Guan Eng: CAT (Competency, Accountability and Transparency) must be applied to MAS

Penang Chief Minister Lim Guan Eng expressed shock at the net loss of RM2.52 billion for last year recorded by national carrier Malaysia Airlines (MAS).

Lim said in a statement today that the outstanding loss is a "stark reminder" of how mismanagement and a failed business model has caused a crisis in the once-reputable and proud airline.

He urged the government to engage a new business model to prevent this national asset from plunging into fatal crash.

He suggested that a business model based on principles of Competency, Accountability and Transparency (CAT), like in Penang, would be able to "impress and attract" investors.

Lim  added that the current business model employed by MAS is clearly a "failed one".

"If MAS continues to subscribe to the old centrally-planned model and political interference that breeds corruption and inefficiency, the country's national carrier is doomed," he predicted.

Downward spiral

Lim said MAS has been on a downward spiral since the departure of now Minister in the Prime Minister Department Idris Jala in 2009.

MAS net profit of RM490 million in 2009 dwindled to RM234 million in 2010 plunging tragically to the record breaking staggering losses of RM2.52 billion last year, he added, also noting that its cash reserves are drying up.

"These losses are a far cry from a few years ago when Idris was tasked to revitalise MAS as chief executive officer," he stressed.

Idris was appointed in 2005 and was able to turn the company around to record a profit of RM850 million in 2007 against a loss of RM1.3 billion two years before that.

"Why is Idris able to turn around MAS and leave it in a healthier condition, but now all his hard work has been undone?"

"Do we need Idris back in the MAS cockpit to save the doomed airline?" he added.

Flying on fumes

In addition to the stark losses, MAS's cash reserves more than halved to RM1 billion at the end of last year from RM2.1 billion at the end of 2010 while net assets dropped from RM3.5 billion to RM1.1 billion.

The DAP secretary general said MAS is no longer flying on fuel but instead is now "flying on fumes".

He argued that this is the result of a legacy of "a piratisation deal" disguised as privatisation and subsequent re-nationalisation gone awry.

Lim added that even the 2001 bailout in which the federal government paid double the market price at the time, could not rescue MAS from its fundamental problems.

At that juncture, the federal government paid RM1.8 billion or RM8 per share to businessman Tajudin Ramli (left) instead of the market value of RM3.68, he stressed.
"MAS can not blame the prevailing poor global economic conditions. Singapore Airlines managed to record profits last year. In fact, we need not even look that far as even local budget carrier Air Asia has been able to outdo MAS by miles.

"One need only to look at Air Asia's current market capitalisation which stands at RM10.1 billion, compared to MAS at RM4.8 billion."

Who is responsible?

Lim question why a budget airline that charges far lesser fares can make more money than an airline that charges more.

He added that the viability of the country's national airline is in question until and unless fundamental issues are resolved.

"Is it a question of a failed business model or management failure, or both?" he queried.

"And who will be accountable for such a loss? Surely RM2.52 billion losses by our national airline is unacceptable to everyone in the country," he said.

Lim said someone needs to account for the losses especially when the reason it was renationalised in the first place, was to rescue it from the afflictions of mismanagement and a poor business model.

He urged the government to identify those responsible for such huge losses and take action against them as the people expected nothing less from a responsible government.

Umno MP, aide jailed 6 years, fined RM400,000 each

The Shah Alam sessions court today sentenced Umno’s Sabak Bernam parliamentarian Abdul Rahman Bakri to six years’ jail and RM400,000 in fines for graft.

Judge Azhaniz Teh Azman Teh, who yesterday found Abdul Rahman (left) guilty on eight counts of making false claims amounting to RM80,000, fined him RM50,000 or a year's jail for each charge.

The six-year prison sentence is to be served concurrently while the fines, if not paid, would result in another eight years’ jail.

The MP’s assistant, Mohd Rusli Busro, was found guilty of abetting Abdul Rahman and sentenced to a similar jail term and fines.
Judge Azhaniz pronounced the sentence after listening to the mitigating plea from lawyer Kamarul Hisham Kamaruddin who represented both the defendants.

Kamarul Hisham had asked for a lighter sentence for his clients as allowed under Section 294 of the Criminal Procedure Code, arguing that the offences committed by Abdul Rahman and Mohd Rusli were more procedural in nature and due to inaccuracies in their claims than any real swindling of public funds.

Cannot afford to pay the fines

But the prosecution's Razak Musa maintained that the defendants must bear the full brunt of the law as their use of forged receipts in their claims, and depositing the claimed funds in excess of actual spending into private accounts showed wrongful gains and intent to swindle public funds.

He maintained that a heavy punishment was necessary as a lesson to the defendants and prevention by example to others.

The judge, however, suspended both their jail terms and fines pending their appeal after an application by the defence citing the legal principle that jail time cannot be compensated in case their appeal overturned the conviction and sentencing.

Kamarul Hisham argued that they also could not afford to pay the fines and as such will be put in jail if the fines were not suspended pending their appeal.

A bail of RM50,000 was set for Abdul Rahman and RM30,000 for Mohd Rusli.

Abdul Rahman, 47, was found guilty under Section 11 (c) of the Anti-Corruption Act 1997 and sentenced under Section 16 of the same Act for making the claims of RM10,000 each between Jan 21 and Feb 4, 2008, when he was Sungai Ayer Tawar assemblyperson.

Make police report or shut up, MCCBCHST tells Hasan Ali

The Malaysian Consultative Council of Buddhism, Christianity, Hinduism, Sikhism and Taoism (MCCBCHST) called on former Selangor exco Hasan Ali to substantiate his claims of Christians proselytising Muslims with proof.

"There are more than enough criminal laws in the country to charge persons who try to proselytise Muslims and Dr Hasan should have lodged a police report and provided proof," said the NGO in a statement.

The interfaith body said that it is disturbed by the numerous statements from Hasan accusing Christian missionaries of trying to proselytise Muslims but with no proof to back  them todate.
It described the former PAS leader's statements as nothing more than "innuendos and insinuations".

MCCBCHST added that as a politician, Hasan's constant rhetoric against the Christians may bode "a hidden agenda", as otherwise he would have lodged a police report for the matter to be investigated and the guilty party, if any, punished.

"His latest statement is similar, where he accuses Christian missionaries of donning Muslim robes and going into mosques to pray with Muslims in order to convert them.

"Without proof, it appears to be far fetched that people will go into mosques to convert Muslims. On the contrary, it could be argued that such people were taken to mosque in order to convert them to the Muslim faith," reasoned the NGO.

Gov't ticked off over inaction

MCCBCHST also challenged Hasan to identify the 51 Muslims apostates and make them available to the public to allay accusations that they may have been set up.

The NGO also lamented the failure of the government to rein in Hasan and to probe ihim for sedition as his inflammatory statements can  stir up ill-feelings against the Christians.

It feared that such inaction by the authorities may create suspicion of government complicity in the minds of the people.

"Our leaders have been propounding moderation both locally and internationally yet inflammatory remarks by persons such as Dr Hasan are left unchecked," said the interfaith organisation.

Pua queries NFCorp’s Singapore plan

KUALA LUMPUR, March 1 — Tony Pua asked today why the National Feedlot Corporation (NFCorp) is looking to expand to Singapore when the island republic bans the import of raw beef from Malaysia.

The DAP publicity chief pointed out that Singapore’s Agri-Food and Veterinary Authority (AVA) only permitted processed beef such as sausages, patties, meatballs and smoked meat to be brought in.

Even then, only five companies were allowed to do so — Mac Food Sdn Bhd, Nestle Manufacturing Sdn Bhd, PAP Cashnet Sdn Bhd, Unilever Bestfoods Sdn Bhd and Lucky Food Processing Sdn Bhd.
 
“NFCorp has not been given any approval to export its beef or processed meat to Singapore... Is this not a clear case of putting the cart before the cows?” he said in a statement.

Pua (picture) said NFCorp must also answer claims that the RM250 million loan it was granted by Putrajaya had been used as leverage to obtain commercial bank loans used to start a supermarket venture in Singapore.

Running a supermarket was different from exporting beef, he noted, saying that the sale of beef products would do very little to increase demand for Malaysian beef in Singapore.

“If promoting beef from NFCorp is indeed the overriding objective... then Datuk Seri Mohamad Salleh either completely lacks business sense or is lying through his teeth to justify use of public funds,” he said.

NFCorp chairman Datuk Seri Mohamad Salleh Ismail told The Malaysian Insider yesterday the company intends to sell its beef products abroad as the local market was too small to support its intended output.

Salleh explained that NFCorp was now building up the market in Singapore and will do the same in Indonesia as the National Feedlot Centre (NFC) was on target to produce 78,000 tonnes of beef by 2015.

The NFC, which is supervised by NFCorp, was set up in 2007 to provide food security and attain 40 per cent self-sufficiency for beef production by 2015.

“When we have this many tonnes of beef, the Malaysian market will not buy everything so we have to find other places to sell,” Salleh said yesterday.

However, he declined to comment on his family’s alleged links to Farmhouse Supermarkets in Singapore, only stating that NFCorp would issue a statement soon to “explain in the proper context”.

PKR strategic director Rafizi Ramli, who has led opposition attacks against NFCorp, said today the company has no business expanding overseas if it cannot meet even production quotas for the local market.

The NFC only managed to produce 400 tonnes of beef annually in its first two years of operation, or only 0.8 per cent of the government’s 50,000-tonne yearly target, he claimed.

NFCorp hit the headlines after it made it into the Auditor-General’s Report last year, and has continued to hog the limelight after it was linked to federal minister Datuk Seri Shahrizat Jalil.

Salleh, a former food science head at Universiti Pertanian Malaysia (UPM), is Shahrizat’s husband. He runs the company with their three children.

PKR has made several claims of abuse over NFCorp’s federal loan involving over RM62 million spent on land, property and other expenses unrelated to cattle raising.

Why go abroad when targets have not been met, Rafizi asks NFCorp

PKR strategy director Rafizi Ramli said National Feedlot Corporation (NFC) chairperson Salleh Ismail's explanation that the local market is too small hence the need to expand overseas, does not make any sense.

This is because NFC's current beef output is way behind the target set by the government, one of the criteria for awarding the RM250 million soft loan to the corporation, said Rafizi.

Comparing the output target stated in the official website of veterinary service department with NFC's current production, Rafizi found that the company's output in 2010 only met 0.8 percent of the department's target in 2009.

According to Rafizi, NFC had slaughtered 1,914 cows from 2008 to 2010, producing 400 tonnes beef annually (assuming every cow slaughtered gives 200kg of meat), but the government's target in 2009 was 50,000 tonnes.

"NFC has no right to talk about new market abroad as long as it has not met the target to supply 40 percent of domestic market, because that is the purpose of setting up NFC.

 "Salleh's statement that the local market is too small for NFC output is a lie that insults the intelligence of Malaysians," said the PKR leader.

Rafizi (right) reiterated that he is still awaiting NFC's official statement explaining why the government loan was used to invest in overseas businesses unrelated to the purpose of the loan.

Yesterday Salleh, the husband of Family, Women, and Community Development Minister Shahrizat Abdul Jalil, told online news portal The Malaysian Insider that NFC was building up the market in Singapore and was eyeing Indonesia next.

He said this was necessary as the National Feedlot Centre would produce 78,000 tonnes of beef by 2015 once its abattoir becomes operational, more than what the Malaysian market needed.

"When we have this many tonnes of beef, the Malaysian market will not buy everything so we have to find other places to sell," he was quoted as saying.

However, Salleh declined to comment on Rafizi's allegation that his family has misused the soft loan to open a premier supermarket in Singapore, only saying that NFC would issue a statement soon to "explain (the matter) in the proper context".

NFCorp justifies its expansion into Singapore

KUALA LUMPUR, March 1 — The National Feedlot Corporation (NFCorp) said it intends to sell its beef products abroad as the local market was too small and could not support the firm’s intended output, after opposition officials exposed a supermarket venture linked to the company’s directors.

NFCorp chairman Datuk Seri Mohamad Salleh Ismail explained that the publicly-funded cattle-rearing firm was building up the market in Singapore and would likely do the same in Indonesia in future.

He said this was necessary as the National Feedlot Centre (NFC) would produce 78,000 tonnes of beef by 2015 once its abattoir was operational, more than what the Malaysian market needed. The NFC was first set up in 2007 to provide food security and import substitution for beef from abroad.

“When we have this many tonnes of beef, the Malaysian market will not buy everything so we have to find other places to sell,” he told The Malaysian Insider yesterday.

“We don’t have a contract with the government (to sell beef)... We only have a contract to slaughter the cows. Where do you think we are going to sell this?”

Salleh was responding to claims that he and his family had used NFCorp’s RM250 million federal loan as leverage to obtain loans from two commercial banks to open a supermarket in Singapore.

However, he declined to comment on his family’s alleged links to Farmhouse Supermarkets, only saying that NFCorp would issue a statement soon to “explain in the proper context”.

PKR strategic director Rafizi Ramli alleged yesterday that Farmhouse Supermarkets would be the anchor tenant at The Star Vista mall in Singapore, a claim mall owner CapitaMalls Asia denied today.

Rafizi later issued a correction, stating that he had mixed up The Star Vista with the nearby Rochester Mall, where Farmhouse Supermarkets is said to be the largest tenant on the second floor.

Salleh also said yesterday the NFC was intended to support local cattle farmers and grow the Malaysian beef market, and stressed that no one should be opposed to such socio-economic development.

“Why is Rafizi so against it? If we are going to buy from farmers and sell to people all over the world, what is wrong with that?” he said, adding that the project was still on-track to achieving its goals.

The NFC was first mooted as a high-impact project under the Ninth Malaysia Plan (9MP) and aims to turn Gemas in Negri Sembilan into Malaysia’s Beef Valley and cut down foreign beef imports.

NFCorp, which supervises the NFC, hit the headlines after it made it into the Auditor-General’s Report last year, and has continued to hog the limelight after it was linked to minister Datuk Seri Shahrizat Jalil.
Salleh, a former food science head at Universiti Pertanian Malaysia (UPM), is Shahrizat’s husband. He runs the company with their three children.

PKR has made several claims of abuse over NFCorp’s federal loan involving over RM62 million spent on land, property and other expenses unrelated to cattle raising.

Deputy Prime Minister Tan Sri Muhyiddin Yassin announced last month that Putrajaya would appoint an auditor to scrutinise NFCorp’s books in light of accusations made against the company.

Opposition parties have called on the government to freeze NFCorp’s assets to stop the company from using more public funds while the probe was being carried out.

Commercial crimes investigators said last week they will recommend to the Attorney-General’s Chambers that all NFCorp directors be charged with criminal breach of trust.

Daim first, Kit Siang says of Dr M’s ‘all Tuns’ audit, including sons and grandsons of Tuns

KUALA LUMPUR, Feb 29 — A royal commission of inquiry (RCI) should look into Tun Daim Zainuddin’s role in allegedly losing billions of ringgit during the Mahathir administration, Lim Kit Siang said today.

The DAP parliamentary leader agreed with Tun Dr Mahathir Mohamad that “all Tuns” should be audited, especially his successor Tun Abdullah Badawi, and said former finance minister Daim must not be left out.

“The other Tun I can think of is Tun Daim Zainuddin, who was Mahathir’s finance minister twice and played a key role in many of the financial scandals in the Mahathir era,” Lim said in a statement today.

Dr Mahathir, prime minister from 1981 to 2003, said today he would accept an audit on his administration after Lim claimed taxpayers lost RM100 billion in financial scandals during the former’s 22-year tenure.

“But all Tuns must be audited. The sons and grandsons of Tuns as well,” he said in an apparent reference to his successor, Abdullah.

Dr Mahathir has repeatedly criticised Abdullah since 2005, accusing the latter of nepotism by allowing son-in-law Khairy Jamaluddin to wield power in the prime minister’s office and encouraging corruption.

Lim also said today the RCI would help determine if the Malaysia Airlines System Bhd (MAS) “double bailout” was triggered by the RM30 billion 1992/93 Bank Negara Malaysia (BNM) forex scandal, among others.

He added that it was up to Dr Mahathir to clarify if the proposed full audit and accounting into losses caused by alleged financial scandals should also be extended to cover Abdullah’s five-year premiership.

Lim last week called on Putrajaya to perform a full review on the billions in losses it incurred from financial scandals during Dr Mahathir’s tenure.

The Ipoh Timur MP said such scrutiny was needed as Prime Minister Datuk Seri Najib Razak appeared not to have learned lessons from the scandals, which he asserted had cost the nation some RM100 billion.

He cited Putrajaya’s move to settle out-of-court with Tan Sri Tajudin Ramli as an example of how the federal bailouts of companies have not abated under Najib.

Tajudin was recently freed from a RM580 million debt resulting from the loan he had taken to purchase MAS in 1994, after agreeing to an out-of-court settlement initiated by the government.

But in his court affidavits earlier, the former MAS chairman claimed it was Dr Mahathir, then prime minister, who had made him purchase the controlling stake in MAS at the time.

According to Tajudin, this was to help bail out BNM after the central bank suffered massive foreign exchange losses, due partly to speculation in foreign currency markets.

Describing this as “national service”, Tajudin also claimed the airline purchase had come with an “overriding agreement” that indemnified him against any losses suffered.

But Dr Mahathir in his autobiography published last March denied that he had forced Tajudin to purchase MAS in 1994 for RM1.8 billion, claiming instead the latter was “elated” over his purchase.