Wong Chen's Q & A session.

I've been busy today answering questions from readers and a reporter on the Proton–Geely deal. To simplify things, I won't repeat myself, but I will give you directly what I've told the Malaysiakini reporter:

Q: Is it a good deal in the first place? Should DRB sell more than 49.9%? Also, who owns the golden share now? In future, who will have the say with regards to strategy?

A: Proton has been commercially unsustainable for a long time, therefore this deal cannot be judged on whether it is good or bad but as a necessity. The details of the deal must be fully disclosed and the Government must come absolutely clean on the new shareholding structure of Proton. Does the Government still have a golden share? Are there any other third parties holding shares and acting in concert with Geely? I find it very hard to believe that Geely is willing to buy Proton without majority control.

Q: After selling 49.9% shares to Geely, is Proton still a national car? Does it qualify to receive RM1.1 billion R&D from the government?

A: I don't think Proton can be considered a national car anymore after the deal completes in July. Again, I stress the Government must come clean on the details of the deal. If I have to make an educated guess, the RM1.1 billion payout to Proton is probably to help Proton settle all outstanding liabilities in order to deliver to Geely a clean company in July.

Q: Certain politicians suggest reducing the import duty since protection for Proton is no longer necessary, what do you think? Should excise duty, one of the main reasons pushing up car prices, also be reduced? You suggested eliminating the excise duty, what should be the time frame?

A: If Proton is no longer a national car, then the excise duty must in principle, gradually be reduced and then eliminated within 3 to 5 years. I am against a sudden elimination in excise duty as it will cause market confusion and destroy all locally produced cars including Perodua, and will also decimate the used car market. The Government must act responsibly and tell Parliament what it intends to do as soon as possible. Keeping the details of the deal opaque and being silent on its excise duty policy are irresponsible acts, and these serve only to cause unnecessary anxiety and confusion in the market.

Q: What's next for our national automotive policy, then? Should we turn into a manufacturing hub like Thailand, or should we continue to create our own cars?

A: We have a strong automotive parts industry and we have to thank Proton for that. However we must move on. I am positive on Geely's abilities and its management of Volvo is impressive. I hope Geely can do the same with the Proton brand and make it a regional brand. Malaysian cars can be competitive if we eliminate the culture of unlimited protectionism which breeds wastage, inefficiencies and corruption. Protectionism can be good but it must have a specific limited time frame, and the management must be based on merits and abilities. Proton squandered all the protectionist policies and the time has come to end it.

Q: What should be the strategy for Proton now? Should Proton enter the China market under the name of Geely? Or should Proton come out with a new name/brand after the acquisition?

A: I don't think Proton should enter the China market, that is Geely's home turf. For Malaysia, it should keep Proton and see how it performs in Malaysia for a few years. Proton must always be market sensitive.

Li Shufu, the man who dared to buy Proton

Li Shufu

Chinese entrepreneur and founder of Geely Automobile, Li Shufu, is the man who dared to buy loss-making national car maker Proton.

After years of dwindling sales and financial losses, it is hoped that finally now, Shufu is the man who would work his 'magic' in reviving Proton as he did with prestigious Swedish auto maker Volvo.

Given his proven track record in turning round loss-making auto companies, the Malaysian government and Proton's parent company DRB-Hicom are confident he will herald a new era of growth for Proton.

Yesterday, DRB-Hicom signed an agreement with China-based Zhejiang Geely Holdings Group Ltd  for the Chinese car group to acquire 49.9 percent in the national car maker.

Under the deal, Proton would also dispose its entire stake in British sports car-maker Lotus for 100 million pounds (RM1=RM5.57), a move that will enable Proton to cut its losses.

As Geely's owner, Shufu owns 100 percent of Volvo, yet many might not be aware that the owner hails from China.

Shufu is rare among today's many Chinese entrepreneurs for taking on auto manufacturing as it is a sector dominated by state enterprises and multinationals.

He founded Geely in 1986 to build refrigerators and became an automaker in 1997 when he wanted to produce a cheap car for the masses.

Geely Group now has reached 1.3 million car sales in the financial year 2016.

And, Shufu is now reportedly worth a staggering US$7 billion.

As an entrepreneur-owner, his almost 50 per cent ownership is a major plus point which Proton would derive from the partnership.

This is because Geely is a "entrepreneur driven" auto company and one of the few left in the world as opposed to car firms owned by state enterprises and multinationals.

As an entrepreneur-owner, there would undoubtedly be a greater sense of personal commitment to ensure that Proton achieves success at the domestic, regional and possibly global levels.

No wonder he is sometimes referred to as the 'Henry Ford of China'.

Before he bought Volvo in 2010, the Swedish car maker owned by Ford then, was on the brink of extinction.

He also owns the iconic London taxi Company.

With Geely's expertise, one can expect new Proton models, transfer of technology, more jobs, auto engineers and bigger orders for parts vendors.

The partnership can also help ramp up production capacity of its under-utilised Tanjung Malim plant to its full annual capacity.

The Chinese firm's acquisition of Proton nicely fits into its plans to make its presence felt in South-East Asia for which it has been on the lookout for a manufacturing plant in the region.

Investor sentiment on Geely has been immensely favourable with its share price on the Hong Kong Stock Exchange having risen from HK$3.77 in 2014 to HK$11.50 as of May 22, 2017.

Only time will tell whether Proton would emerge as a formidable automative player again.

Nevertheless, with Shufu and Geely providing solid backing, our very own and much-loved Proton brand now has a real chance of making a comeback, and probably a huge comeback at that.

- Bernama

Zhejiang Geely Holding Group Co Ltd make a U-turn.

China's Geely buys 49.9 percent of Malaysian automaker Proton.

Read full report HERE

Too little, too late from Maxis?

Maxis thought it held monopoly in the broadband market until new kids like U Mobile and YES started offering 15Gb + unlimited calls for 70 and 16Gb for 88. Even Digi offer 9Gb + unlimited calls for 128. Maxis recently jacked up its freebies for the MaxisOne 128 package to 8Gb + unlimited calls. Even that doesn't come close to these newer players who have levelled up with their infrastructures. If Maxis users ported out under protest it is understandable.

Subscribers want value for money and Maxis packages are the priciest. Brand recognition means nothing when rivals begin to provide better coverage and shorter latencies. Unless Maxis react fast to lower the commitment fees, and take a huge loss, it will lose more in the coming years. Not only will porting out continue, new subscribers learning of better offers will subscribe elsewhere. 

Soon sales of discounted smartphones or giving the cheaper ones away free will no longer attract customers who hate to be tied down to a 24 months contract and a mandatory 500 opt out penalty. Price rules and the war of giving the better deals with no strings attached has begun.

Look out for 5Gb + unlimited free calls to all networks for just 50-60 in a year's time. Those with the largest subscriber base will survive.

What happened at THE STAR'S 2013 AGM, May 22?

The following appeared on the online Business Times Premium website, but have since been removed.

Wong Chun Wai (WCW)
Fong Chan Onn (FCO)
Vincent Lee (VL)
Koh Beng Huat (KBH)

There was a big turnout for the AGM. The venue (room next to
auditorium) was crammed and overflowed and this was pointed out by two
shareholders. "It is too small, you are not performing your social
responsibility and it looks bad."

A lot of shareholders expressed concern about the falling share price
saying if revenue, circulation and readership is going up as claimed
why the dip?

 One shareholder noted that even Star directors were selling their
shares to which one director said he is still buying.
FCO said Star is an investment stock, not a betting stock and still
pays good dividends.

A visibly upset shareholder criticized the paper for telling lies and
inaccurate reporting and said she represents many other readers with
similar sentiments. "If you don't report correctly, who will buy your
paper?"

WCW responded by describing the shift in the sentiments of urban
voters/readers of Star as being anti-establishment /angry with
anything associated with BNasional. He said that Star was generally
accurate in its coverage and online portals like TMI and Malaysiakini
were sometimes wrong.

For example, he said Star never said Barisan would win in Penang. He
added they report what politicians say. The comment, "Don't talk
rubbish" was overheard while he was talking. He asked for
shareholders' patience in hearing him out WCW said he has to work in a
difficult situation as he has to answer to KDN (Home Ministry),
shareholders, owners, and readers. "I am praised and bashed by both
sides. We put Anwar on the page one with Najib and I got a shelling,"

An ex-employee said he would support a management buyout (MBO)
provided the buyers are those with a good reputation as he said it is
better if Star is out of the Barisan/MCA mode which comes with tight
controls and obligations.

 He also criticized the partisan advertisements in the run-up to GE13
ie "A vote for DAP is a vote for PAS" saying it had angered readers
and that they were ill-conceived and not thought out properly. The
directors reiterated there will be no MBO and MCA has no intention of
selling off Star.

Other shareholders asked what rates were charged for the political
advertisements but the BoD said it was given on a "group buying basis"
but did not reveal the actual rates. They said it was according to
"professional market pricing" and there was "no special treatment for
anybody."

Another shareholder said the Star should lead the way in offering
unbiased and objective writing. Star writers should be professional
although she acknowledged that specialist writers/columnists have a
right to have their say.

A shareholder also questioned how the recommendations for the
re-election of directors are done. "The next AGM, when we elect a
director, please let us know what their contributions are."

Finally, after all the resolutions were passed by a show of hands, the
former general manager of Star, Koh Beng Huat, got up to speak. He
pointed out that he had given the secretary a list of written
questions and asked that the answers be read out. Most pertained to
the welfare of Star employees. He also asked about the progress of the
book which was to be published in conjunction with Star's 40th
anniversary. The answer was the editorial team was busy because of
GE13 and they are now editing and "verifying interviews."

KBH: This is the first time I have stepped forward since I left. The
humble workers laid the foundation for the company. The employees are
the most valuable asset but the impression given is otherwise.  I hear
a lot of negative remarks about the paper and the company - from both
current and former employees. Why couldn't Star retain Ho Kay Tat?  He
was a true professional. Did he leave because of politicking among the
top management?
I sold 30 lots of shares. The price has gone down from
3.20 to 2.60 after Ho Kay Tat left.
The performance bonus should be scrapped. I've seen how the system was
abused more than 30 years ago in NST, resulting in victimization and
favouritism. I don't want Star employees to feel the same. I know you
reward your favourites, those you don't like you minimise and cut off.

The ex-gratia bonus had been successfully implemented for many years.
It was a motivator to employees.
Star is not performing the way it should be performing. It used to be
among the top 100 companies by market capitalization. Something is
seriously wrong. We are told circulation and revenue is going up but
the share price is dropping. What are the directors doing?
I'm not protecting WCW, I'm sad for him. He is a professional. He
should concentrate full time on editorial matters. Don't get involved
with the BoD.

There is too much politicking - they will make use of you. He loves
the paper, so do I.  WCW don't spend time designing T-shirts and
accepting mock cheques. Don't spend time on the BoD. They will grill
you and politicians want to make use of you. Get out of the Board.

I am a lifetime member of MCA. MCA owns 40% - they act like they own
the paper. And whack each other like mad. Star should not get involved
in internal party politicking. You can't run Star like an advertising
agency. (VL interjected and said that Naga had been second largest
contributor to Star revenue).  Advertising is a dog eat dog. A
newspaper is very different.

Don't bully the staff, don't' take them for granted. Don't ignore
them. Treat them with respect. Take care of the employees - they are
our greatest asset. Star cares for its workers. Why is it until now
they have not been given their increment and performance bonus? Don't
give out titles as you like. Don't bully the employees and transfer
and redesignate them. This is not your father's company. David Yeoh is
a wonderful newspaperman. What is he doing in Penang?

The Star has achieved great success over the years but this year is
not going to be a good year. I heard a lot of negative comments about
the top management and BoD. The rate they are carrying on Star is
going downhill.

When I and Steven Tan went to see the chairman, FCO, when he was
Minister of Human Resources he brushed us off and said he was too
busy. The chairman and directors come and go. I hope FCO will not
brush us off this time and give a firm commitment. Make sure the
company is run properly. Don't disappoint
Tunku Abdul Rahman. Don't ignore his contribution.

2.  PUBLISHED MAY 24, 2013
Poll results a hot issue at Star AGM
A few shareholders accuse publication of supporting BN

BY S JAYASANKARAN IN KUALA LUMPUR

WHAT was to have been a routine annual general  meeting of Star
Publications last Wednesday turned out to be anything but.
According to people present, one man told Wong Chun Wai, the firm's
editor and executive director, that though he remained a shareholder,
he had stopped buying the newspaper because of what he felt was the
publication's one-sided coverage that seemed to favour the ruling
Barisan Nasional.

Another accused Tony Fernandes, who was seeking re-election as the
firm's independent director, of using chartered flights to ferry
Bangladeshi "phantom" voters - a widely believed rumour spread by the
opposition - to cast ballots in the May 5 general election. Mr
Fernandes, the controlling shareholder of budget carrier Air Asia,
agreed that there had been chartered flights but said they had been
used to ferry Sabahans working in Johor home
to vote.

The general tone of many of the shareholders was hostile. "It was as
if the elections weren't ended," one shareholder who was present told
The Business Times. "Instead of talking about business or profit, they
just wanted the paper to bash the government."

If history was to be a guide, then the KLSE should improve should Pakatan wins

As the 13th general elections looms, many people are wondering what the impact will be on the financial markets in Malaysia in the event of a Pakatan win. Well, there is no precedent in Malaysia. We never had a change of federal government - one of the very few countries left in the world that hasn't had a change of government.

However, we can use precedence from other countries around the region. Let's look at Indonesia. In 1998, General Suharto was overthrown after 33 years in power. At least a million people went to the streets and demanded his overthrow. The ensuing chaos led to his resignation.

The Jakarta Composite Index (JKSE) dropped to a low of 245. Five years after his downfall, the JKSE doubled, and another five years later, it reached 900 percent appreciation, and currently it stands at a record high of 1,700 percent appreciation. That means, if you had invested RM10,000 in Jakarta stocks at the height of the revolution, it would be worth RM180,000 today. Not a bad investment.

Let's look at Thailand. The Thai SET Stock Index Chart shows that the Index has reached a record 5-year high today and has been climbing consistently for the last 4 years despite the chaos in Bangkok in May 2010 and the subsequent general elections in July 2011, where the Pheu Thai Party defeated the Democrat Party of PM Abhisit.

Let's look at Taiwan. In the year 2000, Chen Shui-bian won a historic election in Taiwan, breaking the Kuomintang's 55-year monopoly on power. In 2004, the pro-Independence Chen stood for re-election. He - and his vice-presidential candidate - were shot during a re-election campaign, at the same time China amassed warships around the islands threatening to attack if the people voted for him. He won anyway.

The TSEC chart shows that the market reacted to the events but it never fails to bounce back.

Let's look at South Korea. In 1980, martial law was declared. This was followed by the Kwangju massacre. By 1997, 1 million people flood the streets to demand General Chun Doo Hwan's resignation. He eventually did. After he stepped down, President Roh-Tae-woo took over followed by another four presidents. All through this time, the markets were hitting new heights . Today the KOSPI is at a 25-year high.

So history shows us that revolutions and change of governments presents great ‘buying opportunities’ for stocks. It's good for the markets and good for investment. Stay tuned for the greatest stock buying opportunity of all time. In Malaysia.

[Contributed by: G H Kok]

Yet another one bit the dust. Why are we not surprised?

Tricubes Bhd today announced that Bursa Malaysia Securities Bhd (Bursa Securities) has disallowed its appeal against rejection of its proposed regularisation plan and de-listing.

In the circumstances, the securities of Tricubes will be removed from the official list of Bursa Securities on Oct 1, it said in an announcement to the exchange.

The troubled company was awarded the controversial 1Malaysia email project in April last year to serve as a designated digital channel for government bodies to communicate with the public.

The project elicited fierce public criticism as all government bodies are required to pay for every email sent using the 1Malaysia email accounts.

Its critics also questioned whether the plan was intended to “bail out” Tricubes.

Shares can no longer be traded

Tricubes said its securities, which are currently deposited with Bursa Malaysia Depository Sdn Bhd, may remain deposited notwithstanding the de-listing of the securities from the official list of Bursa Securities.

Alternatively, its shareholders who intend to hold their securities in the form of physical certificates, can withdraw these securities from their Central Depository System (CDS) accounts at anytime after the securities have been de-listed from the official list of Bursa Securities.

Upon the de-listing, Tricubes will continue to exist but as an unlisted entity.

It is still able to continue its operations and business and proceed with corporate restructuring while shareholders can still be rewarded by the company's performance.

However, the shareholders will be holding shares which are no longer quoted and traded on Bursa Securities, Tricubes said.
Last January, Tricubes Bhd’s 70 percent-owned subsidiary Tricubes NCR JV Sdn Bhd was awarded a RM6 million project by the Home Ministry to maintain the police force’s hardware and software and server enhanced mobile management system (EMMS).

[Source: Bernama]

This is not good, not good at all, not only for Sharizat, but for UMNO as well

NFC-linked supermart kicked out of Singapore mall

Singapore’s Rochester Mall has turfed out its planned anchor tenant Farmhouse Supermarkets as the store, linked to the family of Datuk Seri Shahrizat Abdul Jalil in the ongoing National Feedlot Centre (NFC) scandal, was unable to get its operations ready in time.

The opposition had accused Shahrizat’s(picture) family, who are alleged to have abused a RM250 million federal loan given to their National Feedlot Corporation (NFCorp), of using the funds to finance personal business ventures as well as to purchase land and property unrelated to cattle farming.

“We have terminated the lease of Farmhouse Supermarkets and are in the process of getting new tenant(s) for the vacated retail space,” Singapore’s The Straits Times quoted a spokesman for Singapore-listed United Engineers, the project’s owner, as saying.

The supermarket was to occupy the entire second floor, spanning more than 25,000 sq ft, of the mall at the one-north precinct in Buona Vista.

PKR had claimed that rental alone for the venture would have cost RM2.2 million a month.

But 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 but did not comment directly on Farmhouse Supermarkets.

Salleh, who is Wanita Umno chief Shahrizat’s husband, pleaded not guilty on Monday to criminal breach of trust and violating the Companies Act in relation to RM49 million in federal funds given to manage the NFC project in a scandal that has opened the Barisan Nasional (BN) government to damaging attacks ahead of elections expected soon.

This was after Shahrizat said on Sunday she would quit as women, family and community development minister when her senatorship ends on April 8.

Her resignation came after 4½ months of being dogged by allegations that she and her family used public funds to finance over RM62 million of land, property and expenses unrelated to cattle farming.

The DAP has also accused NFCorp directors of cashing out RM12 million from the federal loan by channelling it through one of their companies in Singapore.

NFCorp, tasked with running the national cattle farming scheme, is headed by Shahrizat’s husband and their three children. The NFC project in Gemas, Negri Sembilan, was awarded to the company in 2006 when Shahrizat was in Cabinet.

She had previously resisted calls from the opposition as well as Umno veterans such as Tun Dr Mahathir Mohamad to quit, stressing that she was “only the wife” of Salleh and had nothing to do with the embattled entity.

NFCorp hit the national headlines after it made it into the Auditor-General’s Report last year for missing production targets.

[Source: The MI]
.

MeatWorks restaurant in Singapore

MeatWorks at ION Orchard Singapore on the 4th Level, is the Restaurant of Lembu - Condo Minister Shahrizat and family,serving Beef from infamous  Malaysian National Feedlot farm.

The Restaurant occupies 5000 sq ft of space, by far the biggest on that level. One can choose to be inside or outside in the podium, centre-stage or what ever you call it, where all and sundry can ogle at you when you eat. The whole set- up, meaning the decor is designed by ONG&ONG, no less ! Anyway it's OUR money, why not ?!!

The Menu boasts of beef from 300 day old grass-fed cow @ SGD80 for 250gm, 200 day old corn- fed @ SGD 50 for 220gm. NO, I did not eat there, heaven forbid! Just curious and being "kay poh." Though it is lunch time, it is empty, compared to its neighbours Taste Dynasty and Taste Paradise etc. Interestingly, MeatWorks seats 234, rather telling eh?! No? When they go under, trust the Chinaman to remove 1 seat. Anyway, why such a big outlet in a shopping Mall? Who wants to throw a banquet there for goodness sake!! Can they really fill up all those tables at one sitting? Ada otak ka? My relatives and friends in Singapore and those in Malaysia and overseas,when you are in ION ORCHARD just go and see, how our hard earned money is being squandered by the BN. Soft loan and bailout, what's new? Are they really so untouchable? Who gave them the power? Just think about it. That's all for now.

AirAsia Moves Corporate HQ from KL to Jakarta

Putting regional office in Indonesia is a blow for Prime Minister Najib.

With all the troubles he has had over the last two months, the confirmation Friday that AirAsia, arguably Malaysia’s most vibrant private company, is moving its headquarters out of the country to Indonesia is one more blow.

Tony Fernandes, AirAsia’s group chief executive, confirmed the decision in Tokyo Thursday, saying the move is an effort to upgrade his company’s image as a regional Southeast Asian airline rather than just a Malaysian carrier.

“I don't know whether Najib has been told or not,” said a business associate of Fernandes in Kuala Lumpur. “But why should Tony care? There are solid business reasons for moving to Jakarta.”

Najib has been on a whirlwind trip to foreign capitals to try and mend the country’s image in the wake of a violent police crackdown on peaceful marchers seeking to present a petition to the country’s king on July 9, asking for election reform. In a throwback to the 1980s, Malaysian censors blacked out details of a report about the march carried in The Economist.

That was followed on July 23 with the results of a royal commission of inquiry that concluded that a young aide to an opposition politician had been hounded so badly during a marathon interrogation over office spending that he threw himself out of a window and killed himself.

Then on Friday, immigration officials took William Bourdon, the leader of a team seeking to ferret out the details of a massive scandal involving defense procurement, off a plane in Kuala Lumpur, held him for several hours and ordered him deported via a flight back to Paris.

Fernandes characterized the move of the headquarters as a simple business decision to take advantage of Indonesia’s vastly larger economy and population, which is nearly 10 times that of Malaysia’s, although Malaysian annual per-capita gross domestic product of US$14,700 by purchasing power parity is much higher currently than Indonesia’s at US$4,200. The size of the country, however, meant that the Indonesian economy was estimated by the CIA Factbook for 2010 at US$1.03 trillion against Malaysia’s US$414.4 billion.

AirAsia’s decision to move the headquarters is a serious negative propaganda blow for Najib’s 1Malaysia Plan, an intensive effort to lure foreign direct investment to Malaysia. In September 2010, the Malaysian government announced ambitious plans to mobilize hundreds of billions of dollars in private investment in an effort to move the country out of the so-called middle income trap, and double per capita income to push Malaysia into the ranks of developed nations by 2020.

AirAsia may well be the only Malaysian company besides the state-owned energy giant Petronas to have made an international impact – and Petronas does it by advertising intensively during Formula 1 races and by sponsoring a car – which Fernandes does as well. Launched in 2002 as a regional no-frills carrier with just two planes, AirAsia now flies 93 planes all over Asia. In addition, a long-haul service, AirAsia X, flies to Europe, Japan and Korea. The company earlier ordered 300 Airbus A320neos.to expand its routes across Asia and beyond.

It isn’t just the publicity damage. In the past 10 years, according to a report by the news agency Reuters, private companies invested just RM535 billion (US$172.4 billion), according to official data. Malaysia’s private investment rate of about 10 percent of GDP is among the lowest in Asia and a third of what it was before the 1998 Asian financial crisis. The government, according to Reuters, contributes around half the investment in Malaysia.

In addition, Malaysia has long been plagued by capital flight, which has been generally regarded as an indication of lack of faith in the country on the part of its businessmen, although in Malaysia’s case the bulk may well be from stolen timber leaving the country from Sarawak and Sabah. Nonetheless, the US-based financial watchdog Global Financial Integrity estimated in a 2010 report that as much as RM888 billion (US$298.3 billion at current exchange rates) had left the country between 2000 and 2008. Illicit financial flows generally involve the transfer of money earned through illegal activities such as corruption, transactions involving contraband goods, criminal activities and efforts to shelter wealth from tax authorities.

AirAsia said the move is a bid to take advantage of access to the Asean secretariat, which is based in Jakarta, in advance of an open skies agreement expected to go into effect in 2015 and which is designed to lower barriers for air travel between the region’s capitals.

Asked why he chose to move the fast-growing airline’s principal corporate base to Jakarta from Kuala Lumpur, Fernandes said: “Asean is based in Jakarta, and Indonesia will be the largest economy in Asean in times to come … And I like it there” – enough, he said, to have impelled him to have already bought a home in Jakarta.

The Indonesia National Air Carriers Association forecasts passenger growth at 10 percent to 15 percent this year. Indonesia’s Central Statistics Agency reported that domestic air traffic grew 22 percent to 53.4 million passengers in 2010 on growing demand from the middle class for domestic flights. That is higher than the 9 percent average increase recorded by Asia-Pacific carriers, according to data from the International Air Transport Association.

“Indonesia is among very few countries that managed to record strong growth in air traffic last year,” said an analyst quoted by the Jakarta Globe. “The lack of available airlines compared to population and geographic conditions is only a sign that there’s a lot of opportunity here.”

[Source: Asia Sentinel]

This is bad, real bad news for Najib. Not only are the FDIs dwindling, our own people are now relocating their operations overseas. It is even a mistake to think that Tony Fernandes is the only one with such a plan. Many more local companies have since relocated their operations, especially to China, and many more are in the pipeline of moving out. So what gives? I guess even with all the spin given by UMNO telling foreign investors what a wonderful place Malaysia is to invest their business here, it is apparent nobody seems to be buying it. Could Tony's decision to move their corporate HQ to Jakarta confirm what investors have been thinking all along? Your guess is as good as mine.

Zeti, is there something wrong with our banks?

Global Finance names the World's Safest Banks 2010 in Asia

NEW YORK, August 30, 2010 — Global Finance magazine (www.gfmag.com) has named the top 10 "Safest Banks in Asia" in an exclusive survey to be published in the October 2010 issue. The banks were selected through a comparison of the long-term credit ratings and total assets of the largest banks. Ratings from Moody's, Standard & Poor's and Fitch were used.

The full report covers the safest banks in Western Europe, Central and Eastern Europe, Asia, the Middle East, North America, Latin America and Australasia. "More than ever, customers around the world are viewing long-term creditworthiness as the key feature of the banks with which they do business," says Joseph D. Giarraputo, publisher of Global Finance. "These banks have solid capital positions and superior risk management capabilities."

World’s Safest Banks 2010 in Asia :

1. DBS Bank [Singapore]
2. Oversea-Chinese Banking Corporation [Singapore]
3. United Overseas Bank [Singapore]
4. Shizuoka Bank [Japan]
5. Bank of Tokyo-Mitsubishi UFJ [Japan]
6. Norinchukin Bank [Japan]
7. Sumitomo Mitsui Financial Group [Japan]
8. Agricultural Development Bank of China [China]
9. National Agricultural Cooperative Federation [South Korea]
10. Industrial Bank of Korea [South Korea]

SO MAY I ASK, WHAT IS WRONG WITH OUR MALAYSIAN BANKS?

For more, please read here.

Yippee! Utusan in the red !!

Utusan Melayu (Malaysia) Bhd reported a pre-tax loss of RM10.682 million, for the nine months ended Sept 30, 2010, against a pre-tax profit of RM1.707 million chalked up in the corresponding period last year.

Revenue declined to RM244.564 million from RM253.847 million previously due to less advertising contribution, it said in a filing to Bursa Malaysia today.

For the third-quarter ended Sept 30, 2010, Utusan recorded a lower pre-tax profit of RM1.736 million from RM10.128 million registered in the same quarter last year.

However, revenue increased to RM89.540 million, during the period under review, from RM89.530 million previously.

Utusan said intense competition for advertising marketing share expenditure, not only among the print media, but also among all media channels has affected the group's performance for the period under review.

The factor would remain as a challenge to the group for the remaining period of 2010, it said.

"Nevertheless, the expected positive growth of Gross Domestic Product this year and next year are expected to stimulate advertising expenditure and provide an opportunity for the group to increase its advertising revenue," it said.

- Bernama

The Sime Darby fiasco - I believe we have the right to know

I have just received an email from a friend and would like to reproduce the contents here.

I have a gut feeling that Sime Darby Berhad, the world's biggest oil palm plantation company, is going to make history soon - for all the wrong reasons.

With an overzealous management, with some executives corrupt to the core and a Board of Directors which knew nothing about the things happening around it, the fiasco in Sime Darby is poised to become the biggest corporate scandal in Malaysia's history.

Therefore, those probing the financial scandal should not confine their investigations to the cost-overruns in Qatar and Bakun. There's more to it than meets the eye.

There are many other questionable deals which took place prior and after Sime Darby's merger with Golden Hope Plantations Berhad and Kumpulan Guthrie Berhad in November 2007.

I have some questions begging for answers:

1. What happened to the trading loss in China which had reached RM80 million at one stage? The Chinese buyers had refused to accept palm oil which was ordered when the price was high but fell when the shipment reached China? Why is palm oil being sold cheaper in China than it is in Malaysia? What is the actual quantum of investments of Sime Darby in China? Utilities Divison's Weifang operations, Jinning Port, Motor operations, property investments, etc. Has Sime Darby evaluated the country risks? Did Sime Darby over-expose itself in China? Was there a risk management report on China before all these investments took place? Were money paid to middlemen to secure projects?

2. What happened to the two AHTS (Anchor Handling Tugs) and one DLB (Derrick Lay Barge) which Sime Darby awarded to MLC Shipbuilding Sdn Bhd to build. Were these ships, worth RM155 million, ever delivered. Or was the RM155 million written off? Did Sime Darby call for tender before awarding the project to MLC? Does MLC, owned by one Redzuan Goh, have the expertise to build ships?

3. Why invest in plantations in Liberia? Is it worth taking the risk going to Liberia? Could Sime Darby have generated more money expanding/developing estates in Malaysia (ie Sabah/Sarawak) - less risk and still plenty of fertile land? Isn't it easier to deal with Sabah/Sarawak Government than the Liberian Government? What's the economic rationale of going to Liberia? This is despite the known fact that Guthrie started the Liberian project but got out of it twice due to civil wars. The Liberian Government is fragile. What if a new regime takes over and nationalises the Sime Darby project?

4. What is this special relationship with Brunsfield Group that enables it to secure many projects from Sime Darby. Among others, Brunsfield was given the contract to renovate KLGCC, to build Sime Darby's World Headquarters in Bukit Kiara, and The Oasis in Ara Damansara where the Divisional headquarters will be located. The total contract awarded to Brunsfield could actually be billions.

5. The sale of the land at USJ Elite Exit (now being developed by a private company - MCT). At what price was this land sold and what was its price when Sime Darby bought it? What is the market price now? Why was the land sold anyway? Is it to show income in an attempt to make losses elsewhere look smaller?

6. The Kuala Lumpur Golf and Country Club in Bukit Kiara now sits on a land leased from City Hall. Apparently, the Sime Darby management had agreed to buy the land from City Hall without the approval of the Board. To rectify the situation, a paper was submitted to the Board last week to approve the sales and purchase of the land in retrospect. It will be silly for the Board to do so, especially now when the Malaysian Anti-Corruption Commission is carrying out an investigation on Sime Darby. How much is the new facelift of the KLGCC going to cost?

I wonder if the Board is aware of all these things I have mentioned.

Islamic car, anyone?

We are already so politically, racially and religiously divided. Do we need another conduit like a car to divide us Malaysians further? Since Proton is going to assemble Islamic cars, don't you think that it is therefore 'haram' for them to use non-Muslim money for the project? What about the other vendors? Must they be Muslims too? Someone wake me up, please!

Proton believes it may have found a huge gap in the market

The Malaysian car maker Proton has announced plans to develop an "Islamic", designed for Muslim motorists.

Proton is planning on teaming up with manufacturers in Iran and Turkey to create the unique vehicle.

The car could boast special features like a compass pointing to Mecca and a dedicated space to keep a copy of the Koran and a headscarf.

The idea came during a visit to the Middle East by a delegation of Malaysian politicians and businessmen.

Malaysian press reports say officials in Iran originally suggested the idea.

Safety features or fuel economy is one way of selling a car, but Proton thinks vehicles designed specifically for Muslims across the world represent a huge gap in the market.

Proton is the most dominant car on the streets here but the company has suffered recently after the government allowed more foreign cars to be imported.

The firm has been in talks recently with VW about a takeover by the German car giant.

[Source: BBC]

UMNO say they can't. LGE proved that they can and they did it! Malays boleh!

PENANG, Jan 31 – Some 70 per cent of two state firm’s open tenders have been won by Malay contractors, showing the community to be as competitive as others, Penang Chief Minister Lim Guan Eng (pic) said today

He said Malay contractors won 16 out of 23 tender awards, or 70 per cent, from the Penang Development Corporation(PDC) and 44 out of 66 or 67 per cent of contracts issued by the Perbadanan Bekalan Air Pulau Pinang(PBAPP) in open tenders since Pakatan Rakyat took over Penang in March 2008.

“The performance by Malay contractors in an open tender system with non-Malays proves that Malay contractors can compete with others and win tender awards on their own merit,” Lim said in a statement today.

The DAP secretary-general has been advocating open tenders under his “Competency, Accountability and Transparency” (CAT) programme since becoming chief minister although Umno and Malay rights groups accuse him of sidelining the community.

“Clearly it is not the race that is an issue but failed policies that encourage dependency especially when it helps Barisan Nasional maintain the status quo and its grip on power,” he added, referring to the ruling Barisan Nasional (BN) federal government.

Lim accused the BN of instituting policies that “stifles initiative, creativity, hard work, drive and productivity which benefited only the few BN cronies at the expense of entire country”.

“For instance, a 30 per cent quota of publicly listed shares were reserved for Malays but only a few benefited as many ordinary Malays never received shares from the Federal government,” he added.

But the chief minister expressed regret that there were allies within PR Penang “is aligned with BN in opposing efforts to implement an open tender system and CAT governance”, referring to Bayan Baru MP Datuk Seri Zahrain Mohamed Hashim, who had criticised his administration.

“We must remain steadfast as we are backed by results. The Penang state government has been able to turn a projected deficit of RM35 million in 2008 budget to a record surplus of RM88 million.

“A projected deficit of RM40 million in 2009 Budget has been turned around to record a surplus of RM77 million.

“In fact, the 2009 budget surplus would have been a record RM92 million were it not for the payment of RM14.7 million as a result of the Tang Hak Ju land scam of the previous administration,” he said.

[Source : The Malaysian Insider]

Guan Eng and his team must be doing something right. If I did not hear it first hand, I probably would not have believe it. I made regular business trips to Penang and during one such trip, I was taken to the hotel from Bayan Lepas Airport by a Malay taxi driver, who incidentally spoke impeccable English. After a few minutes in the cab, I decided to have a chat with the cabbie by asking how were things since the change over of the state government. He responded with a very big smile and a "Very good, Uncle, very good" reply. I asked him how so? Quickly, without hesitation, he told me his uncle, about a month ago, was awarded a tender worth half a million ringgit to install street lights at certain points in Penang and part of the bridge. Although it was one parcel of the project that was awarded to him, he was more than satisfied as during BN's time, his uncle could only dream about securing government projects. He further told me that his uncle need not have to deal with the main con anymore as tenders are now awarded direct to the 'E' and 'F' Class contractors. This was not the only case. At another time, another Malay cabbie too told me how one of his relatives, an 'E' Class contractor was also awarded a job by the state government. Like the subject read: UMNO say they can't, but LGE has proven that they can. To Guan Eng and his team, keep up the good job!

Is this the reason why we are losing out in global trade?

Malaysians in Qatar are upset with the Malaysian embassy officials in Doha here for inviting only a selected number of Malaysians for a dinner to celebrate Malaysia Day at a leading hotel here recently.

Some Malaysians feel this has something to do the recent visit here by International Trade and Industry Minister Mustapha Mohamed. During the visit, Mustpaha hosted a dinner cum discussion with Malaysians at the Malaysian-managed Holiday Villa.

During the briefing, the YB invited Malaysians to raise current issues affecting Malaysian businessmen here in Qatar. Many Malaysians openly complained about the failure of the Malaysian Embassy to cooperate and support Malaysians here.

One Malaysian said he had been working with a leading Qatari construction and development company at the boardroom level for many years. He said to date, no Malaysian embassy official had visited the CEO or chairperson to pitch for work whereas the Singapore ambassador holds regular dialogues and pitches work for Singporean companies and Singaporean products.

Another Malaysian criticised the Malaysian embassy officials' inability to speak Arabic whereas the Singaporean ambassador, who is a Sikh, speaks fluent Arabic and makes the local Qatari officials feel comfortable.

Senior officials from major Malaysian engineering and construction firms attended the minister's briefing. One complained that Exim's bank's failure to support Malaysian companies here and in the Middle East for the past 25 years was a case in point.

One firm has suffered massive losses due to a lack of understanding of local issues. Most private sector officials assigned here said that their lack of knowledge of the local business and economic environments was the main cause of the failure of Malaysian businesses.

One Malaysian resident complained that even Malaysian-produced 'kacang goreng' was being exported to Qatar by a Singaporean company. He said the Malaysian embassy did nothing to pitch for work or even promote Malaysian products.

Some said that Thailand has four to five restaurants here and they market their products through popularising the restaurants. The Thai embassy officials are very active in promoting their country both for tourism and consumer products.

During the dialogue, the minister was unable to answer many specific questions raised by Malaysians here. He said he will advise the Malaysian embassy to be more active. The chargé d'affaires was seen busy making notes.

At the end of dialogue, the minister asked his 20-member delegation to stand up in order to be recognised by the Malaysians in Qatar. Sadly, the Malaysian delegates were so slow that the minister had to practically plead to them three times.

Finally, the Malaysian team got up from one corner of the room. The minister reminded them two times not to group together in one place but to mingle amongst the Malaysians here in Qatar.

Some Malaysians in Qatar feel that the embassy may be upset due to the above incident and avoided inviting all Malaysians to celebrate '1Malaysia' function. As the monies to celebrate Malaysia Day comes from Malaysians, it is unfair to invite only some Malaysians and not most.

[Source : Panglima Garang]

Geronimo's Take : What! A Singaporean Sikh speaks Arabic while our fella (presumably a Malay Muslim) could not? Some thing is not right here. How can we consider ourselves a serious player in the global market when we can't even get our basics right. It reminded me of the time when I needed to buy a property. During one launch by one of the property developers, I noticed that the staff from the foreign banks were selling their loan services aggressively by proactively approaching customers to handle their end financing needs. They always seemed to have a mathematical calculator with them all the time to provide quick answers to the customers should they inquire about the repayment terms. In contrast, the staff of the local Malay bank still relied on repayment tables printed out on a sheet of paper. Every time a prospect inquired about the amount he needs to pay monthly, the staff would have to do cross reference on the sheet of paper which sometimes could be time consuming. In addition, instead of being up and about fishing for customers, they just sat there behind the table waiting for customers to come to them. Speed and pro-activeness count and the local bank was slow to adapt to such simple basics.

BN's monopoly on the apple business - a good analogy

Assuming (B)elum (N)yanyuk company (in short BN) was the sole apple wholesaler in Malaysia and there was no other apple wholesaler to compete with them over the past 50 years. We had another 3 individual apple sellers that we did not pay much attention to because we hardly heard any of their advertisements anywhere. All wholesale apples were sold in a bag, with each bag contained 100 apples and had to weigh around 5kg to ensure those apples were almost identical in size.

During the early days, BN’s apples were very good in quality. We as customers were very happy and satisfied with their apples supply. We were very supportive of BN’s apples to the extent of, even though occasionally we found out that there were 8-10 bad apples in a bag, we were forgiving enough to not ask for single cent refund. After all, they were the only apple wholesale seller available at that time.

After 30 years in service, BN’s directors got greedy. Their directors demanded to live like a king in a palace, so they had to come out with a way to quadruple their profits to build their palaces.

First, they started to import low quality apples to replace those high quality apples and sold to us at the same price as before. We found something amiss about the apples’ sweetness, but they assured us that the apples were the same. Being naïve, we trusted their words as we trusted them for the past 30 years.

Unfortunately, by importing low quality apples did not quadruple their profits, they had to figure out other ways to make their palaces dream came true as soon as possible. Next, they started to tamper with their weighing machines’ scaling. With that, they managed to reduce the number of apples by 30 per bag yet they continued to sell us those apples at the old price despite being cheaper in cost.

Of course we were unhappy with the move and accused them of frauds. But due to of our own stupidity, they managed to convince us that these batch of new apples weighed more because they contained more nutrition than the previous batch of apples. Since we had trusted them for 40 years, so we decided to believe them one more time; after all we yet to have an alternative to choose from at that point of time.

After 3 years, those BN’s directors happily moved in to their new palaces. To their horror – after staying in the palace for barely 2 months, they started to realise that the cost of maintaining a palace in good conditions required much more money than to build it. To make things worse, those directors’ families got greedy as well, some of them demanded that their father to bring them to Disneyland’s tour every summer.

To fulfill all those evil requests, they raised the price of apples by 50% citing rising cost of transportation as the culprit for the major increment. They were braved enough to take this drastic move as they were not afraid that we (the customers) would run away because they were the only one with apples in Malaysia.

When we protested against them, they were arrogant enough to threaten us with defamation suits and requested the police to detain us under (I)kut (S)uka (A)ku Act. Greed brought them to the point of arrogant. They forgot that - we the loyal customers were the people that kept them in business for 50 years. Because of our blind loyalty, now they treated us like their slaves -- whereas in contrary to the business’s world where the customers were always regarded as the boss.

We kept our cool and protested in silence. Quietly, we figured out ways to stop relying on BN for apples. We forced the other 3 individual apples sellers to merge together to become the alternative apple wholesaler in Malaysia. For 50 years, most of us never really bought any apples from them because we trusted BN’s advertisement that their apples were hazardous to us. They agreed to give it a try and with our support, they merged together under a single company called - (P)rotect (R)escue Company (in short PR).

With the birth of PR, we now have 2 apples wholesalers to choose from. But we yet to get the best bargain for our apples, because PR is still weak because they are still in the transitioning phase as running the small apple stalls is very much different from running a wholesale company.

After realizing their sales were dropping exponentially, BN promised to make some changes to their business conducts. However, BN’s promised is like the saying “tomorrow that will never come.” BN’s new approach is always about shouting the same thing - that they have the best apples in town, and we are getting the best bargain from the price we paid. They even come out with a slogan called “1Apple – The only apple company in Malaysia you should trust” to hoodwink us that they are changing for the better. Besides that, they also promise us that they will change their arrogant way of treating us but quietly they are still using the same old tampered weighing machines to weigh their apples behind our backs. But now, we are smart enough not to fall into their tricks again.

As for PR, they are still learning on how to be a good apple wholesaler. They are still learning on how to maintain the quality of apples, how to reduce transportation costs, how to expand their business to meet our never ending demand while moving away from the old habits of selling apples individually.

PR knows that their existence hurts BN’s rice bowl a lot. BN is getting desperate by the day as their business can no longer cover the cost of their palaces and their families are grumbling because they have not been able to visit Disneyland for the past 2 years. PR also realises that counter attacks and sabotages from BN are imminent. Hence, PR has to be always on guard to continuously fight off BN’s attempts to ruin their business.

To add to PR’s list of misery, all transportation companies, apples suppliers and packaging houses are very reluctant to accept orders from PR because they are afraid of offending BN who has given them business for the past 50 years. The business environment is tough for PR because BN is trying to influence everyone to be biased against PR. Despite all that, PR managed to stay afloat for the past 20 months because we gave them enough business to survive.

At least PR knows, we are the one that give businesses to them. Unlike BN, who treats us as we owed them the money to keep them in business. They think PR was purposely started by a certain few to rob their business away, while forgetting the fact that PR was born because of their greed and arrogance towards us.

Yes, we gave birth to PR – but unfortunately we expected too much in return and to make things worse, we expected PR to deliver instant results. We expected those 100 apples in PR’s bag to be 100% perfect. When we find 2-3 apples (mind you, not 3-4 apples), we are very quick to punish PR’s reputation and ask for refund immediately. As a typical Malaysian, we so conveniently forgotten that we used to allow BN to get away with those bad apples without a single complaint 20 years back.

Some of us even go to the extent of threatening PR that we will buy our apples back from BN if they don’t buck up. Some of us already written them off and some have even come to the conclusion that PR is just the same as BN. PR kept quiet to our critisms and threats because PR respects our views and values our importance. But to be fair to them, we must also admit that it takes time to adapt from being a small stall apple seller to a apple wholesaler because it is totally a different business altogether.

We forget that PR is still new in this wholesaler business. Their directors all have different opinions of running this wholesale company because their knowledge were limited to operating their 3 different apple stalls - which they were targeting different groups of consumers to keep their business alive. But now, it is a totally new scenario for these directors as they have to juggle between keeping their old customers coming back while satisfying the request of new customers that turned their back on BN. They are still searching for a balance business approach so that they will not offend any of their new and old customers.

Yes as we expected in PR, there will be some quarrels every now and then. We saw some directors resigning along the way because they couldn’t agree to what PR is doing or they did not manage to secure any credible position in PR. Some of them jumped over to BN because of better offers from BN to sabotage PR’s stability. Some voiced their problems and dissatisfaction over the medias because they can’t get their voices heard in the board room.

But this is not a good reason why we should lose confidence in PR. We have to keep in mind, all new companies face the same problems like PR and it takes time for them to get stabilize, and it takes time for those directors to familiarize with this wholesale business. Besides that, they have to deal with the constant sabotages from BN – which actually gives them less time to concentrate on improving this wholesale business. We can’t expect them to be as masterful as BN in such short period of time in running this wholesale business when they are having a hard time running their business in a BN-friendly environment. Problems will keep cropping out every now and then, but the important thing is those PR’s directors know how to solve those problems efficiently.

Yes, I agree that sometimes PR’s directors argue too much, and it makes them look rather instable. But are we too quick to punish them because of that? Why the impatient from our side? Why can’t we be more supportive of them?

I think the only reason why we feel so agitated when PR failed to be what we wanted them to be; is because we wanted to kick BN out of business so badly and we could not stand our hope being dashed because of PR’s incompetency. PR is our last hope to ensure we get the fair price for our apple supplies.

Just because we gave birth to PR, doesn’t mean that they can’t do no wrong. We should treat PR like our children, they must given the chance to rise again after they hit a snag. We must educate them to be the wonder child we hope for. But we mustn’t discourage them when they make mistakes. Instead, we must ensure, they are able to rise up stronger again and again after each setback they endured. We can criticize, but we must also guide them to the right path. We can’t be too quick to write them off since we know that going back to BN is not going to help us to improve the situation anyhow.

BN is still the bigger player in this apple industry. PR is still very much the underdog, and in the business’s world, everyone is biased towards the underdog. PR is going to have a hard time finding suitable low-cost transportation, suitable suppliers and loyal workers without being sabotage by BN. They have to keep their business afloat despite the rising costs of goods imposed by BN’s cronies to destabilize PR. The only way they can survive is by increasing their apples sales, which means it requires more support from us. Once they become the big brother in the apple business, they can start to dictate those suppliers and the transportation providers aligned to BN to lower their price or else they will lose the business contracts from PR.

To counter those frauds and high prices in the apple industry, we need PR to rise up in this BN-friendly environment to compete with BN, head-to-head. We must ensure there’s at least 2 apples wholesalers at any one time in the future. If we punish PR too hard, BN will take advantage of the situation to break PR into 3 small stall apple sellers so that they can monopoly the market again. And we must not let that happen because in the end we are the only one who suffer.

Now let us get back to our real BN and PR in politics. Malaysians tend to very forgetful but they also can be very unforgiving. Malaysian can be very forgiving on your mistakes for the past 50 years, but they can never forgive you for today’s mistake. One wrong statement can change their whole perception about PR regardless of how many good things PR had said or done in the past.

But sad to say, a lot of Malaysian are still generally very emotional and very ignorant about the country well-being. As long as they get their typical 3 meals a day, they couldn't care less about what’s the BN politicians are doing to our country. They forgot about the possibility that their children and grandchildren may not be that lucky as them!

PR’s death only benefits BN and its cronies and no one else. We are the biggest loser if PR goes down. Therefore, we must help to ensure PR survives at all cost. We must continue to lend our support to PR, even more so when they hit a rocky path like they are having now.

We must not lose sight of why we gave birth to PR. We wanted an alternative for us to choose from. PR’s survival and success is about us and our country - rather than it is about PR or BN’s political prosperity. We must ensure PR survives and becomes the big brother in Malaysia’s politics to kick start the healthy competition between BN and PR. There’s no real start to a 2 party system until the other side wins for at least once.

For a better Malaysia, we need PR. Punishing them now will lead us to back to BN’s dictatorship, and that’s exactly what BN wants us to do.

[Source : Harakah]