Sunday, June 8, 2014

Eyeing the importance of being earnest

CRONY CAPITALISM? It's time for YTL boss to walk the talk and show ethical leadership by example

APPARENTLY, the negative trait of Melayu mudah lupa is not only confined to the Malays, but also to other ethnic groups in Malaysia. This is evident from the statement by YTL Corporation Bhd managing director Tan Sri Francis Yeoh when he commented  on crony capitalism a few days ago.
Yeoh's claims that he is successful because he is not a crony and doesn't depend on government contracts.
He also went further, which seems tantamount to fanning the flame of racial provocation, by stating that non-Bumiputera small-and-medium enterprises (SMEs) "absolutely have no chance" to even fight "for the crumbs" as they are already at the low end of the food chain.
He delighted in lecturing us, delivered with a straight face and an affectation of pious conviction, that Malaysians are not taking advantage of our ethnic diversity, and we must introduce more open competition and encourage greater transparency in business.
Not unexpectedly, his statement evoked negative reaction from the public, and many reacted in disbelief to Yeoh's hypocrisy given his companies' close links with the government in the past as well as in the present.
Tan Sri Ramon Navaratnam summed it up aptly when he said that "people who live in glass houses, should not throw stones". He further correctly stressed that Yeoh's talking about getting rid of cronyism doesn't sound right while his companies bagged lucrative government contracts through direct negotiations rather than open tender exercises.
Why the repetitive mantra by Yeoh despite YTL receiving all the government's love and special attention all these times? We know that great wealth buys great political influence, but to insult the people's intelligence with his sermon borders on brazen arrogance.
Maybe these kinds of people live in a bubble, and not surpassingly, those inside the bubble sometimes think that they can pull the wool over our eyes.
Nonetheless, let us address Yeoh's arguments specifically.
Yeoh is adamant that YTL is successful because he is not a crony and doesn't depend on government contracts. That is a bold statement.
Without government contracts, YTL would still be a small-time contractor. In fact, it is continuously the beneficiary of government assistance. For instance, in 1990, YTL was awarded an almost RM1 billion contract to build public hospitals.
Unless Yeoh suffers from amnesia, he could not possibly forget his big break in 1992 when the government awarded him the first licence to build, operate and manage power plants.
Without this lucrative concession, his company would probably be stuck as Syarikat Pembinaan YTL Sdn Bhd, a relatively small construction and property development company. This foray into the power sector vaulted YTL into the big league, where its pre-tax profit last year alone amounted to RM2.5 billion, versus RM30 million in 1991 before contributions from power operations began flowing in.
Importantly, most of the projects given to YTL were and still are heavily subsidised by the rakyat. His power agreement with Tenaga Nasional Bhd was so lopsided and utterly unjust that Tan Sri Ani Arope, the then TNB chief executive officer, submitted his resignation after refusing to accept YTL's terms.
His "take or pay" agreement with TNB obligated it to take up YTL's power output -- priced much higher than what TNB could easily produce -- whether the utility needed it or not, for 21 years.
Maybe that's what Yeoh meant when he stated that YTL became successful via "innovation", which ripped off billions in taxpayers' money.
Has he also conveniently forgotten how he was recently awarded a RM10 billion contract by the Education Ministry to provide, among others, laptops to schools, despite YTL not being a computer maker, nor expert in education services? The contract irked member of parliament Zaril Khir Johari, who raised questions on this issue in Parliament. His 1BestariNet programme, which is to install 4G high-speed broadband to all schools, indirectly means that the rakyat are actually funding the commercial expansion of YTL's YES 4G network. So much for innovation.
Yeoh was also borderline malicious when he said the non-Bumiputera SMEs had been discriminated by the government.
Well, I wonder where he got his statistics from. Analyses done by the Economic Planning Unit show that non-Bumiputera businesses, especially Chinese companies, took 80 sen for every RM1 in government contracts.
Even funding for SMEs benefited non-Bumiputeras the most, as data shows that Bumiputera companies accounted for about 30 per cent of the entire funding for SMEs last year.
To put things in perspective, the value of the contract YTL secured from the Education Ministry alone, for providing only laptops to students, exceeds the entire funding for all Bumiputera SMEs for the entire period of last year!
It is heart-warming to learn that YTL supports national unity. Let us, for a second meditate upon and closely scrutinise these nationalistic statements from Yeoh: "We should leverage on our different ethnic races in the nation and should start working together. We have been working for a long time like we're in a tunnel. We have not learnt to work together. We have been separated and not looked at each other's strengths. We do not celebrate our diversity."
Such enlightened view should indeed be emulated by other companies! However, in the name of transparency, would YTL be willing to make public the ethnic diversity figures in YTL workforce, its board of directors, exco, senior management, mid-management and low-level positions?
YTL should also make public how much was sub-contracted to Bumiputera and Indian companies, compared to Chinese-owned companies.
Similarly, in the name of transparency, would YTL also make public its power agreements, which had enabled YTL to make astronomical returns at the expense of the people? Please allow public scrutiny of the agreements, as suggested by MP Tony Pua from DAP not too long ago.
Yeoh also argued that he is a true patriot, for he has "defended the present government's concerted efforts to introduce more open competition and encourage greater transparency in business".
This is commendable, but flies in the face of facts. How does YTL explain its willing participation in direct negotiations with the government on some of the most lucrative contracts? It was only last week that a YTL Corp wholly-owned subsidiary was awarded a power plant project by the Energy Commission via direct tender!
Maybe YTL can make a declaration to the public that it will no longer participate in direct-negotiations and cease altogether from seeking contracts from the government.
There is still time for redemption for a devout man like Yeoh to walk the talk. I am sure he would like to show ethical leadership by example.
Moving forward, we have to help Yeoh from backsliding from his recent epiphany, and to become the born-again corporate leader that he aspires to be.
I would urge the government to be kind to him by avoiding any dealings with YTL group, either in providing contracts, or using its products and services. The government should also exclude YTL from participating in any way whatsoever in the KL-Singapore High Speed Rail project, if the project is yet to be awarded to him. He sorely needs help from the government to wean him away from his old habits.
As for me, I will also do my little part. I will stop patronising YTL hotels, shopping malls and Internet service provider, among others. I am boycotting YTL and I suggest the rest of Malaysia follow suit.
After all, Yeoh proudly claimed that his company gets 85 per cent of revenue from overseas operations.
Oh, by the way, the deafening silence from some of the most vocal critics of crony capitalism in Malaysia is really puzzling.
Imagine if the same statement was made by a Malay tycoon, I am sure the deafening silence will become a raging tropical thunderstorm.
Maybe when a Bumiputera businessman gets a contract, it's cronyism and unfair privileges. But when people like Yeoh gets it, it is innovation, market forces and meritocracy.


Read more: The importance of being earnest - Columnist - New Straits Times http://www.nst.com.my/opinion/columnist/the-importance-of-being-earnest-1.613360#ixzz340s6K3AG

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