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Friday, 31 December 2010

The Untouchables at Khazanah, TM and Axiata-Part 1

The version of the story does NOT match the internal notes we have. Are we going to see similar statements coming from Khazanah, TM and Axiata?
From October 2004 to February 2006, Alcatel bribed government officials in Malaysia to obtain confidential information relating to a public tender that Alcatel ultimately won, the result of which yielded a telecommunications contract valued at approximately US$85 million. It was also reported that the TM employees who received bribes were "foreign officials" within the meaning of the US Foreign Corrupt Practices Act and "were in a significant position to influence the policy decisions Telekom Malaysia made." It added the Basel-based Alcatel Standard made significant lump-sum payments through US bank accounts to two consultants labeled "Malaysian Consultant A" and "Malaysian Consultant B", purportedly for market research. "Alcatel Standard paid US$200,000 to Malaysian Consultant A in 2005 for a series of 'market reports' describing conditions in the Malaysian telecommunications market. Similarly, Alcatel Standard paid US$500,000 to Malaysian Consultant B in 2005 for a 'strategic intelligence report'. "However, the work product these consultants prepared could not justify the size of Alcatel Standard's payments. In fact, Malaysian Consultant A and Malaysian Consultant B did not appear to render any legitimate services to Alcatel Malaysia in connection with these
In other words the two buggers who received USD 700,000 conned Alcatel into paying them the money. The giver has admitted their crime. They admitted they bribed. They have been fined and legally prosecuted. See here? Unless a charge is related to a crime, then the charges stick. Otherwise you waste public money and time. As a passing mention- we charged Khir Toyo for securing a piece of land at a much cheaper price that when it was first obtained? Stupidity is not a crime. If it is, then we should castrate the seller. Pull out all of Khir's teeth. Court order him from eating tempe. Where is the crime? That charge must relate to a crime.
Same thing with Sime Darby. Why didn't it just report to the police? Or to MACC? Unless the charges are related to some crime, the charges will just be a wipe-out.
Unless we have a different set of laws which say what the two guys did wasn't a crime, we will actually see the statement at the beginning of this article. It will be a committee hastily assembled to cover the backsides of many people. People from Khazanah, people from TM then, people from MOF even.
So, it is very perplexing, that we are only starting with an investigative committee. It would appear that what TM and Axiata are doing is to assemble a team to cover the misdeeds of some people. TM or Axiata shouldn't waste their time and money (whose money?) to whitewash this episode and should just make a police report about a crime having been committed.
So:-
Telekom Malaysia Bhd (TM) has set up a board sub-committee to investigate the Alcatel Lucent SA (ALU) kickbacks scandal which implicates two Malaysian officials in a US$85 million (RM263.5 million) contract given out by the local telecoms giant. Regional mobile phone service provider Axiata Bhd has also promised to investigate the bribery case as it occurred in 2006 when it was a TM division known as Telekom Malaysia International (TMI). Both public-listed companies, which share a common shareholder —sovereign wealth fund Khazanah Nasional Berhad — announced their respective investigations in filings to Bursa Malaysia last night.
Bursa Malaysia? Wasn't this the organization headed by a former Shell Legal Manager who has actually once said, that anything sanctioned by Khazanah should be treated as gospel truth? That those much admired denizens at Khazanah are the Malaysian version of The Untouchables?
Let's go beyond the obvious. Any decision on capex expenditures by any of the Khazanah owned companies must have been referred to Khazanah. Azman Mokhtar who swears by the various coloured manuals that Khazanah operates by, will never allow any capex expenditures passed without notice. He is after all an honorable man. He has brought a new culture of managing Khazanah. His style is cheese compared to chalk of previous stewards of Khazanah.
It's a new age Khazanah that acquires shares and sell down in the open market. It doesn't want to sell to PNB? Isn't that strategic? To me, what Khazanah is doing is also similar to the typical BUmiputera who gets shares and then cash out. Same sting operations. Khazanah is then as rotten as those Bumis who got shares and sold RM52 billion of the 54 which were issued to them under NEP. It's a new age Khazanah that is also debt ridden and issues sukuk and bonds here and there.
As to CAPEX spending especially if they are huge decisions on who to appoint as vendors must also be made within the full knowledge of Khazanah.
When TM got the license to operate the 3G services, it carried out tender exercises to secure the best vendors. Vendors must have been evaluated in terms of acceptability, track record and technical reputability. Hence, when TM called for tenders to supply them with the equipment, many were invited including those with lesser track record such as Huawei of China. Well known players such as Erickson, Nokia were also invited.
In the first phase of installing the 3G services Huawei of China appeared to be a favorite vendor. The appointment of Huawei as the vendor for the Klang Valley was pushed hard by several directors of TM. It was almost accepted but for the tenacity of some people who insisted that Huawei lacked a track record. The solution offered by Huawei was accepted by only one or two countries at that time. On the other hand the solutions offered by other well-known and tried vendors such as Nokia and Erickson were applied in many more countries. As a compromise, it was decided that Nokia would be appointed vendor for the Klang Valley and Huawei can be used to test its technical capabilities in peripheral areas such as Penang and Johor.
To recap: in phase one which is base period, Nokia and Huawei were the vendors.
We come to the second phase. When time came for expanding the 3G services, following the more or less compromised approach at the first phase, the same protocols were followed. Huawei and Nokia and others with proven track records were invited to bid for tenders for the expansion of the 3G services.
Read carefully this. When everyone of the solutions providers had been called, Azman Mokhtar received a gentle nudge from someone in MOF to " tolong Alcatel kalau boleh". This someone from MOF (remember during this time, MOF has MOF1 and MOF2) must have been a persuasive nudger; because Azman MOkhtar interpreted that tolong kalau boleh tolong as mesti tolong.
But Azman Mohtar is an honorable man. He swears by the yellow book, green book and what books.

10 comments:

Anonymous,  31 December 2010 at 06:18  

Dato', the fact that he remains as head of Khazanah is because of his interpretation to tolong kalau bolih tolong is as mesti tolong. So that is it and he is just like 'Unta Kenyang" dok angguk sahaja la and luar cakap lain tetapi belakang buat lain.
I bet that you will remain as ADUN or even can take over MB Pahang if you can do the same lakonan! The country does not need someone of analytical mind but rather the tumpul mind like many that head the government department. To quote wikileaks "This is an Incompetent nation" -lebih kurang macam itu lah in conclusion.
So what will happen next only GOD knows. But the only hope is the rakyat will rise up and wake up UMNO! if Jibby has to go then let it be! And if UMNO/BN has to go also let it be!!!
Syabarmenantimelayu.

Anonymous,  31 December 2010 at 07:36  

Dato,

Any contract exceeding rm50m need MOF endorsement. Perhaps, the two consultants work as runners for TM board members or someone in the senior management of TM. The reason being, Alcatel-Lucent had the technical evaluation result n prior to the tender and has met with this TM technical team during tender preparation.
As regard to
HuaWei, the famous SIL has a hand in assisting the local representative of HuaWei. (SilverRidge)

Anonymous,  31 December 2010 at 09:15  

Once NMY is gone, all these nincompoops will fall like a deck of cards !!!

Cepatlah Tok Jib, the rakyat are getting restless.

Tenang is coming !!

Little Bird

Anonymous,  31 December 2010 at 10:35  

why don't they just ask alcatel to give the names?and the bank accounts etc?

but the funny remark is the fact that alcatel made payments for info of no substance.Thus,wouldn't be surprised that the two are not "substantial" personnel within the organisations and not directly involved in the tender/award process.

anyway..the crux of your story is still to come.Khazanah created multicolor mgmt but is now surpassed by DSIJ (negative $4 bil oil hedger) acronymisms.But both report to TSNY (RM XXX bil forex loss trader).Like attract like.

We rakyat die die only and see things after the horses have bolted away.Urghh

Anonymous,  31 December 2010 at 10:51  

The MRT is a done deal and soon contracts will be signed and commitments made.At that point,it will be too costly to turn back.

Read a letter from the Star..interestingly the guy is almost begging for govt to review cos MRT will only benefit less than 7 % of the population.One of your commentators wanted to kiss PM's feet for a highway to Kota Baru.

But its a lost hope now.Even without a Masterplan the MRT is a done deal.The cart is before the horse cos the horse is on a yacht somewhere in the Mediterranean.

The sage Jala have pronounced that the MRT has a 25% IRR ...but qualified one i.e EIRR.I am sure if the Sage puts his mind and his number crunchers together he can turn stones to diamonds.But certainly his skills in turning oil to dollars have been proven to be grossly inadequate.But its ok..let him have another fo at playing games with our money.

Its depressing indeed.

Anonymous,  31 December 2010 at 11:43  

if tok jib takut sgt nak terajang nmy, tok jib sekali will go. slogan 1malaysia pun cannot save him

Anonymous,  31 December 2010 at 12:58  

Sak,

Isn't the standard modus operandi of the UMNO government and GLCs to set up investigative committees one after the other to investigate the allegations of misdeeds when in fact, these investigative committees are actually looking for excuses to "cover" up the misdeeds. How many investigative committees to-date have ever came out with their honest findings on cases of corruption, police brutality (eg., Teoh Beng Hock, Kugan), racist actions of school principals, etc. Even the royal commissions are just for show as nothing was ever done on the findings viz a viz Lingam case, police commission.

As if you do not know, the setting up such investigative committees is to lend credence to the government's promise to "act" against the perpetrators when in fact these such committees are just eyewash and intended to pull wool over the public's eyes that the government is serious. The only serious thing about these committees is to find excuses to bury the allegations and have the No Further Action stamp on the findings.

No wonder our tiny little red dot neighbour continues to laugh and ridicule the 1government as being incompetent and stuffed with nincompoops. The little red dot is simply making this fact known to the rest of the world.

Forget about investigative committees. Just get MACC to conduct the investigations because this is their job anyway. Oops, I forgot. The MACC will only investigate RM2000 corruption cases involving opposition figures as any cases above RM2000 and involving GLCs are outside their domain. Ah well, this is 1malaysia, the land of major corruption opportunities.

donplaypuks® 31 December 2010 at 18:46  

First, let's get this out of the way.

As so tellingly revealed in 'Yes, Minister' the purpose of an "independent" internal inquiry is to make sure the truth does not ever get out and that blame is attached to no one. Such inquiries usually result in the sacking of the office tea-lady or the messenger boy, and occassionally, the security guard!

Hrrumph! It is fairly commonly known in M'sia that bribes, whether by foreign or local contract tenderers, are classified as payments for 'market research' 'administrative assistance' or 'consultancy fees' in the books of the giver'!!

In the case involving a certain dead Mongolian lady and the payment of a gaji buta $500 million commission to her paramour's company, it was classified as payment for 'support and facilitation services' although the paramour in question did not know the difference between a periscope, protoscope and peniscope!

You mentioned the 3G tender. Ask yourself why Digi did not get a licence even though a week prior to the final announcement, market talk was rife that Digi had succeeded. Instead the last (of 4)licence was awarded to a MCA croney's company which had no track record whatsoever and the then Minister was quoted as saying 'Digi can negotiate with Time.com or the other (crony) company for a JV.'

And believe me, this is just the tip of the iceberg in M'sia!

One other matter. The pre-split price of Telekom was about $12 while post-split, the combined share prices of Axiata (formerly Celcom)and TM has hovered between $5 - $8.50. Similarly, in the case of the Sime Darby merger exercise, it is $24 vs $$8.50. Both these exercises were moooted by Khazanah and hailed a great success by them and the respective Chairmen and CEO's of Telekom and Sime.

By what standards these were successful exercises, you should ask the ordinary unconnected shareholders who cried all the way home!

Do we really have the right people running Khazanah, PNB, EPF, Socso and the Glc's? I think not and yet mediocrity, incompetence and downright thievery is allowed to persist in our country as a matter of corporate culture.

Time for heads to roll, you say? You betcha!

dpp
we are all of 1 Race, the Human Race

Anonymous,  31 December 2010 at 21:23  

Dato,
please let us know if our money is safe in Wawasan 2020, ASM, 1ASM...the bulk of my money are there!

Anonymous,  11 January 2011 at 17:48  

Dear frens
how come nmy so powerful? even tok jib cannot touch him?
hello brader, don't be so naivela, or pretend to be naive.

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