The next time, before you accuse a corporation or an individual of being a bankrupt just make sure you read their balance sheets first.
The question here is how many of our politicians, journalists, bloggers, lawyers, judges and economists can interpret financial statements? Obviously, some just don't care to find out the truth before opening their big mouth.
These are the people who are often confronted with the intricacies of financial figures and its imputations that could be as simple as ABC for some and as puzzling as the jigsaw puzzle for others.
Politicians, are the worse offenders when it comes to not doing their homework.Than you have the other type, political leaders surrounded by advisers and sycophantic political vultures who dish out wretchedly wrong advices to advantage their own position without caring for the dire consequence.
Felda, in response to some of the malicious rumours that the company is bankrupt has decided to sue for defamation a number of people including Anwar Ibrahim, Zaid Ibrahim, PAS MP Abdul Wahid Endut, a former deputy minister and at least three reporters.The Malaysian Insider story here.
The source of the rumours is Felda's dwindling case reserve of RM4 billion which apparently had diminished over the past few years and blaming Najib's involvement in its ruinous financial management.
Did people like Anwar Ibrahim and top dog lawyer Zaid Ibrahim actually check Felda's financial statements before going public with their assertions.
Felda confirmed that it is true its cash reserve has declined but on the other hand its current and fixed assets had risen as much as RM6.2 from RM9.17 billion in 2004 to RM15.37 billion in 2009.Maybe, Felda should also be more forthcoming where the money has gone to. New investments or drawn down to meet its financial obligations?
What construes bankruptcy? It is an inability of an individual or organisation to pay its debts as and when it becomes due.In more simple term you have more liabilities than assets and you can't pay your creditors.You are not a bankrupt unless legally declared so by a court of law.
In Malaysia the Bankruptcy Law is still archaic.The last time the government wanted to revise it to be current with what is practised in other developed economies it was bullied and pressured by the banking community not to amend the Act.
Getting court protection for scheme of arrangement with creditors is almost unheard of in Malaysia.Once, you are bankrupt, you are almost bankrupt for life and applying for discharge is dicey if you have many creditors.
Personal bankruptcy is painful for those genuinely in trouble.The Najib's government should make attempts to change and update the Act to be in line with developed nations and to make the banking community more prudent in their lending and not become too dependent on getting the life and soul of the guarantor when loan goes bad.
In many Western countries discharge is automatic after a few years, provided you are on good behaviour, did not commit fraud or broke any of the conditions applicable to a bankrupt.
Has Felda failed to meet any of its financial obligations or asked for restructuring of any of its short and long term debts that might indicate acute liquidity problems? If it has not than it is not anywhere near insolvency and even if it has applied for restructuring it is still not deemed bankrupt unless declared so by the court.
Even if Felda were to have lost all the cash reserve in a bad investment, technically, it is still not bankrupt as long as it can meet its financial obligations in the day-to-day running of the company.
Anwar Ibrahim was a former Finance Minister and Zaid Ibrahim used to run the biggest law firm in this country.It's absurd that they don't know the procedures.It goes to show that they don't care what it takes, they are prepared to throw caution to the wind to implicate Najib to gain political mileage.
Though, I think they are not very good at it, lying has become a set pattern and the forte of Pakatan leaders.
If Felda can prove that they are not any where near bankruptcy, the two Ibrahims better be prepared to consider bankruptcy themselves.This can be not only the most costly legal suit in Malaysia's history, it can also bankrupt the defendants unless of course Anwar can take over Puterajaya and do what he accused the BN government of doing, interfere with the judiciary.
So, next time before you call a company bankrupt, please learn to read and interpret the "balance sheet". That's where the company's financial health is hidden.
5 comments:
I hope FELDA sue the pants of Anwar and Zaid and especially that former Gerakan fellow who frogged to PKR, that arrogant Tan Kee Kwong as well.
I hope FELDA sue the pants of Anwar and Zaid and especially that former Gerakan fellow who frogged to PKR, that arrogant Tan Kee Kwong as well.
I could be wrong, but nowhere do I recall Zaid or anyone saying Felda was bankrupt.
As for the accusation that Felda had been grossly mismanaged by Najib, the original blatant accusation came from Dr.Tan Kee Kwong, ex-Gerakan/BN, now PKR.
DR.TKK, son of Gerakan founder Dr. Tan Chee Koon, served a stint as deputy Minister at Primary Ind when Najib took over the Felda portfolio.
It is unlikely that a highly educated, intelligent and informed person like TKK would just fire from the hips to the extent of inviting a defamation law suit from Najib and Felda.
Reading between the lines, I think there's more to come out of the the Felda woodwork.
It's time the Govt came clean with publishing the full accounts of all these Stat bodies like Petronas, Felda etc., so that the Rakyat can be satisfied on the transparency and accountability issues.
dpp
we are all of 1 race, the Human Race
HL
I may not agree with the two Ibrahims and Mr Tan Kee Kwong at this moment as I have not seen FELDA's balance sheet, may be they had, that is why they made such claims.
But at the rate the billions in cash dwindled from the balance sheet as claimed, It reminds me how what the balance sheet of those listed companies that gone into PN17 appears a few quarters before they declared the company defunct !
So, please do not kill the messengers every time when something like this happens. Try to get some information and check before you draw your guns !
With all the corruptions that veins through the nooks and crannies of our government agencies, It will definitely be a tragedy for the nation if an institution like FELDA need bailing out !
HL, you are correct to say that these politicians should review the balance sheet first before mouthing off.
But even ordinary rakyat like you and me cannot get access to such information despite these GLCs being owned by the govt, i.e taxpayers.
Perhaps FELDA should have given some figures like what their liabilities are, so that we can be assured that they owe less that what they own.
I mean you can have RM 4 billion in cash but owe RM 7 billion in loans means there could be a liquidity gap, but doesn't mean one is bankrupt.
Whether you are pro-govt or not, DPP has a valid point - we need transparency and accountability to the rakyat.
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