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| Daim Lied In Parliament Devious Finance Minister,Daim Zainuddin lied in Parliament when he said that Net Tangible Asset(NTA)per share of MAS is RM8.00.The truth is,the NTA per share is only RM1.23.Daim must be removed from public office. Edited transcripts of his reply to questions from 10 MPs over the government's purchase of MAS shares from Naluri Bhd. was made available by The Sun on 22.3.2001. MAS unaudited accounts for year ending 31.12.2000 is available on its website.This must be the accounts that Daim refer to for his computation of NTA as he also quoted MAS as having assets totalling RM11.44 billion.But despite assets totalling RM11.44 billion MAS has long term borrowings of RM8.61 billion, deferred charges of RM1.87 billion.Officially MAS declared its NTA at RM1.23 although my computation shows that the NTA is only RM0.66 as I would have excluded the deferred income of RM453 million appearing in the same Balance Sheet as being not tangible.But whatever the case where does Daim gets the figure of RM8.00 from! Daim also had the audacity to equate MAS with SIA and Cathay Pacific.He was surely hoping we do not verify his assertions.Doesn't he know that these airlines do not undergo abuses that MAS had to go through?In whose name and under whose authority was MAS abused?As these airlines are managed with the highest standard of corporate governance,the result shows a healthy profit margin and reserves many times the share capital. For financial year ending 31.3.2000 SIA made a profit after tax of RM2.56 billion(SGD 1.17 billion) and its NTA per share is RM19.27(SGD 8.76).The result for Cathay Pacific for year ending 31.12.2000 showed a profit after tax of RM2.48 billion(HK$5.09 billion) and NTA per share of RM4.56(HK$9.35).SIA's profit margin is 13% whreas that of Cathay Pacific is 14%. These go to prove that both SIA and Cathay Pacific are in the airline business and their results are consistent.The results of MAS showed a totally different statistics.They must be doing some other monkey business! Daim's argument about controlling stake and premium is a fallacy.With NTA of RM1.23 and a loss after tax of RM852.7 million,how much premium can you give? At premium 50% of NTA the share is only worth RM1.84. Isn't a market price of RM3.60 sufficient premium for the share?Does the 29.09% constitute controlling stake when the Minister of Finance own the golden share? On whose behalf was Daim talking when he said that Tajuddin was a reluctant seller?Didn't Tajuddin said that he was relieved("Saya lega") with the sale. Daim said that the government is confident of turning around MAS in a short time.Please give the timeframe and what are his plans.As an experienced wheeler dealer he better shut-up until he has the plans properly laid-out. His threat to sell back MAS to Naluri or that MAS will fall into the hands of foreigners has been heard many times before.This is the standard line used whenever he wants to justify the use of public fund to bail-out his companies.Doesn't MAS belong to him and Tajuddin is his lackey? |
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| Monday March 26 Unmasking the masquerade of probity WORLDVIEW Harun Rashid 1:18pm, Mon: In Malaysia there is a stock exchange. Shares in about 700 public companies are offered each trading day. The value of the shares fluctuates. At the moment the valuation tends to drift lower each day. This is the result of an imbalance between buyers and sellers. On occasion it appears there are only sellers, and the market falls steeply. When the selling stops, the buying of a relatively few shares changes the mood. The market jumps to life. The buyers are local savings and retirement funds whose investment activities are influenced by the minister of finance. He wears three hats. When he wears the finance minister's hat he controls the powerful public purse. When he wears the Umno treasurer's hat he is protecting the interests of the party in power. When he wears his own personal hat as a private businessman he is protecting his own interests. It is difficult to determine which hat he is wearing at any given moment. In any modern country the situation would be forbidden for conflict of interest. Malaysia is not a modern country, and such behaviour is accepted as a matter of course. In his personal affairs, the finance minister has partners of many years standing. When he wears the finance minister's hat and directs that large sums be paid to one of his business partners, there is an appearance of impropriety. He recently paid (wearing the finance minister's hat) to one partner an enormous sum for a controlling interest in the national airline. The price is over twice what the open market was willing to pay. The excuse is that the airline is failing and needs to be rescued. He says the high price is necessary to wrest control from his partner, who was supervising the loss of over RM1 million per day. The problem with this answer is that it fails the test of logic. A failing enterprise does not command a premium price. The government already holds what is known as a golden share in the airline, giving it effective management control. The government can do as it likes without any consideration of the shares. The finance minister thus looks to be rescuing himself and his partner in a difficult and losing proposition. A comedy In another recent transaction, the finance minister oversaw the transfer of money from a retirement fund under his influence to rescue a consortium of banks in the underwriting of an IPO. The direct recipient of the funds is another long-time business partner. The finance minister pretends he is not a party to this transaction, but he cannot escape responsibility, as the explanation he offers is transparently false. The public was offered the shares, but when only 25 percent could be placed, the fund secretly accepted almost half of the shares, again at a grossly inflated price. In Malaysia there is a pretense of probity. The pretense becomes more shabby by the hour, as even the government-controlled media now sees. The public only buys government mouthpiece newspapers for laughs, finding in them a form of comedy. The papers are seriously sold as truth, but the public knows shoddy goods, and the media is certainly peddling shoddy goods. The editors have publicly announced their helplessness to defy the heavy hand of the government. They plead for release from half-truth and falsehood in the effort to mend falling circulation. It is too late. The pretense of probity has destroyed all media credibility. The number of deaths in a recent incident cannot be reported in the mainstream media without public suspicion. Rumours abound. The government reacts by threatening prosecution of anyone who questions the facts as presented by the police. The police have no credibility. Nothing could generate more public suspicion. The unwillingness to report even the most minor fact of daily life in Malaysia makes the media meaningless. Candor lacking The Malaysian press has not been allowed to acknowledge that the national airline endangered public safety through its imprudent fly-on-fumes practice for several years. The pilots complained from the first, but only the strong objections of London aviation authorities finally put a stop to this insanity. The passengers were blithely unaware. Only good weather prevented a tragedy. A free press would print the story. The foreign minister of Malaysia has spoken this week in Geneva of human rights violations in Malaysia. He says these rights must be abridged in order to maintain stability. The same argument has been made by every despot. The oppressive laws are not amended, at least until the new generation assumes political power. In the meantime, investigative journalists probe to penetrate the pretense at probity. -------------------------------------------------------------------------------- HARUN RASHID is a scientist avidly interested in the application of Islamic principles in international affairs. The promotion of goodwill through civilisational dialogue motivates his writing. His Worldview column is a personal analysis of Malaysian affairs from a global perspective. |
| FAC News - 28 March 2001 MAS’ NTA - Daim Lied in Parliament The Malaysian government is fond of accusing the opposition of lying. Recently the police interrogated Dr Wan Azizah Wan Ismail, Anwar Ibrahim’s wife, for allegedly making a false statement that the police consider as seditious in nature, while Youth Leader Ezam Mohd Noor has even been formally charged for the "crime". The Malaysia government, however, is no less guilty of this crime and, in the past, FAC News has exposed the many lies the government has spun. (One was the meeting Prime Minister Dr Mahathir Mohamad was supposed to have had with a renowned Muslim religious leader in the Middle East while another was the Malaysian Ambassador to the US’ claim of the meeting he had with the seven US Congressmen – both which were proven to be false). Last week, Finance Minister Daim Zainuddin lied in Parliament when he said that the Net Tangible Asset (NTA) of Malaysian Airlines System (MAS) is eight Ringgit (RM8.00) per share whereas the NTA is actually only one Ringgit and 23 Sen (RM1.23). Daim’s comment was reported in The Sun on 22 March 2001. On checking with the MAS Website, it was found that the accounts for year ending 31 December 2000 is still unavailable so Daim’s statement is not supported by documentary evidence. Daim also said that MAS has total assets of RM11.44 billion. MAS, however, has a huge liability of RM8.61 billion in the form of long term borrowings and deferred charges of RM1.87 billion. This would therefore reduce MAS’ NTA to only 66 Sen (RM0.66). Daim certainly has some explaining to do as to from where he derived this figure of RM8.00. In Daim’s address to Parliament, he compared MAS to SIA and Cathay Pacific. This is like comparing the Kuala Lumpur Hilton to a teh tarik (tea) stall. SIA and Cathay Pacific are well-managed companies and MAS is nowhere near their league. For 31 December 2000, SIA made an after-tax profit of RM2.56 billion (Singapore $1.17 billion) and its NTA per share is RM19.27 (Singapore $8.76). Cathay Pacific’s December 2000 year-end results shows an after-tax profit of RM2.48 billion (HK$5.09 billion) while its NTA per share is RM4.56 (HK$9.35). SIA's profit margin is 13% while that of Cathay Pacific is almost the same at 14%. MAS, on the other hand, while actually having an NTA of only RM1.23 per share – and not RM8.00 as claimed by Daim in Parliament – generated an after-tax loss of RM852.7 million for that same period. |
| Wednesday March 28 EPF betraying trust with crony bailouts Hassan Karim 10:23am, Wed: translation Finance Minister, Daim Zainuddin has finally admitted that the Employees' Provident Fund (EPF) had given a RM500 million loan to Time dotCom in 1996. Time dotCom has pledged to repay half the loan while the balance will be settled in the form of share equity. Two weeks ago, EPF chairperson, Abdul Halim Ali denied that the fund had purchased shares of the beleaguered company which had not been subscribed during its recent initial public offering. However, Abdul Halim admitted that EPF had approved a RM500 million loan to ‘salvage’ the Halim Saad company (via Time Telecommunications Holdings, a subsidiary of Time Engineering Bhd). EPF, which has 9.7 million contributors, is the largest fund in the country with a total of RM180 billion in deposits. The fund is managed by a board of directors who are assisted by expert advisors while matters of investment are tabled by its investment panel. There are six workers union representatives on the EPF board, including the presidents of MTUC and Cuepacs respectively. Concerning its involvement with Time dotCom, one cannot help but ponder whether it was a wise decision on the part of its directors and the investment panel? Time dotCom is part of Halim Saad's empire. This renowned corporate leader also owns Renong, a problematic conglomerate noted for its close ties with Umno and its leaders. Due to financial problems, a Renong subsidiary, Time Engineering Berhad was forced to restructure. During the restructuring process, Time dotCom was set up. It is in the midst of this exercise that EPF was snared into issuing a loan and purchasing its shares. Decreasing dividends The question to be addressed here, is whether it is proper for the employee's savings fund to be linked with problematic companies owned by Halim Saad, a crony corporate leader? Whose interest should be of priority to the EPF investment panel - its 9.7 million contributors or that of Halim Saad? From year to year, there has been a decrease in the dividend being paid out by EPF to its contributors. Last year, saw its lowest rate ever, which was a six percent pay out. At the same time, more and more information is being unearthed about the abuse of EPF funds to rescue crony companies linked to Mahathir and Daim. In 1999, a total of RM12 billion of the citizens’ and country's funds from various sources had been used to throw a lifeline to Renong. An economist had stated that some RM50 billion (to date) of these funds had been utilised to rescue ailing companies belonging to cronies, especially those linked with the Prime Minister and the Finance Minister The employees' funds in the EPF appears to be one of the main victims of this rescuing practice. Apart from Time dotCom’s RM500 million loan , EPF funds have also been used to rescue several other companies. Among them are Khazanah Nasional Bhd which borrowed RM2 billion of EPF funds, Perwaja, RM710 million and KLIA Bhd, the developer of the Kuala Lumpur International Airport, which secured a loan of RM1 billion from the EPF. All these were large-scale loans involving hundreds and thousands of millions. After participating in many bailouts of crony companies within the nation, the EPF now proposes to expand its investment operations overseas. We hope the members of the EPF board of directors, including Zainal Rampak (MTUC president) and N Siva Subramaniam (Cuepacs president) will not bow to the wishes and desires of certain quarters and epitomise the Malay saying, ‘Harapkan pagar, pagar makan padi!’ -------------------------------------------------------------------------------- HASSAN KARIM is vice president of the Parti Rakyat Malaysia (PRM). |