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Sakmongkol ak 47

ariff.sabri@gmail.com

Tuesday, 12 October 2010

Around our country this past week-1

I propose to touch on several events around the country.
  1. The PM is pleased 1MDB made its first profit. It is RM 426 million.
  2. Syed Mokhtar proposes to take over UEM and with it, PLUS and all highways.
  3. Tengku Razaleigh's appointment as Director of Elections for Galas.
The PM says he is pleased. Because 1MDB, the sovereign fund formed probably on the advice of our 28 year old whizz kid from Wharton. MBA or just a first degree? No matter. The rakyat is also pleased with this development. They know the 1MDB had its origins from the Terengganu Wealth fund. It was called Terengganu Investment Authority initially.
It was to be the depository of Terengganu's petro Ringgit. Not safe people say. Whoever gets to control Terengganu will control it later. UMNO factious groups in Terengganu are fighting over it. More horrifying if Terengganu falls to PAS later. So, better hijack the Fund to be under control of Federal government. Make it 1 Malaysia Fund. That way, it's meant for everyone. Ini special punya. Even though we have Khazanah, the more national of our wealth fund. Let Azman play with Khazanah, we play with the 1MDB playdoh. (playdough)
Does not matter say the young advisers. So long as it's not controlled by the state. 1MDB was formed in March 2009 as the Terengganu Investment Authority (TIA) state wealth fund. The original fund size was RM5 billion from the federal government and another RM6 billion from the securitisation of Terengganu's future annual oil royalty. What happened to the millions before TIA?
So, the TIA had an original RM 11 billion war chest. RM 5 billion from the federal government through the issuance of bonds and RM 6 billion against the pledging Terengganu's 5% future oil royalties. Ini biasa what- you borrow against assured receipt of revenues.
But people quarrel over the fund. Rival factions in Terengganu. Idris Jushoh's Ghee Hin against Mat Said's Hai San. So, better bring it under PM's control. Make it the 1MDB. This way, the 'natang' people in Terengganu will not fight over the money. No sarongs lifted, no headgears dislodged. So, TIA subsequently became a federal agency in the middle of last year with its current name and mandate to pursue sustainable long term economic development.
After all that, we are told 1MDB made RM 426 million profit. Wah, bagus punya maa. Where did the profits come from? The CEO Sharol Hilmi said it was largely from the disposal of investments in its joint venture company with PetroSaudi and  some of it was from the effective management of treasury function funds in 1MDB.
Ahso, it's from the disposal of investments and earnings from treasury operations. Meaning, dividends. Something like what Berkshire Hathaway does I suppose. Place investments in blue chip companies and get returns. So how much is the RM 426 million profit came from sale of investment assets and how much from dividend earnings?
"It is our strategy to invest whilst seeking the best returns for our investment," said Shahrol. we can't dispute this strategy. But we want to know, this RM 426 million profit is made on the back of how much investments. Is it obtained on the back of RM 11 billion? The capital that's sunk into the Fund?
Tuan CEO don't be angry if people question the choice of Abui Dhabis' GLC- the MUbadala Group. They will invest USD 7 billion into the aluminium industry in Sarawak and in the development and construction of the RM26 billion KL International Financial District. Why Mubadala people asked? Ini simple thing sahaja what- construction and buildings. Any class A Bumi contractor can do. MMC or Gamuda who will dig tunnels can do. YTL can do. So why call in Pak Arabs?
Lu orang semua jangan bising. Jangan jadi arm chair critics. Lu orang apa tahu. We choose Mubadala because of its "very strong global partnerships and linkages with international blue chip institutions across several sectors, including services, banking and finance."
Aiya- chief, the group has registered a loss of 4 over billion dirhams (USD 1.22 billion) for the first half of 2010. That would dispute your claim that MUbadala has very strong global partnerships and has the investing savvy. So, you have signed with a party that is currently making loses.
But I would like to caution our this CEO. That is, if the man from Stanford Palo Alto wants to listen to a man who studied at Owens Manchester. When Mudabala people bring in the USD 7 billion, these will be reflected in our reserves. So people will be watching whether our reserves will swell by the investment instalments by Mubadala.
Then we are pissed off at people who says auditors refuse to endorse our books. They did, says the CEO pointing to the fact that the accounts had been fully audited and signed off by KPMG as of 31 March 2010 and two other audit firms – Deloitte & Touche which was involved in the valuation and analysis of 1MDB's portfolio and Ernst & Young which provided tax advice for 1MDB.
We said refused at first. Sharol took off from the signing. He was telling the truth. Technically speaking. If the books were signed in March, what was the accounting year? Financial ending year? March or 31st December as is normal?
The market did not say has not be signed. What people are saying there was much reluctance to endorse the books at first. After much persuasion or perhaps given offers they can't refuse, auditors finally signed off. Publish and be dammed. Hopefully, no busybodies pick this up. If they do, dismiss them as arm-chair critics or even mad people.
Never mind. You do your damndest and we do mine.

14 comments:

hishamh 12 October 2010 at 08:39  

Dato Sak,

Whether Mubadala invests the money or not, it won't be reflected in our international reserves.

That will only happen if BNM fully sterilises the inflow (aka selling down the Ringgit), which isn't likely. TS Zeti appears committed to letting the Ringgit float freely.

Blow d' whistle 12 October 2010 at 08:57  

Dato'

today they said they will consider the buy-out of 5 GLC by 'selected few BUMI's'when their concern should be the disposal of MONOPOLY in certain industries

its true now they are "MuBedalLah"

sakmongkol AK47 12 October 2010 at 08:57  

hishamh

i stand corrected there. but will let that passage remains. we dont know the manner mudabala does its investments.

lan 12 October 2010 at 09:07  

Tq for shedding some light how this co main a big profit in such a quick time!

Anonymous,  12 October 2010 at 10:05  

Dato'

Who cares whether Mubadala lost USD1.22 billion in the first half year as long as they "bring" in USD7 billion of FDI to 1Malaysia. Wah, USD7 billion of FDI will surely paint a rosy picture to all and sundry that 1Malaysia is attracting FDI all over again....hip hip hooray. Let's just hope that the 1Government is not robbing Pak Ali to pay Pak Sheikh.

Red Alfa 12 October 2010 at 11:25  

Salam Dato'

There are just so many Malaysians who remain and will always be blissfully unaware of the impending economic doom that will be befalling on us by 2020 ... notwithstanding your very enlightening postings.

Perhaps if you would weigh-in with what would affect us the ordinary citizens individually from the big time ripping offs that are happening right in front our eyes.

Perhaps we should be reminded what could befall us seeing what the sub-prime loan crisis did to the nest-eggs of retiring US baby boomers, the bankrupting of the hard earned savings of the Icelanders and the Greeks.

I for one am anxious that my savings still in EPF, in Tabung Haji and Unit Trusts would become nothing in 2020 as everyone are still believing the ETP is going to be what ONLY the Malaysians and not anyone else in the World could make Malaysia high income country and working like charm!

donplaypuks® 12 October 2010 at 11:56  

I sense that a very huge - the mother of all - ponzi schemes is being hatched as once again billions of $ of M'sian taxpayers' money is being put in the hands of foreign agents and new kids on the block.

I could be wrong and hope so, but something about all these 'audited but full details cannot be disclosed to the citizens' rings hollow!

If we need foreign investment expertise, why not go for proven thoroughbreds like Warre Buffet instead of $4 billion loss making Mudabala?

Something's not right. Eventually we'll probably discover a gaji buta 10% fee rent collector connected to the powers-that-be laughing all the way to the bank.

dpp
we are all of 1 race, the Human race

hiley 12 October 2010 at 14:48  

The Malays' tolerance level is sure high.

Seems we are are so strenously rationale and intellectual people.

The ground under us is caving in, our children's and grandchidren's future uncertain, our people like in batu pahat and elsewhere toiling with a pitiable RM 468 wage , super-mega projects and big bucks handed out to exclusively chinese big boys... and we are still rationalizing and coaxing using kind and intelligent arguments with these 'greed-knows-no bounds' economically dominant chinese racists as if we have to pujuk, comfort them like they are the victims. Like, sorry we have been oppressing you for so long. Victims,my ass!

So you think you pay more tax, huh? Pay more tax , my ass!

Anonymous,  12 October 2010 at 16:35  

Dato,

I've been following your writing for quite a while, and I find easier to enter my head when you put in lot of local humor instead of all those economic jargon meant for heavy stuff reader. Lu tau gua cakap bukan ?

Bleacher,  12 October 2010 at 16:37  

Dato Sak,

Your presentation on 1MDB has many similarities with Enron and Arthur Andersen Consulting. Enron used AA to help with creatively planned accounting fraud. To cut the story short Enron collapsed and the dissolution of the Arthur Andersen accounting firm.

Or maybe 1MDB with its team of consultants improvised something better ....after the lesson learned with Enron?

dinturtle 12 October 2010 at 21:54  

Salam Dato,

Not that i dont trust ur facts, but any links that i can get more info on the origins of 1MDB from Terengganu Wang Ehsan ?

i wonder if orang Ganu know of this fact, i mean the wang ehsan was well publicised as being given back to Ganu almost 2 years back, probably as part of BN's KT PRK campaign. Then they simply tookit back under our noses. Buruk siku eh ?

Anonymous,  12 October 2010 at 22:18  

Who is behind 1MDb?
Who is behind sg besi airport?
how much did 1MDb paid to get sg besi land?
Dato Sak pls write more?

Anonymous,  13 October 2010 at 03:58  

wa manyak moling, mahase melayu pembangunan jadi menjadi semua olang mau mikin mangunan. mangunan mikin manyak malang moleh meli, ekonomi ale naik. tapi itu ha olang modoh munye celite, lepas mangunan siap menyiap sape mau luluk, hantu luluk tatak mayar sewa munye. pekeje kontlak lanti semua olang acing lapat luit hantar malik negeli. pekeje sini negeli lapat tahi kucing.

itu ha olang olang kaya simakin kaya semuanye kelajaan mantu memantu kasi plojek. Olang kaya ini negala tatak tahu meniage luar negeli semua meliage tahi kucing lekat ini negeli.

wa menci lan menyakit hati. wa mau malang2 mulah. keleta, belas, lumah wa mau mulah sebab wa munya gaji 800 latus sahaje.

HAKIMAN,  13 October 2010 at 12:02  

Dato Sak, What about the past week when PERKASA boss should lack of decorum and respect as a self-professed political leader championing the rights of Malays, and their gracious culture by not standing up for the one-minute silence in Parliament for a fellow parliamentary colleague who died while in office?

It matters, because symbolism is important. You see that even among sportsmen/women when their fellow players passed away. You see that everybody even stand when the national anthem of another country is played in the Commonwealth Games and Olympics.

I wonder why you had excluded that..Ibrahim Ali is no ordinary politician. He protruded himself into the limelight to champion everything that is negative in this country, including the "shit..shit..shit" verbal diarrhoea on Aljazeera TV.

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