‘Insane’ profits from farms in Camerons

By Farrah Naz Karim And Aliza Shah - 17 November 2014 @ 1:35 PM

KUALA LUMPUR: PROFITS from illicit farming in Cameron Highlands is so insane that authorities fear it will be an uphill battle to stop the illegal clearing of government land and forests in the highlands.

New revelations have suggested a gaping difference between the “official” output from land under Temporary Occupation Licences, and the actual tonnage of produce harvested from the highlands.

The New Straits Times was made to understand that some 500,000 tonnes of farm produce, from three harvests, are exported from the highlands each year. This is all supposedly from farms under TOLs. Income derived from these exports is in the region of a whopping RM1.5 billion a year.

Agricultural experts and authorities told the NST that the kind of tonnage coming out of Cameron Highlands would have been from at least 5,300ha of farmland.

However, official documents suggest that only some 2,000 TOLs were issued for agriculture in the highlands, covering an area of roughly 2,000ha.

The number of state-issued TOLs for Cameron Highlands in 2003 was 1,843. By 2012, it had increased to 2,041. Each licence is roughly for a tract of land between 0.8ha and 1.6ha. Illegally expanded farms are a different story.

The output of farm produce from 2,000ha of land in Cameron Highlands, according to agricultural experts, should logically be in the region of 180,000 tonnes a year, if harvested three times annually.

“Unless the officially allowed acreage for TOL land cultivation had been expanded by 3,300ha (from 2,000ha to tally with the output of produce from 5,300ha of farm land) since 2012, it is rather perplexing to see so much produce coming out of legal cultivation.

“Just how do you explain the difference in tonnage? Where did the rest come from? I think we all know the answer,” said the expert.

Meanwhile, the Agriculture and Agro-Based Industry Ministry’s Horticulture Division director Normah Othman told the NST that records showed that 50 per cent of the farm produce from Cameron Highlands were exported to Singapore.

“The up to 500,000 tonnes of produce that comes from Cameron Highlands we are talking about are all from TOL land. For every kilogramme of farm produce, the average profit is RM3,” she said.

If basic calculations are anything to go by, greedy and unscrupulous farmers have been laughing all the way to the bank, with some RM890 million every year, thanks to the dubiously sourced produce tonnage.

This latest revelation has also prompted stronger calls for a thorough audit of official data of land approved for cultivation under TOLs against farming currently being carried out in the highlands.

Malaysian Institute of Integrity Datuk Dr Mohd Tap Salleh said only by doing so would the authorities know the extent of the damage that irresponsible farmers had done.

“The institute welcomes the positive response from the state government to the suggestion by NST for a full land audit to be carried out.

“We also welcome the National Audit Department’s response that they would soon send their auditors for the purpose,” he said.

The NST had been running a series of issues besieging Cameron Highlands.

Among others, it had exposed the existence of a highly-confidential document known to those in business in the highlands as surat kuning. This “recommendation letter” is usually sent to the district office by influential figures.

This newspaper then called for a thorough audit of the highlands’ administration, including the issuance of land development permits, if the state was serious in arresting the ongoing land encroachment problem in the highlands.

Pahang Menteri Besar Datuk Seri Adnan Yaakob responded to the NST, agreeing to an audit that would cross-check the development of land against what had been set in the highlands’ development plan.

He said in the district’s planning, land-use categories had been pre-identified and marked and that “all development programmes needed to tally with the plan”.

In his statement, he denied that the surat kuning from palace officials, was among the root causes of problems that Cameron Highlands was facing, saying that it was only normal for many applicants to get testimonials and recommendations from whom they think could lend support to their applications.

He said testimonials and recommendations from all, including palace officials, were looked into, but in the end, it would be the state authorities who would decide, based on merit.

The NST has learnt that the issuance of new TOLs has been frozen since 2001.

Kedudukan Hadenan dalam Protasco jadi tanda tanya

20 November 2014 3:04 AM

KUALA LUMPUR 19 Nov. – Kedudukan Tan Sri Dr. Hadenan Abdul Jalil sebagai Pengerusi Protasco Berhad (Protasco) menimbulkan persoalan dalam kalangan sesetengah pihak apabila syarikat tersebut menghadapi krisis di peringkat pengurusan tertinggi.

Persoalan timbul apabila pihak yang bertelagah di dalam syarikat itu dikatakan perlu merujuk kes tersebut kepada Suruhanjaya Pencegahan Rasuah Malaysia (SPRM) mengenai dakwaan wujud salah laku membabitkan pengurusan syarikat terbabit.

Apa yang menimbulkan persoalan pihak terbabit ialah kedudukan Hadenan selaku Pengerusi Panel Penilaian Operasi SPRM dan status beliau tersebut dikhuatiri boleh menimbulkan konflik kepentingan selain aspek soal integriti urus tadbir korporat.

Kemelut dalam Protasco timbul setelah Pengarah Bukan Eksekutifnya, Tey Por Yee dilaporkan memfailkan tindakan mahkamah bagi pihak dan kepentingan syarikat untuk menuntut semula wang sebanyak RM10 juta daripada Pe­ngarah Urusan, Datuk Seri Ir. Chong Ket Pen yang didakwa diperolehnya secara rahsia daripada urus niaga pembelian 68 peratus saham syarikat minyak dan gas Indonesia, PT ASI.

Krisis tersebut berpanjangan apabila Protasco pula dilaporkan bertindak balas dengan memfailkan tindakan mahkamah ke atas Por Yee dan seorang lagi Pengarah syarikat itu, Ooi Kock Aun pada 22 September lalu kerana didakwa melanggar kewajipan fidusiari membabitkan tuntutan ganti rugi sebanyak AS$27 juta (RM88 juta) atas penipuan dan konspirasi dalam urus niaga pembelian saham sebuah syarikat minyak dan gas Indonesia, PT ASI.

Tidak cukup dengan itu, syarikat dilaporkan turut membuat laporan polis ke atas Por Yee dan Kok Aun yang dikatakan mahu mengadakan mesyuarat agung luar biasa (EGM) dijadual 28 November ini bagi menyingkirkan Chong.

Krisis dikatakan semakin panas apabila Chong pula dilaporkan memanggil EGM pada 26 November ini, bagi menyingkirkan ke­dua-dua seterunya itu.

Protasco MD : Tey and I were not business partners

Posted on 14 November 2014 - 05:37am
sunbiz@thesundaily.com

PETALING JAYA: Protasco Bhd's executive vice-chairman and group managing director Datuk Seri Chong Ket Pen has clarified that he and Tey Por Yee, an investor he is in dispute with, were not business partners.

"This is to clarify that I did not have prior business dealings or know of Tey Por Yee until December 2012, when he was interested to be a shareholder of Protasco," Chong said in a statement yesterday.

Chong said he viewed Tey to be a strategic investor that would be beneficial to Protasco and agreed to help organise and secure a short-term loan to complete Tey's purchase of Protasco shares in December 2012.

"I viewed him to be a strategic investor that would be beneficial to the company, and I agreed to help organise this loan for RM20 million," he said.

Chong reiterated that he lent Tey half of the loan through his personal company, RS Mahaniaga, via a short-term loan with a bank, and the other half via JF Apex through a margin financing facility in his own own name.

"These loans were secured by my own Protasco shares and my personal guarantee," Chong said.

He added that the RM10 million that Tey paid to RS Mahaniaga is repayment for the bank tranche of the loan. The RM10 million under JF Apex is still outstanding.

Tey: Defence filed confirmed Chong took Protasco’s money 

9:07 PM - 10 Nov
by Xavier Kong

In response to the defence filed by Protasco Bhd’s managing director Chong Ket Pen earlier today, Protasco non-executive director Tey Por Yee calls that the defence filed confirms that Chong took Protasco’s money for his own benefit.

Tey noted that there was no proof of a loan agreement between Tey and RS Maha Niaga Sdn Bhd, a company owned by the senior management of Protasco.

“The allegation that I borrowed RM20 million from Chong and Maha Niaga is downright untrue and unsubstantiated. If it is true, Chong should provide the agreement to back his claims. The only loan that Chong has given is RM10 million and it was to Kingdom Seekers. We have a loan agreement drawn up and I will be happy to make it public to substantiate this,” said Tey.

Tey added that, under the terms of the loan agreement between Chong and Kingdom Seekers Ventures (Tey’s vehicle), the repayment of the loan is subject to the PT Anglo Slavic Utama deal going through, which meant that Kingdom Seekers was to return the RM10 million to Chong seven working days after the completion of the deal. In the loan agreement, Chong had allegedly agreed that Kingdom Seekers could appoint an executive director to the Protasco board of directors.

“There has been no demand or any reason for Kingdom Seekers to return the loan as Chong has not fulfilled the terms of the agreement,” Tey said, adding that, from the defence filed and served by his legal counsel, it was apparent that Chong had advanced RM10 million from Maha Niaga.

“In turn, Maha Niaga took a RM10 million short-term loan, with a 2-month repayment period from UOB. This short-term loan was secured using Protasco shares as collateral and with Chong’s personal guarantee,” continued Tey, noting that Chong’s confirmation of the receipt of the sum shows support for Tey’s statement that RM10 million of the RM16 million which Protasco’s subsidiaries paid for the bitumen and coal trading with Indonesia, flowed back to Maha Niaga as personal financial gain for Chong.

Tey then pointed out that Chong had needed to service the loan from UOB within two months, but could not ask for payment from Kingdom Seekers due to the PT ASU deal having fallen through.

“So he took money from Protasco’s bitumen and coal deal (with Indonesia) to the exact tune of RM10 million to cover this loan,” said Tey.

In response to the claim that Telecity Investments Limited was servicing his private loan to Chong, Tey noted that he does not own Telecity, nor is a director of the company.

“My involvement was to invest in Protasco, and introduced PT ASU to Protasco like anybody sometimes introduce contacts to each other. I am not involved in the day to day business of Protasco. As far I am aware, the oil field investment is a legitimate investment with proper due diligence conducted by the international firms of KPMG Singapore, Grant Thornton in Jakarta, and RISC Advisory (an oil and gas consultancy firm from Australia) which were engaged by Protasco,” said Tey.

At the end of the trading day, Protasco’s shares were last traded at RM1.79, up a sen.

Protasco’s ‘thrilling’ O&G adventure

Posted on 5:29 PM - 4 Feb by Khairie Hisyam    
   
Diversified outfit Protasco is revising the terms of its shares acquisition in oil and gas company PT Anglo Slavic Indonesia, but when Tiger delved into the details it found more questions than answers. Should shareholders not be informed of everything of consequence?

Hunting is an art. When the hunger isn’t debilitating, the lengthy prowls as Tiger stalks an unassuming kijang are delightful.

The long wait for the perfect time to pounce just heightens the anticipation of Tiger’s teeth sinking into flesh, a thrilling adventure just yearning for a satisfying end. And when that destined moment comes, it feels as though the stars are aligned and the jungle stands still as Tiger leaps to its kill, a culmination of patience and skill.

A perfect hunt is an art in itself, whether in Tiger’s jungle or the corporate landscape. Fresh from feasting after one such hunt, Tiger found another thrilling adventure to watch — Protasco’s attempt to get into the oil and gas scene.

Oh really?

Just before the Horse came galloping in last week, the diversified outfit announced that it had signed an amended sales and purchase agreement (SPA) for its proposed shares acquisition in PT Anglo Slavic Indonesia (PT ASI), which indirectly controls the rights to develop and produce oil and gas in the Kuala Simpang Timur Field (KST Field) in Aceh.

In the amended SPA, Protasco will be paying US$22 million (RM68.4 million) for 63% of PT ASI, which amounts to 78.75 million shares. This is a lower price from the original SPA inked in December 2012, which had Protasco paying US$55 million for 76% or 95 million PT ASI shares.

Accordingly, the profit guarantee that comes with the equity acquisition is amended too, from US$55 million over four years in the original SPA to US$22 million over four years in the amended version.

But this is rather strange, when Tiger thinks about it. In the amended SPA, the valuation of PT ASI amounts to roughly RM108.57 million. Yet the valuation in the original SPA would have put the company’s value at about RM233.56 million — slightly more than double the 2014 valuation.

So how did PT ASI drop in value so drastically within a short span of 13 months?

It’s like stalking a big wild boar, salivating at the prospect of a big meal, only to pounce and discover it was a tiny hare after all, barely enough to pick Tiger’s magnificent teeth with.

Thankfully we weren’t kept in too much suspense by Protasco, which explains that the amended purchase price was arrived at on a “willing buyer, willing seller” basis in view of a valuation of the shares by KPMG Singapore in a report dated Jan 20, 2014.

Hang on, though. If KPMG’s valuation puts the value of the shares at US$22 million, then how was the previous valuation figure of US$55 million derived?

In any case, Protasco saved some US$33 million here, thanks to a clause in the original SPA which allowed for renegotiations should an independent valuation find that the shares value was below US$50 million or beyond US$60 million. Paying the right price is good news for shareholders, isn’t it?

Although speaking of value, Tiger wonders about PT ASI’s true value. In its announcement Protasco noted that KPMG used a discounted cash flow approach in its valuation of the company, whose net assets stood at around RM31.4 million (roughly US$9.42 million) as at end May 2013.

That means PT ASI’s RM108.57 million valuation is slightly more than three times its net assets. Rather strange for a relatively small oil and gas outfit which has been recording losses for three consecutive years — 2010, 2011 and 2012.

Not to mention the dangers of using discounted cash flow in this valuation, of course. It is known that a small variance in inputs, especially discount rates, can change the resulting values greatly in using this method. There are many variables in the oil and gas business i.e. fluctuating prices, currency exchange rates, exploration success (or failures), the list goes on.

For one this deal means Protasco will extend a loan of US$5 million to PT ASI for exploration purposes, and exploration activities can easily take longer than expected and even incur extra costs.

Now that Tiger thinks about it, how much money will the other shareholder in PT ASI  provide to the company for exploration purposes? Is it on equal contribution terms?

If Tiger were holding Protasco shares, Tiger would wonder if enough due diligence had gone into this PT ASI acquisition deal. But maybe the management has some insight that escapes the rest of the jungle (in which case they should enlighten their shareholders at least).

Speaking on the management, Tiger was tipped that the original SPA, announced on Dec 28, 2012, came a bit more than two weeks after one Ooi Kock Aun was made a Protasco board member on Dec 10, 2012.

What is interesting here is that Ooi is the chief finance officer at publicly listed PT Inovisi Infracom Tbk, which is also involved in oil and gas among other things. In the amended SPA, 297.1 million shares in Infracom, worth US$30.3 million, is blocked as security to repay Protasco’s RM50 million deposit and purchase price if the amended SPA is terminated.

So whose shares are those and what is the relationship of the mystery shareholder with this PT ASI acquisition deal? Tiger doesn’t think a random investor would be so generous as to give a guarantee such as this unless there is direct involvement.

Another interesting highlight is that this guarantee was not in the original SPA. Is Infracom linked to the seller? If it is, then is Ooi, a Protasco board member, linked to the seller?

Oops, Tiger forgot. Tiger should mention here that the seller is PT Anglo Slavic Utama (PT ASU), which wholly owns PT ASI. In turn PT ASU is wholly owned by Anglo Slavic Petrogas, which is based in the British Virgin Islands.

So many unanswered questions makes for a thrilling adventure, but such suspense should be confined to the jungle and the cinema, not the financial markets. With the dearth of information shareholders do not even get their say in this deal since the total transaction sum comes to 24% of Protasco’s net assets, just shy of the regulatory 25% which would have required shareholder approval.

It is only right that Protasco’s management reassures shareholders by disclosing all relevant information to the deal before it progresses further.

GRRRRR!

Tiger Talk

• He allegedly help to organise RM20 million loan for JF Apex and RS Mahaniaga to Tey and Ooi but is not business partner to them. Why is that?

• Tey alleged that Chong gave RM10 million loan to Kingdom Seekers.

• Kinibiz alleged that Chong was involved and agreed to the original price of US$55 million in the first SPA and US$22 million in the amended SPA after due dilligence headed by his son.

• It was Chong also that allegedly agreed to a profit guarantee provided by the vendor of PT ASU for US$22 million. The agreement will have to surface to shareholders.

UMNO NEEDS TO TACKLE INEQUALITY NOW

With the Umno General Assembly starting tomorrow, the Malay Economic Action Council (MTEM) believes that there are economic issues that require full debate to ensure the Malay community can participate in wealth sharing and increase their competitiveness.

Among these issues are housing, cost of living and the issue of poverty. Others include what the government has done in the past 5 years to alleviate conditions to assist the Malay community in excelling in growth and participation in the economy.

MTEM wishes to highlight 10 major issues that Umno should discuss in this coming week at its annual general assembly, which provides a platform for the party to discuss these topics to show the country that it is still relevant and evolving to represent today’s Malay community.

1.   Affordable and liveable housing

In the last Budget, it is seen that instead of controlling the price of housing, the government decided instead to focus on putting the onus on those wanting to buy a home. The recent announcement of issuing out 110 per cent loans can be construed as the continuing subsidising of developers instead of the Malaysian people.

The government should instead move to curb speculation on housing, the major cause that is keeping home prices high and beyond affordable for Malaysians at large.

The price of houses are too high, with new developments too far from economic centres and without concern for accessibility.

If Umno insists it is for the Malay community, where are  the initiatives to set these right?

2.    Economic Sabotage: “Ali Baba” companies and corruption

The release of the latest Auditor General’s report shows that leakages are still happening despite the pledge of the Public Accounts Committee (PAC) chaired by Datuk Nur Jazlan to put things right.

In addition to this, MTEM believes and has supported the need to blacklist companies that sell off government contracts. We also believe there is a need for a new law to disallow Ali Baba companies from tendering for Bumiputera only contracts.

Furthermore, we believe more new laws and amendments must be made for the Malaysian Anti-Corruption Council (MACC) to be effective in its job. We also support the need for the anti-corruption agency to be answerable directly to Parliament.

3.    Trans Pacific Partnership Agreement (TPPA)

We believe that there is a need for Umno to have an internal debate on whether this deal is –as its President continually says – “beneficial outweighing the costs”.

We at MTEM believe that the TPPA will be a loss for Malaysia, impacting the Bumiputera affirmative actions in place and also increasing the cost and limiting access to medication and medical treatment.

Furthermore, the TPPA will have cause the dwindling of Malay and small and medium industries (SMIs).

We also believe the cost benefit analysis should be debated openly. In addition, the RCEP, AEC and FTAAP are all viable alternatives for the TPPA because these provide non binding unilateral commitments within a multilateral framework, which is less restrictive on member nations.

It will provide a more level playing field ecosystem with regional ASEAN and Asian member nations respectively.

4.    Income inequality

The Department of Statistics (DoS) report on Salaries and Wages have shown that there is still an inter-ethnic gap in what companies are paying its employees. In the 2013 report, Malays were reportedly earning a median salary lower than the Chinese. Malays earn a median of RM1,500 compared to RM1,900 for the Chinese community.

Furthermore, the household income survey in 2012 showed that the median income for the Bumiputera household was only RM3,282, the lowest among the three largest population groups in Malaysia.

5.    Wealth inequality

One measure of economic mobility is the ability to generate and maintain wealth. In the “Colour of Inequality” by Dr Muhammed Khalid, we are shown that even the Malays have a large wealth gap within itself.

One in four Malaysians have no property assets, and 74.3 per cent of these are Bumiputeras. Further more, the average real estate value for the Bumiputera household is the lowest among the three largest ethnic groups.

6.    Employment inequality

In 2012, the issue was raised that the Malays were being discriminated in being hired not only by local and foreign companies, but also by government linked companies.

The study by Lee Hwok Aun and Dr Muhammed Khalid summarised that Malay job applicants were significantly less likely to be called for interviews even after controlling the applicants' academic achievements and positive attributes, job requirements and firms characteristics.

It added that there was stark racial disparity, as Chinese resumes registered a mean callback rate of 22.1 per cent steeply above the 4.2 per cent for Malay resumes.

In the same year, there was an increase in the number of unemployed Bumiputera graduates from 39,300 in 2009 to 50,700 in 2012.

With this in mind, MTEM is pushing the government to make it mandatory for all public listed companies to publish their diversity in their respective workforces at all levels in their organisations.

We would also ask Umno to debate the need for an employment discrimination law that will address concerns regarding salary discrimination not only by race, but also gender and for the handicapped.

7.    Relooking poverty curbing measures and assistance

We would also urge Umno to discuss increasing the poverty level and to look at the ability of the Malay community to be economically mobile. Furthermore, we believe there is a need for the political party to look into the definition of poverty in Malaysia.

Are we still looking at someone who earns below only RM700 to RM800, or should it be raised and recalculated to show a more earnest figure? MTEM believes that this Poverty Line Index (PLI) is outdated. We also believe that the World Bank indicator used is from the 1970s, with better models available today.

Furthermore, MTEM believes we need to relook into our mechanism involving social transfers to assist these groups move out of poverty in a more sustainable manner than a one off payment annually such as the Bantuan Rakyat 1Malaysia (BR1M) is being given out 4.5 million Malaysia who qualify - earning less than RM3,000 monthly.

8.    Debt, bankruptcy and second chances

MTEM finds it ridiculous that the head of debt counselling agency AKPK believes that “getting a second job” is the panacea of assisting those burdened with large debts.

Furthermore, there are those who were declared insolvent in the 1997/98 Asian Financial Crisis and even the 2008 Global Financial Crisis. While these are major crises, there are also those less fortunate who have yet to be able to raise up again due to lesser events.

We believe this raises the need to debate whether the government should come up with policies and laws that will grant these individuals a second chance.

9.    11th Malaysia Plan (RMK11)

We believe that with the 11th Malaysia Plan to be unveiled next year, Umno should be setting its goals and targets by this annual general assembly. What is the party’s target in the RMK11 master plan for the Malay community.

From MTEM’s side, we would look at the RM1.7 trillion gross national income (GNI) target of the Economic Transformation Programme (ETP) to have a RM900 bil allotted specific for the Malay community. Currently, the Malay community has a GNI of RM190 bil of a national GNI of RM654 bil.

The current projection MTEM has shows that when Malaysia reach RM1.7 trillion GNI, the Malays would only have RM487 bil, slightly more than half the target we propose for RMK11. Another measure we would use as an indicator would be the median household income.

10. Agenda Memperkasakan Bumiputera

Announced in 2013 by the government, the Agenda Memperkasakan Bumiputera (AMB) had 33 initiatives in assisting the Malaysian Bumiputeras achieve greater heights. However, MTEM believes that the plan does little to address issues critical to the socioeconomic condition of the Bumiputera community.

And yet, nothing has been said and done to ensure that the activities have achieved or shown any results, which baffles us. Instead, the government has continually announced funds channelled towards these initiatives, but has never shown any results or had any engagements with civil society to ensure that the government is on the right track.

We believe that the plan requires more thorough and holistic initiatives that are outcome driven. Furthermore, we are perplexed by the lack in success stories from this government initiative.

NIZAM MAHSHAR
Chief Executive Officer
Malay Economic Action Council (MTEM)

"TRANSFORMASI EKONOMI NAJIB GAGAL DAN PERLU DI MANSUHKAN" kata Tan Sri Muhyidin Yassin.

Sehari dua ini BO peratikan ahli ahli UMNO sibuk membincang dan membandingkan ucapan Presiden Parti DS Najib dan Timbalannya TS Muhyidin di Perhimpunan Agung Umno. Dan kebanyakan topik perbincangan lebih tertumpu kepada gesaan TS Muhyidin supaya Akta Hasutan di kekalkan dan di susuli dengan ‘janji’ DS Najib untuk mengekalkan akta tersebut.

Tetapi malangnya, ramai yang TERLEPAS PANDANG mesej yang lebih penting yang ingin di sampaikan oleh TS Muhyidin. Iaitu mengenai KEGAGALAN PELAN TRANSFORMASI DS Najib. Kegagalan DSN menjaga PERIUK NASI Melayu.

Jika kita perhalusi, itu lah MESEJ UTAMA yang cuba di sampaikan oleh TSM di dalam ucapan nya pada Rabu lepas, sehari sebelum ucapan dasar Presiden Parti. Ucapan selama dua jam yang sarat dengan ANGKA ANGKA dan STATISTIK untuk MENIDAK KAN pencapaian Program Tranformasi DS Najib, terutama di dalam mengangkat mertabat kaum Melayu di segi ekonomi. Malah tanpa segan silu TS Muhyidin seolah olah mengesa supaya DS Najib ‘ MEMANSUHKAN ’ pelan Transformasi Ekonominya.

Berikut adalah antara ANGKA dan STATISTIK di dalam ucapan TSM yang menidak kan pencapaian Program Transformasi DS Najib selama ini…

1. 24 tahun selepas pelaksanaan DEB kita kembali mendengar keluh kesah dan gundah gulana orang Melayu.

2. Median pendapatan bulanan isirumah Bumiputera sebanyak RM3,282 jauh lebih rendah berbanding kaum Cina, iaitu RM4,643 dan kaum India RM3, 676.

3. Dalam kumpulan isi rumah berpendapatan 40% terendah, 75.5% adalah Bumiputera.

4. Di dalam pemilikan tanah hanya 36.3% transaksi bangunan hartanah kediaman, 2.37% hartanah industri dan 7,85 hartanah perdagangan yang melibatkan bumiputera.

5. Bumiputera masih menerima layanan yang tidak saksama dalam sektor swasta. Dalam setiap seorang graduan Melayu yang di panggil untuk temuduga, 5.3 lagi calon adalah dari kaum Cina.

6. Data rasmi juga menunjukan kadar pengangguran adalah tertinggi dalam kalangan tenaga kerja Bumiputera iaitu sebanyak 70.3% manakala graduan menganggur sebanyak 66.9%.

7. Di sektor swasta yang di kuasai oleh kaum Cina pekerja Bumiputera menerima gaji 20 sehingga 40 peratus lebih rendah berbanding bukan bumiputera.

8. 4 juta daripada 6.5 juta pekerja yang mencarum dalam KWSP berpendapatan kurang dari RM2,000 sebulan.

9. UMNO perlu memberi perhatian secara lebih serius kepada usaha meningkatkan kemahiran tenaga kerja Bumiputera. Data terkini menunjukkan 64.3% tenaga buruh Bumiputera mempunyai sijil SPM dan ke bawah. Hanya 27.8% berpendidikan tinggi.

SINDIRAN TAJAM di sertai fakta oleh TSM mengenai masalah perumahan Melayu di Bandar…

“Mengenai isu perumahan, ada ahli UMNO di akar umbi yang mengatakan kepada saya, rumah-rumah yumah-rumah yang dibina dengan harga RM400,000 sebenarnya bukan rumah mampu milik, tetapi rumah mampu tengok sahaja. Menurut Kajian Khazanah Research Institute, harga rumah mampu milik yang sewajarnya adalah 3 kali median pendapatan isi rumah, iaitu bagi kumpulan pendapatan isirumah 40% terbawah dengan harga RM70,000 dan kumpulan berpendapatan sederhana pada harga RM160,000 atau pada purata harga RM130,000. Rumah-rumah yang dibina dengan harga yang terlalu mahal, terutamanya di kawasan-kawasan bandar dan pinggir bandar, sudah tentulah tidak mampu dibeli oleh rakyat berpendapatan rendah dan sederhana”.

TSM mempersoalkan sasaran Pelan Transformasi Ekonomi DSN di dalam menaikan taraf ekonomi Bumiputera….

“Pencapaian sasaran Pelan Transformasi Ekonomi dengan nilai GNI RM1.7 trillion, dengan pendapatan perkapita RM48,000,dengan penambahan 3.3 juta pekerja berkemahiran dan RM1.4 trillion pelaburan daripada sektor swasta dan kerajaan, BERAPA KAH daripada jumlah sasaran ini akan turun mengalir menjadi milik kaum Bumiputera? Dalam KEGHAIRAHAN kita meletakkan sasaran besar untuk mencapai status negara berpendapatan tinggi, kita juga harus menetapkan sasaran yang jelas untuk kaum Bumiputera dan memastikan kekayaan negara kita dapat diagihkan kepada semua rakyat baik di kota mahupun di desa, di semenanjung mahupun di Sabah dan Sarawak, baik kumpulan berpendapatan tinggi mahupun kumpulan pertengahan dan 40% terbawah, semuanya – kulluhum ajma’in – perlu dipastikan mendapat peluang yang adil dan saksama”

Dan yang kita tak perasan langsung di dalam ucapan TSM tersebut adalah gesaan beliau supaya DSN ‘MEMANSUHKAN’ Pelan Transformasi nya...

“Saudara-saudari, kita sebenarnya amat memerlukan satu MODEL EKONOMI yang benar-benar dapat memastikan pertumbuhan disertai dengan pengagihan yang saksama. Kita tidak boleh membiarkan majoriti rakyat negara kita terpinggir dan tersisih daripada arus kemajuan ekonomi negara. Apatah lagi, ketidaksaksamaan dalam masyarakat kita hari ini bukan lagi merupakan masalah kaum semata-mata, tetapi juga masalah kelas. Kita sedang menghadapi masalah jurang yang besar antara golongan kaya dan golongan miskin, jurang antara etnik dan intra etnik,jurang antara Semenanjung, Sabah dan Sarawak, jurang antara masyarakat bandar dan luar bandar, jurang antara CEO, pengurusan kanan syarikat dan pekerja bawahan. Semua ini jika dibiarkan berterusan akhirnya akan menjejaskan pencapaian ekonomi negara kita secara keseluruhan”.

Cadangan TS Muhyidin supaya Umno menjadikan Agenda Bumiputera sebagai Agenda Nasional bukan agenda kaum…

“Oleh itu, kita perlu menjadikan Agenda Bumiputera sebagai Agenda Nasional, BUKAN agenda kaum. Majlis Ekonomi Bumiputera yang dipengerusikan oleh YAB Presiden mempunyai peranan penting untuk mengkaji secara terperinci kedudukan ekonomi Bumiputera, merencana hala tuju masa depan ekonomi Bumiputera, termasuk memperkukuhkan instrumen dasar, institusi dan inisiatif memajukan ekonomi Bumiputera. Saya ingin mencadangkan supaya Agenda Bumiputera serta dasar dan strategi merapatkan jurang ekonomi dijadikan teras utama Rancangan Malaysia Ke-11 yang merupakan lonjakan terakhir Malaysia untuk menjadi sebuah negara maju. Agenda Bumiputera sebagai Agenda Nasional tidak boleh dilaksanakan secara PICISAN atau terpisah daripada kerangka besar ekonomi negara. Ia mesti dilaksanakan secara inklusif, komprehensif dan merentasi semua sektor ekonomi. Saya juga mencadangkan satu Dasar Ekonomi Nasional yang baharu dirangka untuk memacu inisiatif kesaksamaan ke hadapan”.

We must work together, says Khairy

NST, 29 November 2014 @ 4:01 PM

KUALA LUMPUR: Umno Youth chief Khairy Jamaluddin has stressed that the rejuvenation in party (peremajaan) is not about asking for posts.

He is worried that the topic which started on a good note is being misunderstood, a time bomb waiting to explode.

Khairy said Youth chiefs are being looked suspiciously by division chiefs.

"I would like to stress that rejuvenation is not just about age. The election in India, for instance, has proven that the older candidate who had used social networks, has beaten the younger one," he said.

"We must deserve it if we want to go up," he said adding that the young must work together along the veterans.

Call for party rejuvenation is not a 'coup' - Khairy Jamaluddin

Irwan Muhammad Zain, Astro Awani | Updated: November 29, 2014

KUALA LUMPUR: Party rejuvenation doesn’t translate to the youth in the party will snatch the power from the existing crop of older leaders who have been fighting for the party for the longest time,” said UMNO Youth Chief, Khairy Jamaluddin.

He expressed concern over the usage of the term, ‘party rejuvenation’ will only create a gap between the young and old leaders and inevitably leads to weakening the party.

Said Khairy, party rejuvenation doesn't constitute ages, but the capabilities of every layers of leadership in reviving youth imagination.

“As a leader, I’m concerned over the direction of this issue; I’m worried that it will create confusion – from a suggestion to strengthen the party it will only act as a ticking time bomb waiting to explode.

“There have been branch leaders viewed negatively by youth chief. Once embraced, today handshakes are tip of the fingers only. Rejuvenation doesn’t constitute age, it is wholesome. We aren’t asking older leaders to don pink sock, that isn’t authentic, that’s lunatic,” said Khairy.

“Rejuvenation should also be imposed on the older generation,” he said in his winding up speech delivered at the 68th UMNO General Assembly at Dewan Merdeka in Putra World Trade Centre, here today.

In his speech, Khairy also cautioned all UMNO Youth to equip themselves with quality criteria as they act as heir of party and at the same time, acts as a testimony of the superiority of its leadership.

“I’d say to UMNO Youth, don’t get carried away with the rejuvenation, we must be eligible. This isn’t a free lane, if not eligible means not eligible, if there’s ‘rezeki’, Alhamdulillah.

“That is what we understand, the manner the Malays respect the old,” he added.

More here.

Published: Saturday November 29, 2014 MYT 4:44:00 PM
Updated: Saturday November 29, 2014 MYT 4:48:30 PM

Umno AGM: Emulate India's Modi, says Khairy

by d.kanyakumari AND dina murad

KUALA LUMPUR: The rejuvenation of Umno is not related to age but on how the party engaged the young, said Umno Youth chief Khairy Jamaluddin (pic).

Citing the recent Indian general election, Khairy said the 64-year-old Narendra Modi won against his younger counterpart because the Indian Prime Minister had a youthful approach.

"If you really study his campaign method, you will see that Modi used social media and paid a lot of attention to issues and policies relating to the young.

"He captured the imagination of the young and he truly reflected the meaning of rejuvenation," the Umno Youth chief said during his wrap up speech at the Umno General Assembly.

Khairy added that party president and Prime Minister Datuk Seri Najib Razak had also taken these steps.

"Our President - I apologise Sir - is already old but his Facebook followers are in the millions and his budget policies are youth friendly. He even takes selfies everywhere.

"Our secretary general has black hair, that too is rejuvenation. They don't need to use fitting clothes and pink like I do that is not authentic but lunatic," he said

He added that Umno Youth members were not greedy and stupid and they would like to work hand in hand with their seniors.

The Youth and Sports Minister said that rejuvenation also did not mean youth members overthrowing party seniors, but working together in solidarity for the party's future.

"I am afraid if I do not address this issue, it will be like a bomb waiting to explode. Why is such a long overdue and noble issue suddenly becoming a polemic that will weaken our party?" he said, admitting the call to rejuvenation would, at least by a little, change the relationship between the older generation and youths.

"Youths are looked at in a different way by their division leaders, some even treated coldly. I worry if this issue is left untouched, what started out as a good suggestion may ruin the party as there are differing understandings of what rejuvenation means," he said.

Khairy explained that rejuvenation did not mean that youth member were hungry for positions or candidacy, nor was it an attempt to usurp their seniors.

“But it is unity among all branches and levels of Umno in working together and providing opportunities for qualified and deserving youth members,” he said.

He also stressed that the call for rejuvenation was not to be used as a "free pass".

 

Hendon Mohamed emerges top in Bar Council election

KUALA LUMPUR: Amidst grouses over lack of transparency in the Bar Council election, lawyer Hendon Mohamed emerged the top winner for the 2015/2016 term.

Sulaiman Abdullah, who was one of Opposition Leader Datuk Seri Anwar Ibrahim’s counsel, clinched the second spot (1,788) followed by Brendan Navin Siva (1,638).

The election saw 23 candidates contesting the 12 posts in the Bar Council.

Other winners include Andrew Khoo (1,609), Richard Wee (1,519), Honey Tan (1,470), George Varughese (1,445), Syahredzan Johan (1,429), Ravi Nekoo (1,392), Datuk Low Beng Choo (1,388), Datuk Kuthubul Zaman Bukhari (1,362), and Roger Chan (1,346).

The results were posted on the Bar Council’s website.

Lawyer M. Reza Hassan, one of the candidates who contested and lost, was denied entry into the hall to watch live streaming of the vote tallying process.

Reza had refused to sign a letter of undertaking prepared by the Bar Council, barring observers from taking photographs, recording or transmitting images of the vote counting process.

“It is not required by law to sign such an undertaking. That is why I refused to sign the document.

"I promised that I would not take any photograph, but they immediately switched off the live streaming, forcing me to leave the hall,” he alleged on Tuesday.

An observer claimed that the camera focused only on one group involved in the vote counting process.

“There were a few groups counting the ballot papers. But the camera zoomed only on one group.

“We barely saw 200 ballot papers via live streaming. There is certainly no transparency as we could not see the rest,” said an observer, who spoke on the condition of anonymity.

Lawyer Manjeet Singh Dhillon, a former Bar Council president, also questioned the electoral process. “What is there to hide?” he asked.

Malaysian Bar president Christopher Leong could not be reached for comments.

RCI not be-all and end-all to immigrant issues

By B.Suresh Ram - 3 December 2014 @ 5:58 PM

KUALA LUMPUR: The Royal Commission of Inquiry on Immigrants in Sabah says that the power to translate its recommendations lies with the relevant authorities.

It did not state who these relevant authorities in the postscript of the report which was made public today.

“Many people in Sabah seem to perceive the Royal Commission of Inquiry (RCI) as the be-all and end-all to the illegal immigrant problems confronting the state. With respect, we think this is a misconception. The RCI is bound by the Terms of Reference. We can only inquire, make findings and thereafter present recommendations to the relevant authorities. Very much depends on the authorities concerned. The power to translate the recommendations into action lies with them,” the report stated.

The report in Bahasa Malaysia was 427 pages and the English version was 368 pages was made public in Kota Kinabalu.

The commission also said that it was aware that some of the evidence disclosed to the RCI maybe considered sensitive by some quarters.

“However, we think that such evidence has to be viewed against the backdrop of events and circumstances of the period when abuses and / or illegal activities relating to the widespread issuance of Malaysian identification documents (ICs) to immigrants / foreigners, were alleged to have occurred in the state of Sabah,” the report added.

The commission said that it was a period in which syndicates and individuals aided by or in complicity with corrupt officials, had taken advantage of a weak institutionalised citizenship system compounded by the huge numbers of immigrants / foreigners for monetary gain.

“It was also a period which saw the emergence of an alleged project called “Project IC” with corrosive political agenda.

In short, it was a period of heightened nefarious activities that had precipitated and accelerated the influx of illegal immigrants into the state,” it said.

The report added that Sabah now suffers the cumulative spill-over effects of that period.

“We believe that lessons can be learnt from history. All it takes is the political will. There is a need to take bold and decisive steps for an integrated, comprehensive and sustained policy of action.

That of course, is the prerogative of the government and the authorities. It is not a matter within the remit of this Royal Commission of Inquiry (RCI),” it said.

Lease business tempts airlines

AIRLINES are eyeing the lucrative aircraft-leasing business but their success will depend on the infrastructure to support the business.

"Also, the skill sets needed to operate an efficient and profitable leasing company are not necessarily the same skills as running an airline," says an industry expert.

Budget-carrier AirAsia Bhd recently set up its own aircraft-leasing unit, Asia Aviation Capital Ltd (AAC), based in Labuan. AAC will acquire aircraft and secure financing for these aircraft as well as provide operating leases to AirAsia's affiliates outside Malaysia.

According to AirAsia Group founder and CEO Tan Sri Tony Fernandes, AAC is expected to generate up to US$50 mil over the next few years, with long-term projections seeing it earn US$100 mil in later years. Aside from its supply of aircraft to the AirAsia Group, AAC is expected to place aircraft in target markets such as China and Africa.

Joining AirAsia in the aircraft-leasing business is China's first low-cost carrier Spring Airlines Co, as it seeks to reduce costs and increase the use of its fleet.

Indonesia's Lion Air and the Norwegian Air Shuttle are also venturing into the leasing business, which gives good bottomline and net profit margins of about 20%. More often than not, airlines rent out unused planes to manage fleets.

Lion Air's Singapore-based lessor, Transportation Partners, aims to ramp up third-party leasing next year and in 2016 with a focus on China, Brazil, Japan and the United States.

Meanwhile, Hong Kong billionaire Li Ka-shing's Cheung Kong Holdings Ltd is also entering the aircraft-leasing business and is paying US$1.89 bil to buy 35 planes. The company will also form a joint venture with MC Aviation Partners inc, to buy an additional 15 aircraft for US$733.5 mil.

Nevertheless, the entry of airlines to the leasing business raises questions about whether these budget airlines have the know-how to succeed or if they have simply ordered more planes than they need.

Lion Air, AirAsia and Norwegian Air Shuttle collectively have ordered more than 1,400 Airbus and Boeing jets, worth about US$140 bil at current list prices.

Essentially, they are competing with established finance firms that lease out aircraft to cash-strapped carriers from China.

However some, such as Singapore Airlines Ltd, tried the leasing business but eventually exited.

If successful, the low-cost carriers could in theory take business away from traditional lessors, particularly smaller players. That could put pressure on lessors to cut their rates.

Leasing gone wrong for PMB

AIRCRAFT leasing is good business. Many companies worldwide, including AirAsia, are jumping onto this bandwagon. But apparently not for Khazanah Nasional Bhd's leasing unit, Penerbangan Malaysia Bhd PMB). It has racked up accumulated losses of RM 1.92 bil as at Dec 31,2003.

A look at its annual financial statements over 11 years shows fluctuating fortunes. The statements also reveal little information such as to whom PMB leases the planes, at what rates and what other asset it owns.

Where has PMB gone wrong that it has suffered losses for six of its 11 years? Will Khazanah ever turn around the company and what are its plans for PMB? As of press time, Khazanah had not responded to FocusM's queries.

In the absence of answers, we can only speculate that PMB is a vehicle that generally buys planes from a third party and not from aircraft manufacturers Boeing or Airbus. However, it is learnt that it provides the executive jets used for the nation's leaders such as the King and the prime minister.

"Not everyone wants to buy new planes and can wait for a slot. This is where leasing companies like PMB come in. PMB is not making money probably because it is not leasing out planes that are sitting idle. It has old planes, which are not what the market wants. Also, you may wish to know how much the planes are leased for. It is below market price?" says an industry source.

"I don't see the relevance of PMB. It owns Boeing 777 widebodies, which are in demand. It can lease to cash-strapped airlines in China. PMB should list its fleet size and type as well. Why so secretive?" the source asks.

PMB is believed to own four Boeing 777-2H6ER aircraft. Incidentally, the missing MAS flight MH370 is a Boeing 777-2H6ER purchased in 2002, with one safety incident recorded in 2012.

Strangely, 2010 accounts filed with the Companies Commission of Malaysia (CCM) show a huge discrepancy in that its revenue - previously stated as being RM13.05 bil - was restated in its 2011 accounts as being just RM588.04 mil! Net profit for this period was also restated, from RM382.47 mil to RM 129.45 mil.

PMB slumped into the red with a net loss of RM96.74 mil for the financial year ended Dec 31, 2013 from a net profit of RM81.1 mil the previous year, on the back of a lower revenue of RM288.43 mil from RM525.94 mil.

Its revenue of RM288.43 mil - derived mainly from the lease of aircraft and engines - was dragged down by a huge jump in expenditure amounting to RM327.87 mil compared with a previous RM135.3 mil. In addition, for FY2012, PMB received a huge other income of RM359.7 mil compared with RM31.35 mil inFY2013.

The company has total borrowings of RM4.8 bil as of Dec 31 last year, while its cash and bank balances stood at RM1.15 bil.

PMB has been affected mainly by a huge unrealised loss on foreign exchange (forex) of RM212.8 mil and a realised forex loss of RM46.43 mil in FY13; while its depreciation cost was RM62.83 mil.

This is in contrast to its FY12 results, when it realised a forex gain of RM139.6 mil and an unrealised forex gain of RM3.37 mil. However, its depreciation cost was higher, at RM 129.64 mil, in FY12.

PMB's carrying number of aircraft, engines and spares was lower at RM861.77 mil as of Dec 31 last year versus RM1.39 bil the year before, as it recognised an impairment loss of RM52.11 mil with respect to aircraft, after taking into account the decrease in market estimates of the residual value of the assets.

It made a gain on disposal of aircraft, property, plant and equipment of RM 13.5 mil and RM204.61 mil in FY13 and FY12 respectively. It is not known what property it disposed of.

According to PMB, certain aircraft and spare engines have been transferred to subsidiary Aircraft Business Malaysia Sdn Bhd (ABM) by its former subsidiary, Malaysian Airline System Bhd (MAS) in connection with the Widespread Asset Unbundling (WAU) exercise in 2002.

PMB says as part of the restructuring agreement with MAS, MAS has the right to receive 80% of any profit (as defined in the WAU agreements) from the sale of aircraft or loss of an aircraft asset covered by insurance.

A third chance

BinaFikir Sdn Bhd was instrumental in the restructuring of MAS under the WAU scheme. The BinaFikir co-founders were Khazanah managing director Tan Sri Azman Mokhtar and Mohammed Rashdan Yusof.

Rashdan was appointed MAS director in October 2010 and redesignated to group deputy CEO in August 2011. He was also appointed Khazanah's executive director of investments.

Rashdan was part of the team that brokered the controversial MAS-AirAsia share swap in 2011, unwound in May 2012 following opposition from unions and politicians. Here, MAS perhaps lost a good opportunity to turn its fortunes around.

Rashdan also worked out the 10-year, RM2.5 bil, sukuk programme to shore up MAS' capital base under a three-pronged funding pillar. During his short stint at MAS, he was in charge of short-haul operations as well as the commercial, finance, corporate finance and strategic procurement units. This includes the purchase of aircraft. Rashdan resigned as executive director and group deputy CEO in 2012.

Now that Khazanah has stepped in to rescue the ailing airline, it appears Azman and former MAS MD Tengku Datuk Seri Azmil Zahruddin Raja Abdul Aziz, who is in Khazanah, are being given another chance to revive MAS.

The question is, if they have already failed to bring MAS out of the doldrums, how different will it be this time?

The WAU exercise

In 2002, MAS - led by former managing director Tan Sri Md Nor Yusof - engaged in a reorganisation exercise which separated the balance sheet from operations by unbundling and transferring to PMB the 73 aircraft on the balance sheet at an ascribed value of RM5.11 bil, together with associated liabilities amounting to RM6.97 bil.

On the completion of the exercise, PMB - wholly-owned by the Minister of Finance, Incorporated (MoF Inc) -became the designated government holding company of MAS. The transferred aircraft fleet was simultaneously leased back to MAS.

The liabilities transferred to PMB include MAS' redeemable convertible preference shares (RCPS), meaning PMB became contractually bound to bear the cost of the eventual redemption of the RCPS and changing the substance of the RCPS from equity to debt.

MAS operates domestic airline services on behalf of PM B, through an arrangement that transfers the financial effects of the revenue and cost of domestic airline operations to PMB, while MAS continues to own and operate international and cargo businesses.

The reorganisation resulted in the issuing of483.2 million new shares to PMB, at the weighted average market price of the previous five days: RM3.85 per share, in consideration of its assumption of net liabilities of RM1.86 bil. After the exercise, PMB held a 69.34% stake in MAS.

The reorganisation also allowed for the disposal of non-core assets and businesses consisting of the sale of 70% of MAS Catering Sdn Bhd (MCSB) for RM175 mil in cash to Gubahan Saujana Sdn Bhd (GSSB). GSSB is 51%-owned by Fahim Capital and 49% by LSG Asia. MAS retains a 30% stake in MCSB.

MAS also sold properties at the previous international airport at Subang to Asset Global Network Sdn Bhd (AGN), a wholly-owned special-purpose vehicle of the MoF, as well as properties at the KL International Airport, also to AGN, for RM1.01 bil.

The WAU exercise helped MAS return to the black with a net profit of RM339.1 mil for the financial year ended March 31, 2003, from a net loss of RM835.6 mil in the previous financial year; while revenue increased by RM 199.2 mil. Total expenditure in FY2003 was lower by RM699.7 mil following the restructuring exercise.

No WAU follow-through

However in 2005, MAS' non-executive chairman Tan Sri Munir Abdul Majid said the WAU exercise completed in November 2002 was not followed through, with the full operational transformation of the company not as envisaged.

He said the subsequent better financial results, largely the outcome of balance-sheet transformation and of a significant contribution from non-operating income, lulled the company into a false sense of security and achievement.

Munir said MAS was in a dire situation when the sources of non-operating income dried up, with no compensating strong income from operations, further undermined by the sharp rise in the price of jet fuel.

MAS then took immediate measures to check the slide, including cost control, a fuel-efficiency programme and a revenue-enhancement plan. In 2005, MAS roped in Datuk Seri Idris Jala as managing director.

In 2005, the airline changed its financial year-end from March to December. For the nine months to December 2005, MAS recorded a net loss of RM1.26 bil due to higher jet-fuel costs and staff costs which increased by 40% and 21 % respectively over the corresponding period in the previous year.

The losses were incurred despite a higher number of passengers over the nine months. The increase in passenger numbers helped boost its passenger revenue by 14% to RM6.3 bil.

Unbundling the WAU

During Tengku Azmil's tenure as MAS managing director, the carrier started buying more planes, putting a strain on its balance sheet. He took over the position from Idris in 2008 and stayed as MAS MD until 2011, when he handed over the reins to Ahmad Jauhari Yahya.

Ahmad Jauhari had the huge task of steering MAS back to profitability when it recorded its largest net loss in history of RM2.52 bil, due largely to rising fuel costs in FY2011.

He will stay until Sept 19 next year, to ensure a proper handover while MAS undergoes another rejuvenation exercise.

Ahmad Jauhari has presided over a difficult period for MAS, as the company continues to suffer losses and has had to face two tragedies this year with the disappearance of flight MH370, which remains a mystery, and flight MH17, shot down over the Ukraine in July.

Khazanah unveiled a radical plan in August to revive the ailing carrier; a plan calling for job cuts, a capital injection of up to RM6 bil and the creation of a new company (Newco) to carry the airline business. It is taking MAS private.

We don't know how prominently PMB will feature in the MAS restructuring plan but taxpayers will want to know when the bleeding will stop.

From a June 2011 posting here

Oscar for good acting? Anyway, congratulations

‘Toughest job in aviation’ for former Aer Lingus CEO

Christoph Mueller is set for one of the toughest jobs in aviation, turning around an airline that has lost two jets and 537 lives this year

Mon, Dec 8, 2014, 14:49

Christoph Mueller will embark on one of the toughest jobs in aviation, turning around an airline that has lost two jets and 537 lives this year.

The 52-year-old outgoing chief executive officer of Aer Lingus has been named to lead Malaysia Airlines amid a slump in traffic and widening losses. He will need to restore confidence in the airline while cutting 6,000 jobs.

“It’s got to be one of the biggest challenges in the airline business today,” said John Strickland, an aviation specialist at JLS consulting Ltd. “It’s a job that needs a tough nerve, patience and a few deep breaths to take it forward. They’ve got to get back to a point of credibility and respect.”

Malaysia’s government, criticised for its handling of the MH370 disappearance, has unveiled a 6 billion-ringgit ($1.7 billion) restructuring package aimed at restoring profitability in three years.

Mr Mueller, who turned around Aer Lingus as it was contending with budget airline Ryanair Holdings, faces a similar task as Malaysia Air struggles to fend off AirAsia Bhd., the region’s biggest low-fare carrier.

Mr Mueller will take charge of a new company being carved out of publicly traded Malaysian Airline System Bhd., according to a November 5th statement from sovereign wealth fund Khazanah Nasional Bhd., the carrier’s majority investor.

Malaysia Airlines is in talks to bring Mr Mueller to his new post as early as March 1st, according to Khazanah. The fund will buy out small investors and will delist the company on December 15th as part of the restructuring.

‘Precious time’

The Aer Lingus chief executive, who will leave that post by May 1st, “has a strong record of transformation and turnarounds in the aviation industry,” according to Khazanah. The new company, Malaysia Airlines Bhd., is to start operations in July. Turning around the carrier is going to be time consuming, said Mark D. Martin, chief executive officer of Dubai-based Martin Consulting LLC.

Mr Mueller may need at least six to nine months to familiarise himself with the company and the culture in Southeast Asia before he can take actions, Martin said. “We believe this may lead to precious time being lost,” in turn affecting Malaysia Airlines’ market offering and positioning, he said in an e-mail.

During his five years at the Irish carrier Mr Mueller expanded transatlantic services and fended off takeover bids from Ryanair, Europe’s biggest low-cost airline.

Turnaround specialist

“Malaysian is also a legacy network carrier in need of restructuring and it will compete at the home base of Asia’s largest LCC - AirAsia, so great symmetry there,” Davy Holdings Ltd. analyst Stephen Furlong said by e-mail.

Mr Mueller steered Aer Lingus back to profitability and refocused it as a network carrier using Dublin as a transatlantic hub in the face of tough competition from Ryanair, he said. The airline executive previously worked on other turnaround projects, pursuing an aggressive job-cutting strategy at Sabena SA, before the Belgian flag-carrier’s 2001 bankruptcy and partial reinvention as Brussels Airlines.

Before Aer Lingus, Mr Mueller, who completed an advanced management program at Harvard Business School, was executive aviation director at TUI Travel and chief financial officer of DHL Worldwide before it was acquired by Deutsche Post AG. Malaysia Air was already losing money before passenger confidence was shattered after Flight MH370 vanished on March 8th while en route from Kuala Lumpur to Beijing.

Malaysia Air lost another plane when MH17 was shot down over Ukraine four months later.

World’s longest search

No debris of MH370 has been found in what’s the world’s longest search for a passenger jet in modern aviation history. Malaysia Air, which traces its beginnings to the 1930s, will cut its workforce to 14,000 from 20,000, with Khazanah setting aside funds for retrenchment costs. Even before losing the two planes, the carrier had accumulated losses.

In the third quarter, losses widened to 576.1 million ringgit. As part of the restructuring, Khazanah said in August it will review Malaysia Airlines’s services to Europe, renegotiate supply contracts and move the carrier’s headquarters and operations to Kuala Lumpur International Airport. The airline is expected to be relisted in three to five years, Khazanah has said, adding that the fund will invest in a “staggered and conditional basis” over the next three years.

Besides competing with AirAsia and a dozen budget carriers, Malaysia Air faces competition from full-fare carriers such as Singapore Airlines Ltd. and Thai Airways International Pcl. Carriers in the region have ordered billions of dollars in new aircraft to expand while Malaysia Air is restructuring.

“While Mueller does not have a track record in Asia, he’s the right man for the challenge,” said Sudeep Ghai, managing partner at Athena Aviation LLP in the UK.

Bloomberg

Why Aer Lingus Acquisition Is the Best Thing That Never Happened to Ryanair

Marisa Garcia, Skift

Jul 04, 2014 7:18 am

Ryanair is a bit on the ropes because of threats from Norwegian Air and easyJet alike. It needs as few distractions as possible. - Marcia Garcia

Speaking to the Irish Independent, Ryanair’s outgoing Deputy CEO Howard Millar described Ryanair’s failure to acquire Aer Lingus as probably “one of the best things that never happened” to the low-cost carrier.

The 29.8% stake that Ryanair holds in Aer Lingus originally cost the airline 407 Million Euros and is currently valued at 230.7 Million Euros “based on current market capitalisation,” the Independent reports.

The European Commission has repeatedly blocked takeover efforts by Ryanair, which the low-cost carrier has appealed without success. The UK’s Competition Commission last year told Ryanair that it must sell a 5% share of the 29.8% held, claiming that Ryanair has exerted “material influence” over the smaller national carrier.

One claim against Ryanair is that it has interefered with other airline’s interests in purchasing a larger share of Aer Lingus, which Ryanair denies. Speaking to the Independent, Millar said: “In the years that we’ve had the Aer Lingus stake, no-one has turned up and asked if they can buy it.”

The Irish government holds a 25.1% share of the national airline, and Etihad Airways in Abu-Dhabi, which recently took-on troubled Alitalia, owns less than 5%.

Ryanair has twice appealed the mandate to sell off the 5% share mandated, first to the Competition Appeal Tribunal which was denied and determined in favor of the UK Competition Commission’s findings. Ryanair’s second appeal at the UK’s Court of appeals is still pending a final decision, with a hearing scheduled sometime between September 2014 and February 2015.

But why would an airline, so focused on maintaining profitable operations appeal a mandate to shed a portion of its holdings in a losing operation so vehemently?

What It’s Good For

Part of its motivation, as Millar intimates in the Independent’s report, is to lend a kinder side to the aggressive persona of the no-frills carrier. Millar makes light of this, telling the Independent that the airline has now matched the services and culture Aer Lingus would have lent it. But Ryanair is still going through the process of softening its brash image, and enhancing its product to attract a greater base of business passengers.

The other factor which made Aer Lingus attractive was the potential for Ryanair to win control over and indirectly incorporate the national carrier’s long-haul routes into its network. In 2007, the European Commission blocked Ryanair’s attempt to purchase a controlling share of Aer Lingus. Ryanair tried again in 2012 and failed.

Without gaining full control and use of the national carrier’s infrastructure and routes, the benefit of ownership is diminished. This would account for Millar’s statement to the Independent earlier this year that “retaining the Aer Lingus stake is ‘not material’ to Ryanair’s future.” The material gains would come from full control.

A May 1, 2013 report by the Centre for Aviation (CAPA) points out Aer Lingus’ strong “open platform” partnerships with United and Jet Blue Airways, which it established after leaving the oneworld alliance. Such reciprocal code-sharing arrangements in the Americas might have made it easier for Ryanair to transition into trans-Atlantic service, under the Aer Lingus brand at first with a hybrid brand in future. Ryanair’s inability to gain a control share of Aer Lingus has made any such plans impossible, leaving the shares Ryanair holds of Aer Lingus immaterial to Ryanair’s future strategies–just as Millar tells the Independent.

None-the-less, Ryanair continues to fight against the mandate from the UK’s Competition Commission, which would force them to sell 5% of their holdings, if for no other reason than a matter of principle. Michael O’Leary is quoted by the Independent as referring to the decision against them as “bizarre and manifestly wrong.”

Millar admits defeat tell the Independent: “It’s difficult to see us not being forced down,” but plays down the importance saying: “It’s an investment, which will turn out how it turns out. It’s not serious one way or the other.”

The Norwegian Air Threat

But other matters in Ryanair’s market are serious, namely the appearance of Norwegian Air Shuttle as an Irish carrier. Despite Norwegian’s battle for open skies with the Americas, it has recently confirmed to the Irish Times that it “is considering launching a Dublin to Bangkok service next year, in a move that could make it the first airline to connect the Republic directly with the major tourist hub.”

This is not a move which Ryanair would have missed. Thailand is a popular destination for Northern European tourists on the whole. Sources tell Skift that it is just as popular a destination for Irish vacationers as it is for the English, Germans and Scandinavians. In fact, the same June 26 article in the Irish Times indicates that Irish Minister for Tourism, Leo Varadkar, “is keen to see airlines developing services to eastern Asia.”

Routes to Asia would not be limited to tourism, but would also be beneficial to Irish businesses, and to Irish families. The May 1, 2013 report by CAPA referred to the family factor of demand stating: “Asia and Australia are home to a large but diverse Irish diaspora, which Aer Lingus will actively target for the first time through its partnership with stakeholder Etihad Airways.”

The Eastern route is the path of least resistance in long-haul service for Norwegian. Long-haul low-cost service to Asia, the airline has asserted, is possible because of the advantages of their 787 Dreamliners. Arrangements already made in Bangkok for operating bases and flight crew help. This tactic could be beneficial for Ryanair as well, should the larger low-cost carrier choose to pursue any long-haul ambitions.

Ryanair’s focus away from the fight for Aer Lingus, the characterization by Millar of the matter as immaterial, could have more to do with a shift in focus to the Norwegian incursion than anything else.

Bjørn Kjos has previously taunted Ryanair, telling Flight Global in a 2013 interview: “We have a different product than Ryanair, but we can compete with Ryanair…If you cannot compete with everyone, you should stay out.”

O’Leary is likely to share those sentiments. Being rid of the distraction of a fight to hold-on to the losing Aer Lingus proposition, would allow Ryanair to focus on the market disruptions Norwegian represents. With a change in strategy necessitated by these new conditions, the Aer Lingus deal could very well be “the best thing that never happened” to Ryanair–just as Millar says.

Comes a time
when you're driftin'
Comes a time
when you settle down
Comes a light
feelin's liftin'
Lift that baby
right up off the ground.

Oh, this old world
keeps spinning round
It's a wonder tall trees
ain't layin' down
There comes a time.

You and I we were captured
We took our souls
and we flew away
We were right
we were giving
That's how we kept
what we gave away.

Oh, this old world
keeps spinning round
It's a wonder tall trees
ain't layin' down
There comes a time.

- Neil Young (1978)

Pic left: Tan Sri Khoo Kay Peng. Pic right: Chai (2nd from left) attending the court hearing in Kuala Lumpur recently.

High cost of a divorce

Saturday, 8 November 2014

HAVING to go through a bitter divorce can be excruciating for all parties but when the person involved is a big corporate figure, then the dimensions can take on a different perspective.

Being in the public eye means greater scrutiny to proceedings in the court and the end result can mean a substantial loss of wealth for the corporate figure should the judgement go against him.

That scenario is at stake in the divorce battle between Tan Sri Khoo Kay Peng (pic), the founder of the MUI Group and chairman of Laura Ashley, and his wife and former Miss Malaysia Puan Sri Pauline Chai Siew Phin.

The fight in the High Court between the parties is to determine jurisdiction and domicile issues. The decision of the court will be telling as Chai has filed for divorce in London and the High Court there has agreed to hear the case on Khoo’s behest.

It seems as if Khoo is reluctant to want to the divorce to be heard in London. But the current scenario could end up in a highly irregular situation: both the courts in Malaysia and in the UK could end up hearing the divorce petitions of this case.

Lawyers say such a scenario has never happened before, at least in a case involving Malaysian and UK courts.

Chai has succeeded to have the case heard in London premumably because of the generous awards by divorce courts in London, which has given rise to the monicker Divorce Capital of the World.

That is why the court hearings in Kuala Lumpur are filled with claims and counterclaims on the areas of domicile with regards to where Chai resides.

If the case is heard in London then the sums paid out can be extraordinary. The record divorce payout is held by late Russian oligarch Boris Berezovsky. It was reported that he paid up to RM842mil (£160mil) to his former wife Galina Besharova in 2011.

The press in London argue that the settlement between Khoo and Chia could break that amount.

Impact on the businessman

The impact on any businessman going through a divorce would be the settlement amount he has to pay. If the payout is substantial, then it could burn a hole in his pocket.

“It has an indirect impact if the businessman has to sell his assets,” says a family law litigator.

“If he is a good businessman he can recover but if he is going to give half his wealth away, then it would be hard to do so.”

In Khoo’s case, Chai is expected to demand half of Khoo’s estimated RM2.3bil (£440mil) fortune, according to British media.

Khoo has a wide ranging business empire which stems from the MUI Group which owns a plethora of assets but the value of his wealth differs from what the British media says.

MUI owns 100% of Corus Hotel and 35% of Laura Ashley. Khoo directly and indirectly owns 47.67% of MUI and he has a 25% direct interest in Laura Ashley.

Furthermore Khoo owns almost 100% of Central Point Group. Corus Hotels Ltd has net assets of £119.7mil and Forbes values Khoo at £193mil.

Even though the MUI Group is a pale shadow of what it used to be, after having been hit badly during the Asian financial crisis, it is still worth a sizeable amount of money.

Its market capitalisation is RM733.1mil while the market capitalisation of Laura Ashley is RM1.09bil (£205mil).

If the divorce case is heard in Kuala Lumpur then the payout by Khoo will be far less than what the High Court in London will dish out to Chai.

The impact of a divorce on the businesses that are control or owned by Khoo is said to be negligible.

Out of court settlement

Khoo is not the first and he would not be the last businessman to have gone through a messy divorce.

In the late 1990s, Tan Sri Halim Saad was entangled in a divorce case with his wife Puan Sri Norani Zolkifli that was splashed over the news.

In the end, the divorce was settled out of court as was the divorce between Tan Sri Lim Kok Wing and his former wife Puan Sri Tessie Lim Kok Wing. It was reported that Lim agreed to pay RM11.65mil as part-settlement for his divorce and alimony to his wife.

Datuk Seri Mahmud Abu Bekir Taib is now embroiled in a divorce case with his former wife Shahnaz Abdul Majid who is seeking more than RM384mil in a seperation payout. The news of the court preceedings fed salacious interest among the public on the intricarcies of life of the powerful and wealthy.

Lawyers say it is for that reason that most divorce cases involving the rich and famous tend to be settled out of court as the last thing they want is to reveal private details about their wealth and lives.

“If it is a high-profile case, they will try to settle out of court. It is privacy that they want,” says a lawyer.