Having more assets in value over liabilities does not necessarily mean a company is solvent

PM and Finance Minister Najib seems proud to state that 1MDB has assets worth over Rm51 billion while liabilities total only Rm49 billion, and it follows that the company should have no problem as a going concern.

It is unlikely that after many years as a senior political leader as well as current PM and Finance Minister, he has yet to understand basic accounting statements. It is more likely to fool the public that 1MDB can still meet its financial obligations arising from its huge loans.

To use a simple but kind analogy, it is like living in a valuable house with no income to pay for daily food and drinks. But with the humongous loans, it is more like living with constant fear of loan sharks coming for their dues.

A company is considered technically insolvent when its current assets are less than its current liabilities, because it will fail to pay all liabilities due within a year. Unless it has fixed or other assets which can be sold to meet the shortfall, it cannot be a going concern for long.

1MDB is basically in such a situation or even worse. That it has to rely on selling prized assets to settle loan obligations due, shows its desperate situation despite all the brave fronts put up by its CEO, our PM (who created this big financial mess), and his sycophantic ministers and party leaders.

To know that the assets were practically given by the government and were revalued again and again to cover up shortfalls in earnings, again shows their vain attempts to temporarily fool the public, until the situation cannot be contained and some lands had to be sold.

In the first place, the government should have sold the lands to the highest bidders from the private sectors, instead of trying to create a high profile sovereign wealth fund, and having to face severe criticisms in trying to solve the mess, with likely abuses of powers in doing so. The sale proceeds, had those lands been sold to the private sector, could have been used for building hospitals and schools, instead of paying off huge loans created dubiously. Now, it looks like 1MDB was created with intent to defraud, because of the unsatisfactory explanations given on some missing funds.

Under intense pressure due to loan interest and repayment obligations, PM and his aides will have to spend precious time in trying to help out, using whatever necessary power and influence to save his personal pride and position as PM.

According to E.S. Shankar, who blogs under 'donplayuks' (using thinly disguised pseudonyms but leaving no doubt who and what he was referring to):

'To put it simply, as at 31st March 2014, 1GDB had RM51.4 billion in assets - cash and "investments" - AND RM49 billion of liabilities in bonds, bank borrowings, derivative debts and trade and other creditors. The surplus of net assets audited and reported were therefore RM2.4 billion (51.4 - 49), represented by RM2.4 billion of capital and reserves.

However, the RM2.4 billion in capital and reserves is inflated by RM3.6 billion of paper profits from revaluation of 1GDB's land bank. If we remove this window dressing, 1GDB's assets would be reduced to RM47.80 billion, i.e. by matching original cost of assets with current liabilities. In other words, its liabilities would exceed its assets by RM1.2 billion (49 - 47.8).

More than that, there is a huge probability that a significant portion of 1GDB's "investments" financed by the RM46 billion borrowings, are showing huge permanent loss in values that cannot be salvaged.

So, the real net asset value of 1MDB, due to gross mismanagement, CBT, fraud and looting, may be negative RM30 billion!!'

More:
http://donplaypuks.blogspot.com/2015/05/pm-grossmajib-1gdb-rm51-billion-in.html
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How big is half a football field?

A football field can vary from 45,000 sq ft (100 yds x 50 yds or 300 ft x 150 ft) to 117,000 sq ft (130 yds x 100 yds or 390 ft x 300 ft)! So half a football field can range from 22,500 to 58,500 sq ft.

Yes, this has to do with the land sold to Tabung Haji by 1MDB, which had been described as 0.64 hectare or loosely described as 'only half a football field' with graphic to emphasize the point. For using the same description, I was corrected by a Zul who was upset because I missed and did not publish his earlier comment in this blog.

I did a quick search and honestly, I am none the wiser because the few sites I visited gave a range of sizes.

Since I am more used to the old measurements of 'acre' and 'sq. ft.', I have to convert from hectare or avoid using metric measurements.

0.64 hectare is equivalent to 68,889 sq ft; and 1 acre has 43,560 sq ft. Therefore, 0.64 hectare is equivalent to 1.58 acre. When compared with the smallest football field, it is just over one and a half football field (1.53); but when compared with the biggest football field, it is just over half a football field (0.59).

So, on the one hand, Zul is right to be upset, but on the other, the person who used that description is also not wrong, if based on the largest football field.

For those who are interested to find out more:

'Find out the size details of a football pitch.

Did you know that not all pitches are the same size?
The length of a pitch must be between 100 yards (90m) and 130 yards (120m) and the width not less than 50 yards (45m) and not more than 100 yards (90m).
And what about where most of the action happens - the penalty box?

It is also known as the 18-yard-box, with the smaller area - marked out inside it - called the six-yard-box.
This is where some of the world's best strikers earn their living.
And for all you penalty takers - or savers - out there, the most famous spot in football sits 12 yards (11m) from goal.
Last, but not least, that wooden thing at each end of the pitch they call the goal.
Think you know how big it is? It's eight feet high (2.44m) and eight yards wide (7.32m).'

Source:
http://news.bbc.co.uk/sport2/hi/football/rules_and_equipment/4200666.stm

More links:
http://www.sportsknowhow.com/football/field-dimensions/football-field-dimensions.html

'For international matches the field dimensions are more tightly constrained; the goal lines must be between 64 and 75 m (70 and 80 yd) long and the touchlines must be between 100 and 110 m (110 and 120 yd).[3] In March 2008 the IFAB attempted to standardise the size of the football pitch for international matches and set the official dimensions of a pitch to 105 m long by 68 m wide.[5] However, at a special meeting of the IFAB on 8 May 2008, it was ruled that this change would be put on hold pending a review and the proposed change has not been implemented.[6]'

http://en.wikipedia.org/wiki/Football_pitch

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J. D. Lovrenciear laments, 'nothing is now making any sense anymore'

1MDB makes a fool of every citizen, institution including Parliament 

'The latest revelation by Bank Negara Governor is spine chilling. Hot on its heels we also learn that the two top guns of 1Malaysian Development Bhd (1MDB) snubbed the Public Accounts Committee (PAC) by asking for a 30-day grace period.

And if that is not enough the Prime Minister Datuk Seri Najib Razak hollers all the way from Japan that the duo will not run away and will keep their date with PAC.

Add to that the fact that the head of PAC actually granted the 30-day grace to the duo.'

- See more at: http://www.themalaysianinsider.com/sideviews/article/1mdb-makes-a-fool-of-every-citizen-institution-including-parliament-j.-d.-l#sthash.zktRJipt.dpuf

In my humble opinion 1MDB has all the ingredients of a con job, but just because it was initiated by none other than the PM cum Finance Minister, it could override any of the rules of our institutions which are meant to prevent such fraudulent activities.

PM is the highest authority in Malaysia, so who else can we turn to? Not even his former mentor, Tun Dr Mahathir could control him now. Being forced into a corner, Najib has broken his long elegant silence by openly attacking Dr M's past mistakes and need for his support when challenged by Tengku Razaleigh. With Anwar Ibrahim safely behind bars in Sg. Buloh, and with the help of Home Minister and IGP in enforcing the law under Sedition Act and OSA, any potent protest could be nipped in the bud. Even if the judiciary appeared to be partial in their judgments, any criticism could be considered seditious.

1MDB started with only Rm1 million capital, yet it could borrow billions because of guarantees provided by government. It was given choice lands at very low prices which could then be revalued to cover shortfall in earnings, as well as sold at market price, at short notice, to a trust fund so that it could meet an imminent payment on a loan. That 100% of selling price was paid upon signing S&P Agreement was unusual. Other dubious deals include equity converted into loan to avoid external auditors' queries, and cash transferred to a bank in Singapore was transformed into 'assets' and then 'units'. Auditors were changed twice within 5 years. The silence from the relevant authorities was deafening.

Yet, the former and present CEO of 1MDB could avoid being present at a PAC meeting, and allowed a delay of 30 days! If everything had been above board, why the necessity to need so much time to answer to PAC?

To everyone else, 1MDB was a big mistake, but to Najib, he has to salvage his pride by using all his powers to save the company from bankruptcy. It is going to be use of good money after bad, and the 11th Malaysia Plan is just the means for him to do so.
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Understanding the role of the external auditors

'The argument that because 1MDB's accounts have been signed off by auditors meant that no fraud has occurred and that money was not missing is flawed. It shows that these people do not know what they are talking about.

They have badly misinterpreted, deliberately or otherwise, the role of external auditors and they do not understand the meaning of an auditor's report when the auditors sign off the financial statement of a company.

There are no auditors in this world who will agree that their signing off on an account can in any way or form be interpreted to mean that they confirm or guarantee that the accounts are completely true, accurate and do not contain any misstatements, by fraud or error.'

- See more at: http://www.themalaysianinsider.com/malaysia/article/why-auditors-cannot-guarantee-there-was-no-fraud-at-1mdb#sthash.AvPRQz8A.dpuf

'According to The Edge, EY withdrew from the audit because it was unable to get a satisfactory explanation and gain access to information on the joint venture, particularly the US$700 million loan.

When KPMG completed the audits, it was found that the status of US$1.2 billion had changed from equity capital to a loan to PetroSaudi Holdings in the form of Islamic Murabaha notes, which guaranteed an 8.7% annual return.

Citing accountants, The Edge said the equity capital was changed to a loan so that 1MDB’s auditor need not scrutinise how the money was used.'

'If it had remained as equity capital, KPMG would have insisted on seeing evidence of the money, how it was used and why the US$700 million debt was charged to the joint venture.

But as a loan to an external party, it only required a copy of the loan agreement with PetroSaudi Holdings.'

'2010/2011

After the joint venture fell through, 1MDB lent PetroSaudi Holdings another US$500 million in 2010, and another US$300 million in May, 2011, for reasons it has never disclosed.

The total 1MDB had lent to PetroSaudi Holdings was now US$2 billion – money which 1MDB itself had borrowed at a high cost.

This prompted The Edge to question 1MDB’s actions, given that its mandate was never to act as a lender of cash.'

“One can only surmise that it became a lender in order for its audited accounts for FY March 31, 2010, 2011 and 2012 to be approved without qualification, and without having to show to KPMG that it was in control of the money,” said The Edge.

'Meanwhile, the audited accounts for the financial year of 2013 were delayed by a year because KPMG declined to continue as auditors and was eventually replaced by Deloitte.

Deloitte promptly qualified all of 1MDB’s RM13.9 billion of “investments held for sale”, including its shares in the Caymans, as Level 3, the lowest of three levels of assets in the fair value accounting hierarchy.

The Edge said 1MDB was awarded that level because there was no openly and transparently obtainable verification of the fair value of the assets.'

“What can be surmised from the events of the last five years is that 1MDB kept entering into deftly structured transactions timed to avoid vigorous scrutiny by its external auditors about the money,” The Edge said.

“And although it claims to have made gains of US$488 million from the original sum of US1.8 billion, it is not wrong for us to ask it if is just a case of being paper-rich, but cash-poor – that is, are the figures mere accounting entries not fully backed by cash or liquid assets?” – March 1, 2015.

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We thought we had the last straw... but is there going to be a tipping point within Umno?

With open attacks from ex-PM for 22 years who seems to have much respect and influence, followed by some former and present Umno leaders, Najib is still holding the most powerful position. Looking back, Tun Dr Mahathir's legacy seems not to be helping him remove Najib but in helping Najib stay on. Such is the advantage of incumbency. Umno Baru was Tun's creation and he holds membership No.1, but he gave up membership before and rejoined after Pak Lah agreed to leave. But I don't think this is going to make any difference when dealing with Najib, who seems to be under the delusion he is fighting on as a Bugis warrior!

Unlike Pak Lah who was too sensitive to direct insult, Najib seems immune to all kinds of criticisms and insults. So now it is either up to the 191 division leaders (a.k.a. warlords) in Umno to remove him, or the MPs in Parliament to provide a 'No confidence' vote, or wait until the next General Election in two or three years time.

It is obvious to many that Najib is now depending on those who depend on him for positions and opportunities for enrichment, and not necessarily the grassroots in the party. We should not take statements of support as true support because since the division leaders were last elected, the situation has changed.

We have to put up with many lies in the form of public statements by PM and other ministers, but the mother of all lies was when the cash from Cayman Islands becomes 'asset' in the form of 'units'! What a transformation via one of PM's endless possibilities!
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Bukit Beruntung must be one of the most misnamed townships

Literally, in Malay, it means 'Profitable Hill'. The big project, which must have been created out of a cosy relationship between developer and the former BN state government, is believed to have caused the developer's downfall and financial ruin. Years later, the company had to be rehabilitated  with help from the Selangor government.

At the time, the hype was that the new airport will be built nearby. But as it turned out, instead of north, it went south of KL. The impact of this major mistake in guessing the location of KLIA also caused the failure of another major project, Lembah Beringin. I can still remember the advertisement over the radio when I used to drive along NSE, which boasted that the landscape budget alone was over Rm100 million and the distance is only 36 minutes from KL! Even a dedicated entrance/exit from NSE did not help the Lembah Beringin project and the listed holding company was later taken over by a HK magnate.

Bukit Beruntung's failure was a classic example of how the location (and its reputation) of properties is so important. It could mean success breeds success or the reverse, a vicious cycle of bad reputation in terms of security, which leads to low occupation rates and low rentals, and inevitably causing property prices to drop drastically. Even free rental could not attract occupants because of many cases of lawlessness: robberies and even iron grilles were stolen.

After so many years, it is surprising that efforts to revive the place were unsuccessful, especially now that people are crying out for affordable housing in nearby Klang Valley (KL and PJ).

The latest statement by MB of Selangor seems to suggest a lack of cooperation and coordination between Selangor State and Federal governments.
http://www.themalaymailonline.com/malaysia/article/bukit-beruntung-azmin-makes-federal-government-an-offer

To my simple mind, the source of the problems seem to be security, followed by transportation, and once these twin problems are solved, the rest (purchase, rental and maintenance of properties) will follow and take care of themselves.

What is needed is a conspicuous presence of the police or even army personnel. This could be in the form of training camps or whatever necessary to have them there. There must be continuous police presence with beat bases which can prove their effectiveness in handling complaints promptly and efficiently. The place must be well lighted and if possible, with CCTVs at strategic locations.

Ideally, transportation can be served by connecting to the nearest railway station, complemented by efficient transit bus services. The rail service is under Federal control while the latter can be provided by Selangor state. For immediate results, bus services can be opened to willing operators who can provide them.

The house and apartment prices in Bukit Beruntung are so low that they are at 'a steal' prices or 'going for a song'. Present owners are just waiting for the right moment to do up their properties for either own occupation or for rental. There must be many prospective purchasers waiting to buy just before any improvement to the present dire situation.

State government could throw in some incentives like waiving outstanding assessment bills and/or lowering the rates of assessment for a limited period. Industrial lands should be encouraged with incentives to be developed. With cheap lands or factories and safe hostel accomodation for their workers, wouldn't industrialists be tempted?

Paint companies could even be encouraged to sponsor their paints to repaint public properties, in competitions or as part of their advertising expenditure.

I am sure there are many other good ideas which the public can contribute once the State  or Federal government takes the initiative, to be followed by concerted efforts by the relevant stakeholders.

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How 6% GST on prepaid phone card shows our government still favours the big boys

Before: 6% SST was included in those prepaid cards which meant the telcos paid over to the government, 57 sen for every Rm10 sold (6/106 x 10) and the public got Rm10 worth of calls. Was that correct? Why do I get the nagging feeling that we actually got Rm9.43 worth of call instead of Rm10? This especially so with the current statements and corrections which seem to confuse the public, but at the end, the aim is to shift burden to the public.

This is because the relevant ministry seems to make a big deal now that we will be getting Rm10 for every Rm10 paid.

When GST came into effect on April 1, 2015, the burden was conveniently pushed from the telcos to the public: Rm10 prepaid costs Rm10.60. There was understandably public outcry over this. Then Deputy Minister, Ahmad Maslan said it would be for only 1 month and the situation will be reversed back to the old system of having telcos absorbing the GST (used to be SST). Then even PM had to intervened and declared that only the Minister can make public statements on this.

Basically, whether the Rm10 prepaid included GST or is worth Rm10 of calls, the burden will be shifted to the public and this has been confirmed by the Minister.  In other words, either we had been getting only Rm9.43 worth of calls before (even though we appeared to get Rm10 worth) or we are still getting the same Rm9.43 despite the claim that we are getting Rm10 worth for every Rm10 paid. Otherwise, it is impossible that the telcos could shift the burden and yet able to provide the full Rm10 worth, unless there is some adjustment to the rate of charges.

Now I am not even sure if this headline allegedly based on what Minister Shabery Cheek said, 'Prepaid mobile credit - GST free unless you call' is genuine, coming from a site Fake Malaysia News. Honestly, I cannot keep up with checking everything as to whether it is real or fake.
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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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