RM 12.5 scandal is not big enough ..

Talking about financial scandal, the current one that is being heard in the Malaysian court, is one that is called the PKFZ scandal. An ex-minister in charge of the transport ministry, has been accused of not revealing the truth of the actual price that ought to be paid by the port authority from the owner of the land, KDSB. He allowed, or persuaded, or looked the other way, when the port authority of Klang (PKA) bought the land for a certain sum of money, and to be paid over a period of years, at a price with an already built-in 6.0% interest cost. What happened was that PKA bought the land for that sum of money and paid an amount that carries an interest of 7.5% of the unpaid balance - which amounts to a double interest charge on the unpaid balance - and which the cabinet was not properly informed. And because of this, the ex-minister was brought to court.

But the strange thing about this court hearing is that there is no mention about how the land got into the hands of KDSB in the first place. From what I read when the scandal started some years ago, the land was a state land and that it was bought by KDSB at a cost of 2.50 per square foot through the efforts of a couple of UMNO men. [Whether it was bought by the UMNO men at 2.50 per sq.ft and then sold to KDSB - which is a Chinese company in Sabah - I don't know precisely for the write-ups are already unrecoverable or still available in cyberspace]. The land itself was swampy and hence unusable as is. In order to make the land usable, dewatering and land filling were therefore required. Whether the works were deemed as "infrastructure works", it was not made clear in the previous write-ups.

I remember reading the recommendations of the Treasury for the PKA to purchase the land at some RM 10.00 per sq, foot, at the very most; but that the PKA strangely preferred to buy it at the high price of RM 25 per sq.ft, or something like that.

The whole protocol of acquisition by PKA is itself ridiculous. First of all, the land itself is state owned and PKA is a government institution. PKA could easily acquire the unusable land at, say, a token price of RM 1.00 per sq. foot (on the basis of government to government or left pocket to right pocket transaction, so to speak) or maybe the RM 2.50 per sq. foot that somehow was the price at which the 2 UMNO men bought the land. But no, PKA preferred to go about in a complicated way by buying the land from a company that somehow managed to acquire the state land in a dubious dealing after doing some so-called "infrastructure works" . Worse, incredulously, PKA kept on insisting that the land be bought at prices beyond that recommended by the Treasury. During the process, an Arab company was roped in as JV partner to develop the land into a hub for storage and other facilities. Whether the Arab company has paid anything for its stake, it's not known. Only that, the Arab company smelled something fishy about the deal and rightly abandoned about being a partner. Things in Malaysia seemed never to be done in an honest and straightforward way.

To this day, it's not known who the 2 UMNO men were. Are they still alive and enjoying the fruits of their scheming ?

Relevant Facts:

(1) Land area is 404.86 hectares

(2) Location is Pulau Indah, Selangor

(3) Main contractor is KDSB (Kuala Dimensi Sdn Bhd), 64.6% owned by Tiong King Sin

(4) Tiong King Sin is a BN backbencher MP,

(5) PKA stands for Port Klang Authority

(6) O.C. Phang was the General Manager of PKA who proposed aggressively that PKA buy the land at RM 25/= per sq.foot from KDSB

Names, neither one nor the other ...

A Malay man with the funny name of Lorraine Esme Osman finally died in a London Hospital, of cancer. This man was responsible for the RM 2.5 billion BMF (Bank Bumiputra Malaysia Finance) scandal in the early 1980s when, tempted by kickbacks, he gave loans to George Tan of the Carrian Group in Hong Kong without any asset backing. The loans were never recovered. There were 3 or 4 others in cahoot with this crook. None, as far as I know, had been brought to justice in Malaysia. The finance minister at that time was Tengku Razaleigh, another Malay man with a funny name. In the course of an audit inspection in Hong Kong, a Malay auditor, one with a true blue Malay name of Jalil Ibrahim, was murdered there and no one was ever apprehended. To this day, Tengku Razaleigh never gave a satisfactory explanation as to why he was unaware of such a huge loan. RM 2.5 billion in those days is of a high order of magnitude in value even by today's standards. If you factor in the interest rate of 8.0% compounded at a time when RM 2.10 equalled 1.00 USD for about 30 years since 1981, the loan is equivalent to 2.5x1.08^30x3.10/2.10 or RM 37.136 billion today - enough to ease Malaysia's current debt burdens. The loan scandal brought shame to Malaysia and the Malay community as a whole - providing another example to the Chinese on what they have been saying all along that Malays can't do business.

USAAAA to USABBB .............

In spite of Barack Obama's rhetoric today, USA's debt rating would slide down from its recent AA+ to something in the order of below A, I surmise. Let's think about it. USA is now the world's biggest debtor nation. The amount of debt is in the order of USD 14 trillion i.e. USD 14 million million and rising. After World War II, it was the biggest creditor nation. The recent downgrade from AAA to AA+ won't stop and in fact, Standard and Poor (the US rating agency that did the downgrading) has warned that the debt rating is going down further. USA now carries a begging bowl to, of all country, China and Japan plus a few other Asian countries, to borrow money to finance its bloated administration and its three wars in Iraq, Afghanistan, and Pakistan. The war in Iraq can be financed somewhat by Iraq's oil, but the wars in Afghanistan and Pakistan involved simply money thrown down the drain. When it borrows money from, say, China, US gives China an IOU (a piece of paper that says I owe you so much and I'll give you back what I borrow plus a little more, sometime later). When the time comes to pay back, instead of paying China in terms of products, say, weaponry or high end gadgets or in gold, US pays back using its freshly printed USD notes. So China gave good money to US and receives, in return, notes that become less and less in value. That's why China accumulates more and more USDs. To get its fuel, US simply use its printing machine to print USD notes to use them to buy oil from the Arab countries. The US has been doing this scam for years on Japan, Korea, and many other countries. The odd thing is that the USA, in spite of having the largest gold reserves (8,965.6 tons by one reckoning) in the world, never use it to pay its debts. It would prefer to pay from its printing machine. China should start insisting US to pay its debts in gold in the future.

More to come ...