Friday, 31 December 2010

The Untouchables at TM and Khazanah- Final Part.


 

Picture this scenario.

It is now the second phase of providing the 3G services. Nokia and Huawei have performed well. The services were well taken up by consumers. It's time to expand. New tenders must be called. They are called.

The tender committee deliberated on the prospective vendors to expand the services of 3G. The successful vendors in the First phase, Huawei and Nokia participated too. So did other established players. Probably 10-12 were shortlisted.

Now here comes someone, admitting the name of Alcatel. Alcatel says we have the product. But it has no track record. Its product hasn't been tested for its technical integrity and robustness. It didn't get a favorable verdict at the technical stage.

Nevermind. We have been asked to help if we can. That means we have to. Just this time, we set aside the provisions in the colored books. The whispers from beyond the walls of Khazanah are more potent. So, some people insisted Alcatel be given a chance to participate. So it did. It won the contract as vendor to supply the 3G services for the rest of the country. The price was USD 85 million.

A minority objected to this late entry insisting that it must be subjected to the protocols of tender. By that I suppose, it meant, Alcatel must go through a rigorous process of selection and evaluation. Having qualified, they are admitted into the final phase of selection, being assessed by the tender board committee. Assuredly, the person carrying the cause of Alcatel was a member of the tender committee.

It didn't go through such a robust and transparent procurement process, but was admitted in any case. A larger number of board members didn't see anything amiss at this manner of entry. There were whispers that Alcatel's entry has been endorsed right up to the corridors of MOF2. Even though, it was clear, such highhanded admission violated the rules and guidelines ensconced in the multicolored management manuals supplied by Khazanah. The High Priest at Khazanah sayeth- do, so it must be done.

Protestations by minority were easily defeated. The chairman of the tender board put his foot down insisting that Alcatel be considered.

I suppose now TM will grill the chairman of the tender board then. The two fall guys are said to be runners for some board members or to some senior management at TM. If they are runners, they receive instructions. We must go after them.

By the way, I must salute Zamzairani for declaring that investigations into the conduct of TM will be an open book. That book will be much more respected if it leads to direct investigation by the police or MACC. I salute him further, if his statements were made independent of Khazanah's supervision. Hey Zam- did you get clearance from Amok? You mau mati kah? And lose the RM 1.5 million annual income?

Move over to Indonesia. TM has an international arm, TMI. In Indonesia for example TM through its TMI operates it cellular services through ExCelMinIndo. It wanted to offer the same vendor for the Sumatran market. Since Alcatel has already been accepted as the vendor for peninsula Malaysia, why not appoint it as vendor for the Indon market? Senang kerja bukan? If it's good for Malaysia, it must also be good for Indonesian operations.

Those people in Sumatra were asked repeatedly to accommodate the technical compatibility that comes with Alcatel. The CFO was asked to accept the appointment of Alcatel for the end user- Ex Celcom Indo by reporting that Alcatel offered the best in terms of financial acceptability. He refused unless the people here in TM Malaysia request so in writing.

The chief engineer there was asked to report that Alcatel satisfies all the technical requirements and its appointment will therefore be technically justified. . He refused too unless the request from the parent company in Malaysia was done in writing.

In the end, to decide for the end user in Indonesia, TM tender board here approved the award to Alcatel.

What is the relevance of the story above?

The relevance lies in our ability to place what is happening now in its proper context. That context is a procuring regime which is far from what TM has pompously claimed. We have seen how, the procurement regime which consists of certain protocols was often violated to allow selected and preferred and that which has received whispered endorsement to be appointed vendor.

Now now people, the Alcatel people have themselves admitted to bribing the Malaysians, we are now setting up a board-subcommittee to investigate? I am not about to allow the cheap trick in retorting that criminal charges cannot be proffered by a company. Someone commented that on my article on Sime Darby. Then, the most logical step for TM and Axiata is to jointly refer the matter to SPRM so that criminal charges can be taken.

All this setting up a committee is akin to the chisel making noises when the house is already completed. Pahat bising, rumah sudah siap. We the people are reading it more as a CYA ruse- Cover Your Ass ruse. Somebody other than the 2 guys has benefited from the deal. The surest way to get to the bottom of this affair is to get the two jokers to sing like canaries.

It is also strange; the MACC is offering to verify the allegations. Will TM and Axiata or even MACC will then come do the Singapore thing of saying, the version of the story doesn't seem to match with our own internal notes?

The facts are these. Whatever was supplied by Alcatel didn't work and was scrapped. The question is, at that time, was Alcatel evaluated rigorously or was its entry into the business system of TM in Malaysia and also Indonesia, conducted under strict terms of reference of TM's robust and transparent procurement policy.

The way Alcatel was pushed through for the Sumatran market raised serious objections by certain people. It must have been very serious indeed to have led to the resignation of Dato Nurjazlan Mohamed who at that time was a board member of TM and also member to the board audit committee.

So, let us take TM on its "believes that it has a robust and transparent procurement policy and adheres to policy, processes and current best practices". Further, TM added:-

"We take these allegations seriously and we will extend all necessary co-operation where required to the relevant authorities. Through a proposed board sub-committee, we will further conduct a thorough internal investigation to safeguard the integrity of our procurement process and Code of Business Ethics. "TM has a zero tolerance policy towards such improprieties and will take appropriate action in the event that any of our employees were indeed involved," the company said in the filing.

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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.

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Thursday, 30 December 2010

Handling UMNO’s political nemesis


 
How do you deal with the man with so many aliases? Anwar Ibrahim, Pak Sheikh, BABI, Mat King Leather etc etc.
I was talking to a former PKR member who has gone over to parti KITA. We are friends but that doesn't change how I see the party headed by Zaid Ibrahim. Parti KITA will be launched soon. It will be made up of some professionals and perhaps a handful of MPs. I am doubtful about the latter group or perhaps my friend meant a few MPs from PKR. As to its prospects in the coming PRK 13, the party in my mind has 2 chances- slim and none.
But, that aside, how will we handle this parti KITA? Anwar can't say- parti KITA parti yang teruk. Kita sudah beri dia orang peluang dia main kita punya belakang. He can't say that can he?
UMNO too can't say parti kita parti tak guna. Our party is rotten to the core? UMNO can't say this. Only Tun Mahathir can. At one point in time.
Zaid Ibrahim has a least managed to bring a little bit of hilarity into our politics.
We moved on to the next conversation topic. My friend was positive about the recent problems faced by PKR over its party elections. But I fear, his optimism is premature.
But how do you deal with Anwar Ibrahim? I told him, we cannot over exploit the recent internal political bickering in PKR. The reprieve came when those close to PM thought they were doing the PM a favor by having Anwar suspended for 6 months. That's like giving this demagogue of a politician a new breathing apparatus.
He will go around this country to goreng the public and the public will warm up to him. He can claim, this is yet another of those BN contraptions to silence credible opponents. Anwar will make it out as though he OWNS the truth. He will mesmerize thousands and thousands of easily swayed people to his cause- whatever he chose at that particular moment.
The problem here is this. UMNO machinery will not be there to answer him. This is the usual modus operandi of UMNO. Everything has to be done by the PM himself. In 1999, when Anwar's sympathizer's including those within UMNO itself went around parading images of Anwar with a bludgeoned and blackened eye, UMNO didn't answer. They were living under the illusion that any preposterous claims by Anwar's people will not be believed by people at large. Well they did and gave Najib a 241 majority.
If that can happen then, it is repeatable. Now, as opposed to then, the claims are much easier and digestible for the palate. Meaning whatever claims Anwar makes, will be translated into more popular support.
Bangun lah UMNO.
The one who suffered a dent in credibility most was perhaps the speaker of parliament. Never before in parliamentary times, a speaker had to descend from his perch and engaged in a lengthy debate explaining his position. If he wants, he'd better tell the PM he wants to step down as speaker and wants to become an MP. Then he can debate to his heart's content. He appeared at most times like a bewildered headmaster whose pupils are making fun of him.
Anwar's 6 months suspension had the immediate effect of reinvigorating the PKR people. It also provided a diversion from the internal problems. If we read Gobalakrishnan's tweeter, the messages he sent regarding Anwar can be turned in a roller-coaster of a steamy novel. People get entertained and amused but those things are not turning into vote getting storylines.
How do you deal with this creature called Anwar?
I once asked a close friend of Anwar who has been his schoolmate at MCKK and now a leading member of PKR. He says Anwar is beatable. You can dissect and demolish his thinking as expressed in his ideas, plans and ideas. UMNO must counter these and expose the hollowness and shallowness of Anwar's thinking.
Going on the offensive by the daily grind of vile and explicit vulgar description of Anwar is counterproductive. As one of his former schoolmates now residing in Australia has done, it only requires matching what the government has against Anwar with what the people can list against Najib and this government.
The government will be seen as the big bully who cannot handle the opposition and needs to resort to coercive methods. You silence your critics by jailing them, by causing bodily injury and probably by even bombing them. The government is seen as the big bad wolf.
This perception should not be nourished further by the unceasing media onslaught of picturing Anwar as a heinous animal. Because once the perception of a big bully government takes root in the populace, what does this show? This shows whatever Anwar and his propaganda machine churn out are believable and can win them votes. You can't break this lock jam of perception by legalistic means. People will simply turn around and say FU!.
Allow me to illustrate. If the mother to the gerakan youth in Penang goes religiously to Anwar's ceramahs without fail, that spells trouble. It means the idea of Anwar as a victim to a tyrannical government has taken root. If mums and dads stand by Anwar in a show of defiance, it shows Anwar can win.
I have a Malaysian Indian friend who is a successful IT entrepreneur. One day he heard his 75 year old mother praying for Anwar. He was shocked and proceeded to explain to the mother about Anwar. The mother answered back. That may be true, but the government here is the big bully. You can't answer Anwar, you lock him up, and you beat him up. Those are actions of a big bully and tyrant.
If this idea about Anwar as victim takes root, you have the idea of a government that is defeatable.
Instead let others do the fight for the government. Let Anwar fight his detractors. Let Nalakaruppan for example have his day in court. I am sure all the juicy details about this tennis playing partner of Anwar who also doubled up as personal chauffeur ferrying the fairer sex will be taken up by the public. Let all those Rahimi's Saifuls, Rashid the KY Jelly procurer do battle with Anwar. Let Jamil Kuching fight Anwar. Then Anwar will have to fight these people and at the end be a spent force.
The better way to demolish Anwar who relies on the court of public opinion to save him, is to use that very forum to expose him. The main cast of this drama will be people like Nalakaruppan, Jamil Kuching, Rahimi, Rashid and so on.
Let's see if PKR is evicted from their current premises as talk is rife that PKR owes the owner of the premises, a one Soh Chee Weng backdated amount of around RM 700k. Easily payable but it appears that Azmin and Syamsidar have a tight grip on Anwar's finances.

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Wednesday, 29 December 2010

The strange case of Benjamin Button- eh, Sime Darby.


 
SLIME SIME DARBY.
For a brief moment, most of us were probably reassured at the solemnness by which Sime Darby attempted to seek retribution. They lost RM 2.1 billion; they seek to recover a total of RM 430 billion. This amount must be what the forensic auditors recommended. RM 430 is a pure loss through breach of duty and management negligence. The balance of the loss is operational loss and can happen through the ordinary course of business operations. The balance loss is therefore justifiable and not subject to recovery.
I don't know what to say- you lose this amount of money, all you can come up with, is a civil suit? How dumb can that be? Why no criminal charges proffered? Sime doesn't know the meaning of corruption?
How will Sime seek to prove management negligence and breach of duty? Is there some golden rule, you depart from which constitutes a breach of duty? Breach of duty means what? Negligent? Then when Idris Jala lost many millions of money through his negligent hedging should be asked to pay back the money MAS lost?
Nor Yaakob who has gone crying to see Tun Mahathir, horrified at the thought that he may be shown the exit from cabinet this time, should also be asked to pay back the money he lost when speculating on our currency. There are so many examples which will readily suggest that the move by Sime to recover money through civil suits is a stupid move.
How do you define breach of duty and negligence in business matters?
Some people in Sime Darby who were before that, were probably touted as exemplary managers and excellent talent, were found to have caused Sime Darby to lose RM2.1 billion.
Sime is now seeking recovery for 338 million from 4 people. It is further seeking recovery of another RM92 million. This means the total amount intended to be recovered is 430million. This will also mean that out of the 2.1 billion lost, if only 430 billion is the recoverable amount, then the loss of RM1.6 billion is considered loss from business operations. That is acceptable?
Clever, man.
You come forward to pull wool over public eye by stating with the suitable and accompanying somber tone to say- we shall recover this 430 million because of principle. People will laugh at this- because you have not fully explained how the 1.6 billion is a loss that is justifiable and so, there is no need to recover. Sime people think it's their father's bloody money which they can lose.
We find it laughable amidst this gargantuan loss; some people in the Board of Directors have no iota of shame not to resign. I have written a long time ago, the entire board of directors should have resigned at the every moment the financial scandal came to light. If they had, they would still be around to be called in as witnesses to help us discover the truth.
So despite Sime's at first sight, laudable move, there are so many questions unanswered. We shall have to do a bit of sleuthing.

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Sunday, 26 December 2010

Lessons from Tun Razak: class and finesse.

The good son will try to follow the father's steps as far as possible. Or he follows in the sense by avoiding the mistakes of his father.
Tun Razak, our second PM and the father to the present had some eastern gentleman's qualities about him in his political dealings. One of the endearing qualities is his way of dismissing wayward ministers. He was magnanimous.
I believe he was a firm believer that a person's single mistake does not erase the same person's virtues completely. Guided by probably this belief, Tun Razak searched for ways to give his errant ministers exits by way of honorable discharge. The gentleman always accords others with at least some politesse, at least some modicum of respect and honor.
He was never a subscriber to heinously underhanded and supercilious means to eject his team members.
Towards the end of his life, Tun Razak was also intensely bent on ridding himself of one fatal mistake. This 'mistake' was allowing himself be surrounded by disreputable and self-serving advisors. Circa late  1975, before he went to London for what would be his final medical treatment, he stopped over at Denpasar. As many of you know, Denpasar was to be the venue of the first Asean Summit or something. To his last days, Tun Razak wanted to ensure everything was in order.
In one of his relaxed and reflective moments during that time in Denpasar, Tun Razak lamented aloud that he needed help to get rid of 'communists' around him. These people are in control of the country. That was probably one of the darkest periods in the life of Tun Razak. Some people surrounding him had crippling control over Tun Razak.
There are some lessons here for our current PM. It is his prerogative to dismiss and end the services of his minister. But he must do this in the manner Tun Razak would have handled the situation.
As PM he and he alone must do the unpleasant duty. He must not and never allow himself to be ruled and influenced by extraneous factors. While there may be a need to end the services of any of his ministers, he must also address himself to the humanely principle that a person's one fatal mistake need not completely erase one's virtues.
The person concerned may indeed be despicable and deserved to be dismissed. But let him go with a least some residue of self-honor intact.
A potential storm in brewing in the case of a senior minister alleged to have raped or had sex with his Indonesian maid. The incident, it is said occurred 3 years ago. The maid sent documents or some form of documentary evidence to the US embassy and other embassies. The matter was brought to the attention of the PM of Malaysia then.
To me this is not an issue whether Pak Lah concealed the incident or not. For all we know, Pak Lah as the PM then may have concealed a whole lot of other things. He may have kept quiet even on issues that were detrimental to him personally.
The issue here is how to conduct oneself with class and finesse.
If this minister is guilty of such gross indiscretions, the PM must dismiss him on grounds that the latter's dismissal is made on the PM's absolute prerogative. The PM must never be seen as being railroaded in making that decision or he must never been seen as complicit in a conspiracy to 'assassinate' a member of his team.
It is most unfortunate, that word on the ground is offering the storyline that the PM has somehow given his permission to leak to the public, about this particular minister's indiscretions. If the PM knows of this breach of discretion, he must decide on the basis that it's his prerogative to dismiss. He need not resort or countenance underhanded tactics.
That brings us to the dark underworld of self-serving advisors. Tun Razak made that mistake and he wasn't able to control it. In a way, his demise solved the problem for him. But our current PM will want to stay around longer and that will depend on his ability to never allow himself be corralled by self-serving advisors.
The danger of being cocooned by self-serving advisors is the control these people have over what gets to the PM's attention. What passes to the PM's attention may only be what the advisors deemed to be of profit to themselves.
Here and now, the PM cannot afford to be fed with one way traffic kind of information. In this age of internet supremacy where information is no longer the power tool for a small group, the PM must be opened to all means of information. Even those from his advisors must be treated with circumspect.

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Friday, 24 December 2010

Warning signals for UMNO

At 69% approval rating, that is good. I have no doubt that PM Najib enjoys widespread acceptance. I agree that he has done not bad too considering that he inherits a cabinet entrusted upon him by Pak Lah. By and by, there have been no major changes in UMNO leadership structure across the states and bahagians and no major changes in cabinet composition. Old faces serving Pak Lah are still around and faces that we are not sure of being in there in the first place are still around. Especially those wet behind the ears ministers and deputy ministers.
Shaziman Abu Mansor for instance as full minister who seems more adept at antagonizing the civil servants at KKR. Behind the boyish innocence, there lurk some more basic instincts. Its difficult to stay pristine supervising a ministry in charge of million ringgit contracts. Of what useful purpose for example is the deputy youth head of Pemuda UMNO in the team? A more sensible replacement for this fellow is the present head of UDA- Norjazlan Mohamed Rahmat. He has the right values and capabilities to represent UMNO.
But have we looked at UMNO's approval rating? If PM Najib's rating is higher than UMNO which I believe it is, then there is something inherently wrong in UMNO. Thus the only salable product in UMNO now is Dato Najib.
So we have ONLY one salable product. But this product can be sullied by the eager-to-please kitchen advisers. As Najib becomes more imperial and not easily accessible, he is also blocked from receiving reality checks. The only information going to him is filtered by a coterie of advisors. Asked why he is not replacing them with a new team, Najib answered these boys are utterly loyal to him.
Big mistake. That however doesn't necessarily translate into winning votes. He has to get a new team simply because of being in an altogether different position. He is now number One. Loyalty can be rewarded by other means. Retire them off with sustainable business for instance.
We can't win the country riding on the coattails of one fellow. Approval ratings based on a person makes our destiny dependent on that person. What happens if the ratings go down next month?
We are faced with the question- is Najib the time teller or the clock builder? The approval ratings seem to point out he is the former. This spells problems for UMNO. It means UMNO lacks the elements to make it an enduring and lasting organization.
The divide between Najib's ratings with that of UMNO offers no comfort and respite for UMNO.
Is the 6 months suspension of Anwar Ibrahim a strategic move in the sense that it improves the standing of Najib and the government? I think not. PM Najib must have been ill advised by his coterie of eager- to- please advisors. Damn those advisors. They must have been thinking suspending Anwar is a boon to Najib. Or they are doing a favour to Najib.
What it has done immediately is to cancel out the recent internal problems within PKR. Those disillusioned suddenly found common grounds to rally behind Anwar. Anwar will be able to weave a story that this is another of those inventions manufactured by those in power to destroy him. Unfortunately for Najib and the government, this story line resonates well with the people.
Two, you have actually given Anwar a 6 months head start to campaign for elections. He and his people are now able to go around the country to explain their side of the story. What will the UMNO machinery do? It does nothing much to answer the Anwar juggernaut.
Unanswered, what Anwar and his people say will only bring misery on UMNO. Remember the black eye episode? People, even UMNO mid-level leaders in Najib's own Bahagian went around distributing Anwar's blackened eye incident. But his eager to please local leaders kept telling Najib everything was under control. They could have gotten away with their glib lies except for the 241 majority verdict. The same lies are being presented to Najib at the moment.
What about UMNO being accused of abandoning its role as voice of the Malay people? That role has been surrendered by default to Perkasa. It never was nor will it be about Ibrahim Ali. But what Ibrahim Ali has done is to steal the thunder that has been the domain of UMNO since 1946. To articulate about Malay interests as intelligent as it can. In the hands of Ibrahim Ali, the Malay interest which could have been packaged as rational politics is being presented in the raw sewage form- spurning and scaring people.
Who is at fault there? We can't expect Najib to do everything. The fault lies with the other top leaders and ketua bahagians and the information chiefs.

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Deals and last minute sting jobs

I am not going to listen to the usual flippant answer- you don't know? Why it's all designed to fatten the war chest of UMNO and BN- that's why we have all these deals. That is like saying every chicken road-killed is because UMNO is in power and every road-killed chicken in the kampong is the fault of the local assemblyman.
Get a hold of yourself people.
So let's go behind the reasons why for example these people in decision making positions decide to buy over Sunrise Bhd. What they will do perhaps is to create instant billionaires who will invest in China and Singapore. UEM which has its HQ in a very tall building at KL Sentral does not know how to build high rise condominiums? Those people in UEM land must be dullards or what.
With RM 1.4 billion they can go get all the kwailos out there to come work in Malaysia and build all the tall buildings they desire that reach into the clouds. With the same amount of money, they can entice the whole property team at Sime Darby Properties to work for UEM. No, let's go behind and ask more awkward questions.
Let's go behind, why there is a rush to award the RM43 billion job or part thereof to Gamuda-MMC. Obviously some people are getting fabulously wealthy by orchestrating this deal. Why is Putrajaya forming a SPV to finance this project when it was announced the last time, this was to be private sector project financed by private sector? Here is why. Make public the liability, make private the profitability.
Or why now, UEM and EPF who together control almost 70% of the PLUS highways appear to balk at an 11th hour offer by a little kichimayung Jelas Ulung. Maybe there is some collusion and conspiracy to defraud. Or why people in MAS are buying a large number of airplanes without justifying the purchases to the volume of passengers? Because maybe, large amount of commissions exchange hands.
Does the money go to UMNO and BN? Come on, they go to the finders-keepers people.UMNO, BN and the government can always be the bogey-man.
In that spirit, let's play around with the most recent drama unfolded at Khazannah's doors with a little nudge from Jelas Ulung. When the CEO of Khazanah pompously declared that PLUS highways are a critical national asset and the same sentiment was echoed by the choir boys at EPF and UEM, the issue should have come to an end.
But when Jelas Ulung comes forward and offers more meat in the form of explicitly saying they now have firm source of financing and now they won't ask for tax waivers and now they will also reduce or maintain the toll rates- all these sound and appear to be done as if in response to instructions from above.
It suggests for example, people in Khazanah telling some people out there- hey you go back to the drawing board- come back to us with a new proposal at the last minute, with some novel adjustments to pluck the holes in the entire previous proposals.
That would allow those people in Khazanah and EPF and UEM to say in unison, this is a polished deal worth deliberating. We shall now recommend to the shareholders and to impute a disinterested sense of fair play on the whole thing, we shall abstain from voting.
Suddenly, those boys who previously pompously declared that PLUS highways must be retained at all cost because they are a critical national asset are passing the buck to other shareholders. Why the sudden pious retreat?
Its money, money always sunny in a rich man's world.

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Wednesday, 22 December 2010

Here and there.

ONE.
It's comical really. The general big idea is, by teaming up with Sunrise, UEM land will leverage on the latter's expertise in high rise up market condominiums. UEM can build all the other infrastructural edifices; it suddenly becomes dumb when coming to build high rise building. You mean to say, Tong Kooi Ong goes up and mixes the cement himself and lays down brick by brick. So that he becomes a must-have element in the new UEM-Sunrise team?
He engages all the other experts in building them la towkay- architects, contractors, designers etc. the same thing, people with imagination at UEM can do better.
What's the value added actually by taking in Sunrise? Don't tell me, the man heading UEM land coming from Imperial College London can't compete with Tong Kooi Ong? Sunrise hasn't got any substantial land bank anymore except maybe in Johor.
So what's the wisdom behind UEM land buying up Sunrise?
TWO
I am puzzled at the unbounded exuberance of the deputy minister of Transport assuming the role of chief spokesman for the 43 billion MRT project. Isn't this a proposal and project by the private sector to be financed also by them? If so, why does a government man speak on behalf of Gamuda-MMC?
We, the people have a right to get an answer as to why, the EPPs in the ETP which were supposed to be 92% financed by private money are now seeing as though this MRT is a government project? It will at least cost a minimum 43 billion. The government through some department named Prasarana Negara will be the owner and another will supervise the construction. Aren't all these indicate that this project is actually a government project and that Gamuda-MMC which is termed as the PDP is the chosen contractor?
THREE.
This is probably mischievous on my part. But I have been wondering how the government selects winners for the Maal Hijrah icons? What criteria do they use?
Sometimes I am wondering, whether they do this, in the same manner American contractors go out in search of jobbers. Contractors will drive their lorries and pick up any of the Mexicans who have crossed the border as casual workers. The Malays say- tangkap muat.
For example, don't get me wrong ok. The governor of our central bank Zeti Aziz is an accomplished economist. She specializes in Monetary Economics I think, one area in the study of economics which is quite rigorous. But what has she actually done to deserve such an accolade? She has been a good manager, no doubt about that- but in 'peacetime' so to speak.
She wasn't governor during the tumultuous years of our currency crisis. The actual and de facto savior of our economy then was Tun Dr Mahathir. So, if anyone deserves the accolade of Maal HIjrah icon in economics, I would certainly have voted for Dr Mahathir.
No disrespect intended to Tan Sri Zeti.

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3rd Force: between the concept and the actual.

Malaysians on the whole have more affinity with actual political entities. They are more confident and comforted with a materialized organizational form like a political party. Something that has structure, policies and agenda. On the whole, they are less likely to be attracted to pure concepts such as for example the so called 3rd force in Malaysian politics?
Who or what is the 3rd force in Malaysian politics? Does it exist in materialized form with structure, policies and agendas? Or is the 3rd force more of the projection and extension of personal ideals and beliefs which are not unique anyway to the beholders. The same ideals and belief are better articulated and fought for by organized corporeal political parties.
I seriously doubt if RPK and his band of merry men, will make any impact on Malaysian politics. How does it exist? In a substantive corporeal form as a political party or just a 3rd force in concept form?
MCLM or the Malaysian Civil Liberties Movement is at the moment a loose association of likeminded individuals moved by the concept of civil liberties and some understanding of what it means to be democratic. And at the moment, democratic means anything BUT Barisan Nasional or UMNO's policies.
I am not trivializing the motivations of these well intentioned individuals. The issues raised and the concerns voiced are undoubtedly pertinent and very relevant. But perhaps more suited to discussions in the PJ civic center or maybe in the private rooms at Le Bodega or the terraces of private clubs in Kuala Lumpur. Or in the forums attended by starry eyed university students.
And where will the likely constituencies of the MCLM be? Probably more suited to urban constituencies in small pockets of socially conscious groupings such as NGO movements, liberal PTAs, something like that.
They will face formidable competition from established political groupings such as PR, which is something more solid than just some intellectualized concept.
Malaysians with a well-grounded political experience based on political parties that exist in form and substance are likely to stay away from a nebulous concept of a 3rd force. What are its agendas? Its plans? Other than a coalition of individuals with a pronounced disgruntled objection to UMNO and BN.
Even the re-emergence of Zaid Ibrahim in a renamed political party will not make any difference in Malaysian politics. Zaid Ibrahim and his self-sustaining politicians and candidates will not stand a chance in the coming elections.
The optimism of 3rd force entities and Zaid's party is based on a misreading of our political mood.
The misreading stems perhaps fro over reading and unbounded optimism attached to the results of the 12th GE. I say perhaps we have over read the support for opposition parties as being a permanent shift. As such I think, there will a shift back of allegiance to BN and notably UMNO. When that shift happens, the casualties will the MCLM and parties such as headed by Zaid IBrahim.
UMNO and BN will not be able to recapture old political territories but they may be able to recover some lost ground. UMNO's success at that will depend on several factors but that will not be discussed here.
Where is the 3rd force really? In my opinion the actual 3rd force in Malaysian politics are the political parties in Sabah and Sarawak. They have tasted blood and they now know they can be the kingmaker in Malaysian politics. Whichever political parties win in Peninsula Malaysia will have to factor in the Sabah and Sarawak politicians and will have to accommodate them.

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Tuesday, 21 December 2010

Wealth creation and rent seeking

THE TALE OF 2 CITIES: - WEALTH CREATION, WEALTH TRANSFER.

Some valid points were raised by a commentator known as One Malaysian. I don't know who this person is. He/she seems to possess considerable analytical skills. The comments One Malaysian gave to my article, comes in two parts. I will respond to the second part first. I feel honored that my blog has attracted minds of considerable caliber and through the exchange of ideas and thinking; I am made richer in mind.

The second part raises the issue of wealth creation and transfer of wealth or rent seeking action. This will mean, actually, the whole approach taken by the government to create a wealth owning and earning Bumiputera class is wrong since day one. Let me state from the outset then- the government approach breeds only rent seeking behavior. Wealth transfer, transfer income are not additional wealth and not additional income. They are only wealth or income passed from the right hand to the left.

That is why we have been advocating a free market system. Its only when a person becomes a capitalist in the sense that he assembles factors of production, organizes them into production, he creates wealth. Further, through exchange, the country is made richer. No omnipotent body or central planner can plan for the myriad of independent decision making economic actors. The free market and the pricing mechanism provide the means whereby the multitude decisions are reconciled at the least cost and therefore most efficient way.

It follows then, if a body intercepts the free market system, then it replaces the pricing mechanism and furthers only the interests of special groups in society. It furthers the interest of special interest groups, the well-connected and those with power. This is the bane of big government. With big government playing the role of market spoiler, what they do is not create additional wealth. What they do instead is transfer existing wealth from one section of society to another.

Is this good or not? It depends. The judgment on whether this role is good or not depends on the questions we want to answer. If our priority is on the redistributive aspects of the economy, then the issue of creating an overall richer economy is sacrificed. If our priority is the creation on an overall richer economy, then, the distributive aspects of the economy are not emphasized.

The general rule is that, any government linked companies doing businesses, holding and buying shares as trustees for the public or Bumiputeras, , when divesting them to the public, are doing only wealth transfer or just rent seeking action. No new wealth is created and as One Malaysian said, we as a country are not any richer.

The problem is this: our priority is on the distributive aspects of economic management. So wealth transfer notwithstanding, that process of transferring existing wealth is necessary for the overall wellbeing of society.

It also raises a thorny and value loaded issue; will we be as vigilant if the divestiture of shares is taken up by non-Malay economic interests? Will the wealth transfer then be scorned at with the same unspoken vehemence as when the wealth transfer is directed at Malay economic interests?

But One Malaysian has indeed raised a very important point. Creation of additional wealth cannot be achieved through wealth transfer methods.

I share with my readers the rapier sharp analysis of One Malaysian.

Has anyone seen the mission statement of Khazanah? Is it their sole purpose to look after the Bumiputra interest – investing in "strategic" or profitable businesses with the express objective to on-sell then later to Bumiputras? I ask this in pure innocence because I actually do not know. I would be grateful if someone can give me a definitive answer. As of now, my impression (perhaps completely mistaken) is that Khazanah was created to be the government's investment-arm much like Singapore Investment Corporation – a sovereign wealth fund of sorts. The Bumiputra agenda that you talked about was to be a secondary aim. This might mean, for instance, that Khazanah might join up with a Bumiputra party to co-invest in a new strategic venture to share risk. But basically Khazanah's funds belong to the government i.e. to all Malaysians and therefore it has the primary duty to ensure that the funds are well invested and not used solely to benefit the Malays.

Let me get to the next point that you have put forth so forcefully, that is, that Khazanah exist to further the Malay Agenda by selling assets to capable Malays to achieve the aim of spreading wealth ownership. Is this a sustainable and realistic way for the Malays to gain and retain substantial wealth? Make no mistake, I want to see the Malays succeed, but I doubt very much what you advocate is the correct way.


 

Syed Mokhtar is perhaps a very good example to illustrate my point. Did he really create any NEW wealth? What he is good at is to cozy up to politicians to buy government assets cheaply on bank borrowings – ports, Bernas (rice monopoly), power plants, army-supply companies. These are essentially monopolies or quasi-monopolies that guarantee a profit and thus are easy to finance at high margins. If the assets have a high probability to earn say 10%, one could get the bank to lend 80% at 6% interest, and simply pocket 4% - a type of rent-seeking behaviour. Any fool can do such business. He has created no significant businesses from scratch i.e. no new wealth was created, but just shuffling paper ownership from government to him – really a wealth transfer. Is this the route to long-term Malay success? Assuming Khazanah now agrees to sell all its 40 holdings to say 40 Malays it only means that 40 Malays become rich overnight without having to take risks and create anything new. We as a country have not got any richer. And after selling these profitable bits, what else is there to sell? How do we keep the other Malays happy? No, let's think of better ways to help the Malays succeed – and the route will not be easy, but the success will be real and lasting.

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Monday, 20 December 2010

What is Khazanah’s end game?

What's the end game being played by Khazanah? It's instructed to sell shares in the companies that it invested. Reason being- to flush the market with liquidity. But have we thought about the collateral damage?

I have long thought that it was wise before we appoint anyone to head GLCs- doesn't matter how clever they are, they should be re-schooled into understanding what it is to be Malay and the bigger Malay agenda. Now, don't get me wrong, I am not advocating anything sinister on the non-Malays. But imagine this- if those people whom we entrusted to implement policies that could have furthered the interest of Malays as laid down by our policies, didn't understand the reason they were put there in the first place, how could things be better?

Suppose, you install Malays who don't think much about affirmative policies, what do you get? You get results that they think are all right but in reality are detrimental to Malay economic interests. The Malay agenda becomes trivialized.

A few weeks ago, a leading newspaper interviewed a former Malay corporate leader. He was asked whether it is good business if KFC is sold to private Malay interest. He went on to answer if KFC business is to be sold, better to be sold to another GLC.

This is a stark example of someone who we extolled as a sound businessman who doesn't understand the Malay agenda. The idea has always been a GLC holds shares on behalf of Bumiputeras and somewhere along the line, there is a credible Malay entrepreneur who can take over the business, he should be given the chance. Hello- if you people must know, theer are many Malays out there whose name isn't Syed Mokhtar Bukhary. You give opportunities to many Bumiputeras. You don't keep the businesses in GLCs for infinity. This was why GLC was set up in the first place. But the stupid business leader didn't understand the bigger Malay agenda.

The same fools seem to head other GLCs at the moment. Many of them were placed at strategic GLCs by Nor Mohamad Yaakob. Obviously he is the chief culprit who doesn't understand the meaning of being Malay and the bigger Malay agenda.

What was the main reason Khazanah was set up? To invest in industries and businesses on trust for Malays. Now, if Nor Mohamad Yaakob says, sell into the open market, the value of Malay economic interests will be diluted. That is what I mean; having Malay technocrats who don't understand what it is to be Malay. Same goes for those in Equinas. Send them to be re-schooled first.

I think if I become a delegate at next year's UMNO General Assembly, I want to move a motion to lynch Nor Mohd Yaakob. By his balls the better. This is the man who just said we are nearing our goal of becoming a developed nation. Are we getting the fabled USD15, 000 per capita income already? Weren't we warned that that we are going to be a bankrupt nation if we go on spending on subsidies and then the same guy who gave the warning then launched a massive plan to spend and spend?

Maybe Nor Yaakob is seeing a lot of money flushed in the market. How? He has instructed his Khazanah boys to sell off shares to increase liquidity in the market.

As the man responsible over Khazanah, he famously endorsed the recruitment of brainy boys to helm Khazanah and GLCs. He then went on to announce, these people will be judged in accordance to various performance measures. The over rated KPIs.

KPIs are good only for marking term papers nowadays. The best KPI now seems to be the approval rating of ordinary Malaysians. Generally speaking, we don't have faith in the Khazanah mafia. The PM should now find ways to disband Khazanah and re constitute another sovereign wealth fund. Answerable to parliament if need be.

There are so many strange things done by the Khazanah people. It used to be a front for McKinsey at one time. I don't know why, these supposedly brainy people appear to be overawed by the Mckinsey name. Maybe because they are numeric people or maybe the confidence oozing from Mckinsey boys is secretly adored by inferiority complexed people at Khazanah. Nowadays we hear Azman Mokhtar going around sermonizing as a lay preacher. He has a diploma in some religious studies or something from UIA. Maybe by doing that, some of the questionable business deals are cleansed, no?

The man in charge of Telekom Malaysia for example was nominated by Azman Mokhtar. Azman's preference on ZamZairani is on the basis of "I can vouch for him as I know him since our MCgaygay days". Yes sir, this is great- we choose people on the basis of who I like and who I know.

What has Zam done for Telekom? Nothing other than serving as batman for Azman Mokhtar. And I hear it was Azman who moved the motion to increase Zam's salary to almost RM 100k a month. Holy cow- you pay RM 100k a month managing a company that's not moving anywhere.

What will Zam do that will not be different from what that Wahid Omar chap did before him? First, get rid of deadwood in Telekom. Wahid did that. And I have to say in all honesty; at least that was a credible achievement. It's amazing he didn't get blown up for doing that.

Retrench or VSS those who don't add value to the company. Then, there is the asset stripping much liked by accountants. Selling off Axiata shares appeared to be the latest. With the money, TM has funds to pay shareholder and probably avoid confrontation. They will go on selling whatever can be sold.

What is Khazanah's agenda?

Maybe Nor Yaakob and his KPI-steroided boys at Khazanah have different agendas. They want to be in business (more than 50 ventures all over the place) without a care about the bigger agenda. The bigger agenda is to push for Bumiputera ownership of economic resources at reasonable levels.

I maintain and believe that the primary purpose of Khazanah as is with GLCs is to hold shares on trust for bumiputeras. That should have been the primary agenda. It holds in trust the various companies in the name of Bumiputera. Then, if there are Bumiputera entrepreneurs who can take up the stakes that it holds, sell to them. In that way you build up a network of Bumiputera entrepreneurs which is in line with the overall government agenda of redistributing economic resources.

So when Khazanah sells its stakes, the right of refusal should vest with Bumiputera. It makes sense, because then the equities held on by Khazanah, made possible with government money, will divest into the hands of bumiputera.

Now I hear, Khazanah has been instructed to pare down its shares in the various companies so as to increase liquidity in the market. But if it sells in the open market, then the agenda of holding on to shares on trust for Bumiputera is diluted.

What's the reason for forming Khazanah? It was planned initially for khazanah to hold equity in strategic industries. But nowadays, Khazanah is into all sort of business. From agriculture rearing prawns, to creating a lego land.

What was the rationale of raising sukuk bonds in Singapore? Here, we are making all kind of braying noises that we are creating an integrated Islamic financial district. That district will be masterminded by a non-Muslim who is probably accompanying the PM this Christmas holidays to Dubai. Maybe after that, that Jho Low will be standing by in New York to party all night long.

Khazanah Nasional has substantial stakes in companies that are involved in various sectors such as:

Agriculture


 

  1. MAFC 100%
  2. Blue Archipelago 100%
  3. Biotropics 100%

Automotive

  1. Proton Holdings 42.74%
  2. Miyazu Seisakusho 9.12%


 

Basic Materials

  1. CIMA 100%


 

Financial Institution Group


 

  • Santubong Ventures 100%
  • ACRM 70%
  • Valuecap 33.33%
  • ACR Holdings 31.56%
  • ACR ReTakaful 40%
  • Bank Muamalat 30.0%
  • CIMB Group 28.39%
  • EON Capital 10.0%
  • Jadwa Investment 10.0%
  • IDFC 8.97%


 

Healthcare

  1. Integrated Healthcare Holdings (IHH) 100%
  2. Parkway 23.86% (held via IHH)
  3. Pantai Holdings 60%
  4. IMU Health 67.5% (held via IHH)
  5. Apollo Hospital 12.21%
  6. Pharmaniaga 86.8% (held via UEM Group)


 

Infrastructure & Construction


 

  1. Plus Expressways 16.74%
  2. UEM Group 100%
  3. UEM Builders 100%
  4. Opus International 96.39%


 

Leisure & Tourism


 

  1. Themed Attractions 100%


 

Media & Communications


 

  1. Axiata Group Berhad 44.51%
  2. Telekom Malaysia 36.78%
  3. TimedotCom 18.38%
  4. Time Engineering 45%
  5. Astro 29.34%


 

Property


 

  1. STLR 100%
  2. Iskandar Investment Berhad 60%
  3. Putrajaya Holdings 15.59%
  4. UEM Land 77.14%


 

Technology & Bio Tech


 

  1. Atlantic Quantum 100%
  2. MTDC 100%
  3. SilTerra Malaysia 98.05%
  4. Springhill Bioventures 33.33%


 

Transportation & Logistics


 

  1. Penerbangan Malaysia 100%
  2. Malaysia Airlines 17.08%
  3. Malaysia Airports 60%
  4. Pos Malaysia 32.21%
  5. Westport 8.55%


 

Utilities


 

  1. Tenaga Malaysia 35.69%
  2. Northern Utility 20%
  3. Shuaibah Water and Electricity Company 12%


 

Others


 

  1. KCS Green Energy 80%
  2. Parkson Retail 7.84%
  3. DRB-Hicom 5.13%


 

Let's watch who gets to buy shares in these companies as Khazanah divests them.

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It’s a bird, it’s a plane, no its PDP!

Project Delivery Partners.
These McKinsey boys must be running circles around our PM. We have been deluged with all sorts of acronyms. Indeed our economic plan for the country is a smorgasbord of sorts -laden with acronyms. Just as we thought we have had enough, out comes another- PDP- Project Delivery Partner. Man oh man.
What? What in God's name is that? Are UMNO people not interested in seeing through this economic trickery?
You have been screaming about special rights of Bumiputeras. As things are going now, yes, you do have that policy on special rights of Malays, but it's a policy of special rights for special Malays. The puteras in the Bumiputeras.
It's a euphemism for one who actually thought of the idea and presented it to the government. Probably the same fellers purposed the Swiss challenge method.
To avoid being labeled as accomplices to cronyism - they allow, through the government, others to come out with similar ideas. Probably, the 'others' allowed to submit in are their friendly parties so that those proposals that come after will be always be more expensive and the original one submitted looked like a godsend. In the event, should there be one rogue proposer; the original proposer will be given the chance to revise their proposal. Ini semua trick yang orang kasi tahu sama saya.
In that sense than, the 100 storey Warisan Tower is proposed by a PDP. The Sungai Besi project also by another PDP, the sungai Buloh by another PDP. We will be seeing PDP-mania.
Whatever happened to the assurance that 92% of the ETP projects were to be financed by private parties? How come in this instance, the yet to be exactly known cost of the MRT is owned by the government?
I think, we can challenge the government to allow MMC-Gamuda to publish their feasibility studies so that, we who have nothing to do, can make an assessment. Really, there's nothing to be scared of- I am sure the studies were done by brainboxes who can easily trounced our arguments.
Finally there is one issue I need to answer. In my article about the MRT, there was a comment asking me to clarify whether it would be all right had Gamuda been a wholly owned company by Malays. It's not all right, is the answer. The correct interpretation would have been- that was a criticism on the government for its implementation of policies regarding Bumiputera economic interests. The common perception by common Malays is that the policy of special Bumiputera interests has degenerated into a policy for special Malays. UMNO must correct this perception.
The Chinese have played the part of project delivery partners for the special Malays. The term PDP would be appropriate in that circumstance. Do I hold back if that is how the policies thus evolved is perceived and do I hold back too, if that is how the special Chinese business groups operate?

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Sunday, 19 December 2010

Our MRT project

Puhleez-don't tell us the people behind Gamuda or MMC are Nobel Prize scientists and physicists. The experience they have in building tunnels in Kuala Lumpur (SMART) and Taiwan is not unique. So surely that is not their unique selling point.
I saw the program on TV about the Smart Tunnel. It was built using foreign expertise which can be secured at the right price. Hence that is not rocket science- that experience can be acquired. The most important determinant is that you get the opportunity to do it.
Gamuda and MMC are given the opportunity to do the project. They will ask the same engineering company to come and build on their behalf and register as another milestone in acquired experience.
Bull! You give it to me, or to anyone, we can go hunt for the engineers to do the lubang. Its korek korek and korek.
YAB Dato Sri- Rakyat marah bila dengar dengan tidak semena mena, MMC-GAMUDA di beri peluang untuk buat kerja menggali terowong. Mula mula gali terowong, but later in the name of continuity and consistency, they will get the other packages too. Then you can ensure quality control.
Patut lah semasa membentangkan ETP dahulu MMC dan Gamuda sejak awal lagi sudah beritahu mereka yakin di beri peluang. Ini confirm apa yang saya pernah tulis dahulu- bahawa ETP tidak lain hanya amalgamation business plans by various private companies invited to submit by Pemandu and McKinsey boys. Idris Jala isn't that smart to come out with such grandiose plans.
Yang rakyat marah lagi ialah seolah olah pengalaman yang di miliki oleh Gamuda ini tidak boleh di perolehi oleh syarikat binaan lain. Perkara ini bukan susah- jika sesiapa dapat peluang membina terowong ini, kita hanya perlu mencari rakan kongsi yang mempunyai kepakaran dalam bidang tersebut. Tidak munasabah untuk menyatakan bahawa orang di belakang Gamuda dan MMC otak mereka tersangat geliga sehingga mamat lain tidak dapat berfikir serupa.
Semua orang tahu Gamuda ialah syarikat yang di miliki oleh orang Cina. Wajah mereka di depani oleh keluarga di raja Perak. You know, we have had enough of this nonsense lah- no one is above making money the easy way-. The ordinary Malay mamat, the china man, the Indian man drinking thali merah and falling by the roadside or the royal family members. The color of money does not discriminate between philistines and Pharisees, pariahs and Brahmins. The color absorbs the same greed.
And so the mainstream media people screamed:
MMC-Gamuda Joint Venture Sdn Bhd, which has been appointed the project delivery partner (PDP) for the Mass Rail Transit (MRT) project, will be allowed to tender for tunneling works.
"The government felt the exception should be made as the PDP is the only local construction company that has experience in major tunneling works such as in the SMART Tunnel project in Kuala Lumpur and the Kaohsiung MRT project in Taiwan," said Prime Minister Najib Razak today.
We are puzzled actually. For all intents and purposes, MMC-Gamuda has this project in the bag. Just say as it is. What is the value of the tunneling portion? Yessiree- the next time, because only Gamuda-MMC has the experience in koreking, let all projects of this nature be given to Gamuda-MMC. I don't know whether it's to lessen our angst or adding salt to injury, the PM has to add:-
However, MCC-Gamuda will not be allowed to tender any of the work packages in the massive project, estimated to be around RM40 billion - the largest infrastructure project in Malaysia's history. Nevertheless, Najib said the PDP would still have to compete for the work package with other companies and the award would be given on the basis of merit.
The mass rapid transit (MRT) project is expected to generate a gross national income (GNI) of between RM3 billion and RM4 billion beginning next year until 2020. The bulk of it will come from passenger load I hope. The PM told us that around 400,000 people will be using the MRT. That's a sizeable portion of KL population made up of Nepalese guards, Bangladeshi studs, Myanmar refugees and so forth. To generate the 3-4 billion of operating income, what's the price of the ticket?
The MRT must carry more than 400,000 people daily if it's to achieve a RM 3-4 billion revenue. PM Najib must have been thinking of the 3-4 billion coming from tickets and not other income from externalities and spinoffs. Because he added that between RM8 billion and RM12 billion was expected to be generated in terms of spinoffs from the construction of the MRT project. "RM21 billion in GNI incremental impact is anticipated to be generated in 2020 from the value appreciation of the project and the increase in productivity rate.
Haven't economists understood the concept of stretching an argument to maximum absurdity? Who is doing the math for the PM in the above case?

 

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Saturday, 18 December 2010

Sepang F 1 racing: view from the grandstand

I wrote an article on the F1 racing in Malaysia. It drew a respectable number of comments. Clearly, there are more people out there who are more knowledgeable about this industry than I. Since then, my interest in the subject has increased.

I am not the only one paranoid over possibilities of people using some grandiose ideas as means to make us suckers. I am beginning to see, this is another scheme of skimming money from the kitty. Does Sepang make money or does MAHB who owns the circuit cares?

I once asked a former very senior UMNO leader and a senior minister at that, about the F1 racing. Since he is also a racing enthusiast, I asked him whether the Sepang circuit makes money. He answers flatly no.

Then how can it survive? No one he says hosts a racing event makes money nowadays. So how does it survive I pressed on? We don't see Sepang merchandise all around do we? Do they make money?

They do, by asking money from the government. They get all sorts of subsidies. Maybe deferred tax on earnings, reduced tax, no tax, and services in kind, grants etc. we can never know. We don't have audited reports. They spend like it's their father's money.

The government sometimes allows Sepang to have rights over special lottery draws. Oh.. itu macam. Saya pun boleh buat ini business and after that I too can drive around in my Bentleys, hummers, or Cayenne. No big deal. We have been hailing certain personalities as being proven entrepreneurs. In reality they are a bunch of bullshits. Fcuk bananas. Fcuk Sepang.

We haven't been told how much it cost the government to build the circuit? Or was it the MAHB who fully shouldered the cost and how much is that? What's the annual hosting fee? USD 20 million?

The government should stop backing these people with money. MAHB who owns the Sepang circuit must find its own ways to make money. It should build better airports and collect from whoever owes it money. Air Asia who is making tons of money must pay for using the airport. If not, why are you people in MAHB sitting on your backsides?

How much money was actually spent in building the circuit? How mucxh money has it paid Formula One Organizers to hold the races? How much money has it collected? How much tourism was attributed to people coming over to see people having fun in the ultimate phallic symbols? It's said the adrenalin surges in drivers are substitute for the surges achieved at sexual orgasms. I don't know that. But I certainly know of one personality in the multinational company I once worked with, was said to be impotent but compensated his inadequacy there by taking up crazy racing on weekends.

Sporting events such as F1 racing has become a major business industry and perceived as tool for improving the economies of host countries, regions or cities. It's nice if MAHB or the government can show us some economic impact analyses. How many jobs were created? Spillover businesses? Bumiputera businesses? Tourism revenue. Nyonya Ng Yen Yen- lu takde bikin a-na-li-sa ka? Bulapa manyak olang mali wo.

Bernie Ecclestone and the bankers with him are laughing at our antics. If people fight over who gets to use the Lotus name, he doesn't give a tinker's cuss. Eventually one of the suckers will come to negotiate with him on the rights to participate. The whole grand prix thing, since Bernie turned it into some commercial behemoth, has generated bidding wars amongst prospective host countries.

But at what price and what wonderful stories were told to us? Paying the price has commonly involved event organizers inducing governments to provide public funding, telling stories about indirect economic benefits that the event will generate. Where are the results though? The stories are seldom accompanied by a detailed and independent economic impact assessment, to substantiate the claimed benefits. Khazanah, EPU, Pemandu- lu orang semua bikin lah. So that we armchair critics can counter your arguments. Come on, don't be bashful; we aren't as good as those Mckinsey boys.

Why do people go see the races?

Those adrenalin junkies or those who want to be seen and see are all addicted to the high speeds, spectacular overtaking moves, horrific crashes, superman drivers, super-fast pit stops, team tactics and not forgetting the beautiful women. Yes sir, those clad in tight micro skirts. People can memorize those racing for Ferrari (Italian), British-American Racing Honda (British), Renault (French), Williams F1 (British), West McLaren Mercedes (British), BMW Sauber BMW (German), Toyota F1 (Japanese), Red Bull Racing (American), Midland (Russian), Torro Rosso (American), and Super Aguri (Japanese). We can even mesmerize people with our knowledge of engine manufacturers: - Fait - Ferrari (Italian), Honda (Japanese), BMW (German), Mercedes Benz (German), Toyota (Japanese), and Cosworth Ford (American).

Don't forget the Tyre Manufacturers: - Bridgestone (Japanese) and Michelin (French). Then there are the fuel and Oil Suppliers: - British Petroleum, Elf, Esso, Mobil, Petrobras and Shell, PETRONAS.

Why are we enamored with F1 racing? Of course it started with our grey eminence- that man who can walk on water- Tun Dr Mahathir. He wanted to bring motorsports here in Malaysia. F1 Teams are brought here to entertain billions of spectators across the world. The teams vie for the prestige and the honor of being crowned the best constructor (cars, tyres and fuel) and /or driver in the world. We the Sponsors are over the moon to be associated with the best motorsport and /or F1 team in the world and to enjoy global exposure.

But let us pause for a moment and analyze how much it cost is to host a grand prix? A racing circuit must obtain a T1-licence to qualify to host a F1 GP testing session. However to host an actual F1 GP the circuit must receive a Grade Circuit License and such license is only obtainable from the FIA.

Since 1999 F1 GP has been brought to Malaysia, USA, Bahrain and China. This was however at very high monetary costs, the major cost requirement being circuit construction and annual hosting cost. In the cases of the USA, China and Malaysia the government not only played a role in the construction costs of the circuit but also contribute to the annual hosting cost.

Does hosting the F1 race and sponsoring 3 teams to race beneficial to our economy or rather does it benefit a selective group of individuals actually?

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Thursday, 16 December 2010

F1 racing- a view from the paddock.

It's getting more bizarre by the day. We spend money like water. Meanwhile projects get cut because the government is trying to economize. But GLC bosses holding our money aren't practicing prudence.

They are urging the government to spend and spend. Consider the matter of F1 racing for example.

What's attractive about formula one? It's a massive television event, with a global audience of 600 million people for each race. The Formula One Group is the legal holder of the commercial rights. Who owns Formula One Group? Bernie Ecclestone? He owns the market. Owning a racing team is incidental.

Its high profile and popularity make it an obvious merchandising environment, which leads to very high investments from sponsors, translating into extremely high budgets for the constructors. However, mostly since 2000, due to the always increasing expenditures, several teams, including works teams from car makers and those teams with minimal support from the automotive industry, have gone bankrupt or been bought out by companies wanting to establish a team within the sport.

This means, Formula One Racing is a potential landmine. Companies, teams and constructors can get blown to pieces. Or the sponsors teaming up with constructors and teams will have to spend a lot of money to stay afloat. So I hope those companies backing our F1 teams, thinking they are seeking greatness are reading these. PETRONAS are you reading this? Proton- habib are you reading this? Tony- you can go fly.

In the first place, can Malaysia afford to have 3 F1 teams? Are we that rich or glaringly imprudent to be spending large amounts of money? For what purpose? For advertising or putting whatever product and services on a high profile visual?

In 2011, Lotus Racing Team or 1 Malaysia F1 Team or whatever will race as Team Lotus. Who is who? Proton says it owns the lotus name. Tony Fernandez says he owns the lotus brand. Before the actual races, these two business entities are fighting over who gets the right to use the Lotus name.

The Lotus Racing Team originally took a license from Group Lotus (owner of Lotus Cars) that allowed them to use the Lotus name for the 2010 season. Group Lotus, is owned by its parent company, Proton. Group Lotus then terminates the license for future seasons as a result of what it called flagrant and persistent breaches of the license by the team (headed by Fernandez).

What had Tony done?

Will Tony gets what Tony wants? How did Tony Fernandez acquire the confidence to use the name Lotus? Tony Fernandez announced that his Tune Group had acquired Team Lotus Ventures Ltd. This was a company, according to Tony, led by one David Hunt since that has full ownership of the rights of the Team Lotus brand and heritage. Because of this, Tony said he has rights to use the name Lotus and announces to the world that they would be known as Team Lotus or Lotus Racing from 2011 onwards.

Group Lotus( owned by Proton), owner of Lotus Cars launched legal action against Lotus Racing, claiming that Tony Fernandez did not have the rights to use the Lotus name because David Hunt was never in a position to sell them. Proton the parent company of Group Lotus issued a statement saying that Group Lotus owned all rights to the Lotus name in the automotive sector, including Formula One, and that Fernandez has no rights to use the brand in the 2011 season.

Group Lotus then went on to announce that it had bought a stake in Renault F1 and had agreed to become title sponsor, with the French car maker playing the role of engine supplier. The team would be known as Lotus Renault GP.

So what shall we see in 2011? We shall be seeing double- as 2 teams both carrying the name Lotus powered by Renault engines will be lining up to race. To further the confusion, Group Lotus announced that the 2011 Lotus Renault GP cars would carry a black and gold livery reminiscent of the John Player & Sons liveries previously used by Colin Chapman's Team Lotus in the 1980s, paralleling plans by Tony Fernandes to race in 2011 with a JPS-inspired livery.

You have 2 teams (both controlled by Malaysians) using the same name, powered by the same engine who will be also using the same liveries. What's happening? So before the confusion becomes out of control, in December 2010, Tony Fernandes stated that it his team would continue with their present green and yellow color scheme in 201

We see quarrel before the race has even started. Proton which hasn't done enough to market its lotus cars is thinking it can shortcut its way to eminence by sponsoring an F1 racing team. Is that stupid or what?

As a layman and as a person who gets deaf from hearing the roar of F1 engines, I am thinking, rather than spend money on sponsoring a racing team , Proton is better off spending that same amount of money into RND for lotus cars. Why go in to save Dany Bahar and Renault?

What's so special about the name Lotus? Lotus the car manufacturer? Lotus the flower? Lotus the glint in Tony Fernandez's eyes? Which Lotus?

What's in for Proton to be the Lotus-Renault team? The man in charge of the project, one Dany Bahar has said, its longer term plans is to full owner of the team. What does that mean? It means Proton, our car manufacturer whose money making capabilities are questionable under the stewardship of its current CEO is already spending millions and millions to be the title sponsor. Now, to fit into the longer term plans of this Danny Bahar, Proton will be sending many more millions to become a full owner. You can't just buy into Renault and not spend more later being owner, when your partners want to become something else.

Take a look at Lotus Cars itself. It is in the midst of a major renewal, and signaled their intent by wheeling out five concepts at the Paris Motor Show. They'll need a lot of money to realize that future range of cars. After that, will they have enough for Formula 1?

Dany Bahar must have been assured by Proton that he shall have the money he wants. He says he would not commit without backing from shareholders, banks and investors. Whose money is Proton going to spend? For Proton, its foray to become a title sponsor and becoming a full pledged owner, is a recipe for financial disaster.

We now have 3 home boys to race the F1 under their banners:- PETRONAS Mercedes GP, Lotus-Renault and Team Lotus . At least PETRONAS seems to be doing the right thing to sponsor MercGP , as there's a legend there racing for them.

But lotus? Two people are fighting for the rights over using the name. One of them owns a budget airline but probably like many of us, don't know how to change our car tyres. What's in for Tony in racing the F1? What is the strategic importance?

The cars can't be faster than Boeings or air buses? He is already well known especially after winning the bet to employ Branson as a stewardess on his plane? Branson will cross dress. That's advertising for Toy already.

The only plausible reason is that Fernandez is using the "Lotus" name to attract sponsors. He believes he'll have a lot less sponsors, just like Virgin & HRT

Where will the Malaysian government stand on this issue? The Malaysian government says it is supporting Proton-owned Lotus to return to the F1 grid. Is this a good decision? They will argue that it's in the best interest of promoting the sport in the country, to heighten the interest among kids, to make Proton cars better, to maintain the PETRONAS name in F1 etc…

Seriously, the main reason why I think some people are pushing hard to sponsor F1 racing teams is they get their hands on the kitty.

What's in the mind of Proton chief? Could he be seeing sponsoring Lotus Renault as a means to improve the marketability of the Proton brand? If this is their plan, the general idea is its going to take a lot more than a F1 team in their repertoire to improve Proton. Although Proton has owned majority of Lotus stocks for the good part of 13 years, we can't say much of their technology has been transferred to our shores.

Instead of pouring the millions into an F1 team, why not invest in improving Proton? They've been cash-strapped for the past couple years as their sales have taken a downturn due to stiff competition from the like of Perodua, Toyota, Kia, and others. Their quality isn't worth much mention either. Better spend money (our money) here than F 1.

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Tuesday, 14 December 2010

Not divisiveness and racism, not bigotry and stupidity, not incompetency and duplicity, not injustice and lies

Here is another gem of a consolidated comment from Walla.


 

Corruption is the biggest scourge in this nation. Stupidity is a close second. Incompetence is not far behind. Duplicity is catching up fast.


 


 

Sir, do you agree with what was said about our politicians, that they are incompetent?'


 

Sofea, i have a problem with what those dotheads down south said. They're wrong. Our politicians are not incompetent. They're nincompoops.


 

At least when one is incompetent, there is insyaAllah hope they can become competent. But in our case, they can only make dins and poop all over the rakyat.


 

Take one marvelously competent Malay first minister. When asked if development funds can be provided to opposition MPs like how it is done for barisan MPs, he skirted around the question by just saying it's only for barisan MPs to top up federal projects.


 

Excuse me, but rakyat in opposition sites are not rakyat ke? They don't deserve development funds, is it? Then will he answer if they should pay cukai at all?'


 

Sir, you can't say that. You may be branded a traitor.'


 

Let me ask you back, Sofea. Which is more traitorous to the country? The PAC team to dare ask immigration about Project M, or immigration to snub the committee by walking away without answering the queries, or the original designers of Project M?


 

Note that up till today, we don't know how many Indonesians have been naturalized in one stroke in our Sabah and Sarawak so that come a few months' time they will vote for Barisan including our own Brown Rajah.


 

Meanwhile our people who have slogged years for the country can have the privilege of being photographed holding the hand of one grandson of one late leader, thanking him profusely for finally giving them the brittle plastic just so that they can be buried soon, considering their age, as proud citizens of this exceptionally competently-run country.


 

Not good enough an example? Let me ask you again, Sofea. What about spending lavishly over-the-budget on a single residence when thousands of our Malay rakyat can't even afford a roof over their heads these days so that they can call this their own country in order to finally have a taste of what is meant by a sovereignty they have been asked not to disabuse?


 

Talking of which, why did it take so long before people could suddenly have a brainwave to excuse the reason for ketuanan by saying it was really all along about sovereignty and not supremacy? An afterthought, is it? Or the clearest sign of shifting the damn goalpost again?'


 

'Sir, i sense your frustration for our rakyat and nation. Is that why we are having this conversation in the wee hours of this morning?'


 


 


 

Perhaps, at my age, i had to wake up to take a leak?


 

Look, Sofea, UMNO spends a huge chunk of our national development funds on defense. Yet, if we are to believe the wikileaks, a foreign intel can be so assured of itself that it can privately say a politician knowingly walked into a sodomy trap. Why, they got hidden cameras all over the place, including one that could unbelievably read his primal instincts ke?


 

And in the first place, who would knowingly walk into a trap that will not only destroy his career but also vindicate his nemesis?


 

Now, why didn't the Aussies ask SINGAFORINTEL about that, and if they did, why was the transcript not recorded in the same breath?


 

Secondly, Mahathir triumphantly said it was not an entrapment on the reason that 150 people could not have been coaxed to go along with a lie.


 

Hello there, all you need in this country of saya yang mengikut perintah is one lie by one person at the top and all the rest will follow the official line.


 

If this isn't so, why are doctors so adamant they don't need to refer to their patient notes while being cross-examined in a legal setting they may not expect to be comfortable in? Have you ever seen a govt hospital doctor not read from his notes when seeing a patient for a second time, even in his own clinic room?


 

Thirdly, where's the wikileak on the Mongolian case? It is curious that none has surfaced on that case. Surely any foreign intel would be expected to be more than curious over the question as to who had ordered the hit for an order must have been made since it was pre-established in the court that the extermination team only obeyed orders like robots.


 

So if even a court system including defense as well as prosecution has shown such a curious lack of curiosity about a murder case, how can anyone say that it is impossible to coerce an entrapment, especially when that someone has a project to his name that had emboldened an entire government department, namely the immigration office, to defy a parliamentary query on a possible treasonous deed against the sovereignty of the rakyat?


 

I have an idea. Why don't we coopt LKY and Mahathir to come onboard Anwar's case as material witnesses? From their elevated heights, they seem to know what purportedly happened in an apartment. Let them walk their talks for once. Let LKY show proof how he had concluded the act happened and let Mahathir show proof why he is convinced it's not an entrapment.'


 

'Sir, you're mounting a sturdy defense for the opposition!'


 

Sofea, don't get me wrong. I am not mounting any defense at all. If it looks like that, it is only because the facts and the fictions don't jive in this country. Besides, i don't think Anwar is absolutely needed in order to mount a credible opposition for a two-party system in our beleaguered country. It's the rakyat, Sofea. They are the ones who are the hope, voice and destiny of Malaysia, not our brilliantly competent nincompoop politicians.


 

Let all the truths come out so that our rakyat will no longer have a yolk on their necks, so that there is national moral conscience again, so that leaders and higher-ups don't have to shift goalposts to try and justify the unjustifiable anymore.


 

Do you know what is dangerous? It's when our rakyat are made insensate by all these shenanigans. People have limits and limitations. Look at our peoples. Most are simple folks with kind hearts and honest minds. But how have they been treated? Like dupes! They have been treated like cows pulled along by the rings on their noses. Today this direction. Tomorrow another direction. One is reminded of aqiqah korban. But it's not FOR the umat miskin. It's OF the umat miskin. Enough is enough lah!


 

Corruption is the biggest scourge in this nation. Stupidity is a close second. Incompetence is not far behind. Duplicity is catching up fast.


 

When a nation suffers from corruption, stupidity, incompetence and duplicity, it is finished.


 

And the last nail on its coffin will be the dirtiest general elections in our maligned history.'


 

But, Sir, the country is doing well; bonuses will be declared, investments are up and there are so many exciting projects up and coming.'


 

Like the smart tunnel flushing out floods, eh? Did it work in the recent floods? Exciting projects? Come, tell me what will be the price of the ticket? Bonuses and investments? Don't you know the starting salaries of our graduates today are like what they were years ago? Measure the increase against the inflation and then come convince me things have really improved enough for them to eagerly await their bonuses. Investments? Aren't they mostly in our opposition-run states, eh? And how many are in the manufacturing sector which is supposed to be the main employer for the lower-income groups?


 

And look, i have no problems with any wage rise for our defense chaps. They deserve it. In fact i wonder why they have not been the first to get the raise before all others. But what is the impact on the government bottom-line? Has it been timed to swing votes? And how will our rakyat be able to pay for services which the government won't be able to afford when it has to bail-out all these exciting private sector projects whose feasibilities are yet to be submitted long after they have been announced?


 

Just as we have never seen an entire community anywhere else in the world which is proud to say it needs special attention, I have never seen an economy anywhere in the world bolstered by stating the projects first and then waiting for their feasibility reports after!


 

Take the menara wawasan, for example. One minister said go ahead. Next thing an ex-minister said he was sentimental for it not to go ahead. And then the next minute the boss said do the feasibility study first. At this rate, it will come out a crooked high-rise, like crooked bridge and crooked politicians. If all this is not spin, what the fcuk is it?


 

No, Sofea, our politicians are not incompetent. They're eunuchs who have lost their frigging, desiccated marbles.'


 

Talking about eunuchs. I just saw a Chinese movie. Fortunately it has our language subtitles. It was titled Reign of the Assassins and it starred our own Michelle Yeoh.


 

Well, she was a disciple to one eunuch villain but ended up in one last fatal battle with him after mending her ways. He was confident of winning because he had withheld four strokes of swordplay from her which would reveal weaknesses in defense. But he didn't know she had learned those four strokes from another opponent who died trying to mend her soul. She won the fight in the end but was herself mortally wounded. The last words of the eunuch, said to himself hysterically in disbelief while counting the number of wounds he had sustained by her blade, was "now how did she manage to strike me in eleven places?"'


 

But our own eunuchs are so thick-skinned they think they are immortal, Sofea. Our rakyat need to winnow the chaff and see the political, economic and social situation clearly. They need to put everything in the correct perspective.


 

We have veered from the right track for our nation. We need to give her a future all can be happy and comfortable with. This is a nation where all are pendatangs except our orang asals. That is why cooperation and mutual help must be nurtured. Not divisiveness and racism, not bigotry and stupidity, not incompetency and duplicity, not injustice and lies.


 

Truth is the ultimate blade to cut the crap.'


 

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