Malaysia needs structural reforms says global investor


Middle-income trap, brain drain and high public service spending among Malaysia’s risks

Cheah(pic) thinks the local stock market could go up by between 5% to 10% this year while the ringgit, which has mostly been on an uptrend in recent times, is “still down quite a lot”, against the US dollar.

 

 
Middle-income trap, brain drain and high public service spending among Malaysia’s risks

KUALA LUMPUR: A renowned global investor has called for structural reforms in Malaysia, saying that the country faces “very real” structural issues.

Penang-born Datuk Seri Cheah Cheng Hye (pic) who left Malaysia decades ago counts the middle-income trap, brain drain and high public service spending as current risks to the country.

Based in Hong Kong as the chairman and co-chief investment officer of fund and asset management group Value Partners Group for over two decades now, Cheah who helps manage over US$16bil in funds, however concedes that Malaysia remains a country with huge potential and opportunities.

“I don’t think we should underestimate the importance and attractiveness of Malaysia but what I am saying is that if we don’t want to be stuck forever (being) a so-called middle-income country, we need structural reforms,” he told StarBiz in a recent interview.

“Or maybe… we do want to be stuck because it is a comfortable position and because then, we can make a lot of compromises.”

“ (If that’s the case), we should be frank and say it, don’t pretend that we want to be an advanced country because that requires certain sacrifices.”

“The reality is that we are getting less and less competitive, we ranked number 23 in the latest Global Competitiveness report ,behind France and Australia which are developed countries. (Number 23) is not good enough for a developing country,” said Cheah, who recently made it to the top 40 richest Malaysians list.

Emphasising the issue of brain drain, Cheah, a former financial journalist and equities analyst said Malaysia could perhaps emulate India in this area where the concept of an Indian national overseas card has been introduced.

“I am told there are more than one million Malaysians overseas – (people like) entrepreneurs, these are exactly the type of people we want to stay here but they are not.

“We could introduce a new type of card called the Malaysian national overseas card for Malaysians who have chosen to leave the country and become citizens elsewhere.”

This card will give these Malaysian-born individuals no voting rights but will allow them to come back to work and invest here like everyone else, he said.

Cheah said this could help re-attract talent and there will be no political price to pay, because these people cannot vote here nor transfer this card to their children who would likely be foreigners.

“Some may actually come back, because it is not always greener on the other side… but you must make it easy enough (for them to come back).”

Cheah also pointed out that the amount Malaysia spends on public service is “very high” by any standards.

“Quoting from memory, about 30% of government spending is on civil service salaries and 16.5% of all employment in this country comprise civil servant jobs.

“No matter how you explain it, this is abnormally high ; something that I have learnt from my stay in Hong Kong is, keep the government as small as possible.”

He said although the civil service segment here appears to be bloated, it would be “unrealistic” to fire civil servants.

“Instead, maybe we can consider freezing and redeploying resources.

“Like any corporation, if you have too high a headcount, you freeze hiring and you redeploy people to where they are needed,” Cheah said.

Separately, Cheah, whose investments are mostly China-centric believes that Myanmar could be the next big thing.

“Nowadays, I like Myanmar because it is still cheap.

“It has about 55 million people but its gross domestic product (GDP) is only about US$65bil, Malaysia’s GDP is probably about US$320bil.

“Myanmar has enormous potential, at last they are emerging , gradually reconnecting with the world, they have (a lot of ) raw materials and are in a good position as one of the significant Belt and Road countries, China will go out of its way to invest there.”

Cheah said he would like to set up a Myanmar fund to invest in the country and is in the process of studying this possibility.

Among markets in Asia, Malaysia to Cheah, is “moderately attractive”.

He said consumer sentiment here was finally improving after it took a beating largely due to the implementation of the Goods and Services Tax (GST) back in 2015 plus there are some “interesting corporate restructuring taking place.”

Also, it is General Election year which going by history, tends to send the market higher, he said.

“I think there are good arguments why the Malaysian market is good this year but the arguments are not strong enough to result in a very strong market – and there’s also a global environment that’s not as good as last year.”

“I think the US administration is now focusing on globalisation and world trade and it seems to be moving in the direction of conflict with China over trade.

“If there is a China-US trade war, Malaysia will suffer collateral damage because we are a medium-sized player in a global supply chain, so it will be very disruptive,” Cheah said.

Upside for the Malaysian market could also be limited this year, he said, because its current valuation is relatively high at over 16 times price to earnings.

Cheah thinks the local stock market could go up by between 5% to 10% this year while the ringgit, which has mostly been on an uptrend in recent times, is “still down quite a lot”, against the US dollar.

The local unit appreciated by 8.6% against the dollar last year after losing some 4.5%, a year earlier.

At last look, it was traded at 3.9395 against the greenback.

By Yvonne Tan The Staronline
Related Links:

World Bank: Malaysia needs structural reforms – Business News

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Huge Civil Service Size, Attractive Emoluments and Benefits are costing Malaysia ! 

Arrest decline in productivity and competitiveness in Malaysia

Corruptions, Conflict of interests, politicians and Malaysian bloated civil service

Structural issues including education are holding Malaysia back

Malaysia no longer stuck in middle-income trap?

Hedge fund management, Value Partners; Malaysian a Hye Achiever in HK, eyes Penang projects

Serious deficits that cannot be financed could lead to bigger global crisis

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Absorb New ways to prevent floods


Sponge City: Solutions for China’s Thirsty & Flooded cities

 China’s ‘sponge city’ projects may be worthwhile examples for Malaysia.

“Only about 20~30% of rainwater infiltrates the ground in urban areas, so it breaks the naturual water circulation.– Wen Mei Dubbelaar”

Last week, it was the turn of Petaling Jaya, Gombak and Sungai Buloh to be the latest major urban areas in Malaysia to suffer flash floods (Flash floods wreak havoc in PJ – Nation). Scenes of cars and buildings submerged in muddy water are now almost an everyday thing. The focus should now shift from the bad situations to the solutions.

It was also last week that I attended a briefing organised by civil society groups for Penang and Seberang Perai municipal officials and members. The briefing was on the recent floods.

Later, I came across several articles on how China is turning 30 of its flood-prone areas into “sponge cities” to prevent floods and retain rainwater.

The Chinese plan big and fast. It launched the sponge city project only in 2015, but it aims to retain 70% of rain in 80% of urban areas by 2020. The sponge concept is set to spread rapidly as part of global efforts to reduce the impact of increased rainfall and floods, and climate change.

The concept figured prominently at the briefing chaired by Penang state exco member Chow Kon Yeow. Scientist Dr Kam Suan Pheng introduced it when explaining the floods.

She contrasted the present situation when rain falls with what used to happen. In the past, 50% of the rain seeped through the natural ground cover (trees, grass, etc) and into the ground. There was 10% water runoff (to rivers and drains) and 40% evapotranspiration (water going back to the atmosphere).

The trees and green spaces act as a sponge to absorb the rainwater that infiltrates the soil, preventing the water from building up into flash floods.

Due to urbanisation, the green spaces have been paved over with cement and concrete. Now, only 15% of the rain infiltrates the soil, while the runoff has increased to 55% and evapotranspiration is 30%. The sponge now absorbs 15% of the rainwater compared to the previous 50%.

Dr Kam quoted former Penang Water Authority general manager Kam U-Tee as saying that the October 2008 Penang floods were caused by conversion of the valleys into “concrete aprons that do not retain water”. As a result, the water immediately flowed into streams, causing flash floods, even with moderate rainfall.

Given this analysis, a key part of tackling the floods is to reverse the loss of the sponge. In recent decades, Malaysia has seen the conversion of a lot of farms, parks, trees and grass areas into concrete jungles of roads, houses, commercial buildings and car parks.

There now has to be high sensitivity to the valuable environmental and economic roles of trees, gardens, fields and grasslands, and parks. The aim of garden cities is not just to be pleasing to the eye but to be a very important part of development as well.

Now comes the role of sponge cities. The world is applauding the Chinese initiative to counter floods and improve water security by building up the natural cover (or sponge) in its cities.

In 2010, landslides during flooding killed 700 in three quarters of China’s provinces. Last year, rains flooded southern China, destroying homes and killing around 60 people.

In 2015, China launched the Sponge City initiative, which now covers 30 cities, including Shanghai, Xiamen and Wuhan. The target: by 2020, 80% of its urban areas will absorb and re-use 70% of rainwater.

The many types of projects include:

  • > Constructing permeable roads that enable water to infiltrate the ground;
  • > Replacing pavements on roads and parks to make them permeable;
  • > Building wetlands to absorb and store rainwater;
  • > Constructing rooftop gardens (for example, 4.3 million square feet in Shanghai);
  • > Plant trees on streets and public squares;
  • > Build community gardens and parks to expand green spaces; and
  • > Build manmade lakes and preserve agricultural land to hold water.

“In the natural environment, most precipitation infiltrates the ground or is received by surface water, but this is disrupted when there are large-scale hard pavements,” said Wen Mei Dubbelaar, water management director at China Arcadis, in words similar to Dr Kam’s.

“Now only about 20-30% of rainwater infiltrates the ground in urban areas, so it breaks the natural water circulation and causes water logging and surface water pollution,” said Wen in an interview with The Guardian.

In Shanghai’s Lingang district, the streets are built with permeable pavements. There are rain gardens filled with soil and plants, buildings feature green rooftops and water tanks, and a manmade lake controls water flows, reports The Guardian.

Prof Hui Li at Tongji University said the first thing is to preserve or restore natural waterways as that is the natural way to reduce flooding risk.

The problem in Wuhan is that a lot of small rivers were filled in during building. But Lingang still has agriculture land and a lake to hold more water during heavy rain.

What about the cost factor? So far the cities have received over US$12bil (RM47.4bil) for sponge projects. The central government funds 15-20% of costs, and the rest is from local governments and private developers.

But compare this to the US$100bil (RM395bil) of direct economic losses due to floods in China between 2011 and 2014, plus the human lives lost.

Sponge cities are the way to go for the future. Our own governments – federal, state and municipal – should study this option seriously, as the public braces itself for more floods ahead.

– Global Trends by Martin Khor

Martin Khor is executive director of the South Centre. The views expressed here are entirely his own.
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Moving forward with affordable housing


One way to solve housing shortage problem is to build more houses.

“If we take a look at countries with commendable housing policies such
as Singapore and Hong Kong, we notice that the government plays a very
important role in building and ensuring a sufficient supply of housing
for their people.”

THE issue of affordable housing has been a hot potato for many countries, especially for a nation with a growing population and urbanisation like ours.

In my previous article, I mentioned that there was a growing shortage of affordable housing in our country according to Bank Negara governor Tan Sri Muhammad Ibrahim. The shortage is expected to reach one million units by 2020.

According to Bank of England governor Mark Carney, one of the most effective ways to address the issue is to build more houses. There are good examples in countries like United Kingdom, Australia and Singapore, which have 2.4, 2.6 and 3.35 persons per household respectively.

In comparison, the average persons per household in our country is 4.06 person, a ratio which Australia had already achieved in 1933! To improve the current ratio, we need to put more effort into building houses to bring prices down.

If we take a look at countries with commendable housing policies such as Singapore and Hong Kong, we notice that the government plays a very important role in building and ensuring a sufficient supply of housing for their people.

For example in Singapore, their Housing and Development Board (HDB) has built over one million flats and houses since 1960, to house 90% of Singaporeans in their properties. In Hong Kong, the government provides affordable housing for lower-income residents, with nearly half of the population residing in some form of public housing nowadays. The rents and prices of public housing are subsidised by the government and are significantly lower than for private housing.

To be on par with Australia (2.6 persons per household), our country needs a total of 8.6 million homes to house our urban population of 22.4 million people. In other words, we need an additional 3.3 million houses on top of our existing 5.3 million residential houses.

However, with our current total national housing production of about 80,000 units a year, it will take us more than 40 years to build 3.3 million houses! With household formation growing at a faster rate than housing production, we will still be faced with a housing shortage 40 years from now.

Therefore, even if the private sector dedicated all its current output to build affordable housing, it will still be a long journey ahead to produce sufficient houses for the nation. It is of course impossible for the private sector to do so as it will be running at a loss due to rising costs of land and construction.

In view of the above, the government has to shoulder the responsibility of building more houses for the rakyat due to the availability of resources owned by the government. Land, for example, is the most crucial element in housing development. As a lot of land resources are owned by government, they must offer these lands to relevant agencies or authorities to develop affordable housing.

I recall when I was one of the founding directors of the Selangor State Development Corp in 1970s, its main objectives was to build public housing for the rakyat.

However, today the corporation has also ventured into high end developments in order to subsidise its affordable housing initiatives. This will somehow distract them from focusing on the affordable housing sector.

Although government has rolled out various initiatives in encouraging affordable houses, it is also important for the authorities to constantly review the original objectives of the relevant housing agencies, such as the various State Economic Development Corporations, Syarikat Perumahan Negara Bhd, and 1 Malaysia People’s Housing Scheme, to ensure they have ample resources especially land and funding to continue their mission in building affordable housing.

A successful housing policy and easy access to affordable housing have a huge impact on the rakyat. It is hoped that our government escalates its effort in building affordable housing, which will enhance the happiness and well-being of the people, and the advancement of our nation.


Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.
By Alan Tong

Pakatan taking a step backwards’


PETALING JAYA: Pakatan Harap­an’s choice of Tun Dr Mahathir Mohamad as its candidate for prime minister is a step backwards for the Opposition grouping, said Institute of Strategic and Inter­national Studies Malaysia Senior Fellow Sholto Byrnes.

In an opinion piece yesterday in The National, a newspaper published in Abu Dhabi, United Arab Emirates, Byrnes wrote that Pakatan’s choice of Dr Mahathir showed it did not have confidence in its own leaders.

He said it also reflected badly on Opposition supporters who were strongly against the Government, which Dr Mahathir led for 22 years.

“The notion that this represents change, let alone fresh blood, is laughable and reflects very poorly on the Opposition’s confidence not only in its younger cadres, but also in those who have always opposed the Barisan Nasional governing coalition,” said Byrnes.

He said many Opposition supporters and leaders were imprisoned by Dr Mahathir, who is currently Pakatan Harapan chairman, for no good reason other than that their vehement opposition inconvenienced him.

“They are entitled to feel bitter at having to kowtow to their former jailer,” he added.

Byrnes noted that Dr Mahathir, who is now 92, would become the world’s oldest leader if elected in the event that Pakatan Harapan wrests power from Barisan.

This, he said, would open Malay­sia to international ridicule.

“Any who doubt that should imagine the incredulous laughter if either George H.W. Bush, aged 93, or Valery Giscard d’Estaing, a sprightly 91, were to seek to return to the presidencies of the United States and France respectively,” he said.

Commenting on Dr Mahathir’s Dec 30 apology for his past mistakes when he was prime minister, Byrnes pointed out that the former leader said sorry for nothing specific.

Dr Mahathir later suggested that it was Malay custom to apologise for possible past mistakes.

“Whatever charges might be laid against him over possible wrongdoing during the course of his premiership – and Opposition activists have in the past called for him to be put on trial for them – he is essentially unrepentant,” Byrnes wrote.

He said Dr Mahathir would never have switched to the Opposition if Datuk Seri Najib Tun Razak had been prepared to act as Dr Mahathir’s tame supplicant and do everything his former boss wanted.

“For ever since he stood down from the premiership, Dr Mahathir has not been able to let go,” he said.

Recognising that it was Chinese faces who had the track record and visibility in the Opposition after Datuk Seri Anwar Ibrahim’s jailing, Byrnes said Pakatan was trying to hide them behind a facade of Malay politicians to win the crucial votes of the majority Malays.

“There are decent people in the Opposition, whom I have come to know personally. But this new top ticket drives a coach and horses through the Opposition’s old principles and thus through whatever moral authority it had,” he said.

Choosing a nonagenerian former PM to head Malaysia’s opposition is a regressive move

– REUTERS/Lai Seng Sin/File Photo

THE announcement last weekend that Malaysia’s opposition coalition, Pakatan Harapan (PH), had chosen Tun Dr Mahathir Mohamad as its candidate for prime minister made international headlines for two reasons. Firstly, Dr Mahathir has been the country’s head of government before, for a record-breaking 22 years from 1981 to 2003, during which (and afterwards) his governing style was described as “authoritarian”. With trademark sarcasm, the good doctor now one-ups that by conceding that in office he was nothing less than a “dictator”. He is not renowned as an advocate for reformist democracy, which is what PH claims to stand for.

Secondly, he is now 92, which would make him the world’s oldest leader if elected. Opposition columnists have ludicrously compared Malaysia, much praised by the World Bank, the IMF and other international bodies for its current government’s reforms, prudent economic stewardship and excellent growth, with Zimbabwe. In fact, it is the latter’s former president Robert Mugabe, a 93-year-old gerontocrat deposed ignominiously last year, who was so close to Dr Mahathir that the BBC’s John Simpson once paid him the backhanded compliment of calling him “a kind of successful, Asian Robert Mugabe.”

Malaysia’s opposition is now effectively helmed by two leaders from 20 years ago: Dr Mahathir and Datuk Seri Anwar Ibrahim, the deputy he sacked in 1998 and humiliated after the latter was charged and then jailed for sodomy and corruption. Anwar is currently in prison on a second sodomy charge. His wife, Datuk Seri Dr Wan Azizah Wan Ismail, is nominally PH’s candidate for deputy prime minister but should the opposition win, its plan is for Anwar to be given a royal pardon, enter parliament via a by-election and then take over from his former nemesis as prime minister.

The notion that this represents change, let alone fresh blood, is laughable and reflects very poorly on the opposition’s confidence not only in its younger cadres (and by younger, that means 50 and 60-year-olds) but also in those who have always opposed the Barisan Nasional (BN) governing coalition, which has never lost power since independence.

Theirs has not been an easy road. Many were imprisoned by Dr Mahathir for no good reason other than that their vehement opposition inconvenienced him. They are entitled to feel bitter at having to kowtow to their former jailer. And while Dr Mahathir might still be very sharp – his tongue has lost none of its spikiness – they cannot be oblivious to the fact that proposing a man who could be 93 by the time he became prime minister again opens the country to international ridicule. (Any who doubt that should imagine the incredulous laughter if either George HW Bush, currently aged 93, or Valery Giscard d’Estaing, a sprightly 91, were to seek to return to the presidencies of the US and France, respectively.)

So why has Malaysia’s opposition proposed him as their leader? Ah, but Dr Mahathir has changed his tune, some will say and has even recently apologised. Firstly, he said sorry for nothing specific and secondly, he then suggested it was Malay custom to apologise for possible past mistakes. However, whatever charges might be laid against him over possible wrongdoing during the course of his premiership – and opposition activists have in the past called for him to be put on trial for them – he is essentially unrepentant.

The late Karpal Singh, the formidable Indian national chairman of the mainly Chinese Democratic Action Party (DAP), would never have stood for it. His daughter and others with a long record in the opposition cannot stomach Dr Mahathir at the top and have said so vocally, as have some significant members of Anwar’s People’s Justice Party (PKR).

No wonder, for this is no alliance of principle. It is one of convenience. And if the current prime minister, Datuk Seri Najib Tun Razak, had been prepared to act as Dr Mahathir’s tame supplicant and do everything his former boss wanted, this would never have happened. For ever since he stood down from the premiership, Dr Mahathir has not been able to let go. First he undermined his handpicked successor, Tun Abdullah Ahmad Badawi, and then Najib – not for any malfeasance on their parts but for the crimes of not taking his “advice” as orders and for not indulging his dynastic ambitions.

Paradoxically, Dr Mahathir’s appearance at the head of the opposition pact is actually a testament to how strong a position Najib has built over the last two and a half years. Recognising that it was Chinese faces who had the track record and the visibility in the opposition after Anwar’s jailing, PH is now trying to hide them behind a facade of Malay politicians to win the crucial votes of the majority Malays.

But their new alliance is incoherent, with politicians having entirely contradictory records on matters of civil liberties and free speech, for instance – and, worse, deceitful ones, claiming that the goods and services tax that the current government has introduced could be removed, with no real plans for how they would replace the vital revenue.

There are decent people in the opposition, whom I have come to know personally. But this new top ticket drives a coach-and-horses through the opposition’s old principles and thus through whatever moral authority they had.

Malaysia has a good government that has won accolades for its determined fight against violent extremism and its successful economic transformation programme. It deserves a better opposition. And there’s a certain 92-year-old who deserves the gratitude of his people for services past – but also a retirement he has put off for far too long.

Source: by Sholto Byrnes, The Star

> Sholto Byrnes is a senior fellow at the Institute of Strategic and International Studies Malaysia

PKR gives up 14 seats to Pribumi for GE14

PETALING JAYA: PKR has given up 14 constituencies it contested in the last general election to Parti Pribumi Bersatu Malaysia (Pribumi) for the upcoming 14th General Election (GE14).

Pakatan Harapan’s approved distribution of parliamentary seats for GE14 shows PKR giving up seats in Selangor, Negri Sembilan, Johor, Perak, Kelantan and Pahang to Pribumi.

Notably, it has surrendered the Pekan seat – currently held by Umno president and Prime Minister Datuk Seri Najib Tun Razak – to Pribumi.

Notably, PKR has given up its Lumut parliamentary seat, currently held by Mohamad Imran Abd Hamid, to Amanah.

Since the departure of PAS from the now-defunct Pakatan Rakyat coalition, many of that party’s previously-contested seats were distributed evenly among Pribumi and Amanah, a PAS breakaway party.

Interestingly, Pribumi is the Pakatan Harapan party contesting seven seats in Kelantan, against five by Amanah and two by PKR.

Pribumi will have a strong presence in the Umno stronghold of Johor, fielding candidates in 10 seats.

Four of those seats (Sri Gading, Pengerang, Pontian and Muar) were previously contested by PKR, while Tanjung Piai was previously contested by DAP.

Johor’s Ayer Hitam seat, which was previously under DAP’s quota, will be contested by Amanah.

Pribumi is set to contest eight seats in Perak, after PKR gave up four seats there – Tambun, Bagan Serai, Tapah and Pasir Salak.

PKR is also slated to contest the Sungei Siput seat now held by PSM’s Dr Michael Jeyakumar Devaraj. Dr Jeyakumar won the seat under the PKR banner in the last election.

Apart from Johor, Pribumi also has strong representation in Perak (eight seats), Kelantan (seven), Pahang (six) and Kedah (six).

It is believed that Pribumi is thought to have a better chance against Umno in those seats, compared to Amanah.

Some instances of give and take were seen in the planned parliamentary seat distribution.

Amanah in turn has given up the prized Titiwangsa seat to Pribumi, leaving it with no potential representation in Kuala Lumpur.

Related Link:

Dr Mahathir has hijacked Pakatan, says Liow

Dr Mahathir has hijacked Pakatan, says Liowicon video

Penang Transport Master Plan (PTMP) – Tunnel project rocked, Directors arrested in graft probe


 

 

 

Stalled ambition: A view of the Gurney Drive seafront, which is meant to be connected to Bagan Ajam in Seberang Prai under the Penang undersea tunnel project.
The RM6.3bil undersea tunnel project in Penang is on rocky ground with the MACC going on a day-long swoop on companies and state government agencies involved. A high-ranking Datuk in one of the companies has been detained to help in investigations into allegations of corruption in the long-delayed mega project and feasibility studies.

PETALING JAYA: Graft-busters have arrested a Datuk holding a high post in a company involved in the controversial Penang undersea tunnel project to help investigations into corruption claims.

The arrest came after a day-long massive swoop on several offices in Penang, where the Malaysian Anti-Corruption Commission (MACC) seized documents related to the RM6.3bil mega project.

The anti-graft agency raided the offices of four state government agencies – the Penang Public Works Department, Penang State Secretary, Penang Office of Lands and Mines and Penang Valuation and Property Services Department – and three property development and construction companies – Ewein Zenith Sdn Bhd, 555 Capital Sdn Bhd and Consortium Zenith Construction Sdn Bhd’s Penang office.

MACC officers also questioned several officers in charge of the respective agencies and companies since the raids began yesterday morning.

Sources familiar with the investigation said the probe into the undersea tunnel project was also zooming in on land swaps.

Ewein Zenith is a joint-venture vehicle of Ewein Land Sdn Bhd and Consortium Zenith BUCG Sdn Bhd.

The latter is a Malaysia-China joint venture that was awarded the RM6.3bil mega project to build the 7.2km undersea tunnel connecting Gurney Drive on the island to Bagan Ajam in Seberang Prai, a 10.53km North Coastal Paired Road (NCPR) from Tanjung Bungah to Teluk Bahang, the 5.7km Air Itam–Tun Dr Lim Chong Eu Expressway bypass and the 4.075km Gurney Drive–Tun Dr Lim Chong Eu Expressway bypass.

Consortium Zenith BUCG changed its name to Consortium Zenith Construction Sdn Bhd on Jan 18 last year after the withdrawal of Beijing Urban Construction Group (BUCG).

It is believed that the MACC is looking into why the state government allowed the Penang Tunnel special purpose vehicle (SPV) company to pre-sell state land rights worth RM3bil despite a four-year delay in the construction of roads.

Investigators are also believed to be looking into the RM305mil feasibility and detailed design studies that have yet to be completed, even though a payment of RM220mil was made to the SPV.

On Oct 11 last year, the main contractor of the project announced that there was no urgency to finish the feasibility study for the undersea tunnel, as it was only set to begin in 2023.

The feasibility study of the tunnel started in February 2015 and as of October last year, it was said to be 92.9% complete.

Works Minister Datuk Seri Fadillah Yusof has said the delay in submitting the feasibility report to him was very unusual considering that the project was awarded in 2013.

On Friday, Parti Cinta Malaysia (PCM) vice-president Datuk Huan Cheng Guan lodged a report at the MACC headquarters in Putrajaya and handed over documents which he claimed contained new evidence of corruption in the project.

It was Huan’s third report about the matter. He first lodged a police report on July 17 last year, claiming that the project was awarded to an “undercapitalised” company.

He then lodged a report with the MACC on July 21, calling for a corruption probe.

In George Town, a source in the MACC confirmed that they had ­visited the offices of Ewein Zenith, Consor­tium Zenith Construction and 555 Capital, all of which are involved in the Penang undersea tunnel project.

“We went in the morning, shortly after their offices opened,” said the MACC officer.

However, none of the senior management staff were in and only the front office and sales staff were present to attend to them.

State Works Committee chairman Lim Hock Seng said he was not aware of the raids, while Consortium Zenith senior executive director Datuk Zarul Ahmad Mohd Zulkifli could not be reached for comment.

Meanwhile, state secretary Datuk Seri Farizan Darus said the National Economic Planning Unit on the 25th floor of Komtar was also raided, but declined to give details.

Huan thanked the commission for acting on his report.

“I believe the MACC will carry out its investigation professionally without any fear or favour,” he said.

The MACC is expected to hold a press conference today to explain the spate of raids and provide updates on the investigations.

By royce tan, tan sin chow, r. sekaran, cavina lim The Star

How to measure a politician?



Use technology to learn more about them before casting your vote

Cheah taking a wefie with Tanjung Bungah assemblyman Teh Yee Cheu
(behind Cheah) and (from left) Berapit assemblyman Lydia Ong, Speaker
Datuk Law Choo Kiang and state officials during a break at the Penang state
assembly in November.

KEBUN Bunga assemblyman Cheah Kah Peng of PKR is the man of the moment in the political scene in Penang.

Chief Minister Lim Guan Eng barred him from helping with the registration of flood victims for the RM700 aid in his constituency.

Lim, in his Facebook page, said in Chinese that he wouldn’t sit idly when elected representatives do not perform.

He stopped short of naming Cheah, except to say that he heard grouses from Hong Seng Estate residents about not seeing “their assemblyman” during the floods on Sept 15 as well as on Nov 4 and 5. We do not know if this is true.

In any case, Cheah got a letter from the State Secretariat relieving him of the registration duty. Lim and Pulau Tikus assemblyman Yap Soo Huey took over the task.

Cheah, showing his usual gentleman’s demeanour, declined to comment. But this is not the first time he has come under attack from the state administration.

It was learned that he was reprimanded for being unhappy with the passing of the Penang State Park (Botanic) Corporation Enactment 2017.

Penang Botanic Gardens is in his constituency and he feared the Enactment would affect people’s rights after the park was corporatised. It is said he was informed only a few days before the Bill was tabled.

In 2015, Cheah, Penanti assemblyman Dr Norlela Ariffin, Ong Chin Wen (Bukit Tengah), Dr T. Jayabalan (Batu Uban) and Lee Khai Loon (Machang Bubok) were dubbed the ‘PKR Five’ for abstaining in a vote against a Barisan Nasional motion on land reclamation in the state assembly.

Their relationship with Lim soured after that.

How do we define good elected representatives? Keep count of how many times they visit their constituencies?

And then there is the old question: Should we vote for the person or the party? There are many views on this, but as a journalist, I have an occupational advantage.

I have seen a few assemblymen turning up at gotong-royong, spend less than 30 minutes there for photo opportunities and leave. Yes, I know who you are and I am a voter too.

And then I had the chance to cover many state assembly meetings through the years.

This is where we expect constructive debates among the ‘Yang Berhormat’ on issues that affect us. But on a few occasions, there were no fruitful debates or exchange of ideas.

National issues, which cannot be resolved in the state assembly, dominate the proceedings at times. Why? What were our assemblymen hoping to achieve by prattling about things that the hall cannot act on?

They frequently call each other names and bicker in the august House.

In the last meeting, two assemblymen dragged out the name of a newspaper editor and attacked his character in the hall where the editor had no chance to defend himself due to the absolute privilege that lets assemblymen say anything they want there without fear of being sued.

But I was relieved because at least five other assemblymen stood up to defend the editor and talked those two assemblymen down.

Unlike them, I do not have absolute privilege so regretfully, I can mention no names.

With today’s technology, it is easy to get to know political candidates before giving them our votes.

Check out their Facebook pages or Google their names to learn about them.

If they are not up to mark, something might show in their social media exchanges.

Remember, the election season is just around the corner. Use your vote wisely.

By Tan Sin Chow

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Forex losses by Bank Negara Malaysia, Facts were concealed; Mahathir, Anwar and Nor Mohamed implicated: RCI


Important report: RCI Secretary Datuk Dr Yusof
Ismail speaking to media after submitting a police report over Bank
Negara forex trade losses in Putrajaya.

THE Royal Commission of Inquiry into the foreign exchange losses suffered by Bank Negara Malaysia (BNM) back in 1990s has recommended that three people be probed over their involvement and liability.

They are former prime minister Tun Dr Mahathir Mohamad, his then finance minister Datuk Seri Anwar Ibrahim and ex-Bank Negara advisor Tan Sri Nor Mohamed Yakcop, whom the report also named as “principally liable for criminal breach of trust”.

The 524-page report also called out Tun Daim Zainuddin, who served as finance minister from July 14, 1984 to March 15, 1991, for having aided and abetted Nor Mohamed by leaving BNM “to its own devices”.

The commission found that the Cabinet in the 1990s was not given the full picture by Anwar on the forex losses, adding that he had “deliberately concealed facts and information and made misleading statements”.

“The Commission is of the opinion that there was deliberate concealment as BNM’s annual reports did not state the actual losses incurred from the forex dealings from 1992 to 1994.

“It is also of the opinion that the then prime minister (Dr Mahathir) had condoned the actions of the finance minister,” it said.

The RM31.5bil losses, it said, were hidden using “unconventional accounting treatments”, such as booking losses to reserves in the balance sheet and the absorption of the remaining losses by the transfer of shares from the Government to BNM as well as the creation of a “Deferred Expenditure” to be repaid in instalments over a decade.

“All the actions to conceal the losses were discussed and approved by the board of directors before the accounts were signed off by the Auditor-General.

“No further action was taken by the Finance Minister and Treasury secretary-general (as a board member) despite being informed by the Auditor-General on the losses and the unusual accounting treatments,” said the report.

Anwar, noted the Commission, had been informed about the actual forex losses suffered by BNM.

Dr Mahathir, it said, was informed by Anwar together with then Treasury deputy secretary-general Tan Sri Clifford Francis Herbert in late 1993 that BNM had suffered estimated losses of RM30bil on the forex dealings for 1992 and 1993.

However, in the extract of minutes from three Cabinet meetings on March 30, April 6 and 13 in 1994, Anwar had made “no mention of the actual losses of RM12.3bil for 1992 and RM15.3bil for 1993.”

Anwar had chaired the March 30 meeting as the deputy prime minister. The losses for 1993 were reported as RM5.7bil.

“The prime minister, who chaired the meeting on April 6, did not correct or offer more information when the forex losses for 1993 were recorded as only RM5.7bil,” it pointed out.

“The Commission is of the view that it is the finance minister’s responsibility to inform the Cabinet the significant financial affairs about BNM as the Cabinet has collective responsibility with the finance minister and the prime minister for the country’s affairs.”

Dr Mahathir, it said, claimed to have no knowledge of the real amount of losses, which was untenable with his meticulous nature, as well as that under the law, BNM was the banker and financial agent to the Government with the remainder of its net profit to be paid into the Federal Consolidated Fund.

The report said as pointed out by Herbert, he had expected Dr Mahathir to be outraged but his reaction was quite normal with him uttering “sometimes we make profit, sometimes we make losses”.

“His reaction to and acceptance of the huge forex losses suggest that he could have been aware of the forex dealings and its magnitude,” said the report.

The RCI also found Dr Mahathir’s claim that he could only remember the amount of RM5bil forex losses when informed about it in a meeting with Anwar and Herbert in late 1993 to be “questionable”.

It said this was because based on testimonies of other witnesses and documentary evidence, the RM5.7bil only surfaced when Bank Negara’s 1993 annual report was presented to the Cabinet on March 30, 1994.

“Despite his denials, the Commission is of the opinion that a thorough investigation should be carried out to determine the extent of his involvement and liability,” said the report.

By Martin Carvalho, Hemananthani Sivanandam, Loshana K. Shagar, and Rahmah Ghazali The Star

Police set up taskforce to probe possible criminal offences over Bank Negara’s forex losses

Inspector-General of Police Tan Sri Mohamad Fuzi Harun says police will
open investigation paper following a report that was lodged by Royal
Commission of Inquiry (RCI) secretary Datuk Dr Yusof Ismail. (Image is
for illustration purpose only).

KUALA LUMPUR: Police have set up a taskforce to investigate possible criminal breach of trust and cheating which may have been committed during Bank Negara Malaysia’s foreign exchange losses in 1990s

Inspector-General of Police Tan Sri Mohamad Fuzi Harun said police would open investigation paper as the forex Royal Commission of Inquiry (RCI) had lodged a police report this afternoon.

“A taskforce has been formed and it will lead the investigation. We are investigating the case under Section 409 of the Penal Code for criminal breach of trust,” he told the New Straits Times when contacted.

RCI’s secretary Datuk Dr Yusof Ismail, who is the Finance Ministry Strategic Investment Division director, had lodged a report at Putrajaya police headquarters at 4.10pm asking police to start an official investigation.

In the police report, it was stated that those who were involved in the alleged wrongdoings were Bank Negara Malaysia (BNM) officers, BNM Board of Members, National Audit Department, Finance Ministry and the prime minister who served during the period.

Royal Commission of Inquiry (RCI) secretary Datuk Dr Yusof Ismail seen
leaving the Putrajaya police headquarters after lodging a report. Pic by
AHMAD IRHAM MOHD NOOR

The RCI, in its 528-page report that was tabled in Parliament today, said it believed that Datuk Seri Anwar Ibrahim, who was Finance Minister at the time, had misled the government and concealed the actual losses suffered by BNM.

RCI also said it believed that the prime minister at the time, Tun Dr Mahathir Mohamad, had approved Anwar’s “misleading statements”.

The commission also revealed that the losses were far larger than that what was initially reported by the central bank, RM31.5 billion as against RM5.7 billion, in the period of three years.

Yusof spent almost 40 minutes at the police headquarters and later spoke to reporters who were waiting outside.

He said in the report, the commission had requested the police to start a official investigation on the possible criminal breach of trust, forgery and other wrongdoings which may have been committed during the forex activities.

“Our report is basically requesting the police to start investigation and for the Attorney-General Chambers to take action based on the findings by the police,” he said.

Putrajaya OCPD Asst Comm Rosly Hassan who confirmed that the report was made, said a special unit in Bukit Aman would investigate the case.

By TEOH PEI YING and HASHINI KAVISHTRI KANNAN New Straits Times
Related Links:

 PROBE NOR MOHAMED, DR Mabatbjr, ANWAR – PressReader

It recommends that they be investigated for possible CBT, fraud

FILE PIC
Former finance minister Tun Daim Zainuddin after giving his statement to the Royal Commission of Inquiry in September.
THE RCI believes Datuk Seri Anwar Ibrahim had concealed Bank Negara’s actual forex losses from the cabinet, and that Tun Dr Mahathir Mohamad condoned his actions. The panel, in confirming that RM31.5 billion was lost, says there are grounds to investigate them for criminal breach of trust and fraud.
THE Royal Commission of Inquiry (RCI) into Bank Negara Malaysia’s (BNM) foreign exchange (forex) losses in the 1990s has recommended investigations against former prime minister Tun Dr Mahathir Mohamad and his one-time deputy, Datuk Seri
Anwar Ibrahim.
The RCI, in its 528-page report that was tabled in the Dewan Rakyat yesterday, said the duo had
concealed facts from the cabinet.
It also recommended that Dr Mahathir and Anwar be investigated for criminal breach of trust and fraud.
“There is a basis for an official police investigation into BNM board of directors, National Audit Department, then finance minister and prime minister for criminal breach of trust and fraud in the performing of the speculative forex transactions and in hiding the losses from the cabinet and Parliament,” the report said.
Former BNM adviser Tan Sri Nor Mohamed Yakcop was also implicated as the commission found that he was responsible for the billions of ringgit in losses.
RCI had recommended that Nor Mohamed be investigated for alleged criminal breach of trust and for allegedly contravening the Central Bank Ordinance 1958.
The commission also found that former finance minister Tun Daim Zainuddin had allegedly abetted Nor Mohamed. Daim was finance minister until 1991 before he was replaced by Anwar.
BNM lost RM31.5 billion in forex trading between 1992 and 1994. Nor Mohamed was
in charge of several portfolios in BNM at the time, including the management of external reserves.

 

BN and Opposition reps at loggerheads over report – Nation

RCI says Dr M helped in concealing RM31.5bil forex losses 

RCI says Dr M helped in concealing RM31.5bil forex losses …

‘Probe Nor Mohamed for possible CBT’ – Nation

Royal commission recommends CBT probe on Nor Mohamed over ..

RCI: Daim abetted Nor Mohamed in committing CBT | Free Malaysia …

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