1MDB epitomizes bad governance

A so-called sovereign wealth fund, created out of just Rm1 million seed capital, added with government-sold (almost like given) cheap lands, used as collaterals for huge loans, which are supported by government guarantees.

After just a few years, it is evident that certain things just cannot be fast-tracked despite all the special treatment given by relevant government departments because the company is headed by none other than the PM cum Finance Minister himself.

Suspicious deals include buying a power plant which is nearing its end of concession period at a higher than market price. No doubt, with special treatment, getting extension of concession is a piece of cake when you know who rather than having know-how. But in finance, the most basic involves cash-flows and anything negative cannot be sustained for long without creating hiccups and requiring quick funds to at least take care of interest due periodically. Before long, we find the company in the proverbial situation of having only 9 covers (or even less) to cover 10 pots.

Its use of tax haven to park its funds and deliberate avoidance of Bank Negara controls only add to creating more rumours and suspicions. The lack of transparency plus the conflicting statements  to put up a front that 'everything is well and good' only create the impression that it was covering up one lie after another.

Desperate situation requires desperate measures and thanks to investigative journalism and the internet, we were privy to private and confidential documents proving one wrongdoing after another, with the relevant authorities silent on major breaches of the law. Of course, on the basis that all those accusations were lies, they need not do anything. The police seems super efficient (led by the super twit) in monitoring all tweets, internet postings and comments. Anything that could possibly harm the good name of the PM, Rosmah and 1MDB will see the messenger in police remand and enjoy their hospitality of wearing purple uniform, hand-cuffed and bare-footed, with free publicity in the mainstream media.

The system of political patronage is now out in the open, with Umno divisional leaders known to be heading one GLC or another, as reward for supporting the PM. Now that the PM is in want of support, they are only too glad to show theirs so that they can continue to be in highly paid positions which also provide opportunities to enrich themselves.

Not only that, the recent purchase of land from 1MDB by Tabung Haji revealed at least 4 persons in positions with conflict of interest. They were trustees as well as advisors or directors of TH and IMDB respectively. They could well be in positions of conflict of interest without anyone knowing, until the exposure of the actual land purchase. This particular deal must be the last straw which tests the patience of the Malays. TH was established to provide an opportunity for ordinary Malay Muslims to save for their pilgrimage. It is surprising how small amounts from a large population could build up a formidable fund worth billions.

The transaction which saw a piece of land (half the size of a football field) bought by 1MDB for less than Rm100 psf, was sold to TH for almost Rm2800 psf! The exceptional appreciation over a period of 4 years serves to prove the special treatment given to 1MDB. Why is it so special to be practically given the land and why must TH made to buy the land even if it is considered fair market value now? The fact that TH paid for it in full (unlike the usual 10%, followed by 90% upon completion) only prove to show how desperate 1MDB was to get the money in order to pay off an amount imminently due on a loan.

The outcry from the Malays was quick, especially with some withdrawing their savings immediately after the rumours, and effective, because the PM cum Finance Minister actually instructed that the land be sold by TH to a third party! What are the implications of such actions?

Firstly, did the PM give the instruction to TH to buy or at least knew about the decision to do so? The fact that he could now give instruction to sell could only mean that he has the power as well as the intention in the first place. The Chairman of TH (an Umno division head) actually denied that there was such a deal, why?

With such great powers, surely the PM cum FM could actually reverse the deal instead of selling the land so soon after buying it. I can see RPGT at 30% on the expected Rm5 million gain, as well as at least 5% on the huge gain when 1MDB sold the land. The reason could be so simple ie. that any subsequent sale by TH is of no concern to 1MDB since they received the required sale proceeds needed to pay interest due. Had the deal been reversed, any further delay in finding a buyer could mean default on loan repayment which could set off a chain reaction of defaults.

Before the dust settled on this TH deal, there are already rumours of KWAP (pension fund) being in another purchase of 1MDB land.

What happened to 'leadership by example'? Having witnessed all the breaches of the law involving 1MDB, people would be cynical about law and enforcement in Malaysia. While the ordinary people are subject to strict law enforcement, some favoured ones are able to break the law with impunity.

By the way, there was a suggestion recently that a state or parliamentary candidate standing for election must have a credit in Bahasa Malaysia. While the suggestion makes practical sense, I would prefer anyone who has the passion to serve the public, has high integrity as well as possesses what it takes, when appointed to hold public office.

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Our camel is either more resilient or not really tested

What could be the last straw which would break the camel's back was not to be. No scandal, however big, can stick to our PM Najib. It is like water running off a duck's feathers. We thought ex-PM and also ex-mentor of Najib, Tun Dr Mahathir could force Najib to step down. But instead Najib broke his long elegant silence with a direct attack on his former mentor who had been relentless in his open attacks.

'Datuk Seri Najib Razak sounded a defiant note today to pressure to step down as prime minister, saying he will remain in the job with support from Umno and trust from the people.'

'"Was he (Dr Mahathir) not tested? There was the test of Team A and Team B, (where Dr Mahathir) almost lost. More than 50% of Umno members back then demanded for his resignation. What was his reply? "Even if I win by a single vote, I will continue to be the prime minister. A great answer.

"In 1987, I was one of those who supported him. He remains the PM because of what? It is because we (Umno members) were together even in hardship. When he was faced with hardship, we give our support to ensure that he stayed (in power).

"If we did not support him in his time of need, Dr Mahathir would not have stayed on for 22 years as the PM," he said.

"So, do not forget, when he was the PM, we gave him our full support... Now that he is no longer the PM, support us in return.

"Don't make noise even if not so supportive," he said.

- See more at: http://www.themalaysianinsider.com/malaysia/article/defiant-najib-says-will-remain-pm-with-party-public-support#sthash.KcZsySUP.pmG4XrV6.dpuf

In my humble opinion, I would blame the system which decides on who can be PM. As long as majority of 191 Umno division leaders are kept happy, he remains as PM... regardless of Umno members or the public. MCA, MIC and other component parties are never consulted where this is concerned, let alone the public. Silent majority is often taken for granted as consent.

Some people say Najib is more afraid of facing Rosmah if he lost his position than facing the wrath of Tun Dr Mahathir.

The weakness of Westminster model of democracy is to be blamed for a government decided by a majority in Parliament and not by popular vote. We all know how BN obtained 133 seats out of 222 (60%), with just 47% of total votes. In the recent UK general election, the Conservatives under David Cameron won 330 out of 650 seats (about 51%) with just a third of total votes. It surprised most people because they expected a neck-to-neck competition between Conservative and Labour. As it turned out, Scottish National Party gained 50 seats, almost all at the expense of Liberal Democrat (-48), mainly because of Scotland's secession issue as well as whether UK should remain in European Union.

We have something similar in secession issues with Sabah and Sarawak, which support were taken for granted as 'Fixed Deposits' by BN. That Najib broke his silence in the company of Sabah Umno shows the importance of their continued support to his tenure as PM.

We shall see how things will eventual pan out, as some leaders decide on their loyalty, which might make or break their own political careers.


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Will this be the last straw to break the camel's back?

No, I'm not referring to the sex on camel example which is hardly appropriate in Malaysia where camels are only found in zoos. 

But this figure of speech has to do with indefensible conflict of interest involving trustees of Tabung Haji (Pilgrimage Fund) who also serve as advisor or director of 1MDB, or its subsidiary. As Sarajun Hoda puts it, 'The betrayal is in collosal proportion. This is najib's value system. He puts rats to look after cheese.'

                                       Pic from Facebook, courtesy of Sarajun Hoda

According to J. D. Lovrenciear in Malaysia Chronicle:

'How best can we describe a business or investment entity that buys some 70 acres of prime land at below RM100 per square foot and then re-sells it within four years to a body corporate that is a trustee for public (religious) funds at a sweet song of over RM2,000 per square foot?
Business marvel? Brilliant accomplishment? Or is it bordering on ugly profiteering and scheming?
We seem to be losing all our ethical bearings these days. When a retailer hikes his ‘bawang’ and ‘halia’ by a few sens a kilo to make RM30 extra earnings for the day, the government’s enforcement arm will swing into action and the news makes headlines in the muzzled main stream media the next day.'

'And to get Tabung Haji’s property investment arm to pay such a sinfully high price and then get them to justify the action by stating that 1MDB even gave them a decent discount on the going ‘market value’ is like committing two sins to cover one sin really.
And on top of that, we now have even the vanguard of citizens’ safety and security, the cops, threatening to take action on the whistleblower under the Official Secrets Act on this mother-of-all exposes.'

Full article: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=508321:1mdb-rocks-umno-to-the-core-endless-possibilities-for-najib-family-but-ugly-profiteering-scheming-to-others&Itemid=2#ixzz3ZcCF4jL5 

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Both by-elections show BN losing support

Results of the by-elections in Rompin, Pahang on May 5, and Permatang Pauh, Penang on May 7 were as expected with BN retaining Rompin and PKR retaining Permatang Pauh. But taking into account the lower turnouts, it cannot be denied BN's majority was cut by almost half in Rompin while PKR's majority was only cut marginally.

At a time when Najib was counting on showing his popularity, both results were not only disappointing to him, but reflected the voters unhappiness over his handling of the latest issues: GST, 1MDB, and so on.

The usual tricks of election like uncanny coincidences in allocation of development funds during campaign periods; use of government-controlled mainstream media in splashing bad news on the opposition and good news of BN; perceived harassment of opposition leaders; and even a case of someone having voted instead of a senior citizen, failed to work.

Dr Wan Azizah's repeat candidature in Permatang Pauh as a result of her husband Anwar Ibrahim's imprisonment had been described as 'taking the voters for granted' or 'fooling with the voters' and even as 'family business' or calling her 'a grandmother' did not help. Surely the voters knew the circumstances and understood that they were just reacting to injustice perpetrated by the powers that be, each time sabotaging their plans. What else could they do but to fight on and not surrender to harsh injustice?


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Unnecessary confusion over GST on prepaid phone charges

What could have been a simple decision becomes confusion over indecisive and conflicting statements by a Deputy Minister and a Minister which required PM's instruction that only the Minister could make further statements.

Under the previous Sales and Service Tax (also at 6%), it was absorbed by the phone companies like Digi and Maxis, which means the amount charged to the consumers were inclusive of SST and presumably, the tax was duly remitted to Customs department. It was convenient to the consumers in terms of Rm5, Rm10, Rm30 and so on.

It could have been easy to replace the SST with GST, especially when the rate remains the same at 6%, with a mere change in name of the tax to existing accounting systems, so that the bill shows GST instead of SST.

Somehow, some people must have tried to shift the cost of the new GST to the consumers instead and since April 1, any top-up, say Rm5  was charged Rm5.30 (+ 6% GST). Why the change to add on the GST if not for the fact that the consumers are to bear the tax instead of the phone companies? It was confirmed by the Deputy Minister and since the public outcry, he promised it would revert to the old system with the companies absorbing the tax. Since then, there was disagreement over this between the DM and M and the policy remains that the tax will be borne by the consumers and DM had since denied he had promised to revert back to the old system.

In terms of value, 'sidikit sidikit, lama lama jadi bukit' seems appropriate, as a minister announced that the government would lose Rm800 million if it reverts back to the old system. How could this be when in the past, the phone companies would have paid their dues to the government, and they could be doing the same without burdening the public? The government would only lose out if the decision was to make it zero-rated instead.

No wonder some people have accused the government of siding the big companies instead of the common people, a case of 'robbing the poor to feed the rich few' or a reversal of the legendary Robin Hood's policy.

The minister just made a statement that he would be consulting the affected parties to come to a solution, describing it as not straightforward. As I can see it, there might be problems with the dealers, sub-dealers and sub-sub-dealers, with the latter two not even having legal status due to the informal arrangements. Why should the minister be concerned with sub-dealers who got into the act to make some money and they could be losing if they made a wrong decision because of any change? Motorists have been speculating on fuel prices since the decision to change prices every month subject to oil prices.
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