Friday, June 23, 2017

Why disparage the US DOJ's US$1.7 billion asset seizure suit if Dato’ Seri Abdul Rahman Dahlan is not prepared to categorically deny on behalf of Dato’ Seri Najib Razak and Datin Seri Rosmah Mansor that they have received US$732 million in cash and a US$27.3 million pink diamond pendant respectively?

Minsiter in the Prime Minister’s Department, Dato’ Seri Abdul Rahman Dahlan continued his tirade against the US DOJ again yesterday, accusing the DOJ of publishing a “half-cooked report”.

He even insinuated that the United States of attempting to influence the results of the impending Malaysian election.  "Is it because the election is around the corner and some desperate quarters need a leg-up?" he tweeted.

This is on top of the Minister in-charge of the Economic Planning Unit berating the US DOJ the previous day, “you (DOJ) mock, you gave the impression that Rosmah and the diamond did something wrong.  But in the document you submitted, you didn't include the diamond as one of the items that you want to seize. It was unnecessary to put the name there.”

The Minister is saying that since election is around the corner, the US DOJ should not have filed the updated suit last week as it might influence the results of the election, since it implicates both the Prime Minister and his wife of misappropriating state funds for their own personal benefit?

Is the Minister trying to tell the US that they should have waited until the election is over and the Najib administration has won a new mandate, before publishing such scandalous allegations against those who have misappropriated more than US$5.6 billion of funds from 1MDB?

Does the Minister realise how ridiculous he sounds?  Is he really that half-witted, or is he only pretending to be so?

In responding to Dato’ Seri Abdul Rahman Dahlan’s criticism, the US DOJ said that they “have to allege enough facts to show a reasonable belief that United States money laundering and other criminal laws were violated and that the subject assets were involved in or traceable to these illegal transactions.”

Surely Dato’ Seri Rahman Dahlan would know that the way to fight a factual allegation is to provide factual evidence which destroys the allegations.  The daily repetitive attempts by the Minister and his colleagues to taint the US investigations with insinuations of political and other motives not only does not help the cause of the Prime Minister and his wife, they actually worsen the negative perception because the alleged facts have not been challenged.

Malaysians are asking, if the US DOJ is indeed concocting malicious allegations against the Prime Minsiter and his wife as the Cabinet Ministers continue to insist, why haven’t the allegations been denied?

In fact, why hasn't Dato’ Seri Najib Razak produced proof that this bank account(s) never received the purported US$732 million which had originated from 1MDB?  Why hasn't Datin Seri Rosmah Mansor come out to publicly deny that she had indeed acquired, or received as a gift, the alleged US$27.3 million pink diamond pendant?

Their silence speaks a thousand words, while the aimless barking by the Prime Minister’s lieutanants only served to confirm without a doubt in the minds of the people, the truth of the US DOJ scandalous allegations.

Perhaps in his eagerness to castigate the US DOJ, Dato’ Seri Rahman Dahlan has merely forgotten to establish the facts.

Let me challenge Dato’ Seri Rahman Dahlan once again, did or did not the Prime Minister, referred to as MO1 in the US DOJ suit, receive more than US$732 million in his personal bank account in Malaysia while his wife, Mrs MO1 acquired a US$27.3 million diamond pendant after trips to Monaco and New York in 2013?

If the EPU Minister can’t answer the above questions, then he should stop making a complete fool of himself and further destroy whatever is left of the good name of Malaysia to a watching international audience.

Wednesday, June 21, 2017

Why is Minister Dato’ Seri Abdul Rahman Dahlan more interested in asking why Datin Seri Rosmah Mansor was implicated in the US DOJ suit and not outraged by the allegation that US$27.3 million of funds originating from 1MDB has been used to acquire a 22-carat pink diamond pendant necklace for her?

Malaysians are amused by the sardonic entertainment the Barisan Nasional (BN) Ministers are putting up for us on a daily basis in response to the recently updated US DOJ suit to seize an additional US$540 million worth of assets laundered with funds from 1MDB.  This sum is on to of nearly US$1.2 billion in the suits filed since July last year.

At the heart of the scandal is the involvement of a “Malaysian Official 1” (MO1) who received more than US$732 million of the laundered funds in his personal bank account in Malaysia.  What further stunned the nation was when “MO1’s wife” was mentioned in the updated kleptocracy suit, when DOJ alleged that she spent US$27.3 million on a 22-carat pink diamond pendant necklace with that money.

Dato’ Seri Hishamuddin Hussein would put up a blank face feigning ignorance and asked “for all we know it could be anyone. ‘MO1’ could be (Second Finance Minister) Johari (Abdul) Ghani.”

This of course runs contrary to Economic Planning Unit (EPU) Minister, Dato’ Seri Abdul Rahman Dahlan’s public admission on BBC in September 2016 that “obviously, if you read the documents, it is the prime minister…”

This confirmation is on top of the Minister’s earlier contemptuous remark made in August 2016 that “only an idiot doesn’t know who MO1 is”.

The question as to whether Dato’ Seri Rahman Dahlan would tell Dato’ Seri Hishamuddin Hussein that the latter is “an idiot” is perhaps best left for the former to answer.  What is perhaps comically incongruent is how two senior Ministers in the Prime Minister’s office held 2 contradictory positions over the simple poser.

They were both however consistent in ignoring the elephant(s) in the room pointed out by the DOJ – that MO1 received more than US$732 million in his personal bank account while Mrs MO1 got her US$27.3 million necklace with money borrowed by the Government’s wholly-owned subsidiary.

Yesterday again, the EPU Minister, who is also BN Strategic Communications Director, confirmed that MO1 is Dato’ Seri Najib Razak, and MO1’s wife would be Datin Seri Rosmah Mansor.

However, Dato’ Seri Rahman Dahlan took pains to lament that “you (DOJ) mock, you gave the impression that Rosmah and the diamond did something wrong.  But in the document you submitted, you didn't include the diamond as one of the items that you want to seize. It was unnecessary to put the name there."

The Minister clearly and intentionally missed the woods for the trees.  Instead of asking why “implicate” Datin Seri Rosmah Mansor, should the Minister, whose primary responsibility is not to protect the Prime Minister’s wife but the interest of the Rakyat, confirm if the US$27.3 million diamond necklace was indeed purchased with money laundered from 1MDB?

It is worth noting that the EPU Minister did not deny these facts.  He is merely making a hue and cry of the exposure of these “facts”.

Before Dato’ Seri Rahman Dahlan decides to speak to the press again regarding this issue, let me challenge him to confirm these simple facts exposed by the DOJ with Mrs MO1:

1.     On or about July 5, 2013, Datin Seri Rosmah Mansor met New York jeweller, Lorraine Schwartz together with Low Taek Jho and others aboard the 147 meter Topaz, one of the largest private yachts in the world in Monaco.  There group discussed the design of the necklace to hold the 22-carat pink diamond, which itself would be made of smaller diamonds.

2.     On or about September 28, 2013, Datin Seri Rosmah Mansor again met Schwartz with Low in a hotel suite in the Mandarin Time Warner in New York in order to show them the layout of the necklace that Schwartz had designed.

3.     The finished 22-carat pink diamond necklace, which included the 22-carat pink diamond as a pendant, was delivered to a friend of Datin Seri Rosmah Mansor in Hong Kong on or about March 7, 2014, for delivery to the wife of the Prime Minister in Kuala Lumpur.

If Dato’ Seri Rahman Dahlan can provide evidence, on behalf of Mrs MO1 that the above allegations are brazenly untrue, then let me assure the Minister and everyone else in the Cabinet that I will be the first from the opposition bench to sit with him in a press conference to publicly denounce the DOJ allegations.

If not, then let me remind Dato’ Seri Rahman Dahlan, that as a responsible Minister and citizen, he must report the above transgression to both the Police and the Malaysian Anti-Corruption Commission (MACC) for their respective investigations.

Tuesday, June 20, 2017

All Malaysians should heed the call by the MACC Chief Commissioner to be “brave” and file reports on the corruption, abuse of power and money laundering in 1MDB as exposed by the US DOJ

We wholly support MACC Chief Commissioner, Dato’ Dzulkifli Ahmad’s call for Malaysians to be “brave” to report all cases of corruption to the agency.

"Concerned Malaysians need not fear the MACC. We are friendly, so join us and report corruption and abuse of power.  Together we will bring up a society that is brave and will say 'no' to corruption and the corrupt," Dzulkifli told reporters in Kuala Lumpur on 17 June 2017.

He assured that those who want to remain anonymous will have their identities protected and launched the new anti-corruption hotline number 1800-88-6000.

Dato’ Dzulkifli’s call and toll-free number could not have come at a more opportune time.

Malaysians have been outraged and flabbergasted by the latest suit filed two days earlier by the US DOJ under the Kleptocracy Asset Recovery Initiative for multi-billion ringgit worth of assets for funds laundered from 1MDB.

Not only did Malaysians discover that funds exceeding USD5.6 billion have been laundered by 1MDB officials, Jho Low and his associates, we discovered that more than US$200 million or approximately RM880 million have been used to purchase precious designer jewelry for their family and friends.

This included a US$27.3 million 22 carat pink diamond pendant necklace which was acquired by the wife of Malaysian Official 1 (MO1).  The Minister in Prime Minister’s office, Dato’ Seri Abdul Rahman Dahlan has publicly stated that MO1 is none other than Dato’ Seri Najib Razak, and anyone who doesn’t know who MO1 is, is an “idiot”.

The DOJ also detailed how 1MDB forged financial statements, falsified audited financial statements, created multiple version of agreements for the very same transactions, colluded with foreign companies, lied to financial officers and authorities and outrageously pledged worthless securities as collateral to secure its US$975 million loan from the Deutsche Bank-led consortium.

The DOJ have included all these evidential details – telephone conversations, email correspondences, financial statements, transaction documents – were clearly painstakingly gathered by the DOJ from all international banking institutions involved with 1MDB as well as other relevant witnesses around the world.

Hence with the wealth of information and evidence contained in the 251-page suit, all Malaysians can now be “brave” and ring the toll-free 1800-88-6000 number to file a complaint against corruption, abuse of power and money laundering by 1MDB as well as against both MO1 and his wife.  After all, there is no bigger case of corruption plaguing the country today than the RM42 billion 1MDB scandal.

This will answer the Chief Commissioner's honourable plea for the public to “help [MACC] realise the anti-corruption revolution to ensure that our country is free from corruption and abuse of power within the next three years when we hit the year 2020".

However, the bigger question is, will MACC be equally “brave” as ordinary Malaysians to investigate MO1, his wife, 1MDB officers as well as Jho Low and his associates for their crimes against the nation?

Dato’ Dzulkifli Ahmad shall not be so cowardly as to abdicate from its constitutionally enshrined responsibilities by passing the buck to the Royal Malaysian Police, as he so-declared at the same press conference.

Sunday, June 18, 2017

Malaysians shamed as Attorney-General Tan Sri Apandi Ali gets schooled by the United States Department of Justice

The updated second asset seizure suit filed by the United States Department of Justice (US DOJ) under the Kleptocracy Asset Recovery Initiative contained even more outrageous exposés on how 1MDB funds have been misappropriated to those who are in power as well as their associates.

Besides some of the juiciest scandalous details befitting tabloid headlines around the world, the DOJ also took pains to elaborate how the funds exceeding USD5.6 billion have been laundered by 1MDB officials, Jho Low and his associates.

The DOJ detailed how 1MDB forged financial statements, falsified audited financial statements, created multiple version of agreements for the very same transactions, colluded with foreign companies, lied to financial officers and authorities and outrageously pledged worthless securities as collateral to secure its US$975 million loan from the Deutsche Bank-led consortium.

All these evidential details – telephone conversations, email correspondences, financial statements, transaction documents – were clearly painstakingly gathered by the DOJ from all international banking institutions involved with 1MDB as well as other relevant witnesses around the world.

And yet, the first and only response from our Attorney-General, Tan Sri Apandi Ali to date has been to rue DOJ’s “insinuations that have been made against the prime minister of criminal wrongdoing”.

You are wrong, Mr Attorney-General.  The US DOJ suit did not mention or even highlight any specific wrongdoing by Dato’ Seri Najib Razak.  The US DOJ merely detailed how more than US$5 billion from 1MDB, an entity owned by the Malaysian government have been laundered around the world by a Low Taek Jho and his associates.

In the process, the US DOJ merely mentioned that some of the ultimate beneficiaries of the laundering exercise were Dato’ Seri Najib Razak, to the tune of US$732 million and his wife, who received a gift of a pink diamond necklace worth more than US$30 million.

Like Jho’s girlfriend, Miranda Kerr who received multi-million dollar diamond studded jewelry, or “friend”, Leonardo DiCaprio who received multi-million dollar worth of rare movie memorabilia and paintings, they may be oblivious to the fact that the items were purchased with laundered funds.

Perhaps the Prime Minister and his wife are equally innocent and all they need to do is to return the money or surrender the jewelry, just as Leonardo have done.  Hence, it is misguided for Tan Sri Apandi Ali to conclude the DOJ case as one against the Prime Minister.

The real question then is for Tan Sri Apandi Ali to investigate the money laundering exercise carried out by mastermind Jho Low and the abetting 1MDB officials.  The Attorney-General cannot deny the overwhelming prima facie evidence presented by the DOJ on the above.

In fact, the DOJ even presented how the above crimes have broken Malaysian laws:


942. Misappropriating public funds by a public official is a criminal offense under Malaysian law, as enumerated by the Penal Code of Malaysia, including but not limited to sections 403 (dishonest misappropriation of property), 405 (criminal breach of trust), 409 (criminal breach of trust by public servant or agent), 166 (Public servant disobeying a direction of the law, with intent to cause injury to any person (including a company)), 415 (cheating), 418 (cheating with knowledge that wrongful loss may be thereby caused to a person whose interest the offender is bound to protect), and 420 (cheating and dishonestly inducing delivery of property); and the Malaysian Anti- Corruption Act 2009, including sections 16, 17, and 23. Copies of these laws are set forth in Attachment B.

943. Bank fraud is a criminal offense under Malaysian law, as enumerated by the Penal Code of Malaysia, including but not limited to section 415 (cheating), 418 (cheating with knowledge that wrongful loss may be thereby caused to a person whose interest the offender is bound to protect), and 420 (cheating and dishonestly inducing delivery of property).

Malaysians are embarrassed by the fact that our top prosecuting officer had to be schooled by foreign jurisdictions on the laws of this country.

Instead of crying “frustration” that “the AG's Chambers was not informed or alerted by DOJ of this action”, Malaysians would like to know if the AG has bothered to even initiate requests for evidence from the US authorities since the DOJ filed their first asset seizure suit nearly a year ago?

Or is it a case for the AG to see no evil, hear no evil and hence speak no evil?

Saturday, June 17, 2017

Tan Sri Irwan Serigar, as both the Treasurer-General and 1-year old Chairman of 1MDB must investigate and explain the scandalous misappropriations exposed by the US DOJ

The updated second asset seizure suit filed by the United States Department of Justice (US DOJ) under the Kleptocracy Asset Recovery Initiative contained even more outrageous exposés on how 1MDB funds have been misappropriated to those who are in power as well as their associates.

Besides hundreds of millions more in the acquisition of luxury properties around the world and prized art masterpieces, the US DOJ is seizing The Equanimity, one of the most luxurious ships in the world costing more than USD250 million belonging to Jho Low.

Even more scandalous was more than USD200 million spent on precious jewelry including more than USD30 million for a rare pink diamond necklace for Datin Seri Rosmah Mansor.

Besides some of the juiciest scandalous details befitting tabloid headlines around the world, the DOJ also took pains to elaborate how the funds exceeding USD5.6 billion have been laundered by 1MDB officials, Jho Low and his associates.

The previous DOJ suit in July last year has already outlined how USD1.83 billion invested with Petrosaudi International, USD1.367 billion paid to a fraudulent British Virgin Islands incorporated Aabar Investments and US$1.56 billion from 1MDB Global Investment Limited transferred to bogus investment funds, were laundered.

The updated suit published for the first time how an additional USD855 million borrowed from Deutsche Bank was raised and laundered in 2014 via another fraudulent Aabar Investments incorporated in Seychelles.

The exposé which reads like a Robert Ludlum political thriller, detailed how 1MDB managed forged documents including audited financial statements, created multiple version of agreements for the very same transactions, lied to financial officers and authorities and outrageously pledged worthless securities as collateral to secure its US$975 million loan from the Deutsche Bank-led consortium.

Tan Sri Irwan Serigar was only appointed as the Chairman of 1MDB last year to replace disgraced Board of Directors who resigned en-mass. He was not involved with any of the above shenanigans. He, who is also the Treasurer-General, the most senior Finance Ministry official in the country, must take the bull by the horns and uncover all the skeletons in the closet.

The 1MDB management was quick to dismiss the US DOJ allegations as “not backed by evidence”.  Surely, as a most experience civil servant, Tan Sri Irwan Serigar would not take the management denials at face value, especially in the face of such a detailed exposé of how the 1MDB funds were siphoned.

All it takes is for Tan Sri Irwan Serigar to call for an emergency 1MDB board meeting and demand for the relevant bank statements to be presented to discover if the US DOJ was only exposing the truth or they have been misled by all the international banks in the world who cooperated with the investigations.

Will Tan Sri Irwan Serigar do the right and honourable thing for the sake of Malaysian tax-payers, whose money he has been entrusted to manage?  Or will he succumb to the very reason why the previous Chairman and Board had to resign in disgrace, the failure to perform their fiduciary duties to keep a rogue management in check, to prevent fraud and abuse, especially to the scale of tens of billions of ringgit.

Saturday, June 10, 2017

The Government must move to suspend Tan Sri Isa Samad to investigate scandalous approval of RM850mil of “ridiculous deals”, just as the FGVH Board has suspended the CEO for the purported RM46mil worth of irregular transactions

Suspended Felda Global Ventures (FGVH) Chief Executive Officer, Dato’ Zakaria Arshad made very serious allegations that the Board of Directors approved “ridiculous deals”, despite the objections of the management executive committee.

The “ridiculous deals” included a GBP100 million (RM550 million) additional investment in Felda Cambridge Nanosystems Ltd which had already lost RM117 million in the past few years and another RM300 million to acquire a 30% stake in a creamer factory, which is not part of Felda’s core business.

More frighteningly, Zakaria also revealed direct interference by the Board in FGVH to award directly negotiated contracts without tender which he had wanted to stamp out since he was appointed just over a year ago in April 2016.

After nearly a week of the scandalous exposé, the Chairman of the Board of Directors, Tan Sri Mohd Isa Samad has refused to shed light on the above damaging allegations.

Yesterday, the Edge Financial Daily reported that Tan Sri Isa Samad claimed that Zakaria’s allegations weren’t the issue, and the only matter of concern was the purported irregular transactions between FGVH subsidiary, Delima Oil Sdn Bhd and Dubai-based Afgan company, Safitex Trading LLC.

When asked, Tan Sri Isa said, “I don’t want to make any statement on that one… Don’t divert the issue… we are talking about this (Safitex).  Other topics will be discussed another day, after this has been resolved.  For us, the focus now is the actions Zakaria has taken.”

Yes, Malaysians are indeed interested to get to the bottom of Safitex’s US$11.7 million (RM46 million) outstanding debt to FGVH.  However, Malaysians are also equally, if not more interested in discovering the truth behind the RM550 million and RM300 million investments in the above-mentioned “ridiculous deals”.

These explosive exposés involving RM850 million and dodgy contract awards are no less serious than the RM46 million purported transgression by Dato’ Zakaria.

Tan Sri Isa has publicly dismissed calls for him to resign as the Chairman of the Board, claiming that there was no reason for him to do so.  However, if the “ridiculous deals” allegations are indeed true, then the circumstances would certainly warrant his immediate resignation or sacking.

Tan Sri Isa’s refusal to explain or even deny the investments lends credence to the veracity that the Board has indeed approved these “ridiculous deals”.

On that basis alone, just as the Board has suspended the CEO and four others in the company’s management pending internal audit investigations, we call upon the Government, who is the controlling shareholder of FGVH, to immediately suspend Tan Sri Isa as the Chairman, pending investigations.

There is absolutely no reason for the double-standards in treatment where Dato’ Zakaria and four others are suspended for a RM46 million transgression, but Tan Sri Isa Samad gets away scot-free for violating corporate governance ethics by pushing through the approval of RM850 million of “ridiculous deals” despite being merely a non-executive Chairman.

Friday, June 09, 2017

It is time for the Auditor-General and Public Accounts Committee to investigate the shenanigans which has taken place in Felda Global Ventures Holdings Bhd

Both the FGVH Chairman, Tan Sri Mohd Isa Samad and the Chief Executive Officer (CEO), Dato’ Zakaria Arshad have traded barbs and accusations against each other on irregular transactions and activities which have taken place in the struggling plantation company.

The CEO has accused the Board of Directors of approving “ridiculous deals”, despite the objections of the management executive committee.  The “ridiculous deals” included a GBP100 million additional investment in Felda Cambridge Nanosystems Ltd which had already lost RM117 million in the past few years and another RM300 to acquire a 30% stake in a creamer factory, which is not part of Felda’s core business.

Tan Sri Isa and the Board of Directors have to date failed to provide any clarity or rebuttal against the CEO allegations, lending credence to the veracity that the Board has indeed approved these “ridiculous deals”.

On the other hand, Tan Sri Isa has led the Board to suspend the CEO and four other members of the Management, including the Chief Financial Officer for alleged irregularities in payments from a Dubai-based Afgan company, Safitex Trading LLC to a FGVH subsidiary, Delima Oil Sdn Bhd.

According to the Board, Safitex’s debt to FGVH increased from US$8.3 million in 2015 to US$11.7 million in 2016.

Dato’ Zakaria has publicly denied any wrongdoing or “violation of the corporate governance code”.  Initially, in a letter to the Chairman dated 5 June 2017, Reuters reported that he claimed “The payment process... was approved and implemented by the previous chief executive...”

He has also insisted that the amount involved was only US$11.7 million, barely 0.2% of FGVH’s total revenue which did not justify the gravity of the actions taken by Tan Sri Isa.

Yesterday, in a Edge Financial Daily report, Dato’ Zakaria further insisted that the Safitex debt is “100% recoverable”.

However, despite the denial and the attempt to make light of any possible transgression in the above payment, Dato’ Zakaria did not sound convincing in the reasons for the delay of payment by the Afgan company.

No tangible reasons have been given as to why the sum has been outstanding since 2015, or why it would be recoverable. It further begs the question as to why the Afgan company has been given such special leeway in payment terms, particularly since the sums involved were so small in the first place.

Juxtaposed against the company’s performance where its profits plunged dramatically from RM982 million in 2013 to RM325 million, RM182 million and RM31 million in 2014, 2015 and 2016 respectively, the exposes by both the Board and the Management raises major questions on the scale of shenanigans taking place in FGVH over the past few years.

Therefore, the dire situation in FGVH demands more than merely the appointment of Dato’ Seri Idris Jala to be an “independent party” to establish the facts of the case and recommend the way forward.  The former Minister’s appointment and any outcomes arising from his appointment will smell of a political compromise and smack of opaque cover ups.

The gravity of the failure and imbroglio in FGVH demands a thorough investigative audit by both the Auditor-General (AG) as well as the parliamentary Public Accounts Committee (PAC).  This will not be the first time an audit is carried out in a public-listed company substantially owned and controlled by the Government.  Previously, the PAC has also carried out a thorough investigations of the construction of KLIA2 by Malaysia Airports Holdings Berhad.

Both the AG and the PAC have previously refused to re-open investigations into the 1MDB scandal despite new incriminating evidence from the United States Department of Justice, as well as to initiate investigations into SRC International for transferring tens of millions of ringgit into the personal bank account of the Prime Minister.

However, Malaysians hope that both the AG and the PAC will still carry out part of their responsibility to investigate major shenanigans in government-linked companies to protect the interest of the nation’s taxpayers.  The failure by the AG and the PAC to do so would only go to prove that these vital institutions have been severely compromised to ensure that only minor infractions in the civil service will be investigated.

Thursday, June 08, 2017

Did FGVH "Non-Executive Chairman" Tan Sri Mohd Isa Samad over-extend his role to become the de facto CEO and an executive director?

We welcome the Government’s appointment of Dato’ Seri Idris Jala as an “independent party” to establish the facts of the case and recommend the way forward following FGV board’s decision to suspend its chief executive officer, chief financial officer and two other senior members of the management team.

In his investigation process, Dato’ Seri Idris Jala must not only look into the truth behind the purported trangressions by the suspended management team, he must also review the corporate governance practice within FGVH, particularly the role of the Board of Directors.

The current board of directors comprise of a Non-Executive Chairman, Tan Sri Isa Samad; 3 Non-Executive Directors - Dato’ Dr Omar Salim, Dato’ Yahya Abd Jabar and Dato’ Siti Zauyah Mohd Desa who represents the Ministry of Finance; 4 Independent Directors - Datuk Noor Ehsanuddin Mohd Harun Narrashid, Tan Sri Dr Sulaiman Mahbob, Dato’ Mohd Suffian Awang and Dato’ Zafer Hashim as well as the suspended CEO, Dato’ Zakaria Arshad, who was also the sole Executive Director on the Board.

When Dato’ Zakaria publicly alleged that the FGV Board authorised “ridiculous deals” against the opposition of the executive committee, it raised the question of who is ‘running’ FGVH.

The “ridiculous deals” included a GBP100 million additional investment in Felda Cambridge Nanosystems Ltd which had already lost RM117 million in the past few years and another RM300 to acquire a 30% stake in a creamer factory, which is not part of Felda’s core business.

The problem is none of the Board of Directors, other than the CEO have ‘executive’ functions.  This means that they cannot be bringing “deals” directly to the Board for its approval.

Excluding the Independent Directors, Tan Sri Isa and the 3 Non-Executive Directors must explain what powers do they have in FGVH to direct transactions which were specifically rejected by the management executive committee (Exco)?

The proper process should be any proposed transactions must be studied by the Exco and put forward to the Board of Directors for approval.  The Board, after deliberation, could then decide to agree or reject the proposed deal.  It is not be any Board member, even a non-executive chairman, to propose a transaction directly to the Board for approval, especially if it has been specifically rejected by the Exco.

If the non-executive directors of FGVH have failed in carrying out their grave responsibilities and fiduciary duties, then it should be recommended that they be sacked from their positions.

What’s more, Dato’ Zakaria had further revealed direct interference by the Board in FGVH to award directly negotiated contracts without tender which he had wanted to stamp out since he was appointed just over a year ago in April 2016.

As a former Cabinet Minister who preached accountability in our GLCs, Dato’ Seri Idris Jala must verify the very serious allegations above and take action against those who broke the codes of corporate governance in FGVH.

Finally, Malaysian call upon Dato’ Seri Idris Jala to complete his investigations within two weeks so as to ensure the uncertainty within FGVH which is listed on Bursa Malaysia can be resolved the soonest possible.

Wednesday, June 07, 2017

Felda Global Ventures Holdings Chairman must explain suspended CEO’s allegations of “ridiculous deals” steamrolled by the FGVH Board of Directors

The Board of Directors of FGVH has suspended both the Chief Executive Officer (CEO), Dato’ Zakaria Arshad and the Chief Financial Officer (CFO), Ahmad Tilfi Mohd Talha pending internal audit investigations over purported irregularities in payments made by a subsidiary company.

Until such a time where there is greater clarity on what the purported irregularities are, Malaysians can give the Board of Directors the initial benefit of the doubt as we are sick of hearing cases of misappropriation and corruption in government-linked companies (GLCs) which never get investigated or the perpetrators never getting prosecuted.

However, what is most shocking is the revelation by the suspended CEO that he was being punished for attempting to block “ridiculous deals” from being approved by the Board of Directors.

Amongst the investments, he said, was plans for a GBP100 million (RM551 million) expansion of Felda Cambridge Nanosystems Ltd, a nano carbon company, which had already lost RM117 million in the last three to four years.  "Now they (the FGV board) want to expand, they need another 100 million pounds. To me this is ridiculous, we're a plantation company," he was quoted as saying by The Star.

Another investment, Zakaria said, was the plan to spend RM300 million to acquire a 30 percent stake in a creamer factory, owned by a company primarily involved in making cans.  "Why do I want to put RM300 million for a non-core business? They also overruled, even though exco already said no-go but the investment was given the go-ahead," he said.

More frighteningly, Zakaria also revealed direct interference by the Board in FGVH to award directly negotiated contracts without tender which he had wanted to stamp out since he was appointed just over a year ago in April 2016.

These are shocking revelations, which to a certain extent explains how purportedly the largest plantation company in the world saw its profits plunged dramatically from RM982 million in 2013 to RM325 million, RM182 million and RM31 million in 2014, 2015 and 2016 respectively.

The above doesn’t yet take into account the botched US$680 million (RM2.9 billion) acquisition of a 37% stake in Eagle High Plantations at an astronomical price which FGVH could in no way afford.

Based on the latest financial statement in March 2017, FGVH has only RM1.8 billion in cash left while it has to service loans and borrowings exceeding RM4 billion.

Tan Sri Isa must immediately confirm if what Dato’ Zakaria said is true and provide the valid reasons why the Board of Directors are making executive decisions which overruled the company’s top management team and executive committee.

The failure of FGVH Non-Executive Chairman to explain the above scandalous allegations will expose himself to the “violation of corporate governance code”, the very wrongdoing which the FGVH CEO and CFO are purported guilty of.

Saturday, June 03, 2017

PM Dato’ Seri Najib Razak must ensure that proceeds of assets stripped from Proton must be used to repay the Government’s RM1.5bn soft loan and not siphoned by shareholder, DRB-Hicom

Yesterday, the Prime Minister, Dato’ Seri Najib Razak was absolutely right to ask the question, “will you retain a loss-making company?”, in a pointed justification for the sale of Proton. It is a rhetorical question of course, as no one wants and should retain the company if it is in this case, almost forever making losses.

However, aside from the fact that the Prime Minister sets double-standards by not asking the same question to other bleeding companies such as Malaysia Airlines (MAS) which received a RM6 billion bailout package in 2014, Dato’ Seri Najib Razak must ensure that the sale of 49.9% of Proton to Geely by DRB-Hicom does not become a cover for a multi-billion ringgit bailout of the latter.

DRB-Hicom, a conglomerate owned by Tan Sri Syed Mokhtar Al-Bukhary, who has received billions of ringgit in preferential contracts and concessions from the Government in the past, has been making hundreds of millions of losses over the past 2 financial years.

For the years ending 31 March 2017 and 2016, DRB-Hicom recorded losses of RM260.4 million and RM871.6 million respectively. The share price of DRB Hicom has declined by 56% from RM2.60 as at the end of 2012 to RM1.15 as at the end of 2016.

As Second Finance Minister, Dato’ Seri Johari Abdul Ghani announced, as part of the Geely acquisition, the Government will still pay RM1.1 billion in R&D grant to Proton, which will be “refunded” to DRB-Hicom.

In addition, the Government is disbursing another RM250 million, on top of the existing RM1.25 billion in soft loans for the beleagured company.

Proton will also be stripped of its assets in the process, with the Lotus car company being sold to a Geely-led joint venture for GBP100 million (RM556 million) and real estate properties worth at least RM540 million transferred to DRB-Hicom.

The Edge Weekly also reported last week that the bulk of the proceeds from the Lotus sale will find its way back to DRB-Hicom.

Hence the question, Dato’ Seri Najib Razak, is not whether we should dispose of “a loss-making company”. We have already disposed 100% of Proton to DRB-Hicom in 2012 and hence no longer owns loss-making ‘national car-maker’.

The question Malaysians are asking the Prime Minister is why are we allowing DRB-Hicom to benefit billions of ringgit by helping them dispose half of their loss-making company, Proton?

Two days ago, I’ve already issued a statement seeking the Ministry of Finance to elicit a shareholders’ joint and several guarantee on the Government’s RM1.5 billion soft loan to Proton if the Government refuses to recall the loan in the light of the Geely acquisition.

On top of that, given the factors above, the Government must block the transfer of cash and assets to DRB-Hicom unless the Government’s soft loan is repaid first. In other words, the proceeds from the GBP100 million Lotus sale and the RM540 million property transfer to DRB-Hicom must not be allowed to take place, until and unless the Government is paid first.

Otherwise, the 49.9% stake sale of Proton to Geely has only become just a façade not only for Proton’s assets to be stripped, but for Tan Sri Syed Mokhtar and DRB-Hicom to benefit billions of ringgit in the process at the expense of the Malaysian tax-payers.

Thursday, June 01, 2017

Government soft loan to Proton must be recalled with immediate effect unless the “new” Proton shareholders jointly and severally guarantee the RM1.5bn loan

Two days ago I had raised the concern that despite Geely’s acquisition of 49.9% of Proton from DRB-Hicom, the Government may ultimately end up with more than 65% of the shares in Proton, should Proton fail to repay the RM1.5 billion soft loan provided by the Government.

This is because the terms of the soft loan in the form of “Redeemable Convertible Cumulative Preference Shares” (RCCPS) are such that Proton has the rights to convert the loan into its shares at any point of time.  If the loan is still unpaid as at maturity, then the entire sum, including any outstanding interest in the form of dividends, will be converted into shares in Proton.

Hence the fear for Malaysian tax-payers is, if Proton’s purported turnaround plan is successful, DRB-Hicom and Geely will share all the profit, but if the plan fails, we have to be left carrying the baby once again.

In a response to Malaysiakini yesterday, the Second Finance Minister, Dato’ Seri Johari Abdul Ghani tried to assure Malaysians that “we will make sure that the RM1.5 billion will be fully secured.”

Dato’ Seri Johari further revealed that based on the deal between Geely and Proton, the option of a conversion is no longer available.  He even confirmed that there is a clause in the agreement stating so.

"We will secure the assets instead and will continue to receive the coupon rate. We will treat this as a strictly private deal.  Whatever we have promised and committed before Geely came in, we will fulfil them," he added.

Therein lies the confusion and contradiction.  First the Second Finance Minister says that the terms of the RCCPS is no longer valid post-Geely acquisition.  Then he says that whatever the government “have promised and committed before Geely came in, [the Government] will fulfil them”.

So which is which?

If the deal is now “strictly private”, then why does the Government need to continue with the soft loan to Proton which have a tenure of up to 15 years.  Why should a new repayment time-table be set?  On the contrary, the Government is proceeding to disburse the final instalment of RM250 million from the RCCPS to Proton.

Even if we were to agree to continue to lend Proton the sum of RM1.5 billion, which we should not, what is this new “security” for the loan Dato’ Seri Johari is talking about?

Let us not forget that Geely is acquiring 49.9% of Proton for a mere RM170 million, providing an indication of the worth of the company.  So what assets could possibly be left in Proton that is worth RM1.5 billion which could “secure” the borrowings from the Government?  Worse, Proton’s key assets – the Lotus car company and brand and its real estate properties would all have already been disposed under the current Geely deal.

Hence even if the RCCPS “conversion to shares” terms are modified, ultimately the failure of Proton to produce the necessary assets valued at RM1.5 billion to repay the loan would still mean the Government taking possession of Proton once again.

Therefore, the only way to ensure that the Government is “protected” and Malaysians can be assured that Proton does not end up in our unwittingly hands again is to elicit a joint and several guarantee from both shareholders of Proton – DRB Hicom and Geely.  This will be nothing less that what any commercial bank would demand from Proton.

We hope that the Ministry of Finance can provide an official undertaking to concerned Malaysians that such a shareholders guarantee for the RM1.5 billion soft loan, or whatever outstanding amounts, will be secured before the Geely’s 49.9% acquisition of Proton can be officially completed.