MAS- Air Asia deal revisited.

We hear of disturbing news that 15,000 MAS workers want the MAS-AA deal stopped. They have threatened to not vote BN in the coming GE. Is this the proverbial spanner thrown or does it suggest that the MAS-AA deal was indeed opaque and shady?

I asked the Oracle of Syed Putra- can the MAS-AA deal be stopped?  And what do you think of the deal?

It’s difficult for anyone not to impute some massive insider trading in the deal. Just like the recent purchase of E&O by Sime Darby just after a central figure in E&O increased his shares. But the authorities appear to be neutered when it comes to the rich powerful and the connected.

A few months ago, the same person increased his shares ahead of the announcement involving Kencana and Sapura Crest Petroleum. Now I hear, there are rumors saying that the PDA (Petroleum Development Act) is going to be amended that will effectively turned Sapura- Kencana into a second PETRONAS. It will acquire the same monopolistic rights over energy resources.  PETRONAS our national oil company will have to share the industry cake with somebody.

These bastards at the top seem to have an insatiable lust when it comes to greed. It’s the same with MAS. MAS is an exalted brand name. It’s a crime to dilute the brand name and take the lazy man’s way out by cannibalizing it and making money in that process. Khazanah buys back shares from Singaporeans not on account of good business sense but on account of national pride. Yet it doesn’t seem to have the same patriotic sentiments when it comes to diluting and divesting MAS shares even to AAsia.

Hey- I like your analogy of the modern Hamman cutting his teeth both in Pharaoh’s and Moses’s business.

To answer your question as to whether the deal can be revoked- I will have to say yes.

Yes it can- depending on the will and resolve of the PM. That’s a very tall order, suggested the Oracle.

The will and resolve of the PM depends on his understanding of the problem, what he wants to do and the significance he attaches to a strategic asset such as MAS. If the PM’s thinking over these elements are fluid and ephemeral ( for want of less brutish terms) then the opaque and shady deals involving MAS and Air Asia will move on to its conclusion.

So I read with interest when Nazir Razak pompously declared stop the shady and opaque deals or suffer the consequences. I thought he was referring to the deal in which CIMB played, in his own words, a mere matchmaker for Air Asia and Khazanah.

Khazanah forces MAS to lose its manhood by parting away with a substantial portion of its equity in return for a lower number of shares but which are more valuable in Air Asia. Before the deal, the shares of Air Asia were traded on the high side, but after the deal was announced, the shares of Air Asia plummeted. It would almost appear that before the deal, the shares of Air Asia were artificially pushed up to allow its owners to part away with a smaller portion of their shares.

Maybe, it would have been better to wait for the shares of Air Asia to go lower and swap shares. In that way, Kahzanah would have acquired a bigger portion of Air Asia and through that action, improved our national pride.

If they had done that, then maybe, its talk about pride contains some credibility. If not shut the F**k up about national pride.

Meanwhile, we are happy to note that the banker who has once said that the NEP has been bastardized and the ladder by which he has reached the top should now be thrown away is a workaholic coming to his office on Sundays and sometimes, as the guards below will tell you, coming at 2 am in the morning. I told the guard- 

I can do better- if I am paid RM 1.2 million a month, I will even sleep in the office.

With all the deals done by Khazanah and other GLCs are accomplished with stealth, opaqueness and even shady, what’s the conclusion? Did we hear of any AGM preceding the MAS-AA deal? What happens to the minority interests?

The conclusion is: The country’s economy is in unsafe hands. A few private individuals will make mountains of money whereas the problems of MAS will escalate.

Study the 3 points:-

1.      In an attempt to bolster the fortunes of the flag carrier, state asset manager Khazanah Nasional Berhad swapped 20.5 per cent of MAS stock for a 10 per cent stake in Asia’s biggest budget carrier AirAsia on August 9.

2.      The swap enabled AirAsia bosses Tan Sri Tony Fernandes and his partner Datuk Seri Kamaruddin Meranun to sit on the MAS board and will ostensibly help turn it around.

3.      Shareholders of AirAsia will get one free MAS warrant for every 10 shares in the low-cost carrier while MAS shareholders will get one free AirAsia warrant for every 30 MAS shares.

Khazanah thinks the solution to sort out the problems in MAS is to do a share swap. So it exchanges 20.5% of MAS shares with 10% shares in Air Asia. Why must the shares be swapped in the first place? If the source of MAS‘s problems is the quality of managerial talent, then outsource it from somewhere else. Pay talented people high salaries but get them to turn around MAS. After paying them, you are still left with full ownership of the company.

You don’t need Tony or Kamarudin or the business model of Air Asia to turn around MAS. Let’s see they turn around Asia-X first. You people are easily mesmerized by the glib salesmanship of a pirated CD seller that even you, some with advanced ad double degrees from Ivy League universities seem to have lost your marbles in trying to sort out MAS.

I can’t shake off this feeling. We pay peanuts we get monkeys. We pay giant peanuts we seem to get bigger monkeys. But I have to thread carefully here. The boss of Khazanah has been described to me as cheese compared to some other chap who is chalk. I swore I nearly puked when I heard him described in those terms.

What’s the source of MAS’s problems? Is it leadership? Management problem? Managerial quality? Or corruption? Or incompetence? If these are the main sources of MAS’s dismal performance, how can these be sorted out by the share swap?

Because, reasons Khazanah, the share swap will allow the problem solvers get into MAS board and help solve the problem. So, Khazanah, with its reputation of being filled with luminaries from the consulting world, the builders and the fuckers fikir-rers, place the future of MAS on the shoulders of 2 people. 2 people will bring the Midas touch that can sort out MAS through the agency of one of us- Danny Rashdan. If this guy is chosen, the basis of the choice can easily be guessed- he’s likely to be from MC gay gay and he is a friend of Azman ‘the chalk’ Mokhtar. These two factors have been cited and heard repeatedly. A person is chosen to lead and head some government business units owned by the government because he is from MCKK and “ he is my friend”.

Mr Fernandes and Kamarudin Meranum may not be from MCKK, but they are friends to Azman Mokhtar.

What’s my point? My point is, if Khazanah believes the main sources of MAS problems are those mentioned above, then we don’t have to do the share swap. Bring in talented leadership, bring in people with first rate managerial quality and proven record, re structure MAS or even , take the drastic measure by closing down MAS in order to re build it.

Before Fernandes and Meranum have even proven they can do anything to MAS, they are given the incentives in the form of MAS shares. The same dubious modus operandi is repeated all over the place- before services are completed, the service provided is paid all in advance. Remember the service provider to the deal involving the Scorpene submarines?  Those guys were paid in full even before the support services are completed.