Implications of the ‘RM19bil GST collected, RM18bil taken’ and RM19.4bil shortfall !


The immediate concern is the budget deficit for 2018 spiking to 4% if the GST refunds are made this year

ON May 31, when Finance Minister Lim Guan Eng announced that the new government would be able to meet the budget deficit of 2.8% for this year, the sum of RM19.4bil that is to be refunded to companies since the goods and services tax (GST) was discontinued, never came into the equation.

Now, since that money is not in a trust account that was specifically set up to meet the refund obligations, does the government need to borrow more to ensure it meets the refunds? In doing so, would it incur a bigger budget deficit than had been envisaged?

There are wider implications on the shortfall of the RM19.4bil, assuming the refunds are to be done this year.

The biggest challenge for Lim is to cover the shortfall to maintain the budget deficit for 2018 at 2.8%.

The hallmark of the Pakatan Harapan government’s first 100 days of rule is to bring down the cost of living and cost of doing business. Towards this end, it has subsidised the price of petrol and diesel and removed the GST.

The cost of keeping up with the Bantuan Sara Hidup and subsidy for petrol and diesel is estimated to be about RM6.2bil between June and December.

Revenue loss due to discontinuing the GST from June 1 onwards is estimated at RM21bil.

The shortfall is made up of cutting down government expenditure by RM10bil, increasing dividends from government agencies such as Khazanah Nasional Bhd and Petroliam Nasional Bhd, a higher petroleum income tax of RM5.4bil and proceeds from the implementation of the sales and service tax from September onwards.

Nowhere was the RM19.4bil figure that is to be paid back to companies under the GST that was discontinued mentioned.

Lim has said that the money was supposed to be in the trust account, but is not there and has gone “missing”.

Former Finance Ministry secretary-general Tan Sri Mohd Irwan Siregar Abdullah has said that all proceeds from the GST went into the consolidated fund of the federal government. The amount to be refunded is allocated to the trust account monthly based on the requirements of the Customs Department and the financial position of the government.

Customs director-general Datuk Seri Subromaniam Tholasy has revealed that since the GST was implemented on April 1, 2015, the total refunds amounted to RM82.9bil and the amount allocated to the trust account from the federal government consolidated fund was only RM63.5bil – representing a shortfall of RM19.4bil.

Generally, refunds for the GST are to be done within 14 days. But the amount allocated is less because not all refunds are paid within the two-week period.

At times, refunds are held back up to one year, pending investigations. Hence, the cash allocated to the trust account maintained by the Customs and the Inland Revenue Board (IRB) is less than the total amount due for refunds.

For instance, in 2017, the amount allocated to the IRB trust account for refunds was RM7bil when the total amount to be refunded was more than that.

In the case of the Customs, the outstanding refunds for 2017 was RM15bil, but the amount allocated was less.

Under the previous government, the GST provided a steady flow of cash every month. The thinking was that the money for refunds should be allocated when it comes due to best manage the cash-flow position of the government.

However, the view of Lim is that money meant for refunds should have been put into the trust account, irrespective of whether there is a need to pay immediately or otherwise.

Hence, the issue is not really the question of the RM19.4bil meant for refunds going “missing”.

It is whether the money is still in the consolidated accounts or whether it has been utilised. If it was utilised, did the government have the right to use it for other purposes in the name of cash-flow management?

The bigger implication for the Pakatan government is how it is going to cover this RM19.4bil shortfall.

One of the ways the government can cover the RM19.4bil hole without increasing the deficit is to cut more of the excesses.

On this score, the Pakatan government has so far handled public funds in a more judicious manner compared to the previous government. It has cut down the budget for inflated infrastructure projects and stopped unnecessary spending.

The light rail transit 3 and East Coast Rail Link projects are only some examples. It has stopped prestigious projects such as the KL-Singapore high-speed rail and the less glamorous mass rapid transit line 3 project. The government of today has earned full marks for being transparent and diligent in handling public finances.

Despite declaring that the federal government debt is at RM1.07 trillion, business sentiment is at a seven-year high, while consumer sentiment is at a 21-year high.

The stock market is looking good so far, much better than the likes of China and Hong Kong, although the improved sentiments are likely to be temporary.

As for the ringgit against the US dollar, its performance is better against many of the Asian and emerging-market currencies. The tumbling of the Turksih lira and Russian rouble is testimony that the ringgit is not that bad after all.

The government can probe, produce a White Paper or do anything else to look into the RM19.4bil shortfall, but the bottom line is that Lim and Prime Minister Tun Dr Mahathir Mohamad will have to face the reality of making up for a RM19.4bil shortfall in government finances for this year.

Economists are predicting that the federal government budget deficit would be higher than the 2.8% estimated on May 31 this year on the assumptions are made this year. Some are looking at the budget deficit to be as high as 4%

Would there be an impact on Malaysia’s credit rating and the ringgit?

Yes, a spike in the budget deficit would have an impact for the short term.

However, the government of the day will score brownie points in its drive to bring about reforms and governance in the management of public funds. Rating agencies would appreciate any government that promotes transparency and improves on its finances purely by spending within its means.

So far, the government has done away with the GST and taken measures to put more cash into the hands of the people and business to improve domestic spending. The stabilisation of petrol prices and threemonth (June to September) tax-free period between the implementation of the GST and SST has put RM20bil into the hands of the people and businesses. This should help improve the domestic economy for a few months.

However, for the longer term, investors and rating agencies will be looking at how the RM19.4bil hole in the federal government finances will be covered. What are the government assets that will be sold?

Certainly, we are not looking at an expansionary budget come November this year.

Source:  The Alternative view by M.Sshanmugam The Star

RM19bil GST collected, RM18bil taken’

//players.brightcove.net/4405352761001/default_default/index.html?videoId=5819661623001

KUALA LUMPUR: The previous government has not been able to refund companies their tax credit that came about following the implementation of the Goods and Services Tax (GST) because 93% of the money was not placed in the correct account, Finance Minister Lim Guan Eng revealed.

He said some RM18bil of the RM19.4bil input tax credit under the GST system since 2015 was “robbed” by the previous administration.

“I was very shocked when informed that this happened because the previous government had failed to enter the GST collection in the trust account specifically meant for the repaying of GST claims.

“Instead, the Barisan Nasional government pilfered the trust account and entered cash GST collection directly into the consolidated fund as revenue to be spent freely,” he said when tabling the GST (Repeal) Bill 2018 during its second reading in Parliament yesterday.

He said that as of May 31, the outstanding GST refund stood at RM19.397bil whereas there was only a balance of RM1.486bil in the repayment fund.

Lim said from the total input tax credit, RM9.2bil or 47% was recorded between Jan 1 and May 31 this year, RM6.8bil or 35% in 2017, RM2.8bil (15%) in 2016, and RM600mil (3%) in 2015 (from April 1 to Dec 31, 2015).

Under GST, the input tax credit allowed businesses to reclaim credit for taxes paid on purchases, subject to filing of input tax documents.

In his winding-up reply, Lim said a comprehensive investigation would be carried out to determine the cause of the missing funds.

When debating the Bill, Lim also said he had asked for documents to show how the input tax had ended up in the consolidated fund.

“I asked the Chief Secretary to the Government for the Cabinet papers on the matter.

“However, he told me he could not remember anything of such,” he added.

Lim said former Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz, when told of the missing funds, said it was imperative that the money was returned to the claimants as it was fiscally moral to do so.

Later, at the Parliament lobby, Lim said a former Treasury secretary-general may have been aware of the missing RM18bil.

The previous government, he said, had committed wrongdoing over the missing funds.

“I would assume the previous KSP (ketua setiausaha perbendaharaan/Treasury secretary-general) would have known about this.

“We want something definite because we want to look at the circle of decision-makers,” he said.

By martin carvalho, hemananthani sivanandam, rahimy rahim, and loshana k shagar The Star

Khairy urges gov’t to bring ‘GST robbers’ to book

BN MPs want Najib, RM18b GST ‘robbery’ claim investigated


Related 

GST refunds should be in trust account: ACCCIM – theSundaily

RM18b input tax credit under GST system robbed … – The Straits Times

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Malaysia’s RM1.09 trillion debt, 80.3% of GDP demystified


Analysts say new government needs to quickly introduce measures to reduce the country’s liabilities

ASSUMING the government repays its debt by RM1mil a day, it would take Malaysia 2,979 years to pay off its debts.

Malaysia’s new Prime Minister Tun Dr Mahathir Mohamad revealed on May 21 that the country’s debt level has breached the RM1 trillion mark during his first address to civil servants.

The statement, which was nothing less than alarming, has since raised concerns among Malaysians on the country’s fiscal sustainability. Bursa Malaysia was hammered for four consecutive days, as investors frantically sold off their stakes.

The benchmark FBM KLCI saw the biggest year-to-date decline on May 23, tumbling by 40.78 points or 2.21% to 1,804.25 points.

Total gains made by the index this year were all wiped out in just four days following Dr Mahathir’s announcement.

The ringgit, which has weakened since early April, continues to decline as concerns on public debt loom.

Big impact: The benchmark FBM KLCI saw the biggest year-to-date decline on May 23, tumbling by 40.78 points or 2.21 to 1,804.25 points.
An economist tells StarBizWeek that Dr Mahathir’s public announcement on the high debt figure is “not helping”, as anxiety intensifies among Malaysians and in the market.

For context, Malaysia’s real gross domestic product (GDP), an indicator of the size of economy, was RM1.35 trillion as at end-2017 – close to the said RM1 trillion debt amount.

Meanwhile, the federal government’s revenue this year is projected at RM239.9bil as per Budget 2018.

Several critics, including Umno Youth deputy chief Khairul Azwan Harun, claim that Dr Mahathir’s statement on the federal government debt was exaggerated and far-fetched.

AmBank Group chief economist Anthony Dass says that although the current scenario shows some signs of similarities to the 1997/98 Asian Financial Crisis, he would not conclude that the current fiscal condition is somewhat similar to the downturn 20 years ago.

At a glance, the “RM1 trillion debt” remark stands in sharp contrast to Bank Negara’s debt tally of RM686.8bil as at end-2017, putting the federal government’s debt-to-GDP ratio at 50.8% – lower than the 55% self-imposed debt limit.

Dr Mahathir refutes this, saying that the national debt-to-GDP ratio has shot up to 65.4%. A day after his announcement, Finance Minister Lim Guan Eng put the ratio at 80.3% of GDP, or about RM1.09 trillion in debt as at end-2017.

Why is there such an obvious difference in the debt amount now that a new government is in place?

Here is where “creative accounting” comes into play.

The lower official debt figures released under the previous Barisan Nasional government had excluded the contingent liabilities and several other major “hidden” debts from the direct liabilities, which amounted to RM686.8bil as at end-2017.

Contingent liabilities, which were released separately prior to this, basically refer to government-guaranteed debt and do not appear on the country’s balance sheet. Examples of contingent liabilities are the loans under the National Higher Education Fund Corp (PTPTN) and certain debt of the controversial 1Malaysia Development Bhd (1MDB).

As at end-2017, Malaysia’s contingent liabilities stood at RM238bil.

Funding for several government mega-projects such as the mass rapid transit (MRT) projects was also categorised as contingent liabilities. The MRT lines were funded by DanaInfra Nasional Bhd, the government’s special funding vehicle for infrastructure projects.

DanaInfra raises money from the market through sukuk, which are, in turn, guaranteed by the government. The guaranteed amount is classified as a contingent liability.

In the event of less-than-expected revenue collection from the MRT lines moving forward, the government will have to intervene to repay the sukuk holders.

The current ruling government believes that RM199.1bil out of the RM238bil contingent liabilities deserves attention to ensure proper debt repayment.

The 1MDB alone comes with an estimated contingent liability of RM38bil.

High figure: The 1MDB alone comes with an estimated contingent liability of RM38bil. — Reuters
High figure: The 1MDB alone comes with an estimated contingent liability of RM38bil. — Reuters 

On the remaining government guarantees, the Finance Ministry says they have been provided by “entities which are able to service their debts such as Khazanah Nasional Bhd, Tenaga Nasional Bhd and MIDF”.

Apart from contingent liabilities, there are several major “hidden” debts, which do not fall under both direct liabilities and contingent liabilities.

An economist with a leading investment bank in Malaysia calls the debts “off-off-balance sheet” government debt.

These are the future commitments of the federal government to make lease payments for public-private partnership projects such as schools, roads and hospitals.

Examples of such debt would include the debt of Pembinaan PFI Sdn Bhd, a company owned by the Finance Ministry. Pembinaan PFI was established in 2006 under the previous Tun Abdullah Ahmad Badawi administration to source financing to undertake government construction projects.

According to its latest available financial statement for 2014, Pembinaan PFI held a total debt of RM28.75bil.

Interestingly, at end-2012, the company’s debt was the third highest among all government-owned entities, just behind Petronas (RM152bil) and Khazanah Nasional (RM69bil).

With no independently generated revenue, the interest payments on Pembinaan PFI’s debts would eventually come from the federal government’s coffers.

The Finance Ministry puts the debt under this third category at RM201.4bil.

All together, Malaysia’s debt and liabilities are said to amount to a total of RM1.09 trillion.

Actually, for those in the loop, the different debt categories and total liabilities are not something new.

Lawmakers from Pakatan Harapan, particularly current Bangi MP Ong Kian Ming, have alerted the authorities about the debt figures over that past few years.

Ong is also currently the special officer to the Finance Minister. The layman might ask, what was the former government’s relevance of classifying these debts into separate off-balance sheet items?

The motive is to make sure the national balance sheet looks healthy and lean.

Economists’ take

Many have questioned the new government’s move to lump contingent liabilities and debt obligations with the direct liabilities. It should be noted that as per the standard procedure of credit rating agencies, only the direct liabilities are taken into the calculation of the debt-to-GDP ratio.

In a StarBiz report this year, Moody’s Investors Service sovereign risk group assistant vice-president Anushka Shah said that by carving out certain expenditures off its budget, the government would be able to optimise its expenditure profile and minimise the associated impacts from its spending.

However, she pointed out that Malaysia’s federal government debt burden remains elevated at 51%, relatively higher than the median of other A-rated sovereign states at 41%.

On the country’s contingent liabilities, Anushka described them as “low-risk” at the current level, and added that the government has been prudent and careful in managing the guaranteed debts.

“We find that the government has adopted rigorous selection criteria when it grants the guarantees to the respective entities.

“The companies which have received guarantees from the government are relatively healthy and have strong balance sheet positions,” she said.

Ever since Dr Mahathir shocked the market with the “RM1 trillion debt” remark, the focus among Malaysians has largely centred on the nominal value of the debt.

A greater emphasis should instead be given on “debt sustainability”, which basically refers to the growth of debt against the growth of the economy.

Economists who spoke to StarBizWeek have mixed opinions on the level of seriousness of Malaysia’s public debt problem.

Suhaimi: Malaysia’s debt has risen faster than economic growth.
Suhaimi: Malaysia’s debt has risen faster

than economic growth.

According to Maybank group chief economist Suhaimi Ilias, Malaysia’s debt has risen faster than economic growth over the last 10 years.
“In the past decade, officially published government debt and government-guaranteed debt have risen by 10% and 14.5% per annum, respectively, faster than the nominal GDP growth of 7% per annum, which raises valid sustainability risk.“On the government’s debt service costs relative to the operating expenditure, the ratio was 12.7% as at end-2017 and based on Budget 2018 is projected to rise to 13.2%. It has been rising steadily from 9.5% in 2012.

“There is a 15% cap on this under the administrative fiscal rule, while the 11th Malaysia Plan target is to lower the ratio to 9.8% in 2020. The government is looking at the debt issue from this sustainability perspective in our opinion,” he says.

 

Lee: Malaysia’s rising public debt level warrants close monitoring.
Lee: Malaysia’s rising public debt level

warrants close monitoring.

Meanwhile, Socio-Economic Research Centre (SERC) executive director Lee Heng Guie says that various indicators of debt burden suggest that Malaysia’s rising public debt level warrants close monitoring to contain the long-term risks of fiscal and debt sustainability.

“High levels of government debt over a sustained period will have economic and financial ramifications over the longer term. Rising public debt could crowd out private capital formation and, therefore, productivity growth.

“This occurs through the competition for domestic liquidity, higher interest rates, a shifting of resources away from the private sector or investment in low-impact projects. This situation is made worse if the government wastes borrowed money on unnecessary projects,” he tells StarBizWeek.

In contrast to Suhaimi and Lee, Alliance Bank Malaysia Bhd chief economist Manokaran Mottain points out that Malaysia’s debt sustainability scenario is yet to be a cause for concern.

 

Manokaran: Debt sustainability scenario is yet to be a cause for concern.
Manokaran: Debt sustainability scenario is

yet to be a cause for concern.

This is because debt repayments are made on an annual basis as opposed to a colossal one-off payment of RM1 trillion.

“Malaysia’s economic growth of above 5% is sufficient to cover government debt. As long as the economy is growing while the government is able to service the debt charges, it is not really that alarming.

“Even in the United States, the government debt-to-GDP level exceeds 100% at US$21 trillion against the real GDP of US$18.57 trillion,” he says.

Manokaran adds that while total government debt has risen over the years, Malaysia’s annual debt growth rate has been growing slower in recent years.

Deleveraging Malaysia

The government must now move fast to introduce measures to reduce and manage the country’s debt levels. This is highly crucial in assuring creditors and investors that the country’s fiscal health remains uncompromised.

Given the fact that the world is currently at the tail-end of the 10-year economic cycle, it is timely for the government to focus on its ability to fulfil its debt obligations.

In the event of an economic turmoil, a heavily-indebted country would be adversely affected.

Lim has emphasised the federal government’s commitment to honour all of the country’s debts.

“This new government puts the interest of the people first, and hence, it is necessary to bite the bullet now, work hard to solve our problems, rather than let it explode in our faces at a later date,” he said in a statement earlier.

Economists believe that the government must strictly embark on reforming the national expenditure in carrying out debt consolidation.

This includes cutting down on unnecessary expenditure, plugging leakages in the federal government’s finances and containing public-sector wage bills.

Lee has recommended an overhaul the current pension system, considering the unsustainable current trend.

“On revenue reform, the design of tax policy should be fair and equitable in order to be sustainable.

“The push for a wide and investment-friendly reform to boost potential growth should be expedited, as strong investment and economic growth has a huge effect on enhancing revenue growth and reducing public debt.

“On budget planning and development, an oversight body needs to be set up to ensure better fiscal rules, budgetary processes and closer fiscal monitoring to ensure fiscal discipline,” says Lee.

Manokaran says the new government should consider expenditure cuts through the privatisation and reformation of the numerous government-linked corporations, as well as the reduction in size and budget allocation of the Prime Minister’s Office.

On the national mega-infrastructure projects, Manokaran and Suhaimi say that the renegotiation and review of such projects will be vital in managing future debt growth.

Time will tell whether the government can live up to its promise of reducing the public debt dilemma. Pakatan must now balance its “populist” electoral promises and stellar fiscal management policies.

As for now, the government deserves to be complimented for calling a spade a spade, acknowledging the problem at hand.

By ganeshwaran kana The Star

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RM7bil to bail out 1MDB, CEO Arul Kanda utterly dishonest & untrustworthy said Finance Minister


PUTRAJAYA: On top of paying RM6.98bil to bail out 1Malaysia Development Bhd (1MDB), the Government is now facing the prospect of forking out an additional RM953mil to service the company’s debts by November.

“I have been informed that besides the RM142.75mil due at the end of this month, another RM810.21mil worth of interest is due between the months of September and November in 2018,” Finance Minister Lim Guan Eng told reporters after being briefed by ministry officers.

Lim, who was shocked at the revelation, added that the ministry had been bailing out 1MDB by servicing its debts since April 2017, which included payments for International Petroleum Investment Corp’s (IPIC) settlement agreement amounting to RM5.05bil.

“This confirms the public suspicion that 1MDB had essentially deceived Malaysians by claiming that hit had paid via ‘successful rationalisation exercise’.

“It has been the ministry that has bailed out 1MDB,” he said.

He also said the previous government had conducted an exercise of deception with regard to 1MDB and even misrepresented the financial situation to Parliament.

Lim said 1MDB’s chief executive officer Arul Kanda Kandasamy, and directors Datuk Kamal Mohd Ali and Datuk Norazman Ayob will be grilled to determine the company’s state of affairs and its ability to service its debts.

He said officers from the ministry would conduct a detailed study on 1MDB’s debts and liabilities aimed at resolving the “crisis created by the scandal”.

“We will also submit our findings to the 1MDB task force formed by the Prime Minister,” Lim said.

Asked what was the full extent of 1MDB’s debts and liabilities, Lim said this would only be known with full access to files and accounts which had been previously barred or blocked to auditors.

He added 1MDB had contributed to the nation’s debts. – The Star

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Penang’s eight transport plans unfulfilled, Not even one commenced work, says Teng


https://youtu.be/GL2DRy_6PpU

 

Hard questions: Teng holding up leaflets highlighting ‘51 Empty Promises’ of the state government.

GEORGE TOWN: From a monorail over Penang Bridge to the undersea tunnel project, the state has not delivered any of them, said Penang Barisan Nasional chairman Teng Chang Yeow.

“Between 2008 and 2016, there were public transport proposals from a tram, a monorail, Penang Sky Cab, aerobus between the island and mainland, light railway transit, cable car and underground subway to underground mass rapid transit.

“Eight promises made but until today, not even one has commenced work,” Teng told a press conference yesterday.

In November 2008, a few months after helming the state, Chief Minister Lim Guan Eng said the state was considering adding a hanging monorail along Penang Bridge, among other transport projects.

Teng brought up these unfulfilled transport projects yesterday.

He also maintained that the state could cancel the Penang undersea tunnel project because there was no clause in the agreement to pay compensation for cancellation.

“I am shocked that Chief Minister Lim Guan Eng said I should pay compensation if the project is cancelled.

“The question is why the state government still refuses to cancel the contract.

“With so many missed deadlines and no construction after five years and the tunnel feasibility studies not completed, we wonder why the state government still refuses to cancel the project.”

Teng was responding to Lim who said on Wednesday that when a signed contract was cancelled, there must be some sort of compensation – The Star

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More worms open up from Penang Undersea Tunnel project as Datuk Seri photos hots up


Pricey seizure: The luxury vehicles,
(clockwise from top left) a Toyota Vellfire, a Mercedes-Benz, a Land
Rover and a Hyundai Starex, seized from the Datuk Seri.
Happy meeting: In a picture that has appeared in cyberspace, Lim and the ‘Datuk Seri’ are seen in the back seat of a car.

PETALING JAYA: Another photo of Lim Guan Eng with a man who resembles the Datuk Seri being investigated by the Malaysian Anti-Corruption Commission (MACC) has emerged on cyberspace.

The photo shows the Penang Chief Minister and the 37-year-old Datuk Seri who is being investigated for allegedly receiving RM19mil to “help settle” the MACC’s probe on Penang’s controversial undersea tunnel and three highways project.

The photo was taken in a car with Lim and the Datuk Seri together in the back seat, both smiling widely. A caption that went with the photograph claimed that it was taken in August last year.

In early March, a photo of Lim and the Datuk Seri showing both of them wearing socks but no shoes standing on a carpeted floor, went viral.

The photo is believed to have been taken at a private residence.

MCA publicity spokesman Datuk Seri Ti Lian Ker pointed out that when the first photograph emerged on social media, the chief minister conveniently brushed it off, claiming that he had taken photographs with numerous personalities and denied having any dealings with the Datuk Seri.

“He even retaliated by showing a picture of the same Datuk Seri posing for a photograph with Star Media Group managing director and CEO Datuk Seri Wong Chun Wai.

“Wong responded by saying that there were many pictures of him taken with people he barely knew at events he attended and noted he was wearing shoes in the photograph,” Ti said in a statement.

But now with a second photograph of Lim and the Datuk Seri emerging so soon, Ti said, “so, what is Guan Eng’s excuse this time?”

Datuk Seri photo issue hots up

Pictured response: Lim revealing the pictures of the Datuk Seri’s wife with a Barisan leader at a press
conference in Komtar, Penang.

PETALING JAYA: Lim Guan Eng’s refusal to come clean on his relationship with the Datuk Seri being investigated for graft and his “revelation” of photos of the latter’s wife with Barisan leaders are acts of desperation, says Barisan Nasional Strategic Communications deputy director Datuk Eric See-To.

He slammed the Penang Chief Minister for not explaining his relationship with the Datuk Seri, who allegedly received RM19mil to help close the Malaysian Anti-Corruption Commission (MACC) investigation files on Penang’s RM6.34bil undersea tunnel and three paired roads project.

“Firstly, the wife is a media personality whose job would invariably include meeting government leaders.

“Secondly, those photos were uploaded to her public social media account by her, unlike Guan Eng,” he said.

Two photos of Lim and the Datuk Seri have emerged so far.

The first showed both wearing socks, but no shoes, standing on a carpeted floor, while the second was a wefie of both men smiling widely in the back seat of a car.

At a press conference in George Town yesterday, Lim distributed photos of the Datuk Seri’s wife with Barisan leaders to the press in response to the claims that he was close to the Datuk Seri.

“Looking at so many photos of his wife with Barisan leaders, it is clear that both of them are strong Barisan supporters.

“Do not throw stones when you live in glass houses,” Lim said.

However, See-To pointed out that none of the two Barisan ministers who took the photos with the wife had any involvement in the controversial Penang project.

“The Chief Minister’s office had brushed off the first photo implying that he is not close to the suspect, only for a second one to emerge which shows that the relationship is deeper than his office suggested,” he said.

Meanwhile, Lim also told the press conference that the wefie of him and the Datuk Seri was taken with the latter’s handphone.

He added that the real question was who leaked the photos when only the Datuk Seri had them in his handphone.

“Even I do not have them,” he said.

Lim reiterated that he had “taken many photographs with many personalities” and could not recall how many times or where they were taken.

He said there may be more photos of him and the Datuk Seri, the latter’s wife and family members.

“Does taking photos with him, his wife and family make us close buddies?” he asked.

On the same issue, Datuk Seri S. Vell Paari called on Penang Deputy Chief Minister II Dr P. Ramasamy to stop being an apologist for Lim.

The MIC treasurer-general said Dr Ramasamy should have joined him in questioning Lim’s role in the Penang project.

“Ramasamy should now be brave and encourage his boss to make police reports if those two photos are fake, or he should insist that his boss sue me if he believes I had slandered him,” he said in a statement.

Vell Paari claimed that he knew with certainty that the first photo was taken at the Datuk Seri’s lavish house in Petaling Jaya in July last year.

He also claimed that the wefie of Lim and the Datuk Seri was taken in August last year.

The car belongs to the owner of the special purpose vehicle set up for the tunnel project, he claimed.

MIC wants Lim to explain relationship with Datuk Seri

Vell Paari appointed as new MIC Treas

PETALING JAYA: Penang Chief Minister Lim Guan Eng must explain his relationship with a Datuk Seri being investigated in the Penang undersea tunnel project graft probe, said MIC treasurer-general Datuk Seri S. Vell Paari.

Vell Paari said Lim and his party DAP had a duty to the Indian community to “explain” their relationship with this suspect, who had “betrayed the trust of and cheated” the community.

“That suspect is involved in a case where many Malaysian Indians were cheated of their hard-earned money and savings.

“Datuk R. Ramanan and I had exposed him less than two years ago.

“As such, many individuals who are familiar with the suspect have told me that the photo of the Penang Chief Minister with the suspect was indeed taken in the lavish private home of the suspect,” said Vell Paari.

He said Lim and DAP must explain “when and why” the chief minister had visited the suspect’s house.

The 37-year-old Datuk Seri is being investigated by MACC for allegedly receiving RM19mil from the project’s main contractor Consortium Zenith Construction to “help settle” the commission’s probe into the controversial RM6.34bil project comprising an undersea tunnel and three main highways.

Lim’s office subsequently issued a statement saying that linking the Chief Minister to the Datuk Seri was a “disgusting smear attempt”.

“What dealings or businesses does he have with this Malaysian Anti-Corruption Commission suspect?

“If the photo was indeed not from the suspect’s house, the Penang CM and DAP are more than welcome to sue me,” said Vell Paari.

Sources: The Star

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When tongues wag and tales grow: be aware of politicians gone to the dogs!


With the GE imminent, politicians are already snarling at each other, hoping to score points early.

I love dogs. I’ve always had one, from since I was a child, and now, I have three – two Siberian huskies and a poodle.

Despite their differences – in age and breed – they truly love each other, and it’s a real blessing to have this trio of girls in our family.

But I can’t echo that sentiment for some of our politicians. Politics in Malaysia has gone to the dogs. The concerned players are already in dog fights and the general election hasn’t even been called yet.

It’s still early days, although everyone reckons polling is on the horizon. And we’re all too familiar with the dog-eat-dog nature of politics.

Politicians are already snarling, slobbering and barking at each other. Everyone seems to be calling each other liars and running dogs daily.

Therefore, this has left many of us confused. Who is telling the truth? The incessant snapping doesn’t seem to be seeing an end. There is no light at the end of the tunnel, so to speak.

Well, it was the Penang undersea tunnel that got the ball of nastiness rolling. There’s no resolution in sight, for sure, and if you think we should only cross the bridge when we get there, forget it. It’s under-utilised, at least one of them, anyway.

Well, as the saying goes, every dog has its day, but at some point, it’s going to be dog-gone for any politician who can’t stick to the truth or remember the lies he told. For certain, it will be one hell of a dog day afternoon when that happens.

Meanwhile, opposition leader Tun Dr Mahathir Mohamad has been criss-crossing the country telling his audience that Malaysia will go to the dogs if Datuk Seri Najib Tun Razak remains Prime Minister. Yes, those are his exact words – go to the dogs.

There’s still plenty of fire in his belly, like a dog with a bone on issues, although he called off a few functions last week, presumably because of health reasons.

On Friday night, he was admitted to the National Heart Institute. Guess he must be dog tired. He’s still a crowd puller and has the knack of explaining issues in simple language and in a low, calm voice, as opposed to the thunder and lightning approach favoured by his DAP partners.

His deadpan expressions and trademark sarcasm are enough to draw laughter and keep the crowds entertained. But he has been continuously dogged by the ghosts of his past. The palaces are in an unforgiving mood for what he has done previously, when he was at the helm for 22 years.

It was Dr Mahathir who launched the campaign to amend the Federal Constitution to remove the Sultans’ immunity in the 1990s.

Dr Mahathir has also been asked to return his DK (Darjah Kerabat Yang Amat Dihormati) title, the highest award in the state, which was conferred on him in 2002. The move by the Kelantan palace to revoke the Datukships of two top Parti Amanah Negara leaders from the state has sent ripples through political circles.

Amanah vice-president Husam Musa and his state chief, Wan Abdul Rahim Wan Abdullah, returned their titles to the palace several days ago after being instructed by the State Secretary’s office to do so.

In December, Dr Mahathir returned the two awards he received from the Selangor Sultan, a move believed to be related to the palace’s outrage over his remark on the Bugis, whom he describes as pirates, irking many, including several Sultans.

The chairman of Parti Pribumi Bersatu Malaysia (Pribumi) was the recipient of two medals of honour from then Selangor Sultan in 1978 and 2003. One of them was the Darjah Kebesaran Seri Paduka Mahkota Selangor (SPMS) (First Class).

Dr Mahathir reportedly told a Pakatan Harapan rally that Malaysia was being led by a prime minister who is a descendant of “Bugis pirates”.

That comment triggered outrage from the Johor Palace, Bugis community and associations in Malaysia, and even from some parts of Indonesia.

Selangor Ruler Sultan Sharafuddin Idris Shah was also incensed by Dr Mahathir’s remarks in an interview with The Star.

Last January, the Sultan of Johor said he was “deeply offended and hurt” by the political spin used by certain politicians against mainland Chinese investments in the state, saying if left unchecked, would drive away investors. A visibly upset Sultan Ibrahim Ibni Almarhum Sultan Iskandar singled out the nonagenarian for “putting political interests above Malaysian interests, particularly Johor”.

To put it simply, it appears that Dr Mahathir has run into serious problems with the powerful Rulers, and anyone who understands Malay politics will surely appreciate the relationship between the executive and the Rulers.

The Pakatan Harapan may feel that they should unleash our former PM since he was their top dog to best reach the Malay audience, but plans have run aground somewhat.

Politicians come and go, but Rulers remain, at least for longer than politicians. Rulers determine the laws, in many ways, and it would be foolish for a politician to take on these highly-respected royalty.

It will be hard for Dr Mahathir’s younger party colleagues to communicate with him – he comes from another generation all together. And as the adage goes, it’s hard to teach old dogs new tricks. He’s known to be stubborn and one who will doggedly talk about the issues of his choice.

The odd situation is that it is unlikely that any of the Pakatan Harapan leaders will come out openly to defend him. It’s a classic case of tucking their tails between their legs, with the whining kept private.

It’s truly the Year of The Dog. Let’s hope the GE will be called soon because most Malaysians just want to get it over and done with. We have already let the dogs out, and we hope to bring them home soon!

A happy Chinese New Year to all Malaysians celebrating. Gong Xi Fa Cai.

Wong Chun Wai

Wong Chun Wai

Wong Chun Wai began his career as a journalist in
Penang, and has served The Star for over 27 years in various capacities nd roles. He is now the group’s managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly
without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.
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