Tuesday, March 6, 2012

Mahathir's Bashing Fever

Hantu Laut

Anwar Ibrahim was DPM and Minister of Finance from 1993 t0 1998.The question is why did Anwar continue to serve Mahathir even after the Bank Negara debacle. Why stay and serve a bad leader if you are so morally upright?

As finance minister wasn't it his job to advise Mahathir and if he refused to listen than Anwar should have, as a matter of principle, resign his position as finance minister.Now, he disclaimed everything, making Mahathir the sole badass.

Some are born great, some achieve greatness and some have greatness trust upon them.....(Shakespeare)

Unfortunately, Anwar has none of it, and he should know "God's mill grind slow but sure". If you are not yet fated to be prime minister, you'll never be, no matter how hard you try.

This excessive Mahathir's bashing may have negative effects on Pakatan.Mahathir is still a very popular man in spite of all the mud slinging against him.

Mahathir's Disastrous Financial Speculation

A murky and embarrassing case is closed, hiding top government officials’ involvement

Sometime over the next few days, a court in Kuala Lumpur will put the finishing touches to an agreement that allows Tajudin Ramli, the former head of Malaysian Airline System, not only to walk away from charges that he had allegedly looted the airline of tens of millions of US dollars but with an RM580 million (US$293.2 million) out-of-court settlement from the government.

It appears to be a settlement that the government would rather keep to itself. At the heart of the agreement with Tajudin is a convoluted story that began as long ago as the 1980s when Malaysia’s central bank, Bank Negara Malaysia, at the urging of then-Prime Minister Mahathir Mohamad, began speculating aggressively in global foreign exchange markets, at one time running up exposure rumored to be in the region of RM270 billion -- three times the country’s gross domestic product and more than five times its foreign reserves at the time.


Eventually, playing with the big boys came home to roost. In 1992 and 1993, Mahathir became convinced he could make billions of ringgit by taking advantage of a British recession, rising unemployment and a decision by the British government to float the pound sterling free of the European Exchange Rate Mechanism.


Mahathir ordered Bank Negara to buy vast amounts of pounds sterling on the theory that the British currency would appreciate once it floated. However, in what has been described
as the greatest currency trade ever made, the financier and currency wizard George Soros’s Quantum hedge fund established short positions borrowing in pounds and investing in Deutschemark-denominated assets as well as using options and futures positions.

In all, Soros’s positions alone ac counted for a gargantuan US$10 billion. Many other investors, sensing Quantum was in for the kill, soon followed, putting strenuous downward pressure on the pound. The collapse was inevitable. Quantum walked away with US$1 billion in a single day, earning Mahathir’s eternal enmity and earning Soros the title “the man who broke the Bank of England.”


Mahathir and Bank Negara, on the other hand, walked away with a US$4 billion loss, followed by another US$2.2 billion loss in 1993, the total equivalent of RM15.5 billion. Although the disastrous trades destroyed the entire capital base of Bank Negara, after first denying it had taken place, the then-Finance Minister Anwar Ibrahim repeatedly reassured parliament that the losses were only “paper losses” and, now that he is Opposition Leader and head of the Pakatan Rakyat opposition coalition, has managed to skate free of the controversy.


Eventually, the Finance Ministry had to recapitalize the central bank, almost unheard of for any government anywhere. It is reliably estimated that Bank Negara lost as much as US$30 billion in this and other disastrous currency trades, costing the head of the central bank and his currency trader deputy their jobs.


It was at one with Mahathir’s unfortunate penchant for believing he could beat the global financial system in other ways. In the early 1980s, at his behest the Malaysian government attempted to corner the tin market through Maminco Sdn Bhd, a dummy company set up to buy tin futures and physical tin to push up prices on the London Tin Market. Malaysia at that point was producing 31 percent of the world’s tin.


However, the rising prices as a result of Malaysia’s action caused miners to increase production in the other 69 percent of the tin world. At the same time the US government released its tin stockpile. The price collapsed, costing Malaysia RM1.6 billon with the subsequent low prices wrecking Malaysia’s tin industry. Mahathir has repeatedly railed against western governments for rigging the rules against him.


The attempt to corner the tin market and the subsequent loss established an interesting precedent in terms of what would take place with the speculation in the pound sterling. Rather than acknowledge the losses in the tin speculation, the government set up another dummy company called Makuwasa Sdn Bhd, creating new shares supposedly reserved for ethnic Malays which were allocated to the Employee Provident Fund, the country’s retirement fund for private and public workers. The plan was to sell these cheaply acquired shares at market price for a profit to cover Maminco’s losses. Finally, in 1986, Mahathir was forced to admit that Makuwasa was created to recoup the government’s losses from the Maminco debacle and to repay loans to Bank Bumiputra.


Fast forward to today and the out-of-court settlement between several government-linked companies and Tajudin Ramli, in which the government quietly cancelled Tajudin’s debt of RM840 million. It is believed to be the biggest such sum awarded in Malaysian history.
Read more.

Ghosts Of The Past

Hantu Laut

Some have skeletons in the closet that would only haunt them decades later.

Ghosts of the past coming back to haunt those who betrayed the poor kampong folks or was it a ploy by the oppositions. Read the story below.

Angry Murut converts cry foul over land promise

TENOM: Murut natives who had converted to Islam in 1979, under the then Berjaya government-linked mass Islamisation programme which promised new ‘recruits’ individual land titles, are now claiming that the government had cheated them.

The converts were given land plots in Kpg Masanopi, Kembong and have been occupying this area since then. However they have now discovered that the land is not theirs and instead belongs to someone else.

A villager, Ariffin Abdullah, 70, whose original name is Arot Bin Ukab, said that the ‘planned’ village was created in 1979 during the rule of the Berjaya government as a new settlement for a group of Muruts who were willing to convert to Islam.

The converts then went on to develop and till the land providing for themselves by planting rubber trees, orchards and padi. Ariffin was their village head or Ketua Kampung.

But now, so many years later, the villagers who were promised their individual land titles had found out that their settlement area belonged to someone else.

“What is most disappointing is that the land owner turns out to be the person who was entrusted by Harris Salleh (to manage the distribution of the land to us as the new converts,” Ariffin said.

“And our worst nightmare happened when we found out that the person had sold the land to a businessman.

“Imagine, now this businessman has just sued us for illegal occupation of our land!”

“The suit was lodged in Nov 29, 2011. So how can anyone blame us for feeling so humiliated and very angry,” added Ariffin.

Conned all the way

Arffin said that their hard work to develop and till the land had been going on for more than 30 years and during the three decades they were repeatedly assured their land titles would be issued to them in due course.

According to the official records, the first single land title was issued on Oct 30, 1980 under the name of Mohamad Abdul Rahman (then the District Officer of Tenom).

Another was issued to one Anthony Lamb and yet another to Theodore Douglas Lind (the former official of the then Chief Minister).

Ariffin claimed that these three persons were entrusted by Harris to manage and administer the land for the benefit of the converts, but they never got to have the individual land titles issued to the different families as they had promised.

“Instead, they spent the whole 30 over years asking us to be patient.

“But now it is proven (that) their plan (all along) was to own the land, and now thyey have sold it behind our backs,” added Ariffin.Read more.

Sunday, March 4, 2012

Harris:RM430m Bum-Bum Bridge A Waste

Hantu Laut

Former Sabah Chief Minister has taken to task the Federal government decision to build a bridge linking the mainland with Bum-Bum Island in Semporna initiated during the tenure of former Prime Minister Abdullah Badawi.

Harris is indeed right, the unlikelihood of any potential economic growth of the area would make the bridge a white elephant.Story here and here.

Saturday, March 3, 2012

MAS:National Pride Or National Shame?

Hantu Laut

There have been many fatalities in the airline business.

The three most well-known demises of national airlines were Pan Am, Swissair and Sabena of the U.S, Switzerland and Belgium respectively. 

I have had the honour of having flown with all three airlines before they were destined to the graveyard.

One must not have false sense of pride or foolish sentiments when come to running a business. If the business continued to lose money, sell it or close it down. Pouring taxpayer's money into this bottomless pit is completely irresponsible of the government, which eventually would become even more costly to shut down.

The Malaysian taxpayers should not be made to pay money to this sick child just because the government think they are beholden to keep employing those 20,000 grossly overstaffed MAS bumiputra employees and maintain a false and costly national pride.

The government should not be beholden to those good-for-nothing MAS management and employees, but should protect taxpayers money as trustee of the people.

MAS losses were not due to external market forces.It's just incompetence and bad management. Its major losses were due to gross mismanagement arising out of over staffing, overpricing of supplies by sub-contractors, high fuel prices due to poor financial planning and in a nutshell a blundering amateurist management team headed by people who have no knowledge of the aviation industry. MAS has enough business in the air, but excessively high expenditure caused the massive losses.

Its airline core business revenue increased by 2% to RM13.9 billion in 2011 but suffered a massive loss of RM2.52 billion.Higher fuel costs were due to management lack of foresight. A competent management would know how to hedge fuel prices.Since passengers help subsidised fuel cost by paying fuel surcharges, MAS management cannot claim that most of it losses were due to higher fuel costs.

Using the 2011 loss as a yardstick, MAS would have lost 10 Boeing 737-800 in 2011, literally chopping them up for the scrapyard, which hypothetically also means it could have paid the purchase of 10 units of new Boeing 737-800 in cash.Current price of Boeing 737-800 is at US$83-100 million depending on the configuration.

The airline had gone through various management changes over the past decade, yet nothing good had come out of it.

As I have predicted correctly of past management failures, I am still not convinced the new management team put in recently would be able to save the airline.There will be lots of talk but little improvement.

Political interference and corrupt practices are rampant in the airline.Many MAS supply contracts were given to relatives and cronies with highly inflated prices. Remember the RM75 or RM150 per serving of nasi lemak episode not long ago?

Can MAS pay for air crafts due for delivery this year and next? 

They are 5 units A-380, 13 B737-800 and 5 A330-300 awaiting delivery. MAS needs almost RM10 billion for the next two years to pay for aircraft deliveries.

How are they going to pay when they only have RM1.1 cash reserve, which will be exhausted soon to pay for the continuing losses. 

With a severe red balance sheet will the banks lend them money or they may have to go to Santa Clause to get the money, the people's money.

Three things the government can do, forget about national pride, it's a national shame.............sell the damned thing to a private concern, close it down, or chop it up, bit by bit, and feed to the dogs.

MAS, national pride or national shame?

Blast from the past, read here, talk is cheap!