Crony life-support system

Who benefits from Dr. M's corporate triage?Amid the generally warm feelings about Malaysia's economic recovery,the regrouping of Malaysia's corporate cronies is a chilling, but alltoo familiar, sight.As happened in the aftermath of the 1985-86 recession, cronies andcorporate proxies of Prime Minister Mahathir Mohamad and FinanceMinister Daim Zainuddin again are scrambling to position theirbeleaguered business groups to catch the economic growth wave andstock market boom. Meanwhile, calls for a major restructuring toincrease regional and global competitiveness go unheeded.So, while the lessons of the last crisis should be still fresh, theyare being quickly forgotten. The same vulnerabilities are beingcreated as Mahathir and Daim rush to reenergize their corporatepatronage network. And there remain some variables capable of trippingup Malaysia's nascent rebound -- capital controls and politicaluncertainty being among the most hazardous. In an economic sense, thegovernment is asking for trouble.But, having received special treatment from regulators and billions ofringgit from bailout agencies for the past two years, politicallyfavored groups and cronies will be the first to capitalize on theimproved economic environment. Their political patrons wouldn't haveit any other way.There are, however, some stark differences between the currentpolitical and corporate landscape and that which prevailed in the mid-to late-1980s. These differences will make it easier for Dr. M, Daimand their cronies to command a bigger cut of the growth pie and tosafeguard their corporate gang.Office of prime minister has never been more powerfulFirst of all, the office of Malaysia's prime minister has never beenmore powerful and all encompassing. Not only does every buck stop atMahathir's desk, but just about every federal buck in his vastpatronage machine leaves from the very same desk. This wasn't the casethroughout much of the '80s, when Mahathir was still in the process ofconsolidating power under the executive branch of government andeliminating real and potential political rivals.Secondly, the New Economic Policy, despite the many stabilizingbenefits it brought to Malaysia, set in motion a formidable patronagenetwork among the Malay majority and the subsequent Malay-Chinese(otherwise known as Ali-Baba) business partnerships. The mechanics andagencies used to implement the NEP have, over time, given the UnitedMalays National Organization (UMNO) unparalleled dominion over theeconomy.Dr. M, an early and ardent fan of the NEP, accelerated UMNO's and theexecutive's encroachment into the economy as Deputy Prime Minister andthen as Prime Minister since 1981. But it was Mahathir's broadprivatization policy, initiated in 1983, that eventually establishedhim and Daim as the chief auctioneers of state assets and services,giving them a level of unrestrained patronage and political muscle tosecure their power through the dispensation of business privileges andcushy corporate posts.By the latter half of the '80s, Dr. M's "piratization" program, ascritics soon dubbed it, had gathered enough momentum to crush thepolitical fund-raising sources of his erstwhile opponents. As withmost of Dr. M's best-laid crony plans, however, his privatizationprogram hasn't avoided snags, the PRT monorail, Bakun Dam and IndahWater Konsortium being only a few of the most visibly troublesome.Could it have been otherwise? They're cronies, not seriousbusinessmen.Thirdly, Dr. M has eviscerated the few remaining institutions thatmight have been able to restrain his grand scheme to rule Malaysialike no premier has before. (And, fM hopes, never will again.) Theseinstitutions were the judiciary, the royalty and the civil service.This took some time. In fact, it is only in the past few years thatMahathir has been able to suppress the lingering vestiges ofindependence in some of these institutions.In short, Dr. M these days is unlikely to be legally challenged overone of his unethical or corrupt privatization schemes, as he was inthe 80s, when he awarded the North-South Expressway project toUMNO-owned United Engineers (M) Bhd. Likewise, Mahathir has all butensured that he will never face an impartial judge and run the risk oflosing a legal verdict, as he did on several occasions in the 80s.(Certainly, Dr. M's sacked, beaten and framed former deputy premierand ex-heir apparent, Anwar Ibrahim, can testify to the judiciary'scurrent bent.)Dr M's main threat is a internal political oneAnd you can bet that Dr. M won't hear a querulous peep fromMalaysia's long-pampered royalty. After being clobbered by Mahathir inevery confrontation, they are through tangling with Malaysia's firstcommoner king.So, Dr. M is now far better able to take whatever measures arenecessary to protect his corporate coterie. Mahathir needs to keep itintact to ensure his power base. And, as fish out of water in thereal, competitive business world, the cronies who make up his coterieneed his protection and support just as badly.With the May UMNO party elections, a political challenge remains areal possibility. However, Mahathir's potential UMNO rivals aren'tlikely to make a big fuss about the ongoing corporate shenanigans andregulatory irregularities as Dr. M revives his crony network. Most ofthese rivals either aspire to take over the network, too - or arealready too deeply in the same corporate-political muck to raise astink.With that, let's review the details of Dr. M's and Daim's privatecorporate recovery program, which is fully utilizing the courts, thecentral bank, the Corporate Debt Restructuring Committee, PengurusanDanaharta Nasional, Danamodal Nasional and other agencies to againprime the patronage pipeline.Time dotCom, or Corporate Con?It's hard to be shocked these days by the Mahathir Mafia's excessesin hyping their corporate holdings. They have demonstrated fewscruples and little regard for reality in their attempts to boosttheir stock values for the purpose of fund-raising or acquisitionsusing the inflated shares. But Renong Bhd. chieftain Halim Saad'srecent jargon-filled, high-tech drivel about the "new new thing" thatis Time dotCom is beyond ludicrous.In a shamelessly transparent attempt to hop onto the hip Internetwave, Halim appointed himself managing director of TimeTelecommunications Holdings Bhd., changed its name to Time dotCom anddeclared it to be the future savior of the entire debt-ridden RenongGroup. But wait, Bill Gates he's not; and Microsoft it isn't.Nonetheless, the likes of Chua Ma Yu, co-founder of Rashid HussainSecurities Sdn. Bhd., is plunking down big cash on this supposedbroadband fiber-optic cash cow. Ma Yu has been accused of many thingsover the years, but stupid isn't one of them.Neither Time dotCom nor its parent, Time Engineering Bhd., actuallyowns the optic cable running beside the North-South Expressway and,therefore, can't allay analysts' concerns that someday Time will bestripped of its cable control to bail out yet another ailing Renongsubsidiary, associate company or one of Halim's private investments.Ma Yu knows this. But he also knows that Dr. M badly wants toreconnect Renong's life-support system, which helps explain TimeEngineering's nearly 200% increase in its stock price since thebeginning of the year.And, just in case the new dotCom suffix isn't enough to generate amarket frenzy, Time Engineering, which earlier had run to the courtsfor protection against creditors who are owed roughly RM4.8 billion,announced plans to list its Internet service provider, TimeISP, on theMalaysian Exchange of Securities Dealing and Automated Quotation(Mesdaq). It's a good thing that Mesdaq's listing requirements are solightweight. TimeISP has been operating less than three months and hasmanaged to capture only a handful of customers.In a recent flurry of press interviews, the usually media-shy Halimhasn't actually explained how he intends to transform TimeEngineering, which is more than 46% owned by Renong. All he has saidis that he wants the company to become that most elusive of Webanimals: a one-stop Internet shop. To do that, he'll need lots offoreign expertise and even more government assistance to beat backlocal competition from the likes of Telekom Malaysia Bhd. and itsTMnet ISP and Mimos Bhd. and its market-leading Jaring ISP, as well asthe other Malaysian companies with ISP licenses, such as TechnologyResources Industries Bhd., Maxis Communications Bhd, and DiGiTelecommunications Sdn. Bhd.It's also going to require extra servings of market hype to continuelifting Time's share price, which began soaring late last month, aswell as the share prices of Time dotCom and TimeISP when they arepublicly listed. But the hype is sure to be ladled on because thedisposal of sharply overvalued shares will be the only way for Time topay off its and the Renong Group's debt, while also securing theircreditors' approval for various payback schemes.Mind you, Halim isn't talking about productive and efficient growth inthe assets he has been handed by Dr. M's regime. That would be out ofcharacter for him and most of Daim's corporate proxies. Besides, hemay not have that much time.The Renong group's biggest repayment hurdle, some RM16 billion inzero-coupon bonds issued by toll highway operator Projek LebuhrayaUtara Selatan Bhd. (PLUS) to bailout its parent group, only falls duein 2006. But Halim is no doubt mindful that the protection andpatronage he needs to rebuild the dissipated Renong group may only bearound as long as Dr. M stays prime minister. Even if Halim isn'tworried about the May party elections - and freeMalaysia thinks heshould be - Dr. M has already indicated this is his last term as primeminister; it will end in 2004, at the latest. So, Halim desperatelyneeds a buoyant economy and stock market to quickly wheel and deal theRenong Group's way out of debt.Time Engineering has appointed a bevy of heavy-hitting advisers tohelp with its restructuring plans, such a Credit Suisse First Boston,Arthur D. Little, N.M Rothschild & Sons and Commerce InternationalMerchant Bankers. And to give his e-idea a boost, Halim's Time dotComhas signed a memorandum of understanding with Pacific Internet, one ofthe largest regional ISPs and itself listed on Nasdaq.MAS - still a messMalaysia Airlines chairman Tajudin Ramli for months has been assuringall and sundry that MAS's future is all blue skies, followingback-to-back multi-hundred-million ringgit annual losses. What wouldyou expect him to say?But financial analysts haven't been fooled. Sure, the improvedregional economy naturally has boosted MAS's cargo and passenger loadfactors. But despite that, the national carrier remained below thebreakeven level in the first half of its 2000 financial year.Now that the elections are over and if the economic expansioncontinues, Tajudin's longstanding request to hike domestic airfareshas a good chance of being approved. The MAS chief has gotten morethan his fair share of favors over the years from the Mahathir regime,which suddenly abandoned its much-discussed plans to launch a rivalsecond national airline - Air Asia Sdn. Bhd. - soon after Tajudinacquired his controlling stake in MAS from the government. Dr. M'scronies seldom thrive or even survive in competitive industries.If MAS breaks back into profitability, don't expect it to be becauseTajudin restored the airline's operations or managed to radicallyreduce its burdensome RM12 billion debt. No. Instead, look for apossible fare hike and the certain sale of additional aircraft andproperty - maybe even a return to more "flexible" fuel levels oncertain flights - as MAS's one-minute manager scrambles to boost thebottom line.Still, don't count on MAS pulling out of its red-ink dive. The airlinealready is signaling to the market that rising fuel prices maybludgeon earnings. That excuse doesn't fly as far these days, however.Well-managed carriers elsewhere have wedded sophisticated computeranalysis to their operations to boost cargo and passenger factors andtheir earnings, despite higher fuel costs. With Tajudin at the helm,fM figures that MAS is just flying on fumes when it comes to solid,efficient management direction.The dam that won't dieShunted to the back burner in September 1997 by the Asian financialcrisis, the long controversial Bakun Dam project in Sarawak again islooming large, though not nearly as large as originally planned. Nowenvisioned at only a quarter of its original energy output and abouttwo-thirds less in cost, this anemic son of Bakun is nonetheless amonster project, priced now at RM5 billion.But what fM finds more intriguing are the exorbitant governmentreimbursements being paid to Mahathir-Daim crony Ting Pek Khiing andhis companies, especially primary concessionaire Ekran Bhd., ascompensation for canceling and now revamping the shareholder structurefor the downsized project. Ekran alone would collect nearly RM400million of the nearly RM1 billion settlement, a sum easily in excessof earlier discussed compensation figures.More interesting yet is the Sarawak Electricity and Supply Corp.'ssuddenly elevated status in the revised dam venture. A company in theMulti-Purpose Holdings Bhd. group of companies holds a stake in Sesco.And after the Daim-engineered guerrilla tactics to wrest control ofMPHB last year from T.K. Lim and his family, we all know whoseinterests will be served first as the project is revived.Still King of the RoadDr. M's Boys appear to be doing fine, in no small part thanks to sometimely assistance from daddy. They could have -- and perhaps shouldhave -- fared more poorly, considering their imprudent corporategrowth spree prior to the onset of the Asian crisis. Still, theyalways knew that they could count on their father's helping hand.fM won't bother rehashing old bailouts and handouts for the Boys.Besides, we're more intrigued by what's going on in the nationalroad-haulage industry and by Mirzan Mahathir's efforts to keep outcompetition.Dr. M's No. 1 son carved out for himself a fruitful road haulagebusiness under Konsortium Perkapalan Bhd., now known as KonsortiumLogistik Bhd. But like most cronies, his ambition swelled well beyondhis original plans - and even farther beyond his demonstratedabilities. He soon wanted ships, aircraft and warehousing facilitiesabroad, all seamlessly linked under a massive logistical network.It wasn't just the Asian crisis that crushed Mirzan's fanciful dream.Reality intervened - as it would have sooner or later. Even Mirzanhimself agrees. In a candid interview in July 1998 with shippingjournal Lloyd's List, Mirzan describes how he just had no idea what hewas getting into."I am not a shipping person. When I thought about building a fleet, Iviewed ships as the seaborne part of a much wider chain of gettinggoods from A to B. As such, I had not dwelt on the intricacies of theindustry," Mirzan admitted. "But I [then] realized that shipping ishighly specialized. The way the markets move, the high level oftechnical appreciation needed … makes it impossible for someone tocome in and be a player overnight."In other words, the competitive global shipping industry taught Mirzanthe expensive lesson that the Mahathir name is no guarantee of successin the real world, as it had been in Malaysia. Thank goodness nationaloil company Petronas felt the need to acquire its own shipping arm atthe same time Mirzan sorely needed to sell his.These days, back again to mostly Malaysian road haulage, Mirzan is outto safeguard what remains as the core of his corporate empire. So, ashead of Konsortium Logistik and president of the 12-member ContainerHaulage Association of Malaysia (CHAM), he is leading a rearguardaction to curb or eliminate any disruptive threat to his and theassociation's current business arrangements.The most immediate threat is posed by efforts to deregulate thenation's hauling oligopoly, largely a response to complaints frommanufacturers and other producers about the industry's shoddy and slowservice, the cartel-like setting of hauling rates, and the haulers'inability to meet growing demand. To placate the powerfulmanufacturing lobby, the government is allowing eight new competitorsinto the business.CHAM, of course, doesn't like this one bit. So stay tuned to find outhow the new players fare in the months ahead or whether they evensurvive, without being gobbled up by the established haulagecompanies. After all, it wouldn't be the first time that a heavilyregulated industry is squeezed by regulators and consolidated byraiders linked to Mahathir. Just ask the nation's bankers.Dr. M's been swell to YTLLittle did Francis Yeoh Sock Ping realize how important it would soonbecome for YTL Corp. Bhd. to have been named an independent powerproducer before the 1997 financial crisis erupted.fM readers probably recall the controversy surrounding the naming ofYTL as an early IPP and the sweetheart terms under which theconstruction company secured its gas from Petronas and sold its outputof electricity to Tenaga Nasional Bhd. through an ironclad, long-termcontract. None of the other IPPs signed such cushy deals.But it wasn't until the crisis struck that the guaranteed revenuestream from its Paka and Pasir Gudang power plants arrived just intime to save YTL's bacon. The company's other core businesses -construction; cement making; hotels, resorts and related activities;and property development - were tanking, as would be expected amidstthe worst recession in Malaysia's history.The nation's property and construction sectors, YTL's traditional corebusinesses, were hit hard. And tourists fled. Without its powerplants, YTL would have been squeezed, perhaps even more tightly thanmany other Mahathir-Daim cronies. Instead, Francis Yeoh is among thefew sitting fat and happy - and, more important, still expanding.fM is rather amused by his elder corporate statesman posture duringthe crisis. One would think he had actually timed the IPP to counterthe downturn in YTL's other businesses. Please, he's just one of thelucky ones. And, no doubt, he'll get luckier still.Hooked on the easy IPP bucks provided by the Mahathir regime, Yeoh ispushing to more than double YTL's current power-generating capacity ofmore than 1,200 megawatts. And you know what? With Dr. M as a buddy,it's likely that he will succeed.Measat misses its launchIt was 1997. This was the year tycoon T. Ananda Krishnan had intendedto publicly list Measat Broadcast Network Systems on Mesdaq and onNasdaq in the U.S. This also was to be the year when he would havecashed out his investment on the loss-making butpolitically-privileged satellite system, much like he did whenPetronas was instructed to buy in as a major shareholder in Ananda'sKL City Centre. But, the Asian financial crisis struck. His profitshad to be deferred.The nascent economic recovery and bullish stock market, however, nowhas Ananda dusting off his original blueprint, with an added fillipfrom the global dotCom zaniness. Word is that Dr. M couldn't be morepleased - and more accommodating - than to have the national satellitecompany listed in the "evil West".Air AzmiOver-stretched and deep in debt, Malaysia's newest water baron, WanAzmi Wan Hamzah, got a helping hand from Dr. M's Economic PlanningUnit, presumably through Daim's good offices, in securing a heftystake in Syarikat Pengeluar Air Sungai Selangor Sdn. Bhd. (SPLASH).This is the company tapped to handle Phase 3 of the Sungai SelangorWater Supply system, which will rely on another controversial damproject.The dam, which has enraged many because it will disfigure the scenicSungai Selangor just north of Kuala Lumpur and displace aboriginaltribes from their traditional grounds, is being pitched as the fix forrecurring water shortages in the Klang Valley. What really need to befixed are the leaky and illicitly tapped pipelines that distributewater throughout the capital. That way KL's drinking water would besafer, cheaper and more efficiently managed. But, then, there would benone of the hefty up-front fees generated by a huge infrastructureproject, like the Sungai Selangor dam. You don't get ahead incrony-land by thinking small.As expected, Wan Azmi is in fine company with other politicallywell-connected parties, such as SPLASH partners Puncak Niaga HoldingsBhd., Gamuda Bhd. and the Selangor state government. And the projectis being rammed through, despite the protests and questions.Why the hurry? Well, for one thing, Wan Azmi's main holding company,Land & General Bhd., reported a less than scintillating earnings forthe third quarter ended September 30. The company's profit marginsweren't only slim, they were anorexic. Its heavy interest paymentsmight have had something to do with that.The company expects a "satisfactory" last quarter as the economycontinues to mend. Perhaps. But the financial kicker SPLASH shouldprovide will do far more for Wan Azmi's depleted wallet.MRCB payday with Anwar awayWith Anwar's sacking in September 1998, the market soon buzzed withrumors that Malaysian Resources Corp. Bhd.'s days were numbered. Thespeculation, however, was off the mark.Actually, it was several Anwar supporters, who purportedly controlledMRCB, whose days were numbered. They were taken out of the picturewith such remarkable ease that it called into question who really hadbeen in control of MRCB all along. From then, it was an obvious callthat MRCB would soon be hitched to Dr. M's and Daim's corporate yoke.And that's precisely what has been happening.At first the signals came slowly, picking up only after the Malaysianmarket was well into its current upward trajectory. Among the latestwas the Feb. 8 Securities Commission announcement that MRCB wasgranted permission to split the proceeds from the sale of itsinterests in two power plants. So instead of using the entire RM204million from the sale to pay down its whopping RM1.7 billion debt,MRCB can now use only RM155 million and keep the rest. Why?The answer came less than two weeks later. MRCB needs the capital toteam up with Tenaga Nasional and Kumpulan Darul Ehsan Bhd. to build ahuge power plant to service the greater Kuala Lumpur area, as well asrelocate an existing plant in the Klang Valley.By the way, it was none other than Dr. M's Economic Planning Unit thatput MRCB back on the electric-powered gravy train -- anotherilluminating example of politicized privatization.To slum ... ah ... sum upfreeMalaysia could go on and on about the infusions of fresh bloodinto the comatose crony network. We've highlighted only a few of manyexamples. Reviving the crony network is critical to resupplying thepatronage pipeline with which Dr. M and Daim project their influenceon the intertwined worlds of business and politics. This is why failedconglomerates like Renong and critical national assets like MAS neverget turned over to sharper business minds to run. This is why Malaysiawill remain vulnerable to the next economic crisis, politicallydependent on a crony empire that is overleveraged and woefullyundermanaged. Nobody is learning the lesson that history tries toteach.Even Daim and Dr. M know better than to put all their eggs in thecrony basket. They're taking targets of opportunity as quickly as theappear. We've already written plenty about the ransom bounty that willbe made from the CLOB share hijacking and the forcible concentrationof the nation's banking industry under the government, Dr. M and Daim.And, in the case of the deeply indebted HICOM group, they appear to begiving up on cronies altogether - at least for the time being.Instead, HICOM will raise funds by selling national car maker toPetronas, which has long been the buyer of convenience for politicallysensitive enterprises from Bank Bumiputra (twice) to Mirzan's recentlydivested shipping company. The remaining HICOM units and associateswill be absorbed in a RM6 billion merger that will undo the previousspin-off of such units as Gadek Capital. Anything would be better thanadmitting to the intractable problems with Mahathir's heavy-industry"brainchild".Let's not let the economic recovery blind us to Dr. M's and Daim'schicanery and corruption. Wake up and smell the rot. We're surroundedby it.http://freemalaysia.com/

Banking Daim-inance : Malaysia's Great Bank Robbery

Malaysia's bank and corporate recovery program is shaping up into oneof the greatest heists in modern history. None would call itout-and-out nationalization. But freeMalaysia views it as nothingshort of outright crony-ization.By now the evidence is clear, Prime Minister Mahathir Mohamad and hissidekick, two-time Finance Minister Tun Daim Zainuddin, must have beenplotting for nearly a year or longer to acquire a huge chunk ofMalaysia's financial system for themselves and their cronies. And theyhave used billions of our tax ringgit to pay for it.Here's how:The creation in 1998 of Pengurusan Danaharta Nasional, DanamodalNasional and Bank Negara's Credit Debt Restructuring Committee wasgenerally greeted as a smart, first step in reviving the nation'seconomy. Cleansing the system of bad debt and deadbeat companies wouldhelp pave the way for solid and sustained economic expansion in thefuture. That, at least, was the official rationale.And that probably would have remained the agencies' primary aim, iftheir mission hadn't been subverted by Daim when he returned to theFinance Ministry in September, thus combining his leadership rein overthe National Economic Action Council with his stranglehold overMalaysia's public purse. Since then, the recovery program has been apublic deception of the highest order.Selective actions by Danaharta and DanamodalBacked by public funds, Danaharta, Danamodal and the CDRC becamecuriously selective about which bad loans were bought out orrestructured - and under what terms they were acquired. It's clear nowthat these decisions were made with an eye toward late July, when thecentral bank announced its plans for the massive consolidation ofMalaysia's financial system. The shaping of the six ÜberBanks wasunderway.Far more important, the deception was engineered to guarantee thatDaim himself would walk away with more than RM200 billion in bankingassets -- or 40% of the nation's total viable bank loans.And that's not nearly all of it. Daim, as well as the other chosenbeneficiaries of the consolidation, would be handed a bundle of otherking-making advantages, including the forfeited real estate heeffectively would control; the acquired brain power, technology andfinancial-service innovations that would come under his purview; themassive amount of valuable information from corporate borrowers thathe would inherit to expand his corporate empire and drub hiscompetitors; and the resulting flush financial hub from which he wouldfinance his empire's next expansion splurge.In short, it's as if the top half dozen or so banks in America mergedinto one, with Federal Reserve Board Chairman Alan Greenspan the keyshareholder and executive chairman, and then retained the President ofthe United States as a highly paid consultant and head of the newÜberBank's executive compensation committee. How stacked is this deck?Of the RM31.4 billion in bad loans acquired by Danaharta, 85% of thetotal -- nearly nine out of every ten ringgit laid out by the agencyfor bad-loan buyouts -- were channeled to a mere four institutions.And guess which ones they were? (Bear in mind that these bailoutpackages were mostly delivered in the first six months of this year,before the banking consolidation plan was announced.)Sime Bank was relieved of RM12 billion; Bank Bumiputra, RM9.5 billion;MBf Finance, RM4 billion; Oriental Bank, RM1 billion; and CommerceAsset-Holdings' Bank of Commerce, about RM800 million. Now, guesswhere these banks are headed in the pending ÜberBank merger?No prizes for guessing correctlyIf you guessed Daim's and his associates' two designated bankingdominions, you guessed right. The first would be "Multi-Über-Purpose,"whose prospective financial components are Multi-Purpose Bank,RHB-Sime Bank, PhileoAllied Bank, Oriental Bank, Sabah Bank and Daim'sown puny International Bank Malaysia. In addition, four financecompanies, including MBf Finance, and two merchant banks, includingBBMB Merchant Bank, would be injected into Multi-Über-Purpose.No wonder Daim was so eager to relieve former Multi-Purpose chieftainDatuk T.K. Lim of his controlling stake in the conglomerate. Besides,for years Daim has been after Multi-Purpose, especially its financialassets.The second would be the reconstituted Bumiputra-Commerce Group, fromthe combination of Bank Bumiputra Malaysia and CommerceAsset-Holdings. Daim, through his crony-controlled New Straits TimesPress and Renong, holds a combined 37% stake in Commerce Asset. Alsoto be absorbed into this expanded banking group are Quek Leng Chan'sHong Leong Bank and Hong Leong Finance, as well as Credit Corporationof Malaysia and CIMB merchant bank.With the benefit of hindsight on Daim's plan to take over the bankingsystem, it's even easier to understand the sweetheart deal he cookedup to clear the way for Commerce Asset to take over Bank Bumi, which,together with Hong Leong, will give the enlarged banking group atantalizing ethnic and geographic spread throughout all sectors of theMalaysian financial system. For starters, Commerce Asset acquired BankBumi for only about RM1.5 billion, a steep discount to the RM2.46billion book value reported last September. And since Danaharta andthe other agencies assumed all of Bank Bumi's currently acknowledgedbad loans, the problem-plagued bank's books are cleaner than at anytime in that institution's history.In case Bank Bumi's books aren't squeaky clean, however, Danaharta haspledged to buy all new bad loans at full face value until well intothe year 2001. Given the bank's checkered history, perhaps CommerceAsset would be crazy to acquire Bank Bumi without such a guarantee.Still, an effective two-year government guarantee to cover all badcredit that may arise is highly unusual and a strong indication thatBank Bumi intends to pursue its old, money-losing ways for some time,at least into and beyond the next general election.Moreover, Danaharta has agreed to assume Bank Bumi's so-called"credit-impaired assets," again at full face value. This unusualassortment of bank assets relates to loans which currently are beingserviced … but are held by companies and individuals who are or may bein financial distress. Analysts estimate that Danaharta will shell outan additional RM10 billion to assume Bank Bumi's remainingnon-performing and credit-impaired loans.The banking steal, uh, deal of the centuryIn short, Daim and his boys are getting the banking deal of thecentury with their government-sponsored takeovers of the enlargedMulti-Purpose and Bumiputra-Commerce banks. While the otherfinancially troubled banks absorbed an average discount of 57% on thenon-performing loans they sold to Danaharta and others, Sime Bank andBank Bumi get to unload a massive RM21.5 billion in bad loans to thegovernment at full face value. (By government, of course, we meanMalaysian taxpayers.) In other words, taxpayers already have overpaidby as much as RM12 billion because these two banks mysteriouslyavoided the same 57% haircut that the other institutions had toendure. And much more is sure to follow.Danaharta was generous, but Danamodal and Khazanah weren't skinflintseither. Of the RM8.3 billion shelled out by them to help revivedebt-battered banks and corporations, RM5 billion, or 60%, went tojust four institutions. And we bet you can guess who they are: MBfFinance, for RM1.6 billion; Bank Bumi, RM1.1 billion; RHB-Sime, RM1.5billion; and Oriental, RM850 million.No doubt about it, the pending mega-bank merger will radically alterMalaysia's financial landscape. And it will be designated ÜberBanksMulti-Purpose and Commerce Asset that will be changing it the most.Currently, the two banks hold a combined share of only 6% of bankingassets; after the merger, their combined share will balloon to morethan 40%.Growth through asset appropriationToday, Multi-Purpose controls the relatively piddling sum of RM7billion in bank assets; after the inclusion of the 11 otherinstitutions, Daim's ÜberBank will control an astounding RM113 billionin assets, or 24% of the national total.Not far behind, Commerce Asset will climb to the third largest bankinggroup in the country, quadrupling its current market share of 5% toalmost 20% and securing control of RM95 billion in bank assets.In contrast, the nation's vibrant mid-sized Chinese banks will be cutto a lone vestigial remnant, Southern Bank, which will hold only 4% ofthe sector's assets. And, there remains considerable doubt about whowill really control Southern Bank after the merger. After all,longtime Daim kaki Tan Sri Osman S. Cassim represents majorshareholder Killinghall (Malaysia) Bhd's non-Chinese-held share of thebank.The bank merger scheme even effectively sidelines Public Bank, whichwill fall from being one of the leading financial institutions to thesecond to last. Even combining Public Bank's 9% share with SouthernBank's 4% doesn't equal the share of the next-largest ÜberBank,Perwira Affin, which will hold 15% of the system's assets. There canbe no doubt that there will be little room for and no quarter given toindependent Malaysian banking institutions in Daim's Brave New BankingWorld.There you have it, fellow suckers. What Daim's bank scam lacks insubtlety, it makes up for in absolute audacity. We - all Malaysiantaxpayers - have made it possible for Dr. M, Daim and their cohorts topull off the greatest bank heist in our nation's history. That's whatwe get for keeping them in office for 18 years.http://freemalaysia.com/bank_daiminance.htm

' Why was Air Maldives bankrupted?...

Graphic: Maldives ForeignInvestment Services BureauThe funniest thing is despite US$ millions of loss to the company and its employees there has not been a single word from official sources.Why there has not been space for this story on the news headlines? I wonder if this is because of our unique democratic system...Some of our salaries are being reduced. Comprehensive investigations have as yet not been undertaken by the government to uncover the truth behind the scandal. '
Dhivehi Forum posting, 28 July 2000' Nobody is talking about this matter because a real big fish is behind this debacle. '
Dhivehi Forum posting, 28 July 2000
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In a major step forward Air Maldives, the country’s national airline, will be taking delivery of three new wide-bodied Airbus A310-300 airplanes before Christmas. These will be put into service to fly its new long-haul non-stop routes between the Maldivian capital of Male’ and London (Gatwick), Paris (Charles de Gaulle), and Johannesburg twice weekly, as well as its Seoul, Bangkok, and Kuala Lumpur service. The airline was recently awarded the London, Paris and Johannesburg routes.
The leasing agreement is for a five-year term, according to Air Maldives’ Managing Director Fauzi Bin Ayob. The new planes will expand the seating capacity of the airline by 300 percent and will be offering all three classes of service.The signing of the leasing agreement took place on September 28, 1999, nearly 25 years to the day that Air Maldives launched its first services on October 1, 1974 with an HS 748 turbo-prop aircraft that had been leased from the Sri Lanka Air Force.At the signing ceremony, Air Maldives Chairman Anbaree Abdul Sattar stated, 'We are, in every sense, joining the big league of the aviation fraternity but more importantly, we are able, at last, to contribute significantly to the tourism industry of Maldives, which is the mainstream of the economy.'
Washington Times, 8 Dec 1999
topfrom The Air Maldives Mistakeby Ibrahim HameedMonday Times, Maldives, 8 Jan 2001
I was among several people, including some foreigners, that arrived from Malé to join a celebration held at a nearby tourist resort to mark the beginning of the new millenium, 2000. Except for those who received a complimentary invitation, everybody did the payments for their bill from their own pocket.
Somehow I noticed one foreign gentleman, accompanied by several beautiful girls, who instead asked to forward their bill to Air Maldives. Later I learned that this gentleman was the Malaysian in charge of Air Maldives cabin services, and those girls were stewardesses brought from Philippines for the carrier...
Because Malaysia's rich man, Tajudin, was also the chairman and biggest shareholder of Malaysian Airlines, this venture [partnership forming Air Maldives] was considered to be a positive one. Thus, we kept our faith and left all the decision making power to Naluri [Tajudin's company owning 49% of Air Maldives].
However, the Malaysian management didn't seem to act in good faith. The international services of the airline were started by leasing an aged aircraft discarded by MAS. Delays and cancellations, inflicted by technical problems, became the norm. And the company had to charter an airplane - often an aged Soviet-era one - from somewhere every other day to fill the gap.
Malaysian led managements were in deep slumber when some private investors were making huge profits by providing shuttle services, within the country, to thousands of tourists arriving in the country every year. Instead, economically unviable routes like Malé-Kuala Lumpur were maintained, which proved to be no more than picnic trips for the Malaysian-led management, their family members and friends.
Malaysian experts' business plans to expand Air Maldives beyond carrying Indian workers between Dubai and Trivandrum only sent the carrier into the abyss...Long haul flights were started leasing operationally unviable airplanes. As a result, Air Maldives maiden flight to Gatwick, which was supposed to fly non-stop from Malé was forced to refuel at Cyprus...
topextracts from Far Eastern Economic Reviewreports by Alkman Granitsas, 7 Dec 2000Air Maldives' Short HaulMaldives is now on the verge of an Asian-style economic crisis. Business confidence has plummeted and there has been a run on the Maldivian rufiyaa. Foreign currency has almost vanished... Allegations of mismanagement and corruption...Maldives survives on tourism - some 40% of GDP and 70% of government revenues come from the tourism industry...Air Maldives was created in 1994 as a joint venture between the government and Tajudin Ramli's holding company, Naluri, which paid US$8 million for a 49% stake...Late last year [1999] Air Maldives leased three Airbus A310 aircraft for long-haul routes, including one to London. But the route was never commercially viable, the leases cost over US$1 million per month and the losses started to multiply. On March 1 [2000], Air Maldives ceased all international operations. A month-and-a-half later the carrier closed down for good.Tajudin says the [Maldivian] government never lived up to its commitments under the deal. The government, in turn, blames Tajudin for acting in bad faith and has hinted at legal action against him. Specifically they accuse him of pushing the commercially unviable London route and for not paying his share for the new aircraft. '
topComing Down to EarthThe Malaysian government is preparing a US$471 million package to buy out Tajudin's 29% stake in the airline [Malaysian Airlines]... at one and a half times the current market price for Malaysian Airlines shares.It will leave him with US$210 million in cash...The carrier [MAS] is heading for its fourth straight year of losses - perhaps as much as US$160 million in the fiscal year to March 2001...Tajudin defends his record. He says the carrier is stronger than ever and the government is getting a bargain."If you look at the airline we have developed now, on all counts the airline is a lot stronger and better. Even paying the same price I paid for the airline, I think I have been disadvantaged."...Since he took control of the carrier in 1994, MAS has fallen behind its immediate rivals in Thailand and in Singapore. And while MAS is heading towards its fourth consecutive year of losses, everyone else in the region is starting to make money...Ramli has alienated most of the airline's 16,000 employees....80 pilots have defected to jobs at other carriers like Korean Airlines and Singapore Airlines, in many cases, doubling their pay in the process....Tajudin added insult to injury by pursuing what many consider an overtly political agenda of promoting Malays over other ethnic groups, and also by cutting benefits and pay.The average wage for a flight attendant is currently $1,100 month but is expected to be cut by 15% next year.The airline never hedged any of its fuel contracts. When oil was priced at just $12 a barrel 18 months ago, it didn't matter. But since then, oil prices have more than tripled...The carrier remains outside the world's international alliances like the 15-member Star Alliance or its main competitor Oneworld...After buying back Tajudin's 29.1% stake, the [Malaysian] government has indicated the next move will likely be to install a foreigner as chief executive...The government still holds a substantial stake in the company. Government-linked investment companies like Khazanah Holdings, Minister of Finance Inc. and the Employees' Provident Fund, already hold a combined 30% stake in the carrier--add to that the 29% stake they will now buy back from Tajudin.'
top Tajudin Ramli says:' I pushed myself out because I do not have the financial resources. '' There is a Malay proverb: Do not build your house by the shore if you are scared of the waves. '' You have to look back at the record, at what I do. '
topfrom mahafiraun.tripod.comOf Tajudin, MAS and Our Pension Fund!
It's the Tajudin Ramli story again. Where did Daim find this guy?
He's embarassing! He goes around giving press conference saying he actually made MAS so successful that the price he wants to sell of RM8.00 per share is too low!
MAS shares is around RM3.80 today and will not be much higher.
Singapore Airlines by comparison is as big as MAS (in terms of no of airplanes and same route and destinations) but has nearly 20 times more market capitalisation. MAS is expected to annouce losses of at least RM500 million by end March 2001 while all other airlines in the region will announce profitability!
Tajudin boldly announced either SwissAir, KLM or Qantas is interested to acquire a stake in MAS. Not only are they NOT interested, even Brunei(through their investment agency) sold their stake in MAS and for RM4.00!
Now Tajudin goes to Daim and Daim will have to look at which RAKYAT's FUND to use to bail out this guy...and now it is understood that the Pension Trust Fund (Kumpulan Wang Amanah Pension) will be used! And would it be at RM8.00, and if so, WHY? Are we so dumb to think that this 223 million shares of MAS that he owns are going to double up soon to RM16.00?
topfrom freemalaysia.comTajudin Ramli, Rogues Row star
One might ask, "How can he possibly do it?" How does Tan Sri Tajudin Ramli effectively manage Malaysia's national airline, one of the country's largest telecommunications companies and an array of other time-consuming business ventures?
freeMalaysia knows the answer: He doesn't -- at least he doesn't do it at all well.
It couldn't have been otherwise, especially given all the other demands on his time and resources. For instance, there's all the marriages and liaisons. There's also the upkeep of his ocean-sailing yacht, the extravagant private jet and all the bag-carrying trips with Mahathir Mohamad to wave the Prime Minister's "Malaysia Inc." flag. Although the last demand – foreign and especially Third World travel with Dr. M – is certainly a distraction to managing his main businesses at hand, it's probably the best explanation for why Tajudin has survived as long as he has: He repeatedly has shown due allegiance to the boss. And that, unfortunately, is what counts most in the era of "Mahathiromics."
For Tajudin, the ball started rolling only in 1981. A relative newcomer into Finance Minister Tun Daim Zainuddin's circle of bumiputera protégés, Tajudin quickly caught on to the potential of Daim's market-manipulating games and, more important, the rewards that await those who are invited to the table.
At the time, Tajudin was general manager of bygone UDA Merchant Bank. (Some acquaintances, however, contend that he had been hanging around earlier than 1981 at the old Daim-run Peremba office, sucking up for the opportunity to latch onto the "little man's" market-moving magic and his stock-trading network.) But once Tajudin and Daim finally clicked, the crony chemistry worked quickly.
In a characteristic lack of humility, Tajudin was among the Daim protégés and friends who submitted paeans of adulation to authors Cheong Mei Sui and Adibah Amin for the summation of their book, "Daim: The Man Behind the Enigma." He wrote: "From the first impression, I knew I could trust him (Daim). I am a very intuitive person. My first impression tends to be right."
Together, Daim and Tajudin acquired the British-owned Raleigh Cycle, which was later agglomerated into top-tier crony Vincent Tan Chee Yioun's Berjaya Group. Whether Daim ever fully severed his links to Raleigh when he was appointed Finance Minister for the first time in 1984 is hard to say. But without Tun on the day-to-day scene to ensure the company's lucrative connections, Tajudin took his profits and ran to his next Daim-designated corporate post.
The advent of the mobile phone in Malaysia might seem these days like ancient corporate history, given the ubiquity of the devices in the 1990s. And given today's cutthroat, multi-player competition within the once-closed telecom industry, it may be hard for some to recall that, in the emerging days of the technology in Malaysia, a mobile telephony license was a gold mine.
However, freeMalaysia knows better than to credit Tajudin with the foresight to recognize the potential of cellular telephones. Daim would be more deserving. For it was Daim, who used his new political muscle as Finance Minister and his Svengali-like relationship with Dr. M, to "persuade" Telekom into a nearly 50-50 partnership with Tajudin's Alpine Resources to launch the country's first truly mobile network, Cellular Communications Network (Malaysia) Sdn. Bhd., or Celcom.
The slow, plodding Telekom, of course, had the resources and monopoly status to launch the new service by itself; it certainly didn't need the assistance of a former merchant banker and mediocre businessman with no telecommunications experience. But that would have killed a chance for Daim and his cronies from grabbing one of Malaysia's most promising privatization awards of the decade and a gateway into the new era of communications.
In 1989, Tajudin's Technology Resources Industries (TRI) assumed its partner's startup stake in Celcom, thus capturing an effective national monopoly to expand its service for at least three years before Telekom would again be permitted, along with other providers, to enter the market. The best part was that he paid only RM4 million. Tajudin's, in short, was the only show in town; subscribe to Celcom or do without handphones.
But like so many other Daim boys, selected for many factors ahead of business prowess, the 51-year-old Tajudin simply was incapable of mastering and focusing on the new, complex business. Sure, TRI's Celcom rapidly expanded its unchallenged franchise to the point where today it still remains the largest cellular-phone provider in Malaysia. And it mattered little, as long as Celcom was the only cellular system, that the company provided shoddy service and frustrating network congestion.
Tajudin was one hot bumi businessman, with admirers lauding him as the brightest Malay corporate star produced under the New Economic Policy and its successor, the National Development Policy. And before long, he was living the role, spending more than US$10 million for a lavish yacht and jetting the globe to work his home-market magic abroad. Tajudin was to discover, however, that his charms withered beyond Malaysia's borders, without Daim and Dr. M to protect his flanks and administer his profit fixes.
By 1993, Tajudin was behaving like a Third World Rupert Murdoch of the global telecommunications industry: striking up deals with Cambodian Prime Minister Hun Sen's cronies to provide cellular service in that violence-wracked nation; negotiating with Nigeria's corruption-riddled military to set up telecommunications systems for the new capital in the country's interior; and spending (rather, wasting) US$38 million on a U.S.-based satellite company, which owned obsolete Russian satellites and orbital slots granted to the South Pacific island nation of Tonga.
A year later, with his attention-deficit disorder somewhat better controlled, Tajudin's focus returned to Malaysia. With Daim's help, he acquired the government's 32% stake in financially troubled flag carrier Malaysian Airline System. At first, he pushed all the right hype buttons about improving service, efficiency, customer satisfaction, organization, staff commitment, an upgraded fleet, etc. But he ended up ordering all the decidedly non-visionary, shortsighted, corner-cutting measures that you would expect from an accountancy-oriented investment banker with no airline experience and little hands-on business exposure.
Yes, Tajudin demanded that operating costs be slashed. This temporarily improved MAS's share price as investors anticipated some savings. But Tajudin’s ham-fisted – and in some cases, downright dangerous – money-saving ideas, set the stage for the long-term customer dissatisfaction, dismal staff morale and questionable safety standards which today plague the carrier and threaten its viability.
fM doesn't doubt for a moment that Tajudin and his handpicked manager drones approved and installed MAS’ flying-on-fumes fuel policy. Long rumored and recently confirmed, that policy violated international safety standards and left planes without sufficient fuel to cope with weather and traffic delays. The move strikes us as just another uninspired, unengaged, mush-brained decision from the one-minute manager, out to save a few ringgit from the cost of carrying safe fuel loads. Those savings now seem criminally meager, compared to the damage to the national airline's reputation and to Malaysia’s increasingly important tourism industry.
By early 1997, the part-time chief of TRI and MAS had so enraged and disgusted the staffs of both companies that they began rushing for the doors. Staff turnover at both companies has been exceptionally high, even in today's economically tight times. One key managerial loss for Tajudin was the president of Celcom, Rosli Man, a former Telekom hand, whom many industry experts believe is the single individual most deserving of the credit for making the cellular network Malaysia's No. 1, despite Tajudin's frequent and prolonged absences. With crucial departures, such as Rosli's, Celcom and MAS will increasingly fall prey to their competitors, domestic and foreign alike.
The September 1996 sale of a 21% stake in TRI to Germany's Deutsche Telekom AG for nearly RM1.4 billion, an effort to raise sorely needed funds and industry know-how, did little to ease TRI's operating straits and competitive threats. Celcom eventually became the target for no less than six upstart domestic competitors, the product of a privatized telecommunications policy run amok.
TRI's problems, however, pale in comparison with those at MAS. Acquired by Tajudin's Malaysian Helicopter Services Bhd. in October 1994 for RM1.8 billion, the national carrier remains mired in debt. So is MHS, its share price pummeled even before the onset of the Asian financial crisis.
Tajudin denies reported rumors that MAS is on the auction block, with one of the prospective buyers being Malaysia International Shipping Corp. Rather, he is confidently predicting that under his corporate-wide Salam Transformasi campaign, the carrier will return to profitability by the first quarter of next year. Perhaps. But analysts remain skeptical. They have seen Tajudin’s all-glitter, no-substance approach to corporate overhauls before.
On the other hand, if the economy truly does bounce back and if tourism recovers and if there are no more outbreaks of Nipah encephalitis and if MAS isn't forced to sell more planes and if domestic air fares are raised again and if interest rates remain at current lows and ... well, you get the point. For the one-minute manager to succeed, flying conditions must be turbulence free.

Renong: Dead Man Walking

Why the bailout should scare you? Flashback to 10 March, Malaysian Business Times: Renong Bhd's debt restructuring plan should augur well for the bankingsystem, as well as for Renong and United Engineers (M) Bhd, FirstFinance Minister Tun Daim Zainuddin said. "It should be good. Now you have taken away all the loans, and thecreditors will be happy to get back their 100 percent," he toldreporters after a luncheon with Formula One race driver MikaHakkinen in Kuala Lumpur yesterday.Also, Daim said, the Government does not need to guarantee the dealand, therefore, Renong's debt restructuring plan is not a bailout bythe Government of Renong or UEM. Oh, really? Call us cynics, but freeMalaysia isn't buying Daim's mendaciousclaims. And, if Mr. Hakkinen were a Renong shareholder, we bet hewould have lost his lunch right there. The whole Renongrestructuring is a massive mortgaging of Malaysia's future that willloiter menacingly in the background of the Malaysian economy andmarkets for seven years. Then will come time to pay the piper - andsuch a high price it will be. What's worse, this restructuring proves that it's business as usualfor Renong and its UMNO patrons. The approach is taken right fromthe playbook of Renong's go-go days, as if the current economiccrisis didn't exist. freeMalaysia shudders to think how often thisformula will be applied in the year ahead to other bloated anddiseased political companies. The cost may well be crippling for theeconomy. The deal solves nothing ... Let's cut through all the restructuring double-talk: Imagine a shell game. Under one shell is RM8 billion in bad debt thatRenong can't make payments on. Under another shell is RM8 billion inbonds from the same group. You swap what's under the first shell forthe second. Are you better off? If your answer is "yes," listen up. And if you're a UEM shareholder,scream bloody murder.The deal boils down to Renong and UEM exchanging about RM8.4 billionin short-term debt that they can't repay, or even service, forlong-term bonds. Now, the principle behind this restructuring isn'tnew. Refinancing of debt is going on all over Asia and has markedprevious Latin American debt crises. But, this deal is not about spreading out interest and principalrepayments over more time. No, there are no interest and principalpayments - rather, there's just one, when the bonds come due inseven years. Then, Renong and UEM get a RM16.6 billion bill. That'sright, twice the money they raise from the bonds. Zero-coupon bondsdon't mean no interest - just that 10% a year is piling up to bepaid at the end of 7-years. In financial circles, the concept iscalled, quite aptly, a bullet repayment. And fM knows which way thegun is pointing. ... and costs too much More to the point, private debt workouts usually require that lendersaccept losses as part of getting the restructuring completed, the lossbeing fair penalty for stupid credit decisions. In Renong's debtrestructuring, existing creditors get all their money back. Why?Foreign creditors were threatening to take Renong to court, not inMalaysia, but overseas. The prospect of that public airing wasevidently enough to seriously alarm the Mahathir government. At least the Malaysian creditors also benefit from the full bailout,right? Uh … not quite. You see, existing lenders to the group arebeing repaid with a mixture of cash and new bonds issued by UEM's maincash cow, PLUS. It turns out that the most of the cash is going toforeigners, while Malaysian lenders get stuffed with most of the PLUSbonds. Where is PLUS getting the cash? Well, it's selling more bondsto domestic financial institutions to raise the money. It is rich irony that, as Dr. M tries to whip Malaysians into apatriotic frenzy against pillaging foreigners, his finance ministerengineers a financial scam that abuses Malaysian financialinstitutions into bailing out foreign creditors. Why blame the IMFwhen there are the homegrown likes of Daim? In fact, the impact on the nation's foreign exchange reserves won't besmall. About half of the RM8.4 billion in debt Renong is"restructuring" is foreign held. Roughly two-thirds of that will bepaid in cash; the rest will be paid in PLUS bonds that foreigners arelikely to hold just long enough to scream SELL! It adds up to morethan RM4 billion leaving the country. PLUS bonds - a force-fed diet of junk What will be left behind? The PLUS bonds. Let's take a closer look atthem. PLUS is guaranteeing the bonds. Trouble is, PLUS isn't worth RM8.4billion - even after having the North-South Highway toll concessionextended by another 12 years. Estimates vary, but bond holders wouldbe lucky if PLUS were worth RM6 billion. Loading PLUS with more debtis like mortgaging your house twice over. Already 90 sen from everyRM1 of tolls goes towards servicing old borrowings to build thehighway. That's why existing creditors of PLUS have not yet endorsedthis latest rescue plan. That's OK, PLUS alone isn't supposed to repay the bonds; Renong andUEM are. How? Well, the group wants everyone to believe that it willrestore the value of its assets, expand its business, and boostefficiency - and then sell it all (or almost all) off to pay theRM16.6 billion in 2006. Right now, those assets are worth about RM8b,and that's before deducting the several more billion in debt remainingat other group affiliates like Putra, Prolink, Time Engineering,Faber. Watch for their bailouts, too. Now Halim Saad may be working with some low-wattage equipment, but ishe really going to spend all that effort to double the value of hisassets to pay off double the debt Renong owes right now? He could justsell it all right now, be done with it and walk away to his villa inUruguay. The deal just doesn't add up, and that would make anybodyholding the PLUS bonds jumpy. So where's the bailout? This is where the government bailout really comes in. After all this,what responsible financial institution would buy the PLUS bonds?Fortunately, the Renong group has the help of the completely impartialDaim Zainuddin, who - along with Bank Negara - is arm-twisting localbanks, insurance companies and pension funds (pretty much the wholeMalaysian financial system) into coughing up the cash required. The government has given bond buyers incentives: PLUS bonds will count towards banks lending targets. But this willcrowd out other needy borrowers, as Anwar Ibrahim has already noted.Instead of RM8.4b to one crony, these banks could have extendedhousing mortgages of RM150,000 each to 55,000 worthy individuals. No mark-to-market. Banks can classify the bonds as long-terminvestments, and accrue a full 10% imputed interest each year - evenif the bonds are trading at deep discounts in the secondary market. Any one bank isn't supposed to expose more than 30% of its capital toa single borrower. But PLUS bonds are - you guessed it - exempt. New investors into PLUS bonds are, yep, exempt from capital controls.Maybe George Soros will buy some? It's no longer a surprise why Daim (never the upright publiccustodian) has been hurrying along the whole banking system'srestructuring. The Mahathir regime bailed out Malaysian banks so thatthe banks would be able to bail out its cronies without the politicalfallout. And mind, this whole ugly cycle stands a high chance of beingrepeated in seven years time. Business as usual in boleh-land The only way to buy this whole deal is to buy the old standby ofbusiness in Mahathir's boleh-land.It goes like this: Renong's political credentials are Triple A.There's no way in the world that Mahathir will permit the group tocollapse. Sweet government contracts and discounted state assetswill flow Renong's way during the life of the bonds to ensure notonly their repayment, but to also leave a little something for itsshareholders. And if that's not enough, hit the Malaysian public byraising either tolls or taxes or borrowing away their retirementfunds. Never mind that such maneuvers are precisely the sort of shenanigansthat landed Malaysian in today's economic mess. Will Mahathir & Gangever learn their lesson? More important, who's to say that Renong's current benefactors willbe around long enough to make good on their implicit pledge to bailout the group? Seven years is a long time. In the current politicaluncertainty, it's eternity. So, freeMalaysia isn't putting its moneyon the Renong Express; it's nothing more than a bullet train tonowhere. Dead Man Walking. Dissecting the deal:A detailed appendix on Renong's restructuring efforts The debt of the entire Renong group totals about RM30 billion, or7% of all Malaysia's bank loans. Come June 1999, some RM8.4b ofborrowings by Renong and 38%-owned United Engineers Malaysia will bein default. If the proper course of bankruptcy were allowed to run,Renong (which is already in default on a number of loans) wouldalready be in receivership by now; liquidators would be conductingasset sales (perhaps back to the Malaysian government at attractiveprices); and Halim Saad would be jobless - if not exactly poor. Ifthe asset sales fell short of covering total liabilities, Renong'screditors would take the haircut. In this story, the potential winner is the Malaysian government(that's you and me), which gets to buy back cheaply assets ofnational importance. The losers are Halim Saad, his benefactor DaimZainuddin and foolish lenders. That would be the free marketplace atwork. Instead, back in October 1998, Renong proposed that the governmentguarantee a RM10.5b bond issue that would be used to re-financeoverdue loans. That failed - thanks to political protests againstgovernment-funded bailouts.The second proposal, announced on 8 March 1999, seeks to avoid thepolitical problems by getting the government to provide indirectsupport. Toll operator PLUS will issue RM8.4b of zero coupon bondsthat yield 10% and mature in seven years. PLUS would then on-lendthe proceeds - RM5.4b to Renong and RM3b to UEM - to pay off theirexisting creditors. Secured creditors, owed RM5.2b, get fully repaidin cash, while RM3.2b of unsecured creditors get paid half in cashand half in PLUS bonds. Come June 2006, PLUS must find RM16.6b cash to redeem these bonds. http://freemalaysia.com

Wan Azmi - A Bee On the Bonnet

(Freemalaysia fw)
http://www.freemalaysia.com/wan_azmi.htm
Wan Azmi:Loyal to a fault
On his own, Tan Sri Wan Azmi Wan Hamzah could have been a dynamic
businessman in just about any market economy -- but not in Malaysia, not by
himself.
No, in freeMalaysia country, most top-tier corporate players must play
multiple political cards - and pay for them all - to ascend into the ranks
of Malaysia's Fortune 100 or so. Never has that been more the Malaysian
business reality than under the crony economy engineered by Mahathir Mohamad.
The price of admission varies, but it's never cheap. Some corporate players
hedge their bets among several political patrons, despite the higher cost.
Others, including most of the leading Malay entrepreneurs, are more
beholden to a single patron. In tandem with their patron-protectors, these
Bumiputera businessmen ascend the corporate ladder; and they usually tumble
when their patrons stumble.
Wan Azmi has enough sense to see the value of hedging his political bets
for long-term corporate stability. But he didn't. Instead, he stayed by his
main patron, two-time Finance Minister Tun Daim Zainuddin.
In that sense, Wan Azmi could be a character in a modernized version of the
Malay Annals: The smart and ever grateful adjutant, who concedes no wrong
in his former master's excesses and even publicly professes his admiration
for his contributions to Malaysia. He acknowledges that he owes much to his
mentor for giving him the key to the upper business echelons, and he
remains grateful, even when the relationship starts to damage his business
and professional future.
Still, one wonders if Wan Azmi could have been more, done more, advanced
Malaysia more, and achieved a whole lot other mores, if only he didn't
succumb to the fool's golden handcuffs of Malaysia's crony capitalism.
That's the tragedy of Wan Azmi and of every other worthy Malaysian
businessman and entrepreneur who succumbs to a system that extracts maximum
gains for the few at the expense of the many.
Given the near unshakeable status of Malaysia's crony corporate system,
it's hard to find a mountain of fault with Wan Azmi. His is a bittersweet
success story about a guy who has worked hard, studied hard and learned
some hard lessons, both professional and personal. It's more than most Daim
protégés have to tell.
Still, Wan Azmi will never be able to say he did it his way, his own way.
And Malaysian corporate history won't be able to prove otherwise.
Wan Azmi's friends say he is bright, engaging, even fun in casual
conversation. Business acquaintances say that he knows his stuff and that
he usually deals fairly with them. His employees say he's a classy but
demanding boss with a big heart.
Some friends say Wan Azmi has a justifiably large ego; others say that it
can be insufferably large. A few say he's too witty and sarcastic about the
political establishment for his own good. Some even say that he's too damn
honest for his own good. But NONE say that Wan Azmi would have been what he
is today had he not played ball with Daim.
Wan Azmi has never, ever disagreed with the last point. He even once
satirically compared Daim and himself to Batman and Robin, swooping down at
night upon Kuala Lumpur's Golden Triangle district and grabbing for
themselves Malaysia's richest corporate deals. For a while, this wasn't far
from the truth.
An accountant, as are so many of Daim's protégés, Wan Azmi abruptly left
The New Straits Times Group in 1978, where he was financial controller,
after apparently having had a clash with Dato' Junus Sudin, who was then
chairman of the United Malays National Organization's corporate empire
under Fleet Holdings. It wasn't a smart career move. Junus, whose political
patron at the time was Finance Minister Tengku Razaleigh Hamzah, was as
much the corporate kingpin of his day as Daim is today.
Longtime Daim corporate proxy Desa Pachi stepped in to help Wan Azmi get
back onto the corporate fast track by arranging a job interview for him
with Daim, a man whom Wan Azmi had never met and was only vaguely aware of.
Wan Azmi, to his astonishment, was hired on the spot -- even before the
interview was completed -- as general manager of Peremba Bhd., the newly
privatized management arm of the government-owned Urban Development Corp.
It was at Peremba that Daim assembled the corporate corps of protégés that
would serve him to this day. Some of them, such as Halim Saad and Samsudin
Abu Hassan, freeMalaysia has already profiled; others, such as Razali
Rahman and Hassan Abbas, may have their day. The idea was to create a cadre
of loyal bumiputeras, Daim's corporate shock troops, to begin snaring the
many privatization contracts that soon would be secretly awarded by Dr. M's
regime. And for practice, Daim's boys cut their teeth on what then had been
the largest construction project of its day in Kuala Lumpur, the
UBN/Shangri-La hotel and office complex in the heart of the Golden Triangle.
But there has long been a major obstacle in Wan Azmi's career path -- the
Prime Minister. freeMalaysia isn't sure why Dr. M didn't take the same
shine to him as did Daim. We are even more puzzled as to why Daim
repeatedly has had to intervene on his former protégé's behalf with
Mahathir, who for some reason dislikes or deeply mistrusts Wan Azmi. Wan
Azmi remains among the few Daim dandies whom Dr. M hasn't accepted as his own.
Puzzled? Yes, we are. Clueless? No. Snippets from friends and acquaintances
of Wan Azmi, as well as from the good old KL grapevine, help explain the
troubled relationship:
First, but perhaps least important, Wan Azmi is a wily contrarian. Maybe
it's the Kelantanese in him. Enough said about that.
Wan Azmi has complained to just about everybody in the KL business
community who counts that he hasn't gotten a single, big payday
privatization award, which he deserves so much more than all the other
cronies and proxies of Dr. M and Daim, you see.
For a period, Wan Azmi had joined hands with investors from George Soros'
fund management organization. The relationship apparently ended before the
Asian financial crisis, but tell that to Mahathir. And never mind that
Daim, himself, tried to strike up business with Soros in the past.
Wan Azmi has been known to be openly critical of Dr. M, even at public
functions of the Malay Chambers of Commerce and Industry of Malaysia.
Problem was that he was most critical of Mahathir when he was president of
chamber in the early 1990s and with Dr. M present.
Nor has Wan Azmi been the sort of sycophantic corporate diplomat that Dr. M
likes to recruit as part of his entourage for trips abroad. While president
of the Malay Chamber, he was reported to have dissed the Mahathir
administration's manipulation of the New Economic Policy before a gathering
of Turkish businessmen and political leaders in Istanbul.
These alone would be reasons enough for the intensely paranoid Dr. M to
take an immediate and lasting dislike to Wan Azmi. God knows Mahathir has
cast aside other men and a few women for less. But freeMalaysia thinks that
there is a more fundamental reason for Mahathir's unwillingness to advance
Wan Azmi's career -- Wan Azmi's father, former Supreme Court Judge Wan
Hamzah Wan Mohamed Salleh.
Younger readers of freeMalaysia might not be familiar with Wan Azmi's
bapak. They certainly haven't been taught anything in school about the 1988
role Tan Sri Wan Hamzah played in attempting to prevent Dr. M from
eviscerating the last vestiges of judicial independence and integrity. And
it was because he and his fellow honest judges lost the battle -- not that
they stood a chance of winning -- that today's Malaysian judiciary is
widely regarded as among the most corrupt and least competent in the
Commonwealth.
To recap the events of 1988 -- the culmination of Dr. M's despicable
three-year campaign to crush his political rivals and critics -- and Tan
Sri Wan Hamzah's part in unsuccessfully stopping Mahathir's intrigues,
freeMalaysia will be brief. Wan Azmi's father and four of his Supreme Court
colleagues were suspended, charged with "gross misbehavior" and forced to
face a kangaroo, government-appointed tribunal, impaneled to consider their
dismissals.
Basically, the five jurists, acting legally and bravely, temporarily
blocked an earlier and separate -- but equally rigged -- tribunal from
delivering its findings on the judicial actions and statements of former
Lord President Tun Mohamed Salleh Abas to Malaysia's king. Tun Salleh,
nonetheless, was later sacked by the king, accepting the allegations of and
acting under the advice of Dr. M, even though Malaysia's highest judge
refused to appear before or cooperate with the so-called jury of his peers.
His colleagues' temporary restraining order merely delayed the inevitable
firing.
It was Tun Salleh's successor, Tan Sri Abdul Hamid Omar, who filed the
charges against the five Supreme Court Justices for issuing the restraining
order. (Bear in mind that it was Tan Sri Hamid who was chairman of the
tribunal that determined Tun Salleh's fate.) Two of the jurists were fired,
while Tan Sri Wan Hamzah and the other two judges were cleared of all
charges and reinstated.
Though found not guilty, Tan Sri Wan Hamzah was deeply embittered by the
viciousness of Dr. M's campaign against the judiciary's independence and of
the corrupt, sorry state to which Mahathir drove the Malaysian courts. Upon
retiring, Wan Azmi's father became an avid supporter of Parti Islam
se-Malaysia, or PAS, and an articulate campaigner against the corruption
and injustice of the Mahathir administration and the ruling Barisan coalition.
For all these reasons and perhaps more, Wan Azmi was never able to navigate
his yearned-for transition from businessman to governmental leader. For a
while, he had hoped to be appointed Governor of Bank Negara. After all, he
had become the youngest banking chief in Malaysia's history, when at 35
years of age he was named president and chief executive of the nation's
largest bank, Malayan Banking Bhd. That was in 1985, thanks to his
appointment orchestrated by first-time Finance Minister Daim. But because
of the job's time-consuming demands and pressing family obligations, Wan
Azmi resigned from the post after only 19 months and abandoned any hope of
heading the central bank.
And there was plenty of chatter in the mid-1990s about Wan Azmi, after
having established some political credentials as the elected head of the
Malay Chamber, being positioned to run for a safe seat under Dr. M's United
Malays National Organization. Then after a brief interval, so went the
gossip, he would be appointed Finance Minister.
Former Finance Minister (and now jailed rival of Dr. M) Anwar Ibrahim was
said to be all for Wan Azmi as his successor, as long as he was given a
new, suitable portfolio, such as Home Affairs. And fM can't imagine Daim
objecting. What could be better than to have his star protégé holding the
most important regulatory post in the nation, especially for a market
wheeler-dealer like himself? But Dr. M would have none of it; no room would
be made for Wan Azmi in his regime. And that was that.
Wan Azmi, say acquaintances, didn't take rejection easily. His remarks
about Dr. M became even more caustic. But his loyalty to Daim remained as
firm as ever. And Malaysia's network of corporate insiders was well aware
of their unshakeable bond, not weakened in the least by Dr. M's rebuff of
Wan Azmi's.
Indeed, in the 1990s, Wan Azmi flourished in the widely recognized role as
the initial sounding board for corporate deals. Would Daim balk? the
country's deal makers asked him. Would he reject? Would he insist on his
usual cut? And, later, what about Anwar? Would he approve the deal? Could
Anwar get the Securities Commission to accept it? It was and still is an
enviable position that Wan Azmi cut out for himself, with the help of Daim.
And it went even deeper than that.
Wan Azmi also was on hand to settle disputes within Daim's ever-expanding
syndicate. The resulting settlement deals proved lucrative, such as the
time in 1990 when Wan Azmi's property-and-timber group Land & General Bhd.
stepped in to settle a corporate brawl between Berjaya Bhd. chief Tan Sri
Vincent Tan Chee Yioun and Multi-Purpose Holdings Bhd. boss Lim Thian Kiat.
The feud settled, Land & General walked off with control of one of the
country's most promising residential property projects, MPHB's Sri
Damansara, on the outskirts of the Malaysian capital.
The Asian financial crisis has temporarily taken the wind out of Wan Azmi's
sails, as it has for many Malaysian businessmen, crony and un-crony alike.
It's been especially hard for him, as his Land & General's prospects depend
largely on a buoyant property market, the sector hardest hit by the crisis
and probably the slowest to pull out of the recession.
In typical Wan Azmi fashion, he spared no one in placing the blame for the
property market's dismal outlook, including himself and the Mahathir
regime, in a paper he delivered a year ago before Malaysia's annual
National Real Estate Convention. He said that mistakes were made by:
"Bankers who force-fed us with too much credit; Governments who allowed us
to convert too much land and approved too many projects; Buyers who failed
to keep their promise to be around at our sales launches; and leaders who
promised the music would never stop. Our guilt as developers was the guilt
of naivete and our mistake was the mistake of innocence!"
Still, analysts reckon that Land & General will be able to hold life and
limb together, thanks largely to government-mandated low interest rates and
the group's attractive 10,000-acre land bank. It's Wan Azmi's personal
business forays that have analysts worried, such as golf courses and
bungalows in Portugal; mining operations in Australia and elsewhere; his
island resort of Malacca; a bank in Mauritius; a bunch of tiny
manufacturing companies in his home state of Kelantan; and so on.
freeMalaysia is a bit more sanguine about Wan Azmi's survivability. His
smarts and business know-how should see him through. Besides, Daim isn't
likely to abandon his finest protégé. Would Batman ever forsake Robin?

Rent collectors and parasites

Mahathirs' frequent castigating of malays wears out rather quickly, and his endless stereotyping is nauseatingly familiar. We have heard thse same tired message many times before.
While he despairs of the low English proficiency among young Malays, his Minister of Education has yet to take that subject seriously or make it mandatory. Nor has Mahathir provided enough English teachers. especially to rural schools.
While he laments the lack of Malays in Science, public universities, which are under his direct control, continue to pour out gluts of malay and islamic studies graduates. As he again bemoans the computer illiteracy of our youths, our rural schools lack electricity, let alone computers.
There was, as usual the typical tirade on the lack of Malays in business, and just as predicatably, a general denigration of the malay aptitude for commerce. Mahathir has it all wrong.
Malays are indeed shred businessmen, malaysian style that is. Their role modles are the Halim Saads and Tajudin Ramlis. They are handsomely rewarded not for their expertise or entrepreneurial ability, rather on their coziness with the powerful. Budding Malay entrepreneurs learn quickly that to succeed they need not pay attention to their clients or customers, but suck up to the politically powerful. The road to riches in malaysia is not through creating or building, but getting the right contacts and contracts. mahathir has created a class not of builders and creators, but of rent collectors and social parasites.

Ananda Krishnan's empire missing link

Ananda Krishnan's empire comprises telecommunication company (telco) Maxis, pay TV operator Astro All Asia Network, satellite company MEASAT and Tanjong Public Limited Company, which operate in gaming industry and cinema. His fortune was said from petroleum industry.In China, an American Idol type program get huge response from Chinese youth. It contestant's name are among the top ten search in Chinese search engine. All contestant have their own website with their own profile. A lot of blog in China also cover the incident. Discussing and debating the outcome.China, rule by communist. Do not have chance to vote. Now have an opportunity to vote their leader now have the opportunity to vote their idol via sms.TV operator who conduct the show get a lot of sponsorship and advertising money.Telco also gain from sms. With such a huge population in China. Telco are laughing all the way to the bank.Internet company in China, some list on NASDAQ also gain from such program.Thus, some social commentator said the next generation business tycoon comprises person know how to combine the power of 3 industry .......TV, telecommunication and internet.Ananda Krishnan business empire comprises at least two pillar ......TV (Astro) and telco ( Maxis). Thus, the missing link is internet.Most reality show in Malaysia now are conducted by free TV network rather then pay TV network. Pay TV Astro however air free TV via their network. A lot of subscriber of Astro actually viewing free TV via Astro. Thus, Astro has indirectly gain from it.Free TV company do not own telco. Thus, Maxis, being the largest mobile telecommunication company in Malaysia is the biggest gainer.In Malaysia, another gainer is Music and entertainment industry. Actually, it is the music and entertainment industry that make used of the three sector (TV , Telco and internet). In Malaysia, music and entertainment industry able to get an idol or star that have ready market like Academi Fantasia's Mawi and Malaysia Idol Daniel. Recently, a blogger Dawn Yang sign up by a modeling agency in Singapore. This is how the music and entertainment industry make used if internet after threaten by MP3 and other peer to peer program.Malaysia, which majority of it population is Malay or bumiputra. Vote a non-bumiputra as their idol. This might signify that youth in Malaysia is not racist.

Automobile industries in new economy

A lot has been write on our automobile industry especially proton recently. However, Malaysia has been transform from production or industrial economy to New economy as it unable to compete with China on production economy.Traditional production economy or industrial economy cycle start from labour intensive industry like textile industry. Then it move to capital intensive industry like steel industry when accumulated enough capital from labour intensive industry. It subsequently would move to technology intensive industry like automobile industry.Labour intensive----->Capital Intensive----->Technology IntensiveTextile industry------>Steel industry--------->Automobile industryAll new industrialized economy like Japan, Korea, Hong Kong and Taiwan go through that cycle. India's Tata Group also go through that cycle. However, with US quota on textile industry, Malaysia, Thailand and now China unable to leverage on textile industry.Steel industry's product is a raw material for all industry product. Every industry's product comprise steel. It is an essential component of industry economy.Whereas automobile industry is an engine of growth for the whole economy. , General Motor and Ford in US is the largest company in US previously. Like Merces in German and Toyota and Honda in Japan. Japan and German economy flourish due to it automobile industry.In Malaysia, Supplier of Proton and Perodua used to comprise a large portion of company listed on Seond board of Bursa Malaysia.However, If you look at Taiwan experience. It's electrical appliance industrial. Like textile industry, is labour intensive and export driven.Semiconductor industry like steel industry. Semiconductor is like steel in industrial economy. Semiconductor are component in every product now. From electrical appliance, computer, automobile and computer.Automobile industry or engine of growth in new economy is computer industry. If you look at Taiwan experience, Acer Computer, a renown brand in Taiwan personal computer industry able to have the same economic effect of Proton in Malaysia.Thus, the Taiwan experience is:Labour Intensive----->Capital intensive----->Technology intensiveElectrical Appliance----->Semiconductor--->Personal ComputerIn Taiwan, it is the personal computer industry that drive the economy rather than automobile industry. Acer rather than Proton that drive the economy.Do we have a personal computer company that able to create an economy effect like Acer in Taiwan. The potential is Mesdaq listed Ftec Resources Bhd. Ftec started from a humble beginning like founder of Dell. It is sad to heard that it involve in an InventQjaya like crisis. Some directors of the company it invested in South Korea gone missing together with money its invested.With every one focus on Proton. I feel we should put our focus on personal computer, laptop and notebook industry.I feel government department should purchase computer from our only listed brand. Private sector also give it support to create a Malaysian's Acer.Everybody would benefit if we able to create a Malaysia's Acer. It spillover effectwould benefit everybody in IT industry specifically and whole economy generally.Why spend time on less competitive automobile industry. Spend your time to draft a National Computer Master Plan, incentive or protection policy on personal computer industry.

Proton, nurture Malaysia's brand or bumiputra entrepreneur

Proton, nurture Malaysia's brand or bumiputra entrepreneur
Proton, initially founded by the government, has become one of the leading brand in Malaysia at one point of time. If you ask foreigner which brand they can think of like Sony and Toyota with Japan, Samsung with South Korea. People will think of MAS and Proton as a brand they can remember about Malaysia. Especially at a time when Proton was doing well in UK. However, Sales of Proton in UK has deteriorated.After some time, government shift it policy to nurture bumiputra entrepreneur. Proton, and its holding company fall in the hand of late Tan Sri Yahaya Ahmad. However, sudden demise of Tan Sri Yahaya Ahmad cause government effort back to square one. Beside, DRB-Hicom group lead by late Tan Sri Yahaya Ahmad has over gear themselves and over diversified into too many area including transport(IntraKota), Banking and Finance etc. When Asian financial crisis hit the country. The company has to dispose off IntraKota and Proton back to government.AP policy, which aim at nurture bumiputra entrepreneur successfully nurture another automobile entrepreneur.....NAZA group's Tan Sri S.M. Nasimuddin Amin. Tan Sri S.M. Nasimuddin Amin, unlike three other AP King, has his own company NAZA and has make his company into a large business entity.After sudden demise of late Tan Sri Yahaya Ahmad. There was no visible bumiputra automobile entrepreneur in Malaysia until NAZA was granted national car status.However, when government has two goal.....National car brand and nurture bumiputra automobile entrepreneur. When Proton was head by late Tan Sri Yahaya Ahmad where two goal was heading in same direction and lead by same person. It still look okay as there is goal congruence. However, when Proton, a Government Link Company (GLC) head by Executive reported to government and another national car NAZA head by a bumiputra entrepreneur. The two goal was in conflict that lead to conflict between present Prime Minister and Ex-Prime Minister.SolutionThe solution should match the two goal together or what we said "Goal Congruence" in management theory. That is to let bumiputra entrepreneur to lead Proton rather than Proton remain as GLC. When entrepreneur spend their own money invest in a company. They have to try their best to run the company. If not, they will lose all their own money. Of course, the government should not bail out the company when the company fail, nor should government enter into a deal with bumiputra entrepreneur like what disclose by Tajuddin Ramli. All buy and sell should done in a willing buyer willing seller free market basis.When Tun Daim become Finance Minister. He, an ex-businessman nurture a lot of bumiputra entrepreneur. However, those bumiputra entrepreneur was not an entrepreneur or do not run their own business previously. They all are ex-employee of Peremba when Tun Daim head the company. They all are good employee with good qualification. However, if you look at other community like chinese. High qualification good employee might not be successful businessman. Successful businessman might be a school drop out like Bill Gates.Present Second Finance Minister Tan Sri Nor Mohamed Yakcop policy was different from Tun Daim. As an ex-central banker, he like to run a large group of GLC and like to nurture young executive to run the company. It look like he emulate Singapore style where government lead the economic, rather then Hong Kong style where entrepreneur that lead the economic. However, unlike entrepreneur, the only solution for those Nor Mohamed's executive is price increase, which lead to present high inflation environment.I feel Hong Kong style more suitable to nurture bumiputra entrepreneur. Further, GLC was classified as share control by non-bumiputra. Only when a company control by bumiputra enterpreneur, not GLC, was classified as share control by bumiputra. Thus, to place Proton under bumiputra entrepreneur would significantly increase bumiputra percentage to achieve New Economic Policy 30% target.NAZA group's Tan Sri S.M. Nasimuddin Amin. Unlike ex-employee of Peremba, he is a successful entrepreneur himself. Beside not many bumiputra have financial muscle to swallow a large company like Proton. The important point is, he know in and out of automobile industry. This is one of the reason when Ford agree to joint venture with Hyundai's founder.IntegrityIn AP controversial. Ex-Prime Minister Tun Dr Mahathir alleged International Trade Minister Rafidah deceiving him to award national car status to NAZA. It is not sure Tan Sri S.M. Nasimuddin Amin involve or not or only Rafidah was involved. However, Tun Dr Mahathir later attend a function organized by NAZA indicated that he was not involved.Then, there is allegation of people under declared tax under AP system. It is not sure the allegation was against NAZA or other group. No prosecution was done eventually. Even if he involve in under declaration of tax. Government can purnish him by make him to acquire Proton stake at high price.Petroleum moneyHoward Huges(Aviator), successfully venture into aviation industry or airplane manufacturing because he has fund from profit of an oil and gas company he inheritance from his late father. South Korea LG group and Samsung group successfully enter into highly competitive electrical home appliances market because government award them petroleum refinery license. Another South Korea group SK Group also used profit from their oil and gas industry to venture into telecommunication industry.Like our Ananda Krishnan's Maxis.Malaysia Petronas, has at one point of time hold share in Proton. However, Petronas has dispose off the shares eventually. Petronas still sponsor R&D of F1 engine. This means there is two team doing R&D in car engine, Petronas and Proton-Lotus. Should government rationalize the two unit?I feel government should let bumiputra entrepreneur to run Proton. Government can award petroleum refinery license to that particular entrepreneur to finance him to compete in the industry.Alternatively, if Proton remain a GLC. Government should let it place under Petronas. Or more specifically, both Petronas F1 engine R&D unit and Proton should inject into MISC, which has shipyard like Hyundai and Mitsubishi to form a Mitshibishi in Malaysia.On Saturday, Edaran Automobile Nasional Dealers Association of Malaysia said there were 800,000 cars for sale in the market, 250,000 more than usual, making it difficult for national car dealers to remain in business. Thus, Proton and government should act fast to find a solution. However, I opposed merger between Proton Edar and EON as this become monopoly and does not benefit to consumer.

The Malaysia Way- boleh?!

mahathir cronies

Ramli Thamby Chik, a man implicated in the gang rape of an underage girl.
Muhammid Taib, caught with millions in cash in his pocket on his trip to australia.
Sanusi Joned - await trial for assault
Abu Hassan Omar - resigned cabinet for personal and family reason - widespread rumors of illicit set with his sister-in-law.
Tajjuddin Ramli.. son of a paddy farmer .. owning an airline.
Halim Saads -
Tan Sri Halim Saad is a Malaysian businessman. He was the executive chairman of Renong. Renong in turn controls UEM Group and both companies were high-profile organizations in Malaysia's economy and politics. Halim Saad was highly connected to former Prime Minister Tun Mahathir Mohamad and former Finance Minister Tun Daim Zainuddin.