Judged on merit and nothing less


It’s official: The Yang di-Pertuan Agong  Sultan Muhammad V presenting the letter of appointment to Malanjum at
Istana Negara. Looking on is Prime Minister Tun Dr Mahathir Mohamad. —Bernama

Judicial diversity and meritocracy are inseparable in order to win the faith of society. The appointment of Tan Sri Richard Malanjum, a Sabah-born Kadazandusun, as the top judge is a first for a non-Malay Malaysian and is welcomed as a major step towards winning greater confidence in the Judiciary, CHELSEA L.Y. NG writes.

IT’S a fairy tale come true for some Malaysians banking on a better Judiciary grounded on merits when news of Tan Sri Richard Malanjum having been sworn in as the ninth Chief Justice of Malaysia started to trickle down to the media late Wednesday evening.

Just several hours before that, the witty Malanjum had brushed off talk of him being selected as the next top judge.

“Itu cerita dongeng (It’s a fairy tale),” he told reporters in Kuching before walking off quickly.

But by then there were already some pictures of him attending an alleged rehearsal session being circulated among a few privileged ones.

Well, going by some of the not-so-welcoming responses from those who thought that the position was reserved for only Malay judges, the initial hush-hush circumstances were understandable.

But we cannot really fault those who think the positions are reserved purely for Malays. If you have only been exposed to Chief Justices (CJ, top post) and Chief Judges of Malaya (CJM, top three) after 1994, then you might be forgiven for thinking that the posts are for Malaysians of Malay origin only (see lists of LPs and CJs).

In the last two decades, top posts had been taken by Malay judges but if we look further back, the situation was much different prior to 1994. There used to be a good mix of judges from different races at least for the CJM post, which was then known as the Chief Justice of Malaya (a No.2 post then and not to be confused with the current CJ post, which is a top post). The top judge was known as the Lord President (LP) then or Lord President of the Supreme Court in full.

The LP position was created after the abolition of appeals to the Judicial Committee of the Privy Council in 1985.

Below the LP were the Chief Justices of the High Courts of Malaya and Borneo.

 

In 1994, the LP was renamed CJ when the Supreme Court reverted to the name of Federal Court, which was the name used prior to 1985 but with the Privy Council as the highest authority.

In 1994, Parliament amended the Federal Constitution and approved a reorganisation of the court system and significantly set up the Court of Appeal as the second highest court and renamed the highest court Federal Court (previously Supreme Court). After 1994, there was a new No.2 position created called the President of the Court of Appeal. The CJM hence moved to the third position.

For senior lawyer Datuk Roger Tan, judicial diversity is an essential element.

“It is pivotal in creating confidence in a multi-racial society. Diversity can be on the grounds of race, religion and gender.

“In Britain, they just had the first female President of the Supreme Court in hundreds of years,” said Tan.

Lawyer Fahri Azzat said there is nothing in the Constitution that demands that a Chief Justice, President of the Court of Appeal or the Chief Judge of Malaya must be of Malay heritage, or dictates that the racial composition of the Federal Court or even the Court of Appeal contain a majority of citizens of Malay heritage.

In fact, Article 123 of the Federal Constitution which deals with the qualifications to be a High Court judge and above provides the following:

A person is qualified for appointment und

er Article 122B as a judge of the Federal Court, as a judge of the Court of Appeal or as a judge of any of the High Courts if –

(a) he is a citizen; and

(b) for the 10 years preceding his appointment he has been an advocate of those courts or any of them or a member of the judicial and legal service of the Federation or of the legal service of a State, or sometimes one and sometimes another.

For Fahri, that a persistent racial pattern at the appellate courts continues in the Judiciary suggests that race is a more influential factor than abilities or merits when it comes to the appointment and promotion of a judge.

Fahri even wrote about it in 2010 on the LoyarBurok website about the racial composition of the Judiciary.

“Any litigator who is in the thick of litigation practice in our civil courts will acknowledge that at the level of top senior counsel, the composition is the opposite of the nation’s racial population.

“Where top senior legal counsel are concerned, the ratio of Malaysians of Indian heritage are highest as compared to those of Chinese heritage who come in second as compared to those of Malay heritage who have the lowest numbers. That is how I know it to be from experience and conversation,” Fahri wrote then.

However, on Malanjum’s appointment, Fahri has this to say: “I think it is a step or start in the right direction. Whether it closes the gap in terms of judicial diversity and meritocracy remains to be seen with subsequent appointments of both the top judges and the High Court judges.

“I think it will be the starting point for the public to renew its faith in the Judiciary but that again remains to be seen from their judgments, judicial statements and the Judiciary’s actions collectively.

“Just as a swallow does not a summer make, a few judicial appointments do not guarantee rejuvenation of the Judiciary,” he said, adding that these positive developments if seen through over the long term will help foster faith and trust in the Judiciary and the administration of the justice system as a whole.

Retired Federal Court judge Datuk Seri Gopal Sri Ram said the appointment is definitely a welcome move and expected to improve the Judiciary.

“This is the first time we have a non-Malay being made a top judge. Prior to this we had non-Malay judges being appointed to the second highest positions. But that was before 1994.

“From the time of independence until then, no one had looked at the appointments on racial or religious angle. Only in recent times did people start to do so.”

He named a few prominent top judges then such as Tan Sri H.T. Ong, Tan Sri S.S. Gill and Tan Sri Gunn Chit Tuan.

“Richard’s appointment verifies the oneness of Malaysia. That there is only one Malaysia. That there is no East Malaysia or a West Malaysia,” said Sri Ram.

Sultan of Perak Sultan Nazrin Shah had in his special address at the book launch of Tun Arifin Zakaria last year mentioned a valuable quote by his father Sultan Azlan Shah, who was also a respectable Lord President.

“I quote, ‘The rules concerning the independence of the judiciary … are designed to guarantee that they will be free from extraneous pressures and independent of all authority, save that of the law. They are, therefore, essential for the preservation of the Rule of Law,” he said.

The Sultan hit the nail on the head. Justice and judges should be free from any extraneous pressures and everything has to be based on the merits of the law.

The Ruler had on the same occasion called on Federal Court and Court of Appeal judges to write dissenting judgments if they do not agree with the majority of the Bench.

“Sometimes, the brave dissenting voice is transformed into law. A classic case is that of Brown v. Board of Education 347 US 483 (1954) when the US Supreme Court gave weight to the spirit of Justice Harlan’s dissenting voice in Plessy v. Ferguson 163 US 537 (1896).

“As a result, and in a historic judgment, then-chief justice Warren held that racial segregation in public schools constituted a violation of the US constitutional guarantee of equality of rights,” he said.

The Sultan added that judges should be free to express reasons in their judgments as they thought fit, and in other words, for the Rule of Law to flourish, courts and their participants should be allowed to express a variety of ideas and principles.

In the case of Malanjum, some critics even brought up the point that he was not qualified to be made the Chief Justice because of his dissenting judgments in the case of Lina Joy and the use of the Allah word in the Bible.

In Lina Joy, she lost a six-year battle in 2007 to have the word Islam removed from her identity card after the Federal Court dismissed her appeal in a majority decision.

In his dissenting judgment, Malanjum said the department responsible for issuing identity cards should have just complied with Lina Joy’s request to remove the word from her IC. He accused the National Registration Depart­ment of abusing its powers.

“In my view, this is tantamount to unequal treatment under the law. She is entitled to an IC where the word Islam does not appear,” Malanjum said.

In the second case, the Federal Court was divided again with Malanjum dissenting and arguing that the Constitution must remain the supreme law of the land.

In his column, constitutional law expert Prof Dr Shad Saleem Faruqi had also written about Malanjum’s boldness in voicing out his stand and daring to dissent.

According to Dr Shad, in PP v Kok Wah Kuan in 2008, the Federal Court had in a majority judgment “mocked the doctrine of separation of powers as having no legal basis” in the Constitution.

The judgment went further to say that the power of the courts was limited to whatever Parliament bequeathed.

“Fortunately, there was a bold dissent from Malanjum, our Sabah and Sarawak Chief Judge, who insisted that separation of powers and judicial independence are firm pillars of our constitutional edifice.

“He rejected the view that ‘our courts have now become servile agents of a federal Act of Parliament and that the courts are now only to perform mechanically any command or bidding of a federal law’.

“Justice Malanjum was eminently correct on both scores. A Consti­tution is not mere words written on paper,” Dr Shad wrote in his column.

These words by the eminent professor were enough to back Malanjum as a strong guardian of the rule of law and is definitely fitting for the grand position of a Chief Justice.

Enough said, time will tell if we have taken the right path.

Related story:
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Najib arrested, charged and pleaded not guilty


 

Former premier Najib Abdul Razak was arrested at his residence in Jalan Duta, Kuala Lumpur, this afternoon, according to MACC chief commissioner Mohd Shukri Abdull.

The arrest was carried out in relation to the commission’s investigation into the SRC International issue.

Speculation is also rife that the former premier could be charged tomorrow.

Shukri Abdul told the media that the arrest took place at 3pm and the former premier has been taken to the commission’s headquarters in Putrajaya for further questioning.

Previously, MACC had recorded Najib’s statement twice with regard to the SRC International issue.

Last Friday, Malaysiakini had reported that there is a strong likelihood the former premier would be arrested this week.

Malaysiakini logo

[More to follow]

LIVE: Najib arrives in court

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Govt Linked Companies (GLCs) – Monsters in the house?


Politicians should not be appointed to run government-linkedv companies (GLCs) to keep graft in check, said Malaysian Anti-Corruption Commission Advisory Board Chairman Tunku Abdul Aziz Tunku Ibrahim.He  said politicians holding GLC positions might face conflicts of interest, ading to abuse of power and responsibility.

ABOUT a month before Malaysia’s  parliamentary election in May,
then-opposition leader Tun Dr Mahathir Mohamad raised concerns over the
role that government-linked companies (GLCs) were playing in the
economy, being “huge and rich” enough to be considered “monsters”.

Data support his description – GLCs account for about half of the  Benchmark Kuala Lumpur Composite Index, and they  constitute seven out of the top-10 listed firms in 2018. They are present in almost every sector, sometimes in a towering way. Globally, Malaysia ranks fifth-highest in terms of GLC influence on the economy.

Calls to do something about GLCs have   increased since the election following the  release of more damning information, although most of it relates to the GLCs’ investment arm: government-linked investment companies (GLICs).

Some experts have proposed the formation of an independent body with
operational oversight for GLICs, after institutional autonomy is established and internal managerial reforms are introduced. Unlike most GLCs, GLICs are not publicly listed and face little scrutiny. The same applies to the various funds at the constituent state level, which need to be looked at too.

For GLCs, the answer is less straightforward. PM Tun Mahathir claims that GLCs have lost track of their original function. Before the Malaysian government decides on what to do, it needs to examine the role GLCs should play – as opposed to the role they currently play – and to examine their impact on the economy.

In Malaysia, GLCs were uniquely tasked to assist in the government’s affirmative action program to improve the absolute and relative position of bumiputras. The intention was to help create a new class of bumiputra entrepreneurs – first through the GLCs themselves, and then through a process of divestment.

Given the amounts of money involved and the cost of the distortions introduced, the benefits to bumiputra were unjustifiably small and unequally distributed. The approach of using GLCs as instruments of affirmative action failed because it led to a rise in state dependence, widespread complacency and even corruption, as Tun Mahathir himself recognised in his memoirs, A Doctor in the House, and again more
recently. There is also empirical evidence that GLCs have been crowding out private investment, a concern raised in the New Economic Model as early as 2011.

Additionally, the new government has correctly highlighted the need to include certain off-balance-sheet items and contingent liabilities, such as government guarantees and public-private partnership lease payments, in any complete assessment of debt outstanding. The use of offshoot companies and special purpose vehicles (SPVs) in the deliberate reconfiguration of certain obligations mean that traditional debt calculations underestimate Malaysia’s actual debt.

All these factors combine to place new impetus on reconsidering the extent of government involvement in business. Divestment will not solve  Malaysia’s debt problem, but it can help if there are good reasons to pursue it. So how should the government proceed?

It is important to recognise at the outset, that there is a legitimate role for government in business – providing public goods, addressing market failures or promoting social advancement. And like in most other countries, there are good and bad GLCs in Malaysia. If a GLC is not crowding out private enterprise, operates efficiently and performs a social function effectively, then there is no reason to consider  divestment. But a GLC that crowds out private investment in a sector with no public or social function, or one that is inefficiently run, should be a candidate for divestment. In this regard, one has to carefully study why GLCs should be present in retail, construction or property development, for instance.

In assessing performance, one needs to separate results that arise from true efficiency, versus preferential treatment that generates artificial rent for the GLC. The latter is a drain on public resources and a tax on consumers. Divestment in this case, will likely provide more than a one-off financial injection to government coffers – it will provide
ongoing benefits through fiscal savings or better allocation of public resources.

The divestment process should be carefully managed to ensure that public assets are disposed at fair market value, and does not concentrate market power or wealth in the hands of a few. This has allegedly happened with privatisation efforts in the past.

The new government has committed itself to addressing corruption and improving the management of public resources. As part of this process, one must re-examine just how much government is involved in business. This is one of the many tasks that the Council of Eminent Persons is undertaking in the first 100 days of the new government.

To be done correctly, would require a careful study of GLCs and their impacts. This could then rejuvenate the private sector while enabling  good GLCs to thrive, and fortify Malaysia’s fiscal position in the process. This is what Malaysians should expect – and indeed demand – of the “New Malaysia”.

Jayant Menon is Lead Economist in the Economic Research and Regional Cooperation Department at the Asian Development Bank. This is an abridged version of an item that first appeared on the East Asia Forum.

Jayant Menon The Sundaily

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Malaysia’s Mess is more than 1MDB:Umno’s Misrule vua GLCs

 GLCs crowding out private investment, says ADB economist

One billion and counting – Nation | The Star Online

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On the rise: A man walks past the Employees Provident Fund headquarters in Kuala Lumpur. Remuneration of GLC chiefs, senior managemen

Govt-linked companies (GLCs) shake-up as they sing a different tune


EPF Building in Kuala Lumpur.- Art Chen / The Star..
On the rise: A man walks past the Employees
Provident Fund headquarters in Kuala Lumpur. Remuneration of GLC chiefs,
senior management and directors have been on the uptrend following a
transformation initiative to make them more competitive commercially. 

 

Overpaid CEOs and social duties of GLCs set for review

The new government has clearly said that there is a need to review the role of GLCs and the remuneration paid out to their top executives

A GLANCE at one of the annual reports of the country’s government-linked companies (GLCs) reveals that its chief human resource officer earned close to a million ringgit or about RM80,000 per month, last year.

Other senior personnel were also compensated with generous remuneration, with its chief executive taking home over one and the half million ringgit in financial year 2017.

More importantly, this was at a company that had courted much controversy in recent times over allegations of mismanagement and under-performance.

Such a scenario, however, is not uncommon at GLCs, where remuneration of key executives tend to run in the millions but performances sometimes leave much to be desired.

By definition, GLCs are companies where the government has a direct majority stake via their entities such as Khazanah Nasional, Employees Provident Fund, Permodalan Nasional Bhd (PNB), the Armed Forces Fund (Lembaga Tabung Angkatan Tentera) and the Pilgrims Fund (Lembaga Tabung Haji).

In recent years, remuneration of GLC chiefs, senior management and its directors have been on the uptrend following a transformation initiative to make them more competitive commercially.

The thinking behind this is that in order to attract talent – subjective as the definition of that may be – top dollar should be paid.

Some, however, argue that GLCs should in fact prioritise national service a little more.

Universiti Malaya’s Faculty of Economics and Administration professor of political economy Edmund Terence Gomez says GLCs have social obligations.

“What this essentially means is that GLCs cannot operate in a purely commercial manner as they also have to look at the social dimension,” he says. “The GLC professionals have many times articulated that they are doing national service. Going on that alone, one can argue that they shouldn’t be paid private sector salaries,” Terence adds.

And so it is now, there is a disquiet building up among GLCs following the change in government.

The new government has clearly said that there is a need to review the role of GLCs and the remuneration paid out to their top executives and senior management.

In this regard, the Pakatan Harapan government is understood to be mulling over making drastic changes in the appointment and remuneration of key directors at GLCs which include government agencies.

It was reported recently that the Council of Eminent Persons, headed by Tun Daim Zainuddin, who was Finance Minister in the 1980s, has requested details of the salaries of some of the top executives at GLCs as part of the review.

Already, there have been a couple of GLC chief executives who have left and more of this is expected to materialise over the coming weeks.

“It appears to be a purge of Tan Sri Nor Mohamed Yakcop’s boys,” quips an industry observer, referring to the veteran politician who was instrumental in the revamp and transformation of Khazanah which started in 2005 and subsequently, driving the GLC transformation initiative.

UM’s Terence says if the new government is to appoint new individuals, it must ensure that the process is transparent.

“If you are removing these people, who are you replacing them with? More importantly how are you selecting these people?

He adds there needs to be a transparent mechanism in the appointment of this new breed of professionals that will be brought in and what must also be looked into is the kind of check and balances being put in place to ensure governance.

“There should be a debate on these things,” he says.

Economist Yeah Kim Leng believes that a review is timely and appropriate as part of a deeper institutional and structural reform.

“The broad aims are firstly, to reduce excessive payoffs which don’t commensurate with performance and secondly, to address the widening wage and benefits gap between the top and bottom rungs of the organisation,” he says.

Such rationalisation will result in a more equitable salary structure as well as raise the generally depressed wages of middle management and support staff which form the largest number of most organisations, Yeah adds.

Unfair advantage

The role of a head honcho, be it at a GLC or non-GLC, is seldom a walk in the park.

CEOs make critical operational decisions that affect everything from future business directions to the health of a company’s balance sheet and employee morale.

The job generally entails long hours and tremendous pressure to meet expectations of shareholders and stakeholders.

But again, while local GLCs have been key drivers of the economy, one key feature is that they are ultimately owned by the government.

This, some argue, give GLCs unfair advantages such as access to cheap funding and political patronage over their private counterparts.

So, is running a GLC more of a stewardship role as opposed to an entrepreneurship role?

Therein lies the issue that in turn will have a bearing on the remuneration levels of GLC heads.

Minority Shareholders Watch Group (MSWG) chief executive office Devanesan Evanson puts it this way.

“Entrepreneurs have their skin in the game in that there are often the major or substantial shareholder in a company.

“It is in their direct interest to perform as this will be translated into share price appreciation which will impact the value of their shareholdings – this is motivation to grow the entrepreneurial spirit,” he says.

On the other hand, GLC heads do not have their skin in the game save for their limited shareholding through ESOS or share grant schemes.

“If a GLC loses money, the impact on them is limited. They may be prepared to take perverse risks as the eventual loser is the government-linked investment companies or GLICs (and the minority shareholders of the GLC), which eventually are the people who are the members or subscribers of the GLICs.

“In that way, we are not comparing apple to apple and yet, we need talent to run GLCs.

“So we can conclude that, we need to pay for talent at GLCs but it should not be as much compared to what one would pay the CEO of a firm which he started,” Devanesan says, noting that remuneration of some of the GLC heads have risen too fast in recent years.

Rising remuneration is a given, others say, as the government had recruited top talent from the private sector to helm these companies.

A case in point is  Axiata Group Bhd , which has done relatively well with the infusion of the “entrepreneurial spirit” under the helm of president and group CEO Tan Sri Jamaludin Ibrahim, who has helmed the Khazanah-owned telco since 2008, they point out.

Prior to that, Jamaludin was with rival Maxis Communications Bhd, a private company controlled by tycoon Ananda Krishnan.

Other GLCs which have performed consistently over recent years include banks like Malayan Banking Bhd
and CIMB Group Holdings Bhd which have expanded their operations out of Malaysia, carving a brand name for themselves regionally.

Under a 10-year transformation programme for GLCs initiated in 2005, companies were given quantitative and qualitative targets to meet as measured by key performance indicators.

Now, the 20 biggest GLCs currently make up about 40% of the local stock market’s market capitalisation.

One of the principles under the programme was also the national development agenda, which emphasised the principle of equal growth and development of the bumiputra community with the non-bumiputras.

Asian Strategy and Leadership Institute (ASLI) Centre of Public Policy Studies chairperson Tan Sri Ramon Navaratnam says the purpose of establishing GLCs to encourage bumiputras to participate in business has largely been fulfilled.

“Now that the bumiputras are on a strong footing in the corporate sector with able leaders who have wide experience, it (GLCs) could be seen as an erosion to the welfare and progress of the smaller and medium-sized industries, particularly those where other bumiputras are involved,” Ramon says.

Having said that, he says although many GLCs are doing well, they have performed well “mainly because of protective policies and monopolistic practices”.

“The time has come in this new Malaysian era for more competition and less protection.”

Benchmarking

Still, if simplistic comparisons are to be made, the CEOs of the country’s two largest GLC banks, Maybank and CIMB for instance, took home less than the CEO of the country’s third largest bank, the non-GLC Public Bank Bhd
last year.

In 2017, Public Bank’s managing director Tan Sri Tay Ah Lek took home some RM27.8mil in total remuneration while Maybank’s Datuk Abdul Farid Alias earned RM10.11mil and CIMB’s Tengku Zafrul Abdul Aziz made RM9.86mil.

Across the causeway, a survey of CEO remuneration of Singapore-listed companies by one financial portal shows that Singaporean GLC CEOs earned 31% more than their non-GLC counterparts in 2017.

Singapore’s Temasek Holdings-owned DBS Bank, which is Singapore’s largest bank, paid out S$10.3mil (RM30.36mil) to its head honcho, while in the telecommunication sector, SingTel’s remuneration to its top executive was some S$6.56mil (RM19.34mil) for the most recently concluded financial year.

By definition, Singapore GLCs are those which are 15% or more owned by the city-state’s investment arm Temasek Holdings.

UM’s Terence does not think Singapore should be a benchmark for Malaysian companies.

“Singapore is a much smaller country and the manner in which they operate in is also different … their GLCs are deeply conditioned by their holding company, which is the Minister of Finance Incorporated,” he says.

MSWG’s Devanesan notes that determining remuneration is “not exactly science” as there are many parameters to be considered.

Some of the factors to note include whether the companies are in a monopolistic or near monopolistic position and the performance of the GLC heads over the years.

“Based on these parameters, we can instinctively know if a GLC head is over-remunerated,” he says. Over in China, state-owned Industrial and Commercial Bank of China (ICBC), the country’s largest lender by assets, paid out about 63.43 yuan or about RM39mil in total remuneration before tax for the year 2017 to its top executive.

Notably, the Beijing-based ICBC’s net profit’s was at a whopping US$45.6bil (RM182bil) in 2017.

Sources: Gurmeet Kaur and Yvonne Tan The Star

GLC singers sing a different tune

Some officials singing ‘Hebat Negaraku’.

 Swan song for some after ‘Hebat Negaraku’ post-GE14 – CEO think video to showcase musical talents

 

 Several heads of government-linked companies (GLCs) have come together bin a heartwarming music video titled “Hebat Negaraku” (my country is great).

 GLC chiefs show off musical talent in ‘Hebat Negaraku’ music video …

The heads of government linked companies (GLC) who sang a song that later became the theme song for the Barisan Nasional’s election campaign have distanced themselves from the controversial music video.

Those who sang and played musical instruments in the music video titled “Hebat Negaraku” (my country is great) said they did not know the video or the song was going to be a political theme song.

There have been repercussions on the CEOs who appeared in the music video. They have come under scrutiny for making a song that was used as propaganda by Barisan in the last general election.

Three of the GLC bosses in the video have either retired or resigned since the new government took over.

Several more have been speculated to leave in the coming weeks or months but nothing is cast in stone. Sources said this is because most of the CEOs are not known to have campaigned openly for either Barisan or Pakatan Harapan.

“None of the CEOs had a clue it would become a political song. Do you really think the CEOs would have done it if they knew it would become political?” asked one of the CEOs who appeared in the video but declined to be named.

“We have said no to so many things, and we could have easily have said no to this if it was political.’’

Another CEO said he was approached and felt it was “more of a patriotic song and nothing more.”

“At that point in time, we did not think much (of the repercussions). Hebat Negaraku was announced as Barisan’s campaign theme long after the recording was made. We did not know that.’’

Another CEO added: “We thought it was a casual thing when we were approached as some of the CEOs have their own band.’’

It all started when several CEOs were called to be part of a music video and they thought it was to showcase the musical talents of 14 GLCs heads, plus staff members of the 20 key GLCs.

The song is about the greatness, advancement and inspiration of Malaysia. It was released on YouTube on March 22 but has since been taken down.

But fingers have been pointed at the GLCs bosses who made the music video because it became a political video.

Datuk Seri Shazalli Ramly has been said to be the main orchestrator for the group in terms of making the music video. He was also said to be the branding chief for Barisan’s elections campaign.

Barisan lost the elections held on May 9 to Pakatan, which has since formed a new government and is scrutinising all the performance, processes, remuneration and procurement of the government and GLCs.

Shazalli quit his job as group CEO of  Telekom Malaysia Bhd (TM) on June 6. Malaysian Resources Corp
Bhd (MRCB) group managing director Tan Sri Mohamad Salim Fateh Din has retired as group MD last week and it was something he had planned to do.  Malaysia Airports Holdings Bhd
Datuk Badlisham Ghazali did not get his contract renewed. All three were in the music video.

There is a GLC secretariat that now comes under the purview of TM, which was earlier parked under Khazanah Nasional Bhd. The secretariat organised the making of the music video, according to sources. The CEOs were called to attend a session and within a few hours it was all done with no prior rehearsals.

“When you are called, it could be difficult not to comply since it is the secretariat that called you. We have to oblige but we really did not know it was going to be a campaign slogan. This is really unfortunate that it has turned out like this.

“We were surprised when we found out it was a party slogan but it had already been done and what can we do, we are in the picture,’’ said another CEO.

Not all CEOs who were invited took part in the video. Prior engagements were the reason used for declining to appear. – By b.k. Sidhu The Star

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Warning to civil servants: stop bodek-bodeking, Serve people and govt of the day or else ..


 

‘Enough with being yes men’ – MACC chiefs warns top civil servants against brown-nosing

The Malaysian Anti-Corruption Commission (MACC) has warned civil servants to stop the culture of bodek-bodeking (brown-nosing) in the public service.

Directors-general and heads of department must stop being “yes men” to ministers and deputy ministers, Chief Commissioner Datuk Seri Mohd Shukri Abdull (pic) said.

“Do your own work and don’t interfere in the tasks of others. In fact, civil servants should consider this a warning – from now on, stop with the bodek-bodeking culture.

“By right, ministers have no authority on projects, they can only create policies. That is why the directors-general and heads of department must be brave enough to say no.

“Do not be ministers’ crutches or their yes men. It does not matter if we get kicked around as long as we are doing the right thing,” he told Sinar Harian.

He said that the separation of powers between the legislative, executive and judiciary should be abided by, and boundaries of autho­rity should be clear at each level.

“Do not ever breach the boundaries of another person’s job scope.

“That can cause chaos,” Mohd Shukri said.

He also said heads of department, especially those in enforcement divisions, must give clear and accurate advice to ministers, deputy ministers and other policymakers.

“Only say yes if you know it’s true, don’t just say yes, yes, yes although the matter may be untrue. You must be brave,” he said, adding that they should refer to the MACC if they were unclear about instructions.

Mohd Shukri also called on directors-general and heads of department to be bold enough to give the right advice as demanded by their rank.

“If you are not brave enough to say no to something that is not right, then it’s better to not hold that position in the first place,” he said.

He suggested the Government appreciate those who have served with integrity and not the kaki bodek (apple polishers), saying the latter group was ruining the country’s system.

“Get angry at me if you want, I am speaking the truth and the truth hurts but it’s worth it.

“Look at the situation now. When misdeeds are exposed, who wants to help? No one. Only we can help ourselves,” he said.- The Star

Wan Azizah to civil servants: Serve govt of the day or else …

 

Concerned Ministers: (from left) Rina, Dr Wan
Azizah and Dr Maszlee speaking to the media during a press conference
after chairing the national Children’s Well-being Roadmap meeting in
Putrajaya. — Bernama

Civil servants must serve the government of the day and not obstruct the workings of the new administration, says Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail.

“It has come to my attention that a small number of civil servants are not supporting, but obstructing, the Pakatan Harapan government.

“This is a warning to those doing so that we expect professionalism from our civil service and for them to serve the government of the day,” she said in a press statement after chairing a meeting for a national Children’s Well-being Roadmap in Putrajaya yesterday.

Her warning follows concerns raised by Prime Minister Tun Dr Mahathir Mohamad earlier this month over the loyalty of civil servants who campaigned for Barisan Nasional during GE14.

On the Children’s Well-being Roadmap, Dr Wan Azizah, who is also Women, Family and Community Development Minister, said that more input was needed from stakeholders to develop strategies and programmes to address pressing issues affecting children.

She highlighted the need to develop a more integrated and coherent approach when dealing with children with growth deficiencies.

“We do not want a piecemeal approach to this,” she said.

Dr Wan Azizah said the roadmap would also cover marginalised, stateless and refugee children along with children who are victims of sexual abuse.

“This inter-ministerial meeting was called to create coordination as well as an expression of political will and our determination to get to the bottom of these problems.

“We can’t claim to be a caring society if we ignore and neglect those who are most in need of care,” she added.

Present at the meeting were Health Minister Dr Dzulkefly Ahmad, Education Minister Dr Maszlee Malik, Rural Development Minister Rina Mohd Harun, representatives from the United Nations Children’s Fund (Unicef) and Home Ministry secretary-general Datuk Seri Alwi Ibrahim.The Star



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Najib is guilty of incompetence, he says: board to be blamed for 1MDB debacle, not me, I don’t know !


Dr M: Najib always assumes people are stupid 

‘Najib assumes M’sians are stupid’

Every bit of money that was borrowed by 1MDB had Najib’s signature, says PM

It is impossible for Datuk Seri Najib Tun Razak not to know of transactions related to 1MDB when his signature was on the documents, says Tun Dr Mahathir Mohamad.

The Prime Minister said he could not believe his predecessor’s claim that he knew nothing about money from the state fund ending up in his personal account.

“Who wants to believe him (that he didn’t know), when he signed (his name)?

“Every bit of money that goes in and out of the first borrowing of RM42bil, all (had) his signature,” said Dr Mahathir.

The amount refers to the total debt accumulated by 1MDB, a fund which was, in fact, founded by Najib in 2009.

“If he doesn’t know, it must be that he doesn’t understand what a signature means,” Dr Mahathir was quoted as saying in an interview with the Malay Mail yesterday.

Dr Mahathir described as “ludicrous” for someone to direct RM2bil to be transferred into his account, while refusing to be informed of the transaction.

“This cannot be. Because I have to sign to use the money.

“To use the money, I have to issue cheques. Najib always assumes that people are stupid,” Dr Mahathir added.

It was previously reported that about US$700mil (RM2bil) was allegedly misappropriated from 1MDB into Najib’s personal account.

In a Reuters report on Wednesday, Najib blamed his advisers and the 1MDB board for keeping the alleged embezzlement information from him.

He said he did not know if hundreds of millions of dollars that moved through his personal account was from 1MDB, and if money from the fund was eventually laundered to acquire assets globally, including yachts, paintings, gems and prime real estate.

To this, Dr Mahathir said the Government had all the information on Najib’s alleged involvement in moving the 1MDB money, and that it knew how much money had gone into Najib’s account.

On Wednesday, the Prime Minister disclosed that the authorities had “an almost perfect case” against Najib for embezzlement, misappropriation of funds and bribery.

1MDB had fallen RM42bil in debt since its inception in 2009, and Dr Mahathir had been at the forefront raising questions on it over the past three years. -The Star

Najib: If I was informed about the troubles the fund was in, I would have acted

He does, though, have explanations for the vast sums of cash, luxury handbags and jewellery recently seized from his homes by the Malaysian authorities.

Speaking to Reuters in his first sit-down interview since his shock May 9 election defeat, Najib said his advisors and the management and board of 1Malaysia Development Berhad (1MDB), had wrongly kept the alleged embezzlement of funds a secret from him.

Newly-elected Prime Minister Tun Dr Mahathir Mohamad told Reuters on Tuesday that the authorities have “an almost perfect case” against Najib on charges of embezzlement, misappropriation and bribery linked to 1MDB.

Najib, in some of his most extensive comments yet on the 1MDB scandal, said he did not know if hundreds of millions of dollars that moved through his personal account was from 1MDB, and if money from the fund was eventually laundered to acquire assets globally, including yachts, paintings, gems and prime real estate.

“I’m not party to the yacht, the paintings…I’ve never seen those paintings whatsoever,” said Najib.

“I was not aware of these purchases. This was done without my knowledge. I would never authorise 1MDB funds to be used for any of these items. I’ve been in government so long, I know what’s right and what’s wrong,” Najib said in the interview held at a luxurious sea-facing private villa in a five-star hotel on Pulau Langkawi.

He blamed 1MDB’s board, saying it was incumbent upon them to tell him if something was wrong.

Relaxing in a black T-shirt and brown pants, Najib said he was enjoying golf, food, and time with his family.

The family booked the villa to celebrate Hari Raya holidays together. Najib’s children, including stepson Riza Aziz, a Hollywood film producer, were with him for the week, his aides told Reuters.

Malaysian investigators looking into 1MDB say they believe that Najib and his wife Datin Seri Rosmah Mansor have amassed vast amounts of wealth and property using funds from the state fund.

Rosmah briefly appeared at the interview but Najib said she would not take questions.

Nearly 300 boxes of designer handbags and dozens of bags filled with cash and jewellery were among the items taken away by police in raids at properties linked to Najib’s family.

Items included Birkin handbags from the luxury goods maker Hermes, each worth up to hundreds of thousands of dollars.

Najib said the public seizure of handbags and other luxury items created a negative perception but most were gifts given to his wife and daughter and had nothing to do with 1MDB.

“Yes these were gifts, particularly with my daughter’s they were tagged, they were actually labelled: when, by whom,” adding that a lot of them were wedding presents.

Najib said his son-in-law Daniyar Nazarbayev, the nephew of Kazakstan president Nursultan Nazarbayev, also gifted many of the handbags to Rosmah.

“People might find it hard to understand, but my son-in-law for example, he gets Birkin from his source, five or six at one go,” he said.

“His family has got some means, so it has nothing to do with 1MDB if it comes from Kazakhstan.”

US prosecutors have alleged that more than US$4.5bil (RM18.02bil) of 1MDB funds were laundered through a complex web of transactions and shell companies. The US Department of Justice (DoJ) has filed several lawsuits to claim about US$1.7bil (RM6.8bil) in assets believed to have been stolen from 1MDB.

Some of the assets sought include a Picasso painting, luxury real estate in South California and New York, shares in a Hollywood production company and a US$265mil (RM1.06bil) yacht, and more than US$200mil (RM800.9mil) worth of jewellery – including a 22-carat pink diamond pendant and necklace.

Najib said this jewellery set was also meant to be a gift for his wife but she never received it.

“And until today we do not know…she says the item is not in her possession,” Najib said.

In the interview, Najib for the first time also spoke at length about Low Taek Jho, a Malaysian financier better known as Jho Low.

US and Malaysian investigators have named Low as a key figure who benefited from 1MDB funds.

Najib said he felt that Low’s connections in the Middle East, particularly with Saudi Arabia and the United Arab Emirates, could be helpful in pulling in more investment to Malaysia from those places.

But he said he had never instructed Low to get involved in 1MDB, and had no control over what he did.

“I didn’t give him instructions, but he volunteered to do certain things, which he thought would help 1MDB. But whatever he did ultimately is the responsibility of the management and board.”

Malaysia is seeking to arrest Low, believed to be residing abroad, for his involvement in the 1MDB scandal.

He described Low and Najib’s stepson Riza as friends but said he was not aware of any dealings involving 1MDB funds in Riza’s Hollywood production company, which produced The Wolf of Wall Street among other movies.

When asked if he was still in touch with Low, Najib said:

“We have cut off communication again. I don’t know where he is.”

Low’s lawyer did not immediately respond to a request for comment.

Najib has consistently denied any wrongdoing in 1MDB. He has said US$681mil (RM2.72bil) transferred into his personal bank account was a donation from Saudi Arabia, and not as US lawsuits have alleged misappropriated funds from 1MDB.

Najib said he had been given assurances from the late Saudi King Abdullah bin Abdulaziz Al Saud that Saudi Arabia would be sending a donation.

“All I knew, I accepted at face value that this is coming from the Saudis, from King Abdullah at his behest, at his instruction,” Najib said. – Reuters

 

Najib: I did not benefit from 1MDB in any way 

 

His say: ‘If anyone is found to be on the wrong side of the law, let the legal process take its course.’

LANGKAWI: Former prime minister Datuk Seri Najib Tun Razak has denied that he benefitted from 1MDB, adding that he believed that the sovereign fund had been created to do “something good for the country”.

“If I knew there was going to be misappropriation of funds, if that was my knowledge, I would have acted,” he said.

To a question if he blamed the 1MDB board for the fund’s troubles, he said:

“No. I am saying as a general principle, if they are in the know that something is not right, then it is incumbent upon them to tell me. It is the fiduciary duty of the board and the management to do the right thing. I expect them to do the right thing and to follow the law.”

He also said that they had no control over what Jho Low – who has been named the main suspect in the 1MDB investigation – did, adding that he could not pass judgment.

“But there are certain things which he may or may not have done. But I am right to say that investigations should proceed and if anyone is found to be on the wrong side of the law, let the legal process take its course.

“No, he was not working on my behalf. All those items he never invoked my name but he did say he was acting for someone else,” he said.

Asked who Low was acting for, Najib said: “You have to ask him that.”

He also said that he had not talked much about the 1MDB allegations because all these things happened out of Malaysia and that there were some “international ramifications” if he were to name certain prominent individuals who might affect the country’s diplomatic relations.

“I would also like to place on record that (his step-son) Riza has done very well – the movies, the box office sales has reached beyond RM3.2bil. So, it is not abusing concern. It is a profitable concern. But source of funding is subject to investigation. I think we will leave it at that.”

On RM2.6bil that was moved into his personal account in 2013, he said with the general election coming then, he had not wanted to get funding from companies as they would expect something in return eventually.

“If I have a source of funding, I could fund the elections and I could also do a lot CSR (corporate social responsibility) work without being obligated to anyone. That was my real intention you see. And I assumed everything was fine,” he said, maintaining that the RM114mil ringgit allegedly seized during investigation into 1MDB to be “genuine donations because the raid happened just two days after the 14th General Election. As president of the party, I had to prepare for the elections, and elections are very expensive affairs.

“Because donations are made in cash in election times. You don’t send cheques during election times, because people want cash. That is when monies are disbursed accordingly.”

On Barisan Nasional’s defeat in the elections, Najib said he saw part of it coming but that he did not expect it to be this catastrophic, blaming it on Opposition’s allegations that changed public opinion.

On the reopening of the Altantuya Shaaribuu murder case, he said the case had already been dealt with and denied that there was any evidence that he had ever met her.

“There are no records, no pictures or witness to say that I even knew her. It was subject to a proper trial and my name didn’t come up during the trial whatsoever.

“I’m on record to have sworn in a mosque in the name of Allah that I had nothing to do with the case.” – The Star

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US Federal Reserve rate rise, Malaysia and regional equity markets in the red


 

Fed’s big balance-sheet unwind could be coming to an early end

NEW YORK: The Federal Reserve’s balance sheet may not have that much further to shrink.

An unexpected rise in overnight interest rates is pulling forward a key debate among US central bankers over how much liquidity they should keep in the financial system. The outcome will determine the ultimate size of the balance sheet, which they are slowly winding down, with key implications for US monetary policy.

One consequence was visible on Wednesday. The Fed raised the target range for its benchmark rate by a quarter point to 1.75% to 2%, but only increased the rate it pays banks on cash held with it overnight to 1.95%. The step was designed to keep the federal funds rate from rising above the target range. Previously, the Fed set the rate of interest on reserves at the top of the target range.

Shrinking the balance sheet effectively constitutes a form of policy tightening by putting upward pressure on long-term borrowing costs, just as expanding it via bond purchases during the financial crisis made financial conditions easier. Since beginning the shrinking process in October, the Fed has trimmed its bond portfolio by around US$150bil to US$4.3 trillion, while remaining vague on how small it could become.

This reticence is partly because the Fed doesn’t know how much cash banks will want to hold at the central bank, which they need to do in order to satisfy post-crisis regulatory requirements.

Officials have said that, as they drain cash from the system by shrinking the balance sheet, a rise in the federal funds rate within their target range would be an important sign that liquidity is becoming scarce.

Now that the benchmark rate is rising, there is some skepticism. The increase appears to be mainly driven by another factor: the US Treasury ramped up issuance of short-term US government bills, which drove up yields on those and other competing assets, including in the overnight market.

“We are looking carefully at that, and the truth is, we don’t know with any precision,” Fed chairman Jerome Powell told reporters on Wednesday when asked about the increase. “Really, no one does. You can’t run experiments with one effect and not the other.”

“We’re just going to have to be watching and learning. And, frankly, we don’t have to know today,” he added.

But many also see increasingly scarce cash balances as at least a partial explanation for the upward drift of the funds rate, and as a result, several analysts are pulling forward their estimates of when the balance sheet shrinkage will end.

Mark Cabana, a Bank of America rates strategist, said in a report published June 5 that Fed officials may stop draining liquidity from the system in late 2019 or early 2020, leaving US$1 trillion of cash on bank balance sheets. That compares with an average of around US$2.1 trillion held in reserves at the Fed so far this year.

Cabana, who from 2007 to 2015 worked in the New York Fed’s markets group responsible for managing the balance sheet, even sees a risk that the unwind ends this year.

One reason why people may have underestimated bank demand for cash to meet the new rules is that Fed supervisors have been quietly telling banks they need more of it, according to William Nelson, chief economist at The Clearing House Association, a banking industry group.

The requirement, known as the Liquidity Coverage Ratio, says banks must hold a certain percentage of their assets either in the form of cash deposited at the Fed or in US Treasury securities, to ensure they have enough liquidity to deal with deposit outflows.

The Fed flooded the banking system with reserves as a byproduct of its crisis-era bond-buying programs, known as quantitative easing, to stimulate the economy. The money it paid investors to buy their bonds was deposited in banks, which the banks in turn hold as cash in reserve accounts at the Fed.

In theory, the unwind of the bond portfolio, which involves the reverse swap of assets between the Fed and investors, shouldn’t affect the total amount of Treasuries and reserves available to meet the requirement. The Fed destroys reserves by unwinding the portfolio, but releases an equivalent amount of Treasuries to the market in the process.

But if Fed supervisors are telling banks to prioritise reserves, that logic no longer applies. Nelson asked Randal Quarles, the Fed’s vice-chairman for supervision, if this was the Fed’s new policy. Quarles, who was taking part in a May 4 conference at Stanford University, said he knew that message had been communicated and is “being rethought”.

If Fed officials do opt for a bigger balance sheet and decide to continue telling banks to prioritise cash over Treasuries, it may mean lower long-term interest rates, according to Seth Carpenter, the New York-based chief US economist at UBS Securities.

“If reserves are scarce right now, and if the Fed does stop unwinding its balance sheet, the market is going to react to that, a lot,” said Carpenter, a former Fed economist. “Everyone anticipates a certain amount of extra Treasury supply coming to the market, and this would tell people, ‘Nope, it’s going to be less than you thought’.” — Bloomberg

Malaysia and regional equity markets in the red

 

In Malaysia, the selling streak has been ongoing for almost a month. As of June 8, the year to date outflow
stands at RM3.02bil, which is still one of the lowest among its Asean peers. The FBM KLCI was down 1.79 points yesterday to 1,761.

PETALING JAYA: It was a sea of red for equity markets across the region after the Federal Reserve raised interest rates by a quarter percentage point to a range of 1.75% to 2% on Wednesday, and funds continued to move their money back to the US. This is the second time the Fed has raised interest rates this year.

In general, markets weren’t down by much, probably because the rate hike had mostly been anticipated. Furthermore for Asia, the withdrawal of funds has been taking place over the last 11 weeks, hence, the pace of selling was slowing.

The Nikkei 225 was down 0.99% to 22,738, the Hang Seng Index was down 0.93% to 30,440, the Shanghai Composite Index was down 0.08% to 3,047.34 while the Singapore Straits Times Index was down 1.05% to 3,356.73.

In Malaysia, the selling streak has been ongoing for almost a month. As of June 8, the year to date outflow stands at RM3.02bil, which is still one of the lowest among its Asean peers. The FBM KLCI was down 1.79 points yesterday to 1,761.

Meanwhile, the Fed is nine months into its plan to shrink its balance sheet which consists some US$4.5 trillion of bonds. The Fed has begun unwinding its balance sheet slowly by selling off US$10bil in assets a month. Eventually, it plans to increase sales to US$50bil per month.

With the economy of the United States showing it was strong enough to grow with higher borrowing costs, the Federal Reserve raised interest rates on Wednesday and signalled that two additional increases would be made this year.

Fed chairman Jerome H. Powell in a news conference on Wednesday said the economy had strengthened significantly since the 2008 financial crisis and was approaching a “normal” level that could allow the Fed to soon step back and play less of a hands-on role in encouraging economic activity.

Rate hikes basically mean higher borrowing costs for cars, home mortgages and credit cards over the years to come.

Wednesday’s rate increase was the second this year and the seventh since the end of the Great Recession and brings the Fed’s benchmark rate to a range of 1.75% to 2%. The last time the rate reached 2% was in late 2008, when the economy was contracting.

“With a slightly more aggressive plan to tighten monetary policy this year than had previously been projected by the Fed, it will narrow our closely watched gap between the yield rates of two-year and 10-year Treasury notes, which has recently been one of a strong predictor of recessions,” said Anthony Dass, chief economist in AmBank.

Dass expects the policy rate to normalise at 2.75% to 3%.

“Thus, we should potentially see the yield curve invert in the first half of 2019,” he said.

So what does higher interest rates mean for emerging markets?

It means a flight of capital back to the US, and many Asian countries will be forced to increase interest rates to defend their respective currencies.

Certainly, capital has been exiting emerging market economies. Data from the Institute of International Finance for May showed that emerging markets experienced a combined US$12.3bil of outflows from bonds and stocks last month.

With that sort of global capital outflow, countries such as India, Indonesia, the Philippines and Turkey, have hiked their domestic rates recently.

Data from Lipper, a unit of Thomson Reuters, shows that for the week ending June 6, US-based money market funds saw inflows of nearly US$34.9bil.

It makes sense for investors to be drawn to the US, where the economy is increasingly solid, coupled with higher yields and lower perceived risks.

Hong Kong for example is fighting an intense battle to fend off currency traders. Since April, Hong Kong has spent at least US$9bil defending its peg to the US dollar. Judging by the fact that two more rate hikes are on the way this year, more ammunition is going to be needed.

Hong Kong has the world’s largest per capita foreign exchange reserves – US$434bil more in firepower.

By right, the Hong Kong dollar should be surging. Nonetheless, the currency is sliding because of a massive “carry trade.”

Investors are borrowing cheaply in Hong Kong to buy higher-yielding assets in the US, where 10-year Treasury yields are near 3%.

From a contrarian’s perspective, global funds are now massively under-weighted Asia.

With Asian markets currently trading at 12.3 times forward price earnings ratio, this is a reasonable valuation at this matured stage of the market.

By Tee Lin Say StarBiz

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