Pakatan taking a step backwards’


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

– REUTERS/Lai Seng Sin/File Photo

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

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

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

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

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

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

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

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

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

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

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

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

Source: by Sholto Byrnes, The Star

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

PKR gives up 14 seats to Pribumi for GE14

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related Link:

Dr Mahathir has hijacked Pakatan, says Liow

Dr Mahathir has hijacked Pakatan, says Liowicon video

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Penang undersea tunnel project scrutinized by the Malaysian Anti Corruption Commission (MACC)


In troubled waters: An artist’s impression showing where the tunnel project will start on the island.

 

 

Land swap under MACC scrutiny

PETALING JAYA: The Malaysian-Anti Corruption Commission (MACC) probe into the controversial Penang undersea tunnel is focused on land swaps that were made for the feasibility and detailed design study which has yet to be completed.

Sources said investigators are scouring documents involving two plots of land – Lot 702 and Lot 713 in Bandar Tanjung Pinang – with a size of 1.48ha and 2.31ha respectively.

The value of Lot 702 is around RM135mil while Lot 713 is around RM160mil.

It is learnt that both parcels of land have since been mortgaged to banks to obtain financing. The state government has also authorised planning permission on both parcels of lands.

“The state government paid the consultant for the feasibility studies by means of two land swaps. The cost for the feasibility study is around RM305mil.

“It has become an issue on why the study cost was inflated so much when it should have been an estimated RM60mil,” sources said, adding that determining the inflation and the reason behind it were among the challenges faced by the investigating team.

The sources also said that the graft-busters have their sights targeted on “somebody” who has been enjoying kickbacks and entertainment from the deal.

The feasibility and detailed design study is for the 7.2km undersea tunnel connecting Gurney Drive on the island to Bagan Ajam in Seberang Perai.

It is part of the RM6.3bil mega project comprising a 10.53km North Coastal Paired Road (NCPR) from Tanjung Bungah to Teluk Bahang, the 5.7km Air Itam–Tun Dr Lim Chong Eu Expressway bypass and the 4.075km Gurney Drive–Tun Dr Lim Chong Eu Expressway bypass.

Yesterday, the investigating team also questioned four officers from several state government agencies on the land swaps.

Sources added that the anti-graft agency also raided a property agency office in Penang and carted various documents away. It is learnt the chief executive officer of the company was not around during the raid.

MACC deputy chief commissioner Datuk Seri Azam Baki said his investigating team has yet to call in any witnesses for the case as they are still conducting a thorough study on the seized documents.

He added that the officers would still be obtaining more documents from the companies involved and also from the state government.

 

Two bosses of construction firms held for six days as MACC investigates project

Datuks’ remanded in tunnel probe

Taken away: Officers escorting one of the men out of the courthouse in Putrajaya.

MACC digs deeper

A swap involving two parcels of land worth close to RM300mil is in the spotlight as the MACC intensifies investigations into claims of corruption in Penang’s undersea tunnel project and several accompanying highway projects. Two ‘Datuks’ have been remanded and several key officials in companies and agencies involved in the project have been questioned. But Chief Minister Lim Guan Eng says the project will go on.

GEORGE TOWN: Chief Minister Lim Guan Eng says the undersea tunnel project, now the subject of a corruption investigation, will proceed unless there is a court order to stop it.

He said he was baffled by yet another investigation into the project as the Malaysian Anti Corruption Commission (MACC) had been conducting an investigation into the RM6.3bil mega project comprising the tunnel and three other highways since 2016.

“What are they investigating now? Is it because of the looming general election?

“The project was awarded via an open tender overseen by international accounting firm KPMG.

“Still, I have instructed everyone involved to give their full cooperation to the MACC in its investigation as we have nothing to hide,” said Lim at a press conference at Komtar yesterday.

On Tuesday, graft-busters arrested two “Datuks” involved in the controversial Penang undersea tunnel project to help in investigations into claims of corruption.

The duo, who were picked up in Putrajaya and Penang, have since been remanded for six days to facilitate the probe.

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

MACC officers also questioned several officers in charge of the respective agencies and companies. Sources familiar with the investigation said the probe into the undersea tunnel project was also zooming in on land swaps.

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

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

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

In a related development, Vertice Bhd (formerly known as Voir Holdings Bhd) said the current investigation by the MACC will not impact the progress of the undersea tunnel project.

It said the project was an integral component of the Penang Transport Master Plan and that the role of Consortium Zenith Construction as the main contractor would remain.

Consortium Zenith Construction is a 13.2% associate company of Vertice. PUTRAJAYA: Two high-ranking bosses of development and construction companies have been remanded for six days as graft investigators continue their probe of the Penang undersea tunnel project. The two “Datuks” were held here and in Penang before being brought to court.

A 59-year-old businessman was brought to a magistrate’s court here at 9.40am yesterday and remanded for six days until Monday to help with the Malaysian Anti-Corruption Commission’s (MACC) investigation.

Magistrate Fatina Amyra Abdul Jalil allowed MACC prosecutors’ remand application although the Datuk’s lawyer Hamidi Mohd Noh objected, arguing that there was no need for his client to be held.

“I told the court that my client has been cooperative with the MACC.

“I would also like to point out that my client is innocent and his remand is only to assist the investigation,” he told reporters after the proceedings.

The MACC had initially asked for the Datuk to be held for seven days but the magistrate only allowed six days.

He was arrested at the MACC headquarters at around 8.45pm on Tuesday after being called for his statement to be recorded.

In George Town, another Datuk was brought to court for a remand application at 11.40am.

He was handcuffed and wearing MACC’s orange lock-up T-shirt with black pants when he arrived at the courthouse escorted by MACC officers.

The 49-year-old appeared calm and smiled to reporters but did not say anything before he was led inside.

Deputy registrar Muhammad Azam Md Eusoff granted a six-day remand order and the businessman was escorted out of the courthouse about 30 minutes later.

The case is being investigated under Section 16(a)(B) of the MACC Act 2009 for bribery.

It is also believed that one of the Datuks remanded yesterday tested positive for drugs.

On Tuesday, MACC personnel raided the offices of four state government agencies – the Penang Public Works Department, Penang State Secretary, Penang Office of Lands and Mines and Penang Valuation and Property Services Department – and three property development and construction companies believed to be related to the case.

The project involves a plan to bore a 6.5km tunnel below the seabed to connect north Butterworth and the island.

The tunnel is to connect Bagan Ajam, a mature suburb of about 5km from the Butterworth ferry terminal, to the end of Gurney Drive near the Pangkor Road junction on the island.

Connected to the project are three paired roads to be built on the island as a traffic dispersal system to cope with the traffic that the tunnel would bring to Gurney Drive, which is already densely developed.

The three paired roads are from Teluk Bahang to Tanjung Bungah, from Pangkor Road to the Tun Dr Lim Chong Eu Expressway – part of this stretch will be underground – and from Air Itam to the expressway near the Penang bridge.

To finance the construction, projected to cost RM6.3bil, the state government is giving payment in kind of 44.5ha of state land to the contractor, Consortium Zenith Construction.

Chief Minister Lim Guan Eng told the state assembly in 2014 that the land was valued at RM1,300 per sq ft and the project, ending with the tunnel, is scheduled for completion in 2025.

It was reported last March that RM135mil worth of land had been given to the contractor as payment to fund the feasibility studies and detailed studies.

A public-listed company announced in January 2016 that it had secured an agreement to buy 20.2ha of the land from the contractor over 10 years at RM1,300 per sq ft.

It is believed that the MACC is looking into why the state government allowed the contractor to presell state land despite delays in the project construction.

More to be called up for questioning

GEORGE TOWN: Investigations into allegations of corruption in the proposed Penang Undersea Tunnel project are expected to deepen with more people likely to be called up for questioning.

A source in the Malaysian Anti-Corruption Commission (MACC) said the focus was on the feasibility and detailed design study, which had been paid for but not completed.

“We will call in more people involved in the project to assist in investigations into the study,” the source said.

He declined to comment on whether more arrests would follow after two “Datuks” were remanded for six days yesterday to help in the investigations.

The two were remanded in George Town and Putrajaya for investigations into the corruption allegations.

The MACC source declined to share details on evidence collected that led to the remand of the two Datuks yesterday but confirmed that it was about the delayed feasibility study and detailed designs.

The feasibility, detailed design studies and environmental impact assessment was reported to cost RM305mil with RM220mil already paid. Since 2015, NGOs, government agencies, political parties and state assemblymen had asked about the payment and studies, only to be met with replies they considered unsatisfactory.

Last July, the Works Ministry and Board of Engineers Malaysia (BEM) repeatedly asserted that Penang significantly overpaid, by four times, design fees involving three roads.

Barisan Nasional strategic communications director Datuk Seri Abdul Rahman Dahlan sought the professional opinion of BEM, and it was reported that BEM replied that the detailed design costs were four times higher than the maximum allowed under the gazetted scale of fees based on the total project cost.

Last August, the state government declared that the feasibility studies would be ready by September.

In October, however, Works Minister Datuk Seri Fadillah Yusof said his ministry “had not seen a single page” of it.

Source: By mazwin nik anis, royce tan, arnold loh, r. sekaran, simon khoo The Staronline

 

MACC to make more arrests – Penang undersea tunnel project

More arrests are likely in the investigations into claims of corruption in Penang’s RM6.3bil project involving an undersea tunnel and three highways after MACC officers raided 12 more places and took statements from a dozen witnesses. They are looking into an agreement on payments to the concessionaires but Penang Chief Minister Lim Guan Eng says there was no wrongdoing and that not a single sen has been paid for the undersea tunnel project.

PETALING JAYA: Investigators looking into the allegation of corruption in the Penang undersea tunnel project are said to be thoroughly looking through the papers related to the contract for the feasibility study for the undersea tunnel.

“The agreement looks suspicious and the feasibility study for the mega project does not exceed RM305mil as announced by the state government,” sources said.

“The state government might have made a payment which is way different than the real value of the study,” they said.

On Thursday, The Star reported that the graft-busters were zooming in on the land swaps of two plots of land in Bandar Tanjung Pinang.

The sources also say that the reclaimed land for the land swaps were of high value for development. It is believed that the state JKR has set the value for the study and that allegations of misappropriation were raised when the value that was paid far exceeded the initial value.

To finance the construction of the tunnel and three paired roads on the island, projected to cost RM6.3bil, the state government is giving payment in kind of 44.5ha of state land to the contractor, Consortium Zenith Construction.

Chief Minister Lim Guan Eng had told the state assembly in 2014 that the land was valued at RM1,300 per sq ft and the project, ending with the tunnel, is scheduled for completion in 2025.

It was reported last March that RM135mil worth of land had been given to the contractor as payment to fund the feasibility studies and detailed studies. However, the study has not been completed although the land has been handed over.

A public- listed company announced in January 2016 that it had secured an agreement to buy 20.2ha of the land from the contractor over 10 years at RM1,300 per sq ft.

It is believed that the MACC is looking into why the state government allowed the contractor to presell state land despite delays in the project construction and the study.

Source: The Star Malaysia reports by MAZWIN NIK ANIS and INTAN AMALINA MOHD ALI

Related stories:

MACC probe shifts to bidding process – Nation | The Star Online

MACC looking at how RM305mil was paid – Nation | The Star Online

MACC focussing on Penang tunnel project studies, sources say …

Lim: Not a single sen paid for Penang undersea tunnel project …

No money paid for project, says Lim – Nation

 12 spots raided in tunnel probe 

Guan Eng: Project will go on unless there’s a court order to stop

Vertice, Ewein shares down following Penang arrests – Business News

Ewein MD remanded by MACC – theSundaily

Related posts:

 

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


 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Huan thanked the commission for acting on his report.

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

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

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

New Year 2018 high for Malaysia


FBM KLCI moves higher past 1,800 mark while ringgit breaches RM4 level

In a synchronised fashion, the ringgit, stock market and exports are all glowing for Malaysia. Add this to the rising price of crude oil, economists are expecting the good start to the year to continue leading up to GE14. Experts foresee these translating to lower import costs and more affordable overseas education.

 

Busa and ringgit on a high

PETALING JAYA: In a rare occurrence, the local capital markets got off to a roaring start in the first week of the new year.

US$ vs ringgit at 3.9965 

Sentiments on the stock market picked up as it sailed through the 1,800 mark, the ringgit breached the RM4 level against the US dollar and the latest trade numbers released showed that exports have hit record levels.

FBM KLCI up 14.52pts to 1,817.97

The FBM KLCI, a key benchmark for the local stock market, closed at 1,817.97, up 14.52 points yesterday – the highest since April 2015. Analysts and fund managers expect the upward momentum to continue, leading to the 14th General Election (GE14).

“The local stock market is set to continue its upward momentum, with investors in optimistic mood, lingering upon expectations of the GE14,” an analyst said.

The Malaysian stock market is now playing catch-up with key regional markets in other countries that have been moving up.

For instance, in the United States, the Dow Jones Industrial Average closed at fresh record highs above 25,000. Trading volume on Bursa has risen sharply to a high of nearly six billion shares valued at RM3.94bil. This is the highest since 2014.

“The increasing volume is an indicator of more investors joining the fray,” said the analyst.

The ringgit also perked up against the US dollar and strengthened to 3.9945 yesterday, the strongest level since August 2016.

Crude oil prices continue to climb with the Brent Crude rising above US$67 per barrel. Apart from a brief spike in May 2015, this is the highest price levels it has reached since December 2014, when the oil price started its slide down.

Exports in November rise to RM83.50bil

Exports hit record high of RM83.5bil in November – Business News …

Adding to the optimism, the country’s latest trade data for November showed that exports exceeded expectations and rose to a monthly high of RM83.5bil. This is an increase of 14.4% from last year.

The head of UOB Kay Hian Malaysia Research, Vincent Khoo, expects global and local conditions to be favourable for the local stock market as sentiment builds up for the GE14.

“Malaysia has been a laggard and now it is reversing its underperformance. Liquidity is strong locally and internationally as there is more foreign funds participation.

“Economic numbers are strong and export momentum continues to be solid,” Khoo said.

Socio Economic Research Centre executive director Lee Heng Guie said there were continued optimism and positive sentiments on the global economy and markets.

He said the tax reforms in the US would beef up corporate earnings while central banks around the world were raising rates.

The impending GE14, he added, spurred investors’ interest in the stock market and the recovery in oil prices continued to lift the demand for ringgit.

He said the ringgit had a good rally since the last Bank Negara meeting and the upcoming meeting on Jan 29 might see the central bank review its overnight policy rates (OPR) upwards.

The OPR now is 3.25% and many are expecting it to increase, a move that would spur banks to raise their interest rates.

Additionally, Lee said trade data was better than expected and as long as the macro numbers and earnings deliver, it would lift sentiments on market.

Nonetheless, he said investors might be a bit cautious when the dissolution of Parliament was announced.

Meanwhile, Oanda head of trading Asia-Pacific Stephen Innes said Bursa Malaysia was playing catchup as the ringgit remained undervalued in a lot of fund managers’ portfolio.

“But I think the current run will take us to 3.90 (against the US dollar) but at this stage, I think the market is starting to factor in the Bank Negara rate hike in January.

“So we may see a slower appreciation of the ringgit and we should expect profit taking ahead of the rate decision (by BNM) later in the month,” he added.

On the external front, Inness said the global equity market rally was benefiting from higher commodity prices in general and specifically oil prices.

“The recent supply disruptions are having a much more significant impact on prices given Opec’s (Organisation of the Petroleum Exporting Countries) recent production cut and the market is certainly much tighter than it has been in the past.

“Rising oil prices bode well for the FBM KLCI given that oil and gas constituents play a big role in the KLCI make-up. However, I don’t think this is strictly an isolated oil play but it is also rallying on the global growth narrative which is supporting export-oriented firms,” Innes said.

By leong hung yee The Staronline

Bursa and ringgit on a high

 

FBM KLCI moves higher past 1,800 mark while ringgit breaches RM4 level

PETALING JAYA: In a rare occurrence, the local capital markets got off to a roaring start in the first week of the new year.

Sentiments on the stock market picked up as it sailed through the 1,800 mark, the ringgit breached the RM4 level against the US dollar and the latest trade numbers released showed that exports have hit record levels.

The FBM KLCI, a key benchmark for the local stock market, closed at 1,817.97, up 14.52 points yesterday – the highest since April 2015. Analysts and fund managers expect the upward momentum to continue, leading to the 14th General Election (GE14).

“The local stock market is set to continue its upward momentum, with investors in optimistic mood, lingering upon expectations of the GE14,” an analyst said.

The Malaysian stock market is now playing catch-up with key regional markets in other countries that have been moving up.

For instance, in the United States, the Dow Jones Industrial Average closed at fresh record highs above 25,000. Trading volume on Bursa has risen sharply to a high of nearly six billion shares valued at RM3.94bil. This is the highest since 2014.

“The increasing volume is an indicator of more investors joining the fray,” said the analyst.

The ringgit also perked up against the US dollar and strengthened to 3.9945 yesterday, the strongest level since August 2016.

Crude oil prices continue to climb with the Brent Crude rising above US$67 per barrel. Apart from a brief spike in May 2015, this is the highest price levels it has reached since December 2014, when the oil price started its slide down.

Adding to the optimism, the country’s latest trade data for November showed that exports exceeded expectations and rose to a monthly high of RM83.5bil. This is an increase of 14.4% from last year.

The head of UOB Kay Hian Malaysia Research, Vincent Khoo, expects global and local conditions to be favourable for the local stock market as sentiment builds up for the GE14.

“Malaysia has been a laggard and now it is reversing its underperformance. Liquidity is strong locally and internationally as there is more foreign funds participation.

“Economic numbers are strong and export momentum continues to be solid,” Khoo said.

Socio Economic Research Centre executive director Lee Heng Guie said there were continued optimism and positive sentiments on the global economy and markets.

He said the tax reforms in the US would beef up corporate earnings while central banks around the world were raising rates.

The impending GE14, he added, spurred investors’ interest in the stock market and the recovery in oil prices continued to lift the demand for ringgit.

He said the ringgit had a good rally since the last Bank Negara meeting and the upcoming meeting on Jan 29 might see the central bank review its overnight policy rates (OPR) upwards.

The OPR now is 3.25% and many are expecting it to increase, a move that would spur banks to raise their interest rates.

Additionally, Lee said trade data was better than expected and as long as the macro numbers and earnings deliver, it would lift sentiments on market.

Nonetheless, he said investors might be a bit cautious when the dissolution of Parliament was announced.

Meanwhile, Oanda head of trading Asia-Pacific Stephen Innes said Bursa Malaysia was playing catchup as the ringgit remained undervalued in a lot of fund managers’ portfolio.

“But I think the current run will take us to 3.90 (against the US dollar) but at this stage, I think the market is starting to factor in the Bank Negara rate hike in January.

“So we may see a slower appreciation of the ringgit and we should expect profit taking ahead of the rate decision (by BNM) later in the month,” he added.

On the external front, Inness said the global equity market rally was benefiting from higher commodity prices in general and specifically oil prices.

“The recent supply disruptions are having a much more significant impact on prices given Opec’s (Organisation of the Petroleum Exporting Countries) recent production cut and the market is certainly much tighter than it has been in the past.

“Rising oil prices bode well for the FBM KLCI given that oil and gas constituents play a big role in the KLCI make-up. However, I don’t think this is strictly an isolated oil play but it is also rallying on the global growth narrative which is supporting export-oriented firms,” Innes said.

Experts see good tidings in firmer currency

Back in favour:People queuing to change the ringgit for US Dollar at a money exchange outlet in Bangsar, Kuala Lumpur.

PETALING JAYA: Lower import costs and more affordable overseas education are among the benefits brought about by a firmer ringgit and bullish stockmarket.

National Chamber of Commerce and Industry of Malaysia (NCCIM) president Tan Sri Ter Leong Yap said the rise in the ringgit is a sign of growing confidence in the nation’s economy.

“These are good signs which have set a feel-good mood for the market. What is most important is for the ringgit to remain stable as business needs this rather than having to hedge on the foreign exchange,” he said.

However, a stronger ringgit could act as a “double-edged sword”, Ter added, as exports would now cost higher.

“Exporters may not make the windfall profit as before but they had adjusted to this,” said Ter, who is also Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM) president.

Malaysia Retail Chain Association (MRCA) president Datuk Garry Chua said a stronger ringgit bodes well for retailers that rely heavily on imports.

“In the end, the shoppers will benefit as cost of products would be lower due to the exchange rate,” he said.

Chua said the positive stock run was also good news for retailers and consumers.

“People tend to spend more due to easy earnings from the market and this is good for business,” he said.

Malaysia Associated Indian Chambers of Commerce and Industry (MAICCI) president Tan Sri Kenneth Eswaran said the positive developments showed that the nation’s economic transformation is on the right track.

“The ringgit breaking the RM4 barrier and the stock market climb are signs showing the Government’s economic transformation plans are bearing fruit. Traders and consumers will now enjoy lower import costs,” he said.

Taylor’s University deputy vice chancellor Prof Dr Pradeep Nair said the ringgit’s rally is expected to continue and strengthen below the RM4 region.

“For the education sector, this will be beneficial for parents who wish to send their children abroad to do part or whole of their studies to countries like the US, UK and Australia, should the trend continue,” he said.

He said a firmer ringgit would not have a major impact on incoming foreign students.

“We are still relatively cheaper than other countries that use English as the medium of teaching and we will remain one of the preferred destinations for foreign students looking for affordable, quality education,” he said.

Sunway Education Group senior executive director Dr Elizabeth Lee said some parents would be more willing to send their children abroad for further studies.

“I sense that enthusiasm in parents who enrolled their children with us. They are more confident of supporting their higher education throughout,” she said.

By martin carvalho The Staronline

Ringgit boost for investors, importers 

Companies which lost out during a low ringgit recouping fast

Ringgit on uptrend: People queuing up to change money at a money changer. The ringgit has broken past the crucial 4.00 level.

THE New Year is in, tides are changing and the ringgit is recovering from the past two year’s extreme blues.

The long-awaited reprieve has finally come for certain consumer companies that import intermediary goods for their production cycle.

Foreigners who have taken advantage by accumulating and buying into the equity and/or bond market when the ringgit was at a weaker level last year, would be firmly in the money now.

Analysts see the local currency as now being on a cruise control climb mode moving to new highs in the past week and possibly in the near future.

They note that the foreign buyers would see two-way gains and would be able to realise their gains if they choose to.

“If they liquidate and take the money out they will realise the gains and benefit. Last year the ringgit strengthened by almost 10.4%. Ringgit already broke the crucial 4.00 level, assuming that they make money from the market and take it out, they will also pay less to convert to US dollar,” Socio Economic Research Centre’s executive director Lee Heng Guie tells StarBiz Week.

The ringgit had seen a gain of 0.64% after we entered the New Year, adding to its gains that was achieved in the past two months of 5.63%.<

Currency strategists agree that the next crucial psychological mark would be the 3.80 level that is the infamous currency peg level some years after the 1997 Asian Financial Crisis.

The recovering oil prices with the lifting of equity markets due to strong global sentiment aided gains in the ringgit, Lee says.

The FBM KLCI saw a strong upward move as investors celebrated Christmas and ushered in the New Year thereafter.

The benchmark index had gained some 4.6% since Dec 19 to yesterday’s close at 1,817.97.

Meanwhile, the other companies that will stand to gain are consumer-driven companies especially those that have imported intermediary goods to manufacture or complete end products.

Lee says the strengthening ringgit, if it is sustained, would eventually help to boost the consumer sentiment index (CSI).

In the latest reported third quarter of 2017, the Malaysian Institute of Economic Research (Mier) said the CSI continued to remain weak with the index having retreated further to 77.1.

“Anxieties over higher prices grow and (there are) burly spending plans amid waning incomes and jobs,” the Mier said at the release of third quarter CSI figures then.

Any CSI level below the 100 indicates weakness on the consumer front.

Lee says he is hopeful the stronger ringgit would help eventually translate to additional cost savings to the consumer in the form of lower prices.

Meanwhile, MIDF Research’s consumer stocks analyst Nabil Fithri says not all consumer companies would automatically gain from the strengthening ringgit.

He notes that the gainers among the consumer companies would mainly be those which derive their sales from the local market and have imported intermediary goods in the supply chain.

“On average, the companies that import their raw materials lock in the prices through forward contracts for the upcoming six months. So, if there are any gains to their profit margins, it would be seen in the second half of the year,” he says.

Among the companies that stand to gain from this trend are the major consumer food companies such as Fraser & Neave Holdings Bhd (F&N), Nestle (M) Bhd and Dutch Lady Milk Industries Bhd.

Strong gains: The Dutch Lady Milk Industries
factory in Petaling Jaya. The company’s stocks had been making strong
gains since last year.
Better profit: Nestle Malaysia is one of the companies gaining from a strong ringgit.

All three stocks have been making strong gains in their share prices last year despite their high base.

Observers note that a common theme today that belies these stocks are that they derive their sales from the local market, with minimal or zero exports. Hence they will benefit from strong gains should the local currency appreciate further.

“Their raw materials that form a big part of their production are ingredients such as milk, coffee and sugar which are not readily available locally. They need to be imported and these are denominated in US dollar,” an analyst with a local research outfit says.

Two of those stocks that were mentioned above topped the gainers list on Friday: Nestle rising by RM1.20 to a new historical high of RM103.80 and F&N hitting an alltime high of RM27.82.

Investors may also want to train their sights on the smaller-capitalised consumer stocks some of which had been at a disadvantage earlier due to the weakened ringgit.

The stocks in this space include Apollo Food Holdings Bhd, Hup Seng Industries and Berjaya Food Bhd.

Apollo Food, the maker of packaged confectionery products see a big part of their sales being derived locally and their food is usually stocked in the school canteens.

The stock is trading at a current price to earnings ratio (PER) of 23.6 times and forward financial year 2018 ending April 30 (FY18) PER of 18.96 times.

The company’s second quarter profit had dropped by 11.1% to RM3.82mil primarily due to the lower ringgit then compared to the same quarter a year ago.

When the ringgit was trading above the 4.00 level then, the company had said in its prospectus that its operating environment was more challenging due to the increase in costs of raw materials.

Meanwhile, Berjaya Food Bhd could see further gains ahead as the ringgit continues its ascent.

The company owns half of the popular Starbucks franchise in Malaysia beside owning the worldwide Kenny Rogers Roasters franchise after acquiring KRR International Corp of the US in April 2008.

AmInvestment Bank Research said last month that it believed the worst is over for Berjaya Food with KRR’s robust same store sales growth following the disposal of KRR Indonesia.

The research house had highlighted that Berjaya Food would benefit from a stronger ringgit.

AmInvestment Research maintained its buy recommendation on Berjaya Food with fair value of RM1.91 per share.

“Valuations are pegged to a PER of 25 times FY19 forward, reflecting a 20% premium to its historical valuations. We think that it is justified as Berjaya Food has significantly enhanced earnings visibility following the disposal of KRR Indonesia, attractive growth off a low base and a stellar Starbucks brand,” it says.

By daniel khoo TheStaronline

Critical trends to watch in 2018


There are many issues on a fast and slow boil and some of them could reach a tipping point in the new year

ANOTHER new year has dawned, and it’s time to preview what to expect in 2018.

The most obvious topic would be to anticipate how Donald Trump, the most unorthodox of American presidents, would continue to upset the world order. But more about that later.

Just as importantly as politics, we are now in the midst of several social trends that have important long-term effects. Some are on the verge of reaching a tipping point, where a trend becomes a critical and sometimes irreversible event. We may see some of that in 2018.

Who would have expected that 2017 would end with such an upsurge of the movement against sexual harassment? Like a tidal wave it swept away Hollywood producer Harvey Weinstein, film star Kevin Spacey, TV interviewer Charlie Rose and many other icons.

The #MeToo movement took years to gather steam, with the 1991 Anita Hill testimony against then US Supreme Court nominee Clarence Thomas being a trailblazer. It paved the way over many years for other women to speak up until the tipping point was reached. So, in 2018, expect the momentum to continue, and in more countries.

Another issue that has been brewing is the rapid growth and effects of digital technology. Those enjoying the benefits of the smartphone, Google search, WhatsApp, Uber and online shopping usually sing its praises.

But the “Fourth Industrial Revolution” is like Dr Jekyll and Mr Hyde. It has many benefits but also serious downsides, and the debate is now picking up.

First, automation with artificial intelligence can make many jobs redundant. Uber displaced taxis, and will soon displace its drivers with driver-less cars.

The global alarm over job losses is resonating at home. An International Labour Organisation report warning that 54% of jobs in Malaysia are at high risk of being displaced by technology in the next 20 years was cited by Khazanah Research Institute in its own study last April. TalentCorp has estimated that 43% of jobs in Malaysia may potentially be lost to automation.

Second is a recent chorus of warnings, including by some of digital technology’s creators, that addiction and frequent use of the smartphone are making humans less intelligent and socially deficient.

Third is the loss of privacy as personal data collected from Internet use is collected by tech companies like Facebook and sold to advertisers.

Fourth is the threat of cyber-fraud and cyber-warfare as data from hacked devices can be used to empty bank accounts, steal information from governments and companies, and as part of warfare.

Fifth is the worsening of inequality and the digital divide as those countries and people with little access to digital devices, including small businesses, will be left behind.

The usual response to these points is that people and governments must be prepared to get the benefits and counter the ill effects. For example, laid-off workers should be retrained, companies taught to use e-commerce, and a tax can be imposed on using robots (an idea supported by Bill Gates).

But the technologies are moving ahead faster than policy makers’ capacity to keep track and come up with policies and regulations. Expect this debate to move from conference rooms to the public arena in 2018, as more technologies are introduced and more effects become evident.

On climate change, scientists frustrated by the lack of action will continue to raise the alarm that the situation is far worse than earlier predicted.

In fact, the tipping point may well have been reached already. On Dec 20, the United Nations stated that the Arctic has been forever changed by the rapidly warming climate. The Arctic continued in 2017 to warm at double the rate of the global temperature increase, resulting in the loss of sea ice.

These past three years have been the warmest on record. The target of limiting temperature rise to 2°C above pre-industrial levels, a benchmark just two years ago by the UN’s top scientific climate panel and the Paris Agreement, seems outdated and a new target of 1.5°C could be adopted in 2018.

But it is much harder to meet this new target. Will political leaders and the public rise to the challenge, or will 2018 see a wider disconnect between what needs to be done, and a lack of the needed urgent response?

Another issue reaching tipping point is the continuing rise of antibiotic resistance, with bacteria mutating to render antibiotics increasingly ineffective to treat many diseases. There are global and national efforts to contain this crisis, but not enough, and there is little time left to act before millions die from once-treatable ailments.

Finally, back to Trump. His style and policies have been disruptive to the domestic and global order, but last year he seemed unconcerned about criticisms on this. So we can expect more of the same or even more shocking measures in 2018.

Opposition to his policies from foreign countries will not count for much. But there are many in the American establishment who consider him a threat to the American system.

Will 2018 see the opposition reach a tipping point to make a significant difference? It looks unlikely. But like many other things in 2018, nothing is reliably predictable.

Global Trends by martin khor

Martin Khor is executive director of the South Centre. The views expressed here are entirely his own.
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High life of the young, carefree and broke Malaysians hit a new low


Younger set not living within their means and are bankrupt before they are 30

 

“When they start their own lives, they are not financially stable. Some want to get married.” – Datuk Abdul Rahman Putra Taha

They are young and carefree to the point of being careles, and have expensive tastes. Branded handbags, holidays to exotic places, fancy cars and lavish weddings all lead them into huge debts. By the age of 30, they are bankrupt. Some as young as 25 are among the shocking 60% of the 94,400 people declared bankrupt in the last four years.

PETALING JAYA: They lived the fast life, a life of Pradas and Guccis. When the cash is out, they max out on their credit cards.

Some even go as far as taking up personal loans to finance overseas trips, buying the latest expensive gadgets and holding lavish weddings.

And before they even turn 30, they are bankrupt.

Malaysia’s youth are seeing a worrying trend with those aged between 25 and 44 forming the biggest group classified as bankrupt.

They constituted almost 60% of the 94,408 cases reported from 2013 to August, according to the Insolvency Department.

Director-general Datuk Abdul Rahman Putra Taha said there were multiple factors that contributed to the trend, but singled out that many of them just wanted to “start their own life”.

“When they start their own lives, they are not financially stable. Some want to get married, but if the in-laws ask for hantaran gifts such as cars or a house, they need the money.

“Their pay can be considered low but they need expensive gifts. Where else can they go other than applying for personal loans?” he said in an interview recently.

Abdul Rahman also listed the top four reasons why a borrower was declared a bankrupt.

“Car loans took up 26.63%, personal loans (25.48%), housing loans (16.87%), and business loans (10.24%),” he said.

He revealed that the total number of people declared bankrupt from 2013 stood at 296,712 as of August, with Selangor having the most at 72,114, followed by the Federal Territories (46,377), Johor Baru (41,179) and Penang (22,136).

He urged the public to manage their finances prudently to ensure they would not be burdened by debt.

At the same time, Abdul Rahman said Bank Negara Malaysia (BNM) was making huge efforts to ensure it would not be so easy for the young to obtain credit cards.

In response, he said the department was committed to ensuring that the Government meets its target, especially with the Voluntary Arrangement under the Insolvency Act 1967.

Almost 58,000 bankrupts have been cleared or had their bankruptcy annulled by the courts in about the last five years, marking the first phase of the Government’s efforts to reduce bankruptcy cases following amendments to several bankruptcy laws.

From 2013 to August 2017, the courts have cleared 1,356 cases while another 11,627 cases have been terminated upon annulment of the bankruptcy order.

A total of 44,950 cases were discharged via Insolvency Certificate from the director-general.

However, the Government is pushing to slash the number of people being declared bankrupt to just about 4,000 to 5,000 cases per year.

“The enforcement of the newly amended bankruptcy law began this year. If they meet our criteria, qualified borrowers will be automatically discharged as bankrupts three years from the date of filing of the Statement of Affairs (Penyata Hal Ehwal),” said Abdul Rahman

Under the amended laws, someone at risk of being declared a bankrupt can settle his debt without bankruptcy proceedings with a voluntary agreement.

“Our intention is to ensure that borrowers will be able to pay back their loans without undue suffering and creditors will get their money back, too.”

He said debtors must adhere to the agreed sum of contribution paid to the creditors and they must also file their pay and expenses slip statement every six months throughout the three-year period.

“As long as they fulfil the payment within the period, we will release their names,” said Abdul Rahman.

Under the new amendments of the Bankruptcy Act 1967, the Government has introduced a rescue mechanism with a single bankruptcy order to replace the receiving order and adjudication order from the courts as practised previously.

“This move ensures that creditors are also protected under the amended laws,” he said.

The Act has also paved the way for the setting up of the Insolvency Assistance Fund and a release from bankruptcy without objection by the creditors for certain groups of people.

These include social guarantors made bankrupt under the Bankruptcy Act 1967, those who have died, those categorised as people with disabilities (OKU) by the Welfare Department and those certified by government medical officers as suffering from chronic or serious diseases.

The Star Malaysia by RAHIMY RAHIM rahimyr@thestar.com.my

Young, carefree and broke Malaysians hit a new low


Younger set not living within their means and are bankrupt before they are 30

 “When they start their own lives, they are not financially stable. Some want to get married.” – Datuk Abdul Rahman Putra Taha

They are young and carefree to the point of being careles, and have expensive tastes. Branded handbags, holidays to exotic places, fancy cars and lavish weddings all lead them into huge debts. By the age of 30, they are bankrupt. Some as young as 25 are among the shocking 60% of the 94,400 people declared bankrupt in the last four years.

PETALING JAYA: They lived the fast life, a life of Pradas and Guccis. When the cash is out, they max out on their credit cards.

Some even go as far as taking up personal loans to finance overseas trips, buying the latest expensive gadgets and holding lavish weddings.

And before they even turn 30, they are bankrupt.

Malaysia’s youth are seeing a worrying trend with those aged between 25 and 44 forming the biggest group classified as bankrupt.

They constituted almost 60% of the 94,408 cases reported from 2013 to August, according to the Insolvency Department.

Director-general Datuk Abdul Rahman Putra Taha said there were multiple factors that contributed to the trend, but singled out that many of them just wanted to “start their own life”.

“When they start their own lives, they are not financially stable. Some want to get married, but if the in-laws ask for hantaran gifts such as cars or a house, they need the money.

“Their pay can be considered low but they need expensive gifts. Where else can they go other than applying for personal loans?” he said in an interview recently.

Abdul Rahman also listed the top four reasons why a borrower was declared a bankrupt.

“Car loans took up 26.63%, personal loans (25.48%), housing loans (16.87%), and business loans (10.24%),” he said.

He revealed that the total number of people declared bankrupt from 2013 stood at 296,712 as of August, with Selangor having the most at 72,114, followed by the Federal Territories (46,377), Johor Baru (41,179) and Penang (22,136).

He urged the public to manage their finances prudently to ensure they would not be burdened by debt.

At the same time, Abdul Rahman said Bank Negara Malaysia (BNM) was making huge efforts to ensure it would not be so easy for the young to obtain credit cards.

In response, he said the department was committed to ensuring that the Government meets its target, especially with the Voluntary Arrangement under the Insolvency Act 1967.

Almost 58,000 bankrupts have been cleared or had their bankruptcy annulled by the courts in about the last five years, marking the first phase of the Government’s efforts to reduce bankruptcy cases following amendments to several bankruptcy laws.

From 2013 to August 2017, the courts have cleared 1,356 cases while another 11,627 cases have been terminated upon annulment of the bankruptcy order.

A total of 44,950 cases were discharged via Insolvency Certificate from the director-general.

However, the Government is pushing to slash the number of people being declared bankrupt to just about 4,000 to 5,000 cases per year.

“The enforcement of the newly amended bankruptcy law began this year. If they meet our criteria, qualified borrowers will be automatically discharged as bankrupts three years from the date of filing of the Statement of Affairs (Penyata Hal Ehwal),” said Abdul Rahman

Under the amended laws, someone at risk of being declared a bankrupt can settle his debt without bankruptcy proceedings with a voluntary agreement.

“Our intention is to ensure that borrowers will be able to pay back their loans without undue suffering and creditors will get their money back, too.”

He said debtors must adhere to the agreed sum of contribution paid to the creditors and they must also file their pay and expenses slip statement every six months throughout the three-year period.

“As long as they fulfil the payment within the period, we will release their names,” said Abdul Rahman.

Under the new amendments of the Bankruptcy Act 1967, the Government has introduced a rescue mechanism with a single bankruptcy order to replace the receiving order and adjudication order from the courts as practised previously.

“This move ensures that creditors are also protected under the amended laws,” he said.

The Act has also paved the way for the setting up of the Insolvency Assistance Fund and a release from bankruptcy without objection by the creditors for certain groups of people.

These include social guarantors made bankrupt under the Bankruptcy Act 1967, those who have died, those categorised as people with disabilities (OKU) by the Welfare Department and those certified by government medical officers as suffering from chronic or serious diseases.

The Star Malaysia by RAHIMY RAHIM rahimyr@thestar.com.my

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