilitate better east-west access to raw materials and open up new areas for development.

  Secondly, Johor Bahru was also getting heavily congested and subjected to frequent flash floods while state buildings and housing occupy some of the most high-value real estate in the city.  A new seat of government similar to Putrajaya is required, away from the commercial hustle and bustle of the city, but within easy distance that will not be inconvenient to the public, which will also free high-value real estate for commercialisation and the transformation of Johor Bahru City Centre.
  Thirdly, its proximity to Singapore should be capitalised to benefit Johor; instead of simply being Singapore's backyard or hinterland, Johor should aspire to build a city of equal stature socially, if not commercially, to the city nation.

  Historically, Johor had not been very high on the list of Federal infrastructure development funding as states such as Selangor, Kedah, Kelantan or Penang, but this time around the state required Federal assistance to make this a reality.

  It had always been a middling state, not poor enough to require attention, but not near enough to the seat of power like Selangor to require Federal infrastructure focus, or as historically significant colonial outposts as Melaka or Penang to attract tourism projects.
  The state itself did not have the financial means to make all this happen within a time-frame that would make it meaningful, nor would it likely be able to raise the funds itself considering the many development programmes continuously being put in place to raise the quality of living for the rakyat.

  But Johor must position itself for the new millenium, therefore Federal assistance was required to make the transformation in a timely manner and a proposal was worked out by the planners at Bukit Timbalan.
  Ghani and his people had then drafted a comprehensive plan for it in early 2000s and when it was submitted to the Federal Government, was given the green light by then PM Dr Mahathir. 

  However, by the time it was possible to implement the plan, it was Pak Lah at the helm.  Not only did the original plan became a "corridor", the crooked bridge was also cancelled, MRCB via its 4th Floor networkings made inroads through the EDL, and that legacy is now entrenched in Irda and JCorp.
  Nonetheless, Iskandar Malaysia, is for now the only one of all the development corridors which still has the potential to meet its objectives.