Saturday, December 2, 2017

Eyeing Zahari Awang once again

NEP, VISION-2020 & TN50: These are key national policies that can shape the future of Malaysia & the people. I have come across many friends, including Scholars & Ulama, who don’t understand these terms properly. They are also confused about some related concepts like a fully developed country or a high-income country. It is our responsibility to educate fellow Malaysians through discussions & debates in the social media. This is one way to serve the nation instead of waiting for the nation to serve us. I wish to initiate a discussion on these issues, and you are most welcome to participate and contribute towards a better Malaysia in years to come.
New Economic Policy (NEP) was formulated in 1970 by PM Razak with the aim of correcting the economic imbalance between the rich (Foreigners & Chinese) and the poor (Malays & Bumiputras) within 20 years. One key indicator was the Bumiputra equity (ownership) in the country that was targeted to increase from 2.4% (in 1970) up to reach 30% (by 1990). Unfortunately, the key indicator was very far from success as it was just 19.3% in 1990. One former leader blamed leakages as the main reason, in order to justify that the government was already doing its job well, but something was leaking on the way. Actually, the leakage was deliberately the work of PM Mahathir. It is known that the biggest beneficiaries during his rule were the Chinese cronies. They were given government projects to do and get rich quickly and favourably. In a way – “you scratch my back, I scratch your back”. Thus, the government (led by Mahathir) managed to deny or postpone a big promise made to the Malay community.
Vision 2020 was formulated by PM Mahathir to over-shadow the NEP. Since, NEP target was not a success until 1990, Mahathir formulated a proper vision to be realized in 2020 – i.e. a period of 30 years. The new target was a fully developed nation to be achieved by 2020, but the NEP was to continue into the future. Everybody liked Vision 2020, but the Chinese were angry with the continuation of NEP (which Mahathir re-branded it as National Development Policy). Based on his description in 1990, what Mahathir meant to achieve was actually a high GDP-Per-Capita nation, but he kept saying it as a fully developed nation. Anyway, Vision 2020 was loaded with some extra features to be achieved along with the fully developed nation status. That extra features included the social aspects which the non-Malays liked to see themselves as Malaysian citizens of higher political status like the Malays & other Bumiputras by 2020.
A high-income or a fully developed nation, as defined by the OECD, IMF and World Bank is not too difficult to achieve. These organizations maintain a list that is updated every year. So you can always check the status with them. There are about 80 high-income countries today, but there are about 35 developed countries only. Anyway, a high-income or a developed country has a very high GDP Per Capita & HDI index. In both cases, the figure for GDP Per Capita is a moving target, but the HDI value is fixed at 80%, but higher is better. Thus, Malaysia too needs to score 80% for HDI in order to become a fully developed country. A developed country is automatically a high-income country, but not the reverse case. It is not very difficult for Malaysia to become a high-income or a developed country, as the measurement is very straight-forward. But it would take a much longer time to fulfil the social aspects of Vision 2020. A real Malaysian nation is still a far cry away. The Chinese (especially) are more interested in the social aspects as they are already superior in economic terms. The Chinese in Malaysia are comparable with those in Taiwan, Hong Kong and Singapore. On the other hand, the Malays are more interested in the economic superiority as many of them are still poor (relatively). The other Bumiputras are even worse than the Malays.
TN50 is being formulated by PM Najib to over-shadow Vision 2020. It is assumed that Malaysia will achieve a high-income or a fully developed nation by 2020. Thus, Najib is formulating a new vision for 2050 – i.e. a further period of 30 years. You can say that around 2020, Malaysia will be at the lower end of a fully developed status. But by 2050, Malaysia will be at the upper end. Thus, PM Najib is planning to make Malaysia jump from 35th position (in 2020) to reach 20th position (in 2050) in economic terms. Of course, in social terms and democratic terms, Malaysia needs to be raised to a higher level too. What about the Islamic terms? The Ulama & Islamic Scholars need to define what would be a higher level of Islam. Perhaps, Islamic Civilization to be generated by Malaysia should be competitive globally. Traditional Islam needs to become Civilizational Islam by 2050. Traditional Islam focuses more on historical, rituals & memorization aspect of life, in favour of conservatism rather than creativity & innovation. This is a challenge for the Ulama & Scholars.
Meanwhile, the following key objectives are suggested immediately:
 NEP’s Bumiputra equity should be targeted at 35% to reflect a fair percentage of the community in the country today. Once that is achieved, NEP should end.
 GLCs should be used as the instrument to achieve the 35% target, and to sustain the percentage, while Management-Buy-Out (MBO) over the GLCs can be adopted.
 Bumiputra equity had reached 23.5% in 2011-13. What about now in 2017-18? Let the old target of 30% be achieved, and solve that old problem of the NEP.
 NEP target is long overdue. PM Najib must fulfil this promise by 2020, since PM Mahathir had failed to do that in 1990. Let that be 30% in 2020, and 35% in 2025.
 PNB and similar organizations should spearhead the construction of strategic projects to raise Bumiputra equity – e.g. Menara 118 and other tall buildings in big cities. High-tech buildings are manifestations of high technology, sophisticated hardware & software. It demonstrates the presence of very high level human-ware in the country.
In the past, some political top personalities have sent in their dogs to bark at my postings. They did not send in educated people like doctors & professors, but instead, they just sent their dogs to bark & to curse & to make noise. Let there be a healthy debate rather than a blind support. I’m sure DAP & PKR (especially) have many educated people to do this job well. By the way, I’m not representing UMNO & BN & PAS. If anything looks alike, then it’s just a coincidence.

Saturday, November 18, 2017

Eyeing Zahari Awang's arguments

ECONOMIC & POLITICAL Debate: I wish to further justify that Malaysia will be a fully Developed Country, rather than a failed & bankrupted country as propagated by some politically desperate people. Many people behind DAP & PKR have tried to magnify the amount of national & 1MDB debts as a political strategy. I wish to correct their perception because debts can be paid off easily by selling the assets. If you buy assets, then you may have to incur debts. I’m speaking in the interest of the nation without being a member of any political party. Of course, I want Malaysia to be a great country that will benefit all or most of the people.
Today, I’m responding to Prof of Economics (Jomo Sundaram) as per the article in Malaysiakini on 17/10/2017. Someone introduced him as a former professor & an official of the UN in charge of economic development. For sure USA, Europe & Japan don’t need his advice. The countries that needed him most were the under-developed & developing countries. He said a lot about Sri Lanka & Africa (before) in his arguments on ECRL, in which he has equated Malaysia with them. I know that Jomo is a close friend of Prof Syed Husin Ali, but remains a non-partisan person. Anyway, it’s better to look at his arguments rather than his job. Jomo’s idea on the M'sian economy is good only for the checks & balances.
Jomo has said that it’s more difficult to become a Developed Country rather than just a High-Income Country. He is correct. There are about 80 high-income countries today, but there are about 35 developed countries only. Anyway, a high-income or a developed country has a very high GDP Per Capita & HDI index. In both cases, HDI must be 80% or more. Thus, Malaysia needs to score 80% for HDI in order to become a fully Developed Country. A Developed Country is automatically a High-Income Country, but not the reverse case. See Table 3 below for their differences (in the OIC region). Observe that KL & Selangor constitute a fully developed region in Malaysia. Some Islamic countries are already high-income, but they are not industrialized, due to the absence of industrial technology. The latest figure for 2015 shows that Malaysia’s HDI was 78.9% already. A few more years can close this gap of 1.1% only. Of course, the level of industrialization and R&D need to be mobilized in order to become fully developed.
In the OIC region, only Malaysia & Turkey are the most likely ones to become fully developed. Talking about OIC & Islam, it’s good for PAS & Islamic NGO’s (including Ulama) to get involved. Regretfully, the Ulama group is not knowledgeable & not vocal enough to place Malaysia at the top spot in the Islamic World. By right, the PAS group can put pressure on the UMNO group in putting Malaysia as a front country for the New Islamic Civilization. I don’t mean to create the Taliban type of Islam. We need the Universal (International) type of Islam. With so many high-income countries of OIC already there, they can be progressively upgraded to become fully developed – along with Malaysia & Turkey.
Jomo has expressed concern about Malaysia having too many cheap foreign workers & about disindustrialization. Well, cheap foreign workers are good to move the economy quickly. Just remember that Singapore infrastructure was originally built by cheap Malay labourers from Kelantan, because there was no Chinese Singaporeans willing to work there. Well, Singapore & Hong Kong too don’t have much factories. Britain tried to close down factories in the 1990’s, but reversed it again thereafter. Malaysia is still industrializing with high-tech factories, in order to promote higher salaries for the workers. Low-tech factories have moved out to Cambodia, Vietnam, Indonesia, etc. Low-tech factories can still be set-up here by using cheap foreign workers. Thus, Malaysia can become an industrialized country faster by following this approach, provided that R&D is done aggressively from now.
Finally, Jomo advised the government to bring together all the people (including political parties) to discuss economic development. This is a naive idea, because DAP & PKR fellows are never honest in politics. They oppose BR1M, ECRL, Highways, GST, etc. Indeed, they like to propose “Trojan Horses” to bring down the sitting government. Therefore, Jomo’s idea is naive here. I would prefer the PAS group to team-up with UMNO to further increase Islamic credibility in the country. UMNO can provide 2-third, while PAS & Ulama provides another 2-third. Total equals to more than 1. Being together, their own weakness can be overcome. With Anwar being hijacked by DAP, the remaining hope for Islam in Malaysia may come from the PAS group.
Table 2 (below) shows the position of Malaysia among the top countries in Asia. Brunei is just a High-Income (but not a fully Developed) Country. Malaysia is going to be both high-income & fully developed like the former Asian Tigers, Japan & Israel. Meanwhile, our KL Metro has already become a fully developed region with more than 8.2 million people. That is economically better than Israel. Thus, KL Metro alone can counter Israel & the Zionist conspiracy against the Islamic World. I have shown Table 1 (before). I’m giving this table again to reassure that Malaysia is a very prospective nation as the next fully Developed Country.
As usual, fellow friends are welcome to give your comments, suggestions & criticisms. Debates are welcome. Academic arguments are most welcome. Your beliefs are also welcome.

Saturday, November 11, 2017

Zahari Awang's take on the Government's and Harapan's Budget

BUDGET vs. ALTERNATIVE BUDGET & the Future: I would rate the Official Budget presented by Najib at 85%, while the Alternative Budget presented by the PH opposition group at 65% only. Anyway, the Alternative Budget also contains a long term plan for the PH group to win GE-14 and take-over the country. I’m going to focus more on the longer term plan for the country rather than just the 2018-budget. As a non-partisan person, I wish to see economic & social development that benefit the country & most of the people. If that endorses any leader or a certain political party, then it’s just a coincidence. The PAS group is not part of this analysis.
Firstly, the Alternative Budget started with verses of the Holy Qur’an. I wonder if DAP agrees to it. The introduction comes from the tiny Islamic religious personalities in the PH group to colour-blind the Malay-Muslim masses. But the Qur’anic verses hit on Mahathir more than Najib. It was Mahathir who started the culture of monetary corruption. Mahathir was also the PM who morally corrupted the judges. Indeed, he removed the righteous judges in the process. Anyway, ignoring DAP is good because of its on-going (unwritten) policy to slow down the economic progress of the Malay-Muslim community. DAP struggles to provide for more & more space for the Chinese community without mentioning the race. I have sensed examples of such people since the 1970’s. Thus, DAP spirit is the main obstacle to the creation of economic equality in Malaysia. I wish to see economic, social & political equality in Malaysia one day. That will be a real Malaysian Nation.
Secondly, the PH group has a low Malay-Islamic credibility. Its dominant sub-group is DAP that will dilute PH. Its leaders & promoters have manufactured a lot of propaganda stories with lies & half-truths about the country & Najib. God has reminded them – “O ye who believe, if an unrighteous person comes to you with news, ascertain the correctness of the news first, to ensure that you will not harm other people unknowingly and regret later for what you have done” (Qur’an 49:6). But these people are behaving contrary to the Qur’anic spirit. The small number of PH Ulama are keeping quiet, or getting confused, or pretending not to be aware of such virus.
Thirdly, the Alternative Budget has made a lot of U-turns. E.g. BR1M was condemned by PH as a corruption, but is to be retained now. ECRL & HSL were also condemned, but are reserved now. Fortunately, much of the new PH ideas do not come from Mahathir who has become a new madman of Malaysia. Now, the PH group has become a more sensible opposition of the 2-party system. BTW, the much propagated idea that Malaysia will go bankrupt under UMNO has been silenced. Indeed, the PH policy on the removal of GST may lead Malaysia to become a poor nation.
One good idea made by the Alternative Budget is the MBO of the GLC’s in order to increase Malay ownership in the country. The UMNO-led government should look into this and try to address the NEP target by using the MBO approach. In 2013, Bumiputra equity had reached 23.5%, which was quite near to the 30% target set to be achieved in 1990. BTW, the NEP target was manipulated by Mahathir for his political advantage. Therefore by 2020, NEP’s new target should be increased to 35% reflecting half of the Bumiputra percentage in the country. To achieve 35% equity, only a selected few GLC’s will do. But new GLC’s should be formed as guarantees for the future.
Industrialization is not an urgent topic for Malaysia now. According to estimates, our manufacturing industry contributes 40% to our GDP, but others have put it as low as 23% only. An industrialized country needs at least 30%. BTW, it’s OK to increase the percentage, but what is needed more now is R&D rather than factories. Tyre manufacturing idea as pointed out by PH was already mooted since the 1980’s. But Mahathir wanted to focus more on car manufacturing by getting help from Japan. Emulating Japan (which is very advanced) is like trying to copy USA & Germany. You are pushing the people to make a very long jump, and may fall down in the process.
Copying the Nordic countries as proposed by PH is no better as our resource endowment is different. Some PKR leaders & promoters used to compare Malaysia with poor Sri Lanka & Black Africa, which was a pack of nonsense. It is a lot better to copy Singapore, Hong Kong, Taiwan, and South Korea. Malaysia must reflect on the Asian Tigers. Singapore & Hong Kong have less factories & more services, while Taiwan & Korea have the reverse. Economically, we belong to East Asia, the area that is booming right now. Malaysia is already next in-line after the 4 Asian Tigers. Going to the Nordic countries is really a bad dream. Our natural strength lies in rubber, palm oil, petroleum & gas, Islamic Banking & Halal Products. Our expertise has also developed along the E&E products that came through FDI’s. These are areas that Malaysia can be very competitive. It’s fine to re-engineer automobile technology since we have already gained so much expertise in it.
PH is like a PONDAN (half-a-man) in economic development. It views negatively on ECRL, HSR, MRT, Highways, Menara-118, and so on. Its economic plan reflects the traditional Malay mentality that cannot compete well globally. It cannot see China properly. Its focus on 1MDB & Kleptomania is only aimed at removing the sitting PM & UMNO. That is a controversial issue. Just remember that Spain labelled Francis Drake as a great sea pirate, while England regarded him as a great fighter & statesman who made Britain a great country. In the end, its Public Rally on 14/10/17 managed to bring only 5,000 people to the field, instead of 100,000 people. Thus, only 5% of the PH people believed in Kleptomania. Let’s evaluate some PH leaders (below):
MAHATHIR was a quasi-democrat, with an authoritarian style. He kept Chinese cronies to help finance whatever political project that he wanted to do. Thus, Malays were left out. NEP targets were badly missed in 1990. Thus, he created Vision 2020 as a new dream to forget NEP targets, thereby, denying UMNO’s promise to help the Malay race. Being a PM for 22 years, certainly, he managed to do a lot of economic projects. Upon his retirement, with a missed opportunity for his son, he then turned against UMNO by accusing it as not clean enough & not democratic enough. At 92 years old now, with a degraded intelligence, who will endorse him?
ANWAR was Mahathir’s successor for many years. After a failed attempt to oust his boss, he propagated a more democratic government for Malaysia, thereby, launching a Reform Movement. Later, his Pakatan collapsed after failing to become PM & CM; and after failing to prevent an internal party crisis. Anwar is not a leader for economic development. His clear interest was to overcome poverty among the Malay masses. Thus, once the Malays are not poor anymore, Anwar is left to reform on the democratic process & to entertain the traditional Ulama who have been supporting him since the 1970’s. He does not properly understand what makes a great industrialized country. Thus, Malaysia under Anwar is likely to become a better Egypt, or a better Pakistan only.
MUHYIDDIN appears to be a midway person between Mahathir & Anwar. He is less economically inclined than Mahathir, but more than Anwar. He is more Islamic & more ethical than Mahathir, but less Islamic than Anwar. Support for him is a lot cooler. Muhyiddin is broadly comparable to Musa & Abdullah Badawi, who can be rated as Grade B+ (generally) for the PM’s post. Perhaps, Anwar is rated as Grade B++ while Mahathir & Najib as Grade A. But Mahathir (A-) is rapidly depreciating now, while Najib (A+) is very much on the rise.
East Malaysians are very thankful to Najib for the toll-free Pan Borneo Highway. Similarly, East Coast people are very happy for the ECRL & the toll-free KB-Bentung Highway (410 km). Please give Najib another term to complete these projects. Please give him the motivation to do more. Other leaders are not ready for a critical evaluation. Anyway, this is just ONE opinion. Dear friends, you are welcome here.

Saturday, September 23, 2017

Tajudin alleges secret deal with DrM and Daim - The Sun Daily 23rd September, 2017

Faced with a RM589 million suit by Danaharta, one-time corporate high-flyer Tan Sri Tajudin Ramli has counter sued for RM13.46 billion and also drops the following bombshell in court documents:
* He was directed by former prime minister Tun Dr Mahathir Mohamad and former finance minister Tun Daim Zainuddin to buy shares in MAS to help Bank Negara recover from foreign exchange losses in 1994
* The transaction was a national service but was disguised as an arm's length commercial deal because the government wanted it that way
* He was at all times only a nominee/agent of the government in MAS
* He was assured repeatedly by Mahathir and Daim that he would not suffer any losses or be held liable for anything arising from his purchase of the MAS shares.
PETALING JAYA: Tan Sri Tajudin Ramli, who was sued by Danaharta recently for RM589 million, has filed a countersuit against Danaharta, the Malaysian Government and several other companies and individuals for a total sum of about RM13 billion.
The suit revolved around transactions related to shares of Malaysia Airlines Bhd (MAS), Celcom (M) Bhd and Naluri Bhd, all companies that Tajudin had controlled at one time.
In court documents filed by his lawyers Lim Kian Leong & Co on June 29, 2006, Tajudin made some startling revelations about the circumstances leading to his RM1.8 billion acquisition of a 32% stake in MAS in 1994.
He claimed that it was not a normal commercial deal as it was made out to be and that he was instructed by Tun Dr Mahathir Mohamad and Tun Daim Zainuddin to buy MAS shares at RM8.00 each (way above the then market price of RM3.50) as a national service to help out Bank Negara (which owned the MAS shares) which was hit by multi-billion ringgit foreign exchange losses.
Tajudin said his purchase of MAS shares was disguised as a commercial deal as "it was essential for the public and the international investment community to perceive the entire transaction as a normal commercial arms length deal (which clearly it was not)".
The one-time corporate high-flyer said he did not want to buy the MAS stake as he was worried about financial losses but agreed to do it because it was a directive and also because the government had assured him that he would be protected from financial losses and liabilities.
Tajudin said at all time, he was a nominee of the government of Malaysia (GOM) and that there was an "Overriding Agreement" pertaining to the whole exercise.
He went on to say that he was requested from the start never to reveal this arrangement and had honoured it because there were repeated assurances from Mahathir and Daim that he would be protected from any financial losses and liabilities.
He described Danaharta's legal action against him as a "clear breach of the Overriding Agreement by the GOM" and he now had no choice but to reveal what he claimed to be the truth.
In his statement of claim, Tajudin said as a result of the 1998 financial crisis, Danaharta took over his non-performing loans from the bank together with the shares and securities that he had pledged.
At the request of the GOM, he cooperated with Danaharta to settle the problem on the understanding that that GOM would abide by the Overriding Agreement and that a fair mechanism would be reached to relieve Tajudin of all liabilities arising from his purchase of MAS shares.
Tajudin obtained confirmation from Daim before entering into a "settlement agreement" with Danaharta that it was necessary for "appearances"and that the Overriding Agreement would still be honoured.
The court documents went on to explain how in the end the whole negotiations collapsed causing him to lose control of Naluri.
He then alleged that this was part of a conspiracy by Danaharta to sell his shares in Technology Resources Industries Bhd (TRI) to Telekom Malaysia cheaply and enable Telekom to merge TRI's subsidiary Celcom with Telekom Malaysia's own cellular telecommunications business.
Following are the summaries of the key points with regards to the so-called Overriding Agreement Tajudin had with the GOM contained in his 104-page court document.
Since the mid-80s, the Government of Malaysia (GOM) had embarked on a wide-ranging privatisation programme which included major infrastructure development, utilities, strategic industries and other key areas being privatised. The policy was termed generally as "Malaysia Inc.". A key feature of "Malaysia Inc." was the close symbiotic relationship between the GOM and private entrepreneurs.
Whilst termed "private", many of these private entrepreneurs, including Tajudin, were in fact, required and obliged to carry out activities and business on behalf of the GOM as a matter of National Service or Duty:
MAS's performance during the 1980s and early 1990s was not reflective of the dynamic economic upswing experienced by Malaysia.
The GOM, being very concerned with MAS, had considered ways to deal with it, including the disposal of government held shares in MAS (through Bank Negara Malaysia) and privatisation.
Due to the special nature of MAS, as a national carrier with wide-ranging social and political responsibilities, it was not suitable to be privatised in the conventional manner.
However, in the early 1990s, it was well known that Bank Negara Malaysia, which was holding the shares in MAS on behalf of GOM, had suffered massive foreign exchange losses due amongst other causes, to imprudent speculation in the foreign currency markets.
Even though MAS was not a conventional privatisation candidate, the GOM investment in MAS had to be disposed of to cover these foreign exchange losses and so as to make this politically acceptable, the terminology of privatisation was used to disguise the real motive, which was to cover the Bank Negara Malaysia losses.
Initially, 10% was sold in June 1992, reducing the GOM's investment in MAS to 32%. The GOM urgently had to sell the balance of the shares in MAS to meet the foreign exchange losses incurred by Bank Negara Malaysia in 1994 by way of a "privatisation exercise".
When the GOM decided to "privatise" MAS, the GOM wanted an established Bumiputra to take over its equity stake. The GOM, through Mahathir, raised the possibility of Tajudin taking over MAS on behalf of the GOM since Tajudin was already involved in the transportation business through Naluri Bhd ("Naluri") (formerly known as Malaysian Helicopter Service Bhd).
At the suggestion of the GOM, Tajudin considered the proposal to take over MAS. Tajudin could not afford to buy the shares personally or through his private companies. He could only consider taking over the 32% shares in MAS from Bank Negara Malaysia through Naluri.
However, Tajudin was extremely reluctant, as the task to purchase and carry out the radical restructuring required for MAS was beyond that of an ordinary private entrepreneur. Tajudin was concerned the task might bring his other businesses to ruin.
However, the then Prime Minister made it very clear to Tajudin that this task was to be a National Service and was in fact an obligation. It was also emphasised to Tajudin that the Malaysian economy was facing extremely difficult times brought about inter alia by foreign currency speculations by Bank Negara Malaysia and that purchasing the GOM's shares in MAS was considered to be essential by the GOM to avert the national emergency.
Based on conventional financial wisdom, Tajudin was only prepared to acquire Bank Negara Malaysia's interest in MAS at no more than RM5 per share which even then represented a premium of more than 40% over the market price which then was around RM3.50 per share.
Mahathir, through Tun Daim Zainuddin, on behalf of the GOM, instructed Tajudin to pay RM8 per share for the shares in MAS. The GOM required this price to assist it to avert the foreign exchange crisis. The price had nothing to do with the economic or true value of the MAS shares.
However, Tajudin was not prepared to proceed with the transaction without protection as there was no way commercially for Tajudin ever to recoup an investment at RM8 per share or to pay normal commercial financing costs.
When Tajudin expressed his unwillingness to purchase the shares in MAS at RM8 per share, Tajudin was requested by Tun Daim not to refuse the then Prime Minister. After further discussions and considering that it was a National Service and public duty entrusted to him and to avert national crisis, Tajudin had no choice but to agree to proceed with the transaction.
However, Tajudin's agreement was subject to and conditional on the Overriding Agreement on the understanding that Tajudin was to act as the agent and/or the servant of the GOM.
Tajudin wished for the acquisition to be carried out by Naluri, as initially discussed, but the then Prime Minister and the GOM insisted that the sale should be carried out quickly as the cash proceeds were immediately and urgently necessary to offset the massive foreign exchange losses incurred by Bank Negara.
Due to the GOM's insistence, Tajudin agreed to the GOM's request to expedite the purchase and that he personally or through his private company would take over the shares in MAS from Bank Negara on the understanding that Tajudin would later "on-sell" them to Naluri.
The GOM insisted on this method even though it was clearly understood that Tajudin did not have the financial capability.
The acquisition through private means was necessary to avoid the need for time consuming approvals which Naluri (being a public listed company) would have been required to obtain. Tajudin therefore had no choice but to agree to the GOM's requirements as to price at RM8 per share and method and speed. However, Tajudin's agreement was always subject to and conditional upon the Overriding Agreement.
The urgency imposed by the GOM required Tajudin to take out personal loans and giving personal assets/securities as collateral, which Tajudin would not otherwise have had to give if Naluri had been the original purchaser.
The loans taken were advanced to Tajudin's private company, RZ Equities Sdn Bhd. As security for the syndicated loan, Tajudin pledged most of his shares in Naluri and TRI and his other interests to the lenders.
The GOM, through Ministry of Finance ("MOF"), Bank Negara Malaysia and other regulatory bodies, arranged for the transaction to be concluded expeditiously with stamp duty waiver, single customer limit waiver and various immediate approvals, etc. This was all to enable Bank Negara to obtain the sale proceeds to offset its foreign exchange losses and to fulfill the GOM's requirement.
Prior to agreeing to the purchase, Tajudin was convinced and assured by the then Prime Minister and Tajudin agreed that this was not to be a "takeover" in the traditional sense.
It was important for political and commercial reasons (including for foreign investment perception) and also in the National Interest that Tajudin was to be perceived as "taking over" the shares in MAS from Bank Negara through normal commercial share sale procedures and financing.
But the actual agreement between Tajudin and the GOM was different. Prior to entering into the transaction, it was agreed and understood between Tajudin, the then Prime Minister and the GOM that the acquisition would be subject to and conditional upon the Overriding Agreement.
Further, as part of the Overriding Agreement, after the immediate financial crisis at Bank Negara had been averted, Tajudin would be permitted to sell back the MAS shares to the GOM and be relieved and indemnified in respect of all liabilities which may have been incurred as a result of the initial purchase.
Tajudin was also assured by the then Prime Minister that he would not "lose out".
This was explained to Tajudin that if at the end of the day the task turned out to be "too big", the GOM would buy back the MAS shares and work out an arrangement in such a way that all Tajudin's financial obligations would be settled so that Tajudin could "return to status quo", i.e. with no liabilities in respect of any matter connected with or arising from or related to the purchase of the MAS shares from Bank Negara by Tajudin or companies connected to Tajudin.
Thus it was an express term of the Overriding Agreement that Tajudin would be indemnified by the GOM against all such liability aforesaid. It was only on express assurance from the then Prime Minister and the GOM and subject to the Overriding Agreement that Tajudin agreed to proceed with the purchase of the 32% shareholding in MAS from Bank Negara and enter into "commercial" and financial arrangements.
In keeping with the spirit and image of "Malaysia Inc.", it was essential for the public and the international investment community to perceive the entire transaction as a normal commercial arms length deal (which clearly it was not) and Tajudin was requested and until the filing of this Defence and Counterclaim has kept silent to maintain this image.
However, due to the position taken by Danaharta to sue him and the clear breach of the Overriding Agreement by the GOM, Tajudin has no choice now but to reveal the true Overriding Agreement.
Further, as part of the Overriding Agreement, as between the GOM and Tajudin, Tajudin was required to carry out the Public Duty in the National Interest and as part of his "National Service" to take on the task of heading MAS on behalf of the GOM.
To further emphasise the special nature of the Overriding Agreement, Tajudin was appointed, and at all times remained on the board of MAS as a nominee, servant and agent of the GOM, and not in his own right or as Naluri's nominee.
Due to the sensitive nature of the Overriding Agreement, Tajudin did not seek any written confirmation from Mahathir or Daim on behalf of the GOM. Tajudin had never known the then Prime Minister and the GOM to renege on any agreement before and had complete trust in the principle "my word is my bond". However, it should be noted that the GOM at all times maintained a "Special Share" or "Golden Share" in MAS, in recognition of the GOM's special rights and in recognition that Tajudin was acting as a Government nominee.
Throughout his tenure as a director and chairman of MAS, in keeping with his special role as GOM nominee, servant and agent, Tajudin was not allowed to manage MAS according to normal commercial terms but at all times reported to and abided by the decisions of the GOM on material matters, including but not limited to matters concerning the re-branding, livery, disposal of assets, restructure of human resources, policies involving domestic and international routes, passenger and cargo hubs, investments, etc.
Tajudin briefed and obtained the support of the then Prime Minister, cabinet and the GOM on all material issues before implementation and was not permitted to implement matters which were rejected by the GOM. Further, Tajudin also undertook not to sell any of the shares in MAS on the open market even if the share price was very high. This was because MAS was the "national carrier" and the airline was and still is one of the nation's strategic industries.
Following the Asian economic crisis of 1997/98, MAS performance was severely affected. At the same time, MAS critically required more capital injection to meet the loan obligations and working capital caused by the depreciation of Ringgit.
The loans taken by MAS were in foreign currencies (mainly US Dollars and Japanese Yen) as MAS was not allowed due to GOM restrictions to borrow in the Malaysian financial market. MAS's foreign currency loans were particularly onerous.
The GOM did not permit MAS to borrow in the domestic Ringgit market as MAS's capital requirements were such that local banks did not have sufficient resources to lend to MAS without causing a shortage of funds to other Malaysian borrowers.
The GOM therefore insisted that MAS should only borrow from foreign lenders and hence, MAS was particularly hard hit by the depreciation of Malaysian Ringgit at this time.
A substantial portion of the foreign currency debt had been incurred by MAS before Tajudin bought the 32% stake.
Neither Tajudin nor Naluri had sufficient resources to meet MAS's capital requirement. To address the said problem and after discussions with the GOM, and in accordance with the Overriding Agreement, the GOM agreed to repurchase the shares in MAS from Tajudin at RM8 per share.
The monies were paid to Naluri which by then had acquired the MAS shares as originally planned by Tajudin and the GOM.
It was also understood that Tajudin would be relieved of all personal liabilities and indemnified in accordance with the Overriding Agreement but the details were to be left to the bankers and corporate advisers to work out.
Negotiations to transact the aforesaid in accordance with the Overriding Agreement were handled by various parties, including Mahathir and Daim Zainuddin, personally and Tajudin understood that such negotiations were with the support and knowledge of the Cabinet.
Around this time, Tajudin had also been requested by the GOM together with other corporate leaders, to support the stock market and this required Tajudin and companies related and associated with him to invest substantial amounts which would otherwise have been used for their usual businesses.
This is another example of public service which imposed a heavy burden on Tajudin. Mahathir, Daim and the GOM and Tajudin received a huge amount of public criticism at the time, including from foreign commentators who were highly critical of GOM policies but Tajudin was requested at the time as a matter of national interest not to disclose the truth concerning the Overriding Agreement for the time being.
In accordance with the Overriding Agreement, the monies paid to Naluri for the shares in MAS were actually intended to discharge Tajudin's liabilities for the loans taken out to buy the shares in MAS and to constitute a full and final settlement of Tajudin's liabilities and it was agreed that details and exact arrangements were to be worked out by bankers and corporate advisers and Tajudin would be indemnified accordingly.
In hindsight, it is apparent from the events following the repurchase of the shares by the GOM, despite the periodic assurances of the then Prime Minister, that the GOM has by itself and through its servants and agents, including Danaharta and the Special Administrators consistently failed to honour and have indeed breached the Overriding Agreement on several occasions.

Sunday, May 28, 2017

Eyeing an automobile U TURN by someone

First Turn - June 13, 2014

June 13, 2014 7:00 pm JST

Mahathir seeks to turn Malaysia's Proton around with Geely's help

WATARU YOSHIDA, Nikkei staff writer
SINGAPORE -- Proton, founded in 1983 under the auspices of then 
Prime Minister Mahathir Mohamad, once enjoyed good sales as 
Malaysia's national car brand. But recent years have not been so kind. 
The semi-public automaker Proton Holdings has been struggling as 
local Malaysian consumers have shunned the car, namely citing poor quality.
     The carmaker has started to fight back. It recently appointed Mahathir 
as chairman, and it is working to clinch a deal with a major Chinese carmaker. 
Yet, there are doubts about how much the 88-year-old former prime minister 
can do to revive Proton.
     According to the Malaysian financial daily The Edge on Tuesday, 
Mahathir has reportedly said there is no need for government assistance 
for Proton. However, the company's domestic market share has plunged 
to about 20% from its peak of 50% in 2001. The government effectively 
requires that Proton be used for small taxi vehicles. Today, this policy 
is essentially keeping Proton afloat.
     Nevertheless, Mahathir appears determined to go without government 
help. In April, he flew to China with Syed Mokhtar Al-Bukhary, who runs 
the Malaysian conglomerate DRB-Hicom, which owns Proton. The two 
met with Chinese political and business leaders. According to local media, 
Mahathir at the time started crafting a partnership deal between Proton 
and Chinese automaker Zhejiang Geely Holding Group.
     In mid-May, he became Proton chairman after the company formulated 
a strategy for revival through a partnership with the Chinese carmaker. 
At the end of May, current Malaysian Prime Minister Najib Tun Razak 
acknowledged that the partnership negotiations were making headway.
A matter of quality
Specifics of the deal with Geely have yet to be disclosed, but Najib hinted 
at the possibility of Proton manufacturing Geely-designed vehicles.
     Proton's strongest selling point has been the low price of its vehicles. 
But, as one Malaysian woman in her 20s put it, Protons are low-quality, 
and this is keeping customers away.
     Geely owns Sweden's Volvo Car Group. Mahathir wants to use this 
connection to produce Protons that can measure up to global standards. 
He characterizes Protons as cars for the Association of Southeast Asian Nations, 
and envisions that the company will export its vehicles to rapidly growing countries 
in the region.
     Mahathir is looking both to recapture a dominant share in the domestic market 
and to raise Proton's profile globally. This mirrors the company's original strategy 
used when Proton was founded.

U Turn - May 25, 2017

Friday, May 26, 2017


As posted by Dr. Mahathir Mohamad at Che Det  
on May 25, 2017

1. Proton has been sold. It has been sold to foreigners.

2. They say Proton is my brainchild. Now the child of my brain 
has been sold.

3. Yes. I am sad. I can cry. But the deed is done. Proton 
can no longer be national. No national car now. We Malaysians 
are glad to be rid of this pesky car. I am sure Proton will do 
well. It will be a commercial success. It will be sold all 
over the world. The Proton name will be everywhere.

4. It will be like Singapore. Malaysians are proud of this 
great city-state. If it had not been sold it would be, perhaps, 
as well developed as Kuala Kedah or Kuala Perlis. Then we 
cannot be proud of Singapore.

5. Now we can be proud of Proton. With money and superior 
technology it will compete with Rolls Royce and Bentley.

6. But I cannot be proud of its success. I cannot be proud 
of the success of something that does not belong to me 
or my country. Maybe other Malaysians will, but not me. 
Come to think of it, if our country is sold to others, to 
the very rich people of other countries, I am sure our 
country will become well developed too. It can even 
be a fully developed country – exceeding the expectations 
of Vision 2020.

7. It will be a great country with super highways, 
high-speed rail (HSR), gleaming skyscrapers, shining 
new towns, beautifully landscaped and lighted. But 
I can’t be proud! Can I be proud to be living on the 
fringes of this great country so well developed by the buyers.

8. I will die soon. I am already beyond average age. 
And as I slip into my final years, or month or days, 
I will watch as our beloved country is sold to 
foreigners to settle the trillion Ringgits that we owe. 
We will have to sell more and more of our country.

9. What are our assets? Our land of course!! That was 
what we did in the past. We sold chunks of our country. 
We lost the land we sold. That is what we are doing now. 
And that will be what we will have to do – or forfeit 
our country; like we forfeit Proton.

10. Proton the child of my brain has been sold. 
It is probably the beginning of the great sell-out. 
The process is inexorable. No other way can 
we earn the billions to pay our debts. The only way 
is to sell our assets. And eventually we will lose our 
country, a great country no doubt, but owned by others.

11. I am a sissy. I cry even if Malaysians are dry-eyed. 
My child is lost. And soon my country.

12. Please excuse me.

Monday, May 15, 2017

Eyeing Joceline Tan's take on No consensus on PM candidate for the opposition.

Tun Dr Mahathir Mohamad has brought his star power to Pakatan Harapan but the coalition is not interested in having the 92-year-old leader as their candidate for Prime Minister. 
FOR a while, it seemed like Datuk Zaid Ibrahim had been reined in by DAP. He had stopped commenting on issues and his blog, which is a classic reflection of his man-of-letters reputation had become rather tame of late.
But this is one wild horse that cannot be domesticated and earlier this week, Zaid was back to his regular self.
During a dinner that was widely seen as a launch of his bid to become the next MP for Gelang Patah, he boldly proposed Tun Dr Mahathir Mohamad as the Prime Ministerial (PM) candidate for Pakatan Harapan.
That is a pretty bizarre idea but, nevertheless, the audience at the DAP event held in a Chinese restaurant near Skudai broke into applause.
Dr Mahathir and several top DAP leaders were also there and it was unclear whether Zaid had run it by his party bosses before making the announcement.
It is also a good thing that nothing in politics surprises Malaysian voters anymore because the dinner event signified the U-turns that Pakatan has become known for.
Azmin: Those who see him as PM material are gathering strength.
Azmin: Those who see him as PM material are gathering strength.
During the Hulu Selangor by-election in 2010, Dr Mahathir had campaigned against Zaid who was then with PKR but Zaid is now championing him for the coveted job.
In the 2013 election campaign, Dr Mahathir had asked voters to bury DAP leader Lim Kit Siang in Gelang Patah. But the pair are now holding hands to bury Barisan Nasional in the general election.
Dr Mahathir also won loud applause when he declared that DAP is not an anti-Malay party. That was another U-turn because he had painted DAP as a Chinese chauvinist party throughout his years in Umno. That evening also marked the end of any pretences that Lim may still defend Gelang Patah in the general election.
So much has changed in Malaysian politics, yet so little has changed in the way our politicians play politics.
Zaid has since elaborated on his Mahathir-for-PM idea in his blog, describing the former premier as the suntikan baru or new impetus for Pakatan Harapan and also a serious PM candidate.
He said there was only a small chance for Pakatan to win the election and that he regarded Dr Mahathir as the one factor that could make it happen. He urged Pakatan leaders to swallow their pride and persuade the elder man to agree to be the PM of the new government.
He was also aware that his Pakatan partners would not like it and he told his would-be critics, “If you don’t like it, you can lump it”.
Zaid: Ruffled feathers in naming Dr Mahathir for top job.
Zaid: Ruffled feathers in naming Dr Mahathir for top job.
The last time he pushed the parameters was shortly after he joined DAP when he declared Dr Mahathir as the de facto opposition leader, prompting an immediate telling-off from the DAP leadership.
This time around, there has been a chilly silence from the DAP leaders and which can only suggest two things – they are not into Dr Mahathir as the PM and they are upset with Zaid for stirring an issue they would prefer not to deal with for now.
DAP is a very hierarchical party and impulsive announcements on key issues are frowned upon, what more, coming from a new recruit.
But the question among a number of DAP leaders was whether there is a grand strategy behind the whole thing.
“What is his beef? What are the plausible motives? Is that all he can bring to the table to convince voters?” said one DAP politician.
They are wondering whether there is a hidden hand somewhere. Unlike Zaid who wants to put Dr Mahathir on a pedestal, the mainstay of Pakatan just want to use Dr Mahathir to split the Umno vote, to harass Datuk Seri Najib Tun Razak and to whack Umno.
They think Dr Mahathir’s best years are behind him, he has too much baggage to be their PM candidate.
Moreover, it is an open secret that Dr Mahathir is persona non grata with the Yang di-Pertuan Agong. The former premier has a problematic history with the Kelantan royalty. His name was struck off the guest list when the King was sworn in and he was not even on the guest list at the royal installation last month.
“There are more relevant issues to tackle first, like which party will contest in which seats, our common framework and manifesto and even our common logo,” said the above DAP politician.
The same politician said some DAP leaders also have doubts about Parti Pribumi’s commitment to the Opposition coalition and whether it will go back to Umno.
Well-placed PKR sources said Datuk Seri Anwar Ibrahim had recently expressed the same concern. One of the reasons why Anwar did not agree to naming Tan Sri Muhyiddin Yassin as the PM candidate was because he was unsure if Muhyiddin would go back to Umno after winning.
Dr Wan Azizah: To occupy hot seat till her husband can take over.
Dr Wan Azizah: To occupy hot seat till her husband can take over.
PKR deputy president Datuk Seri Azmin Ali, the man who brought Dr Mahathir into the Opposition, played it coy. He said Pakatan already had a PM candidate and the question of Dr Mahathir filling the post had never been discussed.
Actually, Pakatan’s official candidate has long been Datuk Seri Dr Wan Azizah Wan Ismail although the faction in PKR who see Azmin as PM material are gathering force.
The PKR president has been projected as the interim PM until Anwar is available to step in. The storyline is that upon winning, Pakatan will petition the King to pardon Anwar who will then contest a by-election and go on to become PM.
It is one of those magic bullet theories which as one PKR insider put it: “With the right statistics, you can make an elephant stand on a blade of grass”.
But it has not stopped the veteran Otai Reformasi group who comprise die-hard supporters of Anwar from trying.
Two days after Zaid’s venture to name Dr Mahathir as the PM candidate, the Otai Reformasi members gathered outside the National Palace to hand over a petition to free Anwar.
It was their way of saying that Anwar remains their choice for Prime Minister, a repudiation of Zaid’s proposal and a rejection of Dr Mahathir. This is the same group that had spurned and jeered at Dr Mahathir when he attempted to win them over at a political gathering two months ago.
“Our fear is another round of Mahathir, 22 years is more than enough. Our aim is to tell people that there is a leader up there and it is not Mahathir,” said an Otai Reformasi member from Terengganu.
How important is it to have a Prime Minister candidate? It is not absolutely necessary but it would be like a calling card to show you have someone with the credibility and know-how to run the country.
Every political coalition needs a unifying figure. Anwar was that figure in 2013, he was a sort of primus inter pares, a first among equals in the Opposition coalition.
The Barisan side has an established convention where the president of the party with the most seats gets the job. Pakatan has yet to develop such a consensus on the top post.
At the same time, many in Pakatan are unable to accept that the party which has only one MP is laying claim to the premiership. They prefer to settle for Dr Wan Azizah while peddling the storyline that Anwar will be freed, pardoned and installed as PM.
Dr Wan Azizah has shown strength and dignity throughout her husband’s trials and tribulation but she is not of PM material.
Malaysia, said a political consultant, has a RM1.3 trillion economy that is the fourth biggest in Asean.
“It is not a question of gender, it’s a big job where you need to be ready from day one,” said the consultant.
It is only natural that Parti Pribumi regards itself as the party with the PM candidate – their chairman was the country’s longest serving PM, their president was the Deputy PM and their deputy president was a Mentri Besar.
But PKR also has a former Deputy PM as well as a sitting Mentri Besar, namely Azmin, who has an approval rating of over 60% in Selangor.
“Being Mentri Besar of Selangor is like being the Governor of California. In fact, it is even more complex because you have to deal with issues of race, religion, big business and the palace. Anyone who can survive all that has the potential to be PM,” said the above political consultant.
The fact that Pakatan seems unable to accept Azmin as a PM candidate speaks of the cracks between the two parties with the numbers to call the shots.
DAP has issues with Azmin. A lot of it has to do with his hard-nosed approach in the negotiation for seats in the last two general elections. The fissures deepened after the divisive Kajang Move and the Sarawak election where DAP and PKR contested against each other.
It is widely known that DAP’s Selangor chief Tony Pua and Azmin do not get along.
When DAP proposed lawyer Dr Aziz Bari as a councillor in the Ampang Jaya Municipal Council, Azmin used his Mentri Besar clout to block the appointment. The talk was that the Selangor palace had issues with Dr Aziz who criticised the palace resistance to having Dr Wan Azizah as the Mentri Besar.
But it is more likely that Azmin smelt a rat somewhere. Azmin suspected the councillor post was a stepping stone, that DAP was grooming Dr Aziz as their Mentri Besar candidate and his killer instinct took over.
Moreover, Azmin is said to work well with Datuk Teng Chang Khim, a senior state exco member from DAP who is known to be in a different camp from Pua.
Pakatan leaders are annoyed at Zaid for reviving the PM issue which they have likened to trying to reboil a hard-boiled egg. They want to leave the matter on the back-burner and to cross the bridge when they come to it.