The ‘Tiger Woods’ act is not for Malaysia

 It's a long road towards being a tiger economy again

A month before the one-year anniversary of Pakatan Harapan’s ruling the government, Malaysia has earned the accolades of being a “boring” and under-performing stock market. The ringgit, which is the thermometer to gauge the economy, has weakened after the initial euphoria of appreciating as high as RM4 against the US dollar.

An economist had said that Malaysia without the Goods and Services Tax (GST) is too dependent on oil revenue. Budget 2019 was based on crude oil at US$70 and considering that the year-to-date average is lower, the country would not be able to keep to spending limits.

Ironically, the story of Malaysia’s being a “boring and under-performing” stock came as golfer Tiger Woods made a remarkable comeback to win his first major tournament since 2008. That was the time when the golfer’s on-course performance started to go downhill due to injuries and “off-course” affairs that led to a broken-marriage.

Sponsors stayed away from Tiger Woods and he lived with a tag as a great golfing talent that never made it. Now he is seen as a role model in the story of triumph against adversity. Woods US Masters win is now repeated as a story of why one must never give up and the fruits of labour will finally pay off.

Sadly, it only applies in the world of sports. In the sporting world, there are clear rules and everybody play within the rules or they are disqualified. Sports world is based on meritocracy. If you good and talented, you would be found - some way or other - even if you live in Borneo.

Sarawak has produced amongst Malaysia’s best sprinter and diver in Watson Nyambek and Pandelela Rinong who proved their worth based on merit.

Running a government to please people with different demands is not so easy. Meritocracy is only a slogan. It reality, it is hard to implement.

For instance, the government’s bail-out of Felda and Tabung Haji are seen as further straining the country’s balance sheet.

The fear that the of Budget 2019 objective of keeping fiscal deficit at 3.4% cannot be achieved considering that the government has to fork out RM6bil to rescue Felda.

However, what investors fail to realise is that the government cannot afford not to bail out the likes of Felda and Tabung Haji. It cannot operate completely on meritocracy and go by the book strictly because there are political considerations to weigh on.

Felda needs to be rescued because of the massive mismanagement of funds. It involves the lives of 120,000 settlers and many more, if their families are taken into account. The Felda settlers are important voter bank and determine 52 parliament seats.

Most of them are Malays who form the bulk of the voting population of the country as a whole.

Whether we like or not, issues that Felda and Tabung Haji face has to be resolved if there is to be any political stability.

The only consolation is that those who are responsible for the mismanagement of Felda, Tabung Haji, 1Malaysia Development Bhd (1MDB) would eventually pay a price.

In communist China, these people would have faced the firing squad.

In Malaysia, it takes time to penalise those responsible under the law. Pakatan Harapan’s messaging to investors is that it provides accountability, transparency and discipline in running the government. It revealed the total debts and a bigger budget deficit for 2019 and left it to investors to decide if they are prepared to put money in the country.

That it does not tolerate corruption is a message that is being drummed countless times.

Is there is a premium in being transparent, accountable and standing firm against corruption? Yes there is. But as a fund manager says, it does not tell investors where to put their money.

It does not tell investors if there is going to be a continuity to the government’s policies and who the next Prime Minister is going to be after Tun Dr Mahathir Mohamad. The fund manager says that Malaysia needs to tell another story, apart from governance and transparency.

Towards this end, a good line of messaging would be on addressing the political transition after Dr Mahathir.

The fund manager is right in his argument because long term capital needs political stability and leadership certainty.

Dr Mahathir, who is named as among the most powerful persons by Time Magazine, probably knows best why he is delaying in setting a firm time table to hand over power to the only person who has been named so far, which is Datuk Seri Anwar Ibrahim.

Probably because the minute Dr Mahathir announces the time-table to handover, he would be a lame duck Prime Minister, a role the 93-year veteran politician would not relish.

Apart from politics, the other matter bogging investors is the slowing Malaysian economy.

The concern is that the economic growth of 4.5% would not be met and that Bank Negara would be forced to bring down the interest rates.

When interest rates are down because of a slowing economy, it dampens sentiments on the ringgit and puts yields of bonds under pressure.

The prospects of a lower yield and weakening currency are just the catalysts needed for bond investors to take some money off the table.

The unfavourable rating by little known Russel Fund Index earlier this week did not help matters. The end result is that the government bonds are under pressure and so is the ringgit.

The government should keep up with doing the things it can best do, which are enhancing transparency, governance and being more careful in handling public funds. Investors will view with scepticism until they see hard numbers on the economy and consistency in growth.

The Malaysian stock market was among the world’s best in 1993 on the back of a roaring economy that started its growth path some four years earlier.

The economy over-heated, the government got carried away with spending and we paid a heavy price by the ringgit and stock market crashing. It all came down with a thud in 1997.

The Pakatan Harapan government wants to see Malaysia be a “tiger economy” once again.

But it would not be easy. The road ahead is treacherous with lots of obstacles – balancing the demands of the political and social agenda.

We cannot do it the Tiger Woods way because there is no meritocracy when it comes to governing a country. But we will get there eventually as long as we stay the course.

The Alternative view by M Shanmugam

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FELDA WHITE PAPER reveals SHADY DEALS

These penyangak-penyangak left their marks ... we are left to clean up. - Tun Dr Mahathir Mohamad

Settlers were facing hardship, yet new cars were bought. - Datuk Seri Anwar Ibrahim
These actions were not only irresponsible but criminal in nature. - Datuk Seri Azmin Ali
Felda only incurred losses after Pakatan took over the government. - Datuk Seri Ahmad Maslan

The chairman held positions in as many as 39 Felda subsidiaries. Even more shocking is that billions were used to ‘buy’ political support and a stake in an Indonesian firm was acquired for 344% more than it actually costs. And the agency’s debts rose by 1,100% in 10 years

 

RM1.4b of RM10.5b from FGV's listing spent on
'shady transactions', says Azmin Ali

The Edge Markets

Azmin Ali claims almost RM3b used to buy
support in GE14

The Edge Markets

Forensic audit highlights questionable Felda
deals, says Azmin Ali

 ‘Irresponsible and criminal’

KUALA LUMPUR: The Felda White Paper was tabled in Parliament, during which the government accused the previous administration of, among others, shady transactions and conflict of interest.

The Dewan Rakyat was told that some RM2.7bil of Federal Land Development Authority (Felda) money was used to buy political support before the last general election in May 2018.

Economic Affairs Minister Datuk Seri Azmin Ali, in tabling the White Paper on Felda in Parliament yesterday, said it was “corporate malfeasance” that led to Felda suffering massive losses.

He also alleged that former prime minister Datuk Seri Najib Razak was implicated in “shady deals”.

“(Najib), who was known as MO1 and who was the finance minister at the time, was involved in the investment process. These actions were not only irresponsible but criminal in nature,” he claimed.

Azmin cited the purchase of Indonesian company PT Eagle High Plantations Tbk from PT Rajawali Capital at a higher market rate as an example of the abuse of Felda funds.

He added that as of March this year, the RM2.3bil investment was only worth RM500mil.

On Tuesday, Felda director-general Datuk Dr Othman Omar lodged a police report claiming that Najib had pushed it into investing US$505mil (RM2.07bil) in Eagle High.

In the report, he said the amount paid to acquire a 37% stake in the Indonesian company was 344% more than its actual value of US$114mil (RM466.9mil).

Eagle High is part of the Rajawali Group owned by Peter Sondakh, who Othman claimed was close to Najib.

In black and white: Azmin with (from left) Felda chairman Tan Sri Megat Zaharuddin Megat Mohd Nor, his deputy Senator Dr Mohd Radzi Md Jidin and Othman showing the Felda White Paper at Parliament.

Azmin added that Felda’s debts had drastically risen by 1,100% from RM1.2bil in 2007 to RM14.4bil by 2017.

He also said there was a conflict of interest by former Felda chairman Tan Sri Mohd Isa Abdul Samad – referred to as FO1 – by holding positions in 39 other subsidiaries under Felda and Felda Global Ventures (FGV).

Isa, who was appointed as Felda chairman from January 2011 until January 2017, was FGV chairman as well as FIC chairman.

Later, wrapping up his reply to debate on the White Paper, Azmin said the government would adopt a new model in managing land under Felda which had been leased to FGV.

In his winding-up speech, Azmin acknowledged that it was difficult to return the land to settlers as Felda had leased it to FGV under a 99-year agreement.

“However, Felda is in the midst of reviewing the terms of the agreement with FGV so that it would benefit all parties, particularly settlers and Felda, although the land does not belong to them,” he said.

He added the White Paper on Felda would seek a new model to manage Felda land to ensure more profitable economic scale of return.

On claims by opposition lawmakers that Felda had made a loss after Pakatan took over, Azmin clarified that Felda’s true net value was only revealed after an impairment exercise was carried out on its assets.

He said the former Felda management had failed to carry out an impairment exercise to value its investment and kept quiet about it until 2018.

“They did not do the impairment exercise so the books would look good. If the management was honest, they would have carried out an impairment exercise between 2013 and 2016 to determine best value of the investment,” said Azmin.

He said when land was managed by Felda itself, it managed to obtain nett profit of RM1bil to RM2bil.

By Jagdev singh sidhu, martin carvalho, hemananthani sivanandam, rahimy rahim, and tarrence tan The Star

Planting seeds to a new Felda 

 

New beginnings: The new Felda aims to be run as a well-functioning corporation with better internal controls.

THE scale of malfeasance was staggering. The White Paper on the goings-on in Felda and its subsidiaries read like a litany of wrongdoings that breached proper governance standards that most companies have to prescribe to.

There were many reasons why the checks and balances within Felda failed, largely because there was none. The concentration of authority within the hands of a few individuals, with little exercise of fiduciary duty by other members of the board, meant a free hand for the few.

The forensic audit conducted by Ernst & Young detailed the collapse of internal controls and oversight in a number of deals done by Felda. Overpriced deals were made and in the end, it was the settlers that bore the brunt of the consequences.

Charges have been filed against former Felda chairman Tan Sri Mohd Isa Abdul Samad, and given the scale of alleged fraud that had taken place, more police reports are about to be lodged in the days and weeks ahead. And more people are expected to face charges.

All of that will mean that justice to what had happened at Felda will be sought. That process will take time, but in the meantime, the main thrust of the White Paper, apart from detailing the cocktail of crimes, was what to do with Felda next.

The key take-away from the report was that there will be a new Felda. The old one, with its own legacy problems, meant that it will be best to start over again with a new focus.

The financial performance of Felda warrants the change as it has been losing money since its unit FGV Holdings Bhd was floated on Bursa Malaysia and its debt ballooned from RM1.2bil in 2007 to RM14.4bil in 2017. And its assets just about doubled. From those numbers alone, it was imperative that financial assistance from the government be extended to rehabi­litate Felda.

The government will inject RM6.23bil into Felda in stages in the form of grants, loans and guarantees and much of that money will actually go towards reworking Felda.

The agency’s debt will be taken care of and so will the settlers’ loans. Housing for second-generation Felda settlers will be built and RM480mil will be given to help pay for their living cost.

In changing Felda from what it is now to what it should morph into, the government will inject RM1bil for the settlers to plant new cash crops.

Relying on palm oil and rubber alone has been good, and the settlers and Felda benefited from that. But in today’s world, other cash crops have gained prominence over the golden crop of Malaysia.

With the price of food, which includes fruits and vegetables, along with livestock, having increasing value, the shift towards these crops is understandable and inevitable.

Settlers will be able to get more income from cultivating such crops and rearing livestock to go along with the lease agreement they can get by agreeing to allot their rights to their oil palm estates to Felda for a steady monthly return.

Felda can then use the economies of scale from the amalgamated lands and better productivity to generate higher returns. The use of modern technology in farming Felda land is also in the right direction.

The other steps put forward by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali is to have better infrastructure in the areas within the scheme, improve development of human capital and a host of other measures that seek to revitalise the prospects of the settlers and their next generation.

The new Felda aims to be run as a well-functioning corporation. Governance, transparency and all the other buzzwords that mean better internal controls and eliminating corruption needed to be done.

Having professionals run Felda is the correct move and with all of this, it is hoped that Felda will shed its sordid past and return the agency to what the settlers and their kin have sacrificed for.

The overarching intention of the revamped Felda is to make sure that only the welfare of the settlers and the agency are taken care of.

It is also a political move to ensure that a key vote bank that helped swing the tide of the last general election remains intact. But beyond the politics, the revamp of Felda is a much-needed move that will only serve to benefit those involved in the scheme and the country.

It is the right thing to do.THE scale of malfeasance was staggering. The White Paper on the goings-on in Felda and its subsidiaries read like a litany of wrongdoings that breached proper governance standards that most companies have to prescribe to.

There were many reasons why the checks and balances within Felda failed, largely because there was none. The concentration of authority within the hands of a few individuals, with little exercise of fiduciary duty by other members of the board, meant a free hand for the few.

The forensic audit conducted by Ernst & Young detailed the collapse of internal controls and oversight in a number of deals done by Felda. Overpriced deals were made and in the end, it was the settlers that bore the brunt of the consequences.

Charges have been filed against former Felda chairman Tan Sri Mohd Isa Abdul Samad, and given the scale of alleged fraud that had taken place, more police reports are about to be lodged in the days and weeks ahead. And more people are expected to face charges.

All of that will mean that justice to what had happened at Felda will be sought. That process will take time, but in the meantime, the main thrust of the White Paper, apart from detailing the cocktail of crimes, was what to do with Felda next.

The key take-away from the report was that there will be a new Felda. The old one, with its own legacy problems, meant that it will be best to start over again with a new focus. The financial performance of Felda warrants the change as it has been losing money since its unit FGV Holdings Bhd was floated on Bursa Malaysia and its debt ballooned from RM1.2bil in 2007 to RM14.4bil in 2017. And its assets just about doubled. From those numbers alone, it was imperative that financial assistance from the government be extended to rehabilitate Felda.

The government will inject RM6.23bil into Felda in stages in the form of grants, loans and guarantees and much of that money will actually go towards reworking Felda.

The agency’s debt will be taken care of and so will the settlers’ loans. Housing for second-generation Felda settlers will be built and RM480mil will be given to help pay for their living cost.

In changing Felda from what it is now to what it should morph into, the government will inject RM1bil for the settlers to plant new cash crops.

Relying on palm oil and rubber alone has been good and the settlers and Felda benefited from that. But in today’s world, other cash crops have gained prominence than the golden crop of Malaysia.

With the price of food, which includes fruits and vegetables, along with livestock, having increasing value, the shift towards these crops is understandable and inevitable.

Settlers will be able to get more income from cultivating such crops and rearing livestock to go along with the lease agreement they can get by agreeing to allot their rights to their oil palm estates to Felda for a steady monthly return. Felda can then use the economies of scale from the amalgamated lands and better productivity to generate higher returns. The use of modern technology in farming Felda’s land is also in the right direction.

The other steps put forward by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali is to have better infrastructure in the areas within the scheme, improve development of human capital and a host of other measures that seek to revitalise the prospects of the settlers and their next generation.

The new Felda aims to be run as a well-functioning corporation. Governance, transparency and all the other buzzwords that mean better internal controls and eliminating corruption needed to be done. Having professionals run Felda is the correct move and with all of this, it is hoped that Felda will shed its sordid past and return the agency to what the settlers and their kin have sacrificed for.

The overarching intention of the revamped Felda is to make sure that only the welfare of the settlers and the agency are taken care of. It is also a political move to ensure that a key vote bank that helped swing the tide of the last general election remains intact. But beyond the politics, the revamp of Felda is a much-needed move that will only serve to benefit those involved in the scheme and the country.

It is the right thing to do.

By jagdev singh sidhu The Star

Related News

---

Govt to pump in RM6bil in stages to fix Felda

Weak management team caused Felda’s downfall

PM makes rare interjection in Parliament

Action will be taken against Najib for breaking embargo, says Dr M

Felda to embark on group-wide structural reform - 

White paper reveals Felda made several bad
investment decisions - Business News

Weak financials a key challenge - Business News

Taking Felda forward the smart way - Nation 

 

Police may summon VIPs for Felda probe

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For the love of our troubled nation in full parade

Casting whining and whinging aside, it's time we pull our socks up, put our best foot forward, and show the world what Malaysia is all about.

IT’S time for Malaysia to change its narrative. For a start, our leaders must end the hyperbole of how the previous Barisan Nasional government stripped and looted the country’s wealth.

We generally know enough about the financial crime of the century, the hunt and arrests of those implicated in the cases.

Datuk Seri Najib Tun Razak and his wife, Datin Seri Rosmah Mansor, are facing a barrage of corruption and money laundering charges, and they are expected to spend the next five years in court.

The main character, the infamous Jho Low, and his family, are on the run, and it’s a given fact that the long arm of the law will eventually reach them.

A corrupt government has collapsed, and it’s now coming to a year since the new federal leaders took charge.

Malaysia can’t continue telling the world how we’re a troubled country with a deep financial hole, and neither should we keep contradicting our stand.

We can’t be saying we’re near bankrupt one day, and the next, concede that our economy is in good shape.

The Pakatan Harapan government marks its first year at office in May. So, its ministers can’t still be whining about inherited problems of a 60-year-old government forever.

Many of the current leaders, including the Prime Minister, were part of the system, and in the case of Tun Dr Mahathir Mohamad, he was at the helm for 22 years, lest we forget.

Admittedly, an eye-watering amount of money has been pilfered, so, the government needs to retrieve what’s stolen.

Ironically, PH was elected to fix these problems.

Malaysia can’t seem like an attractive business proposition with our troubled nation in full parade, especially when investors have many countries to choose from.

The country’s economy for the next two years will be turbulent, but forming the Economic Action Council is a good start to indicate that we intend to tackle the issues together, with public and private participation.

The Prime Minister has made the right move, but the EAC must run fast to come up with confidence-building measures.

Against the backdrop of a challenging environment for global equity markets and a US-China trade war, Malaysia has continued to tread on a steady economic path. It’s slower than we want to, but at least a recession isn’t looming.

Finance Minister Lim Guan Eng must continue his positive tones, as he has finally been doing, to renew confidence both locally and internationally.

The idea of revenue through taxation should be canned, but grumblings among the small base of individual taxpayers is ringing out loud.

It’s unfair to keep scrapping for crumbs from these taxpayers. A more progressive tax regime should be in place. Give it a name if necessary, but importantly, a firmer consumption tax is required because it will be fairer. It’s simple, if you don’t spend, you don’t pay.

In a way, it needs to be balanced out since individuals can’t be paying both income tax and consumption tax.

Lim has taken the right direction to keep selling the messages of how Malaysia has introduced policies and measures to invigorate the capital market.

“Our stock market has remained resilient in comparison with our peers in Singapore, Thailand, Hong Kong and China.

“Amidst large capital outflows among emerging markets and Asean countries this year, the FBM KLCI benchmark index registered a year-to-date decline of 5.8% as at end-November, compared with other Asian markets that have experienced declines ranging from 9.1% to 22.7%.

“And, we are the second-best performing stock market in the Asia Pacific region,” he said recently.

There is other good news which we’ve yet to shout out loud enough for, like Malaysia currently ranking 15 from 190 economies in its facilitation of commerce, according to the latest World Bank annual ratings.

Malaysia’s ranking improved to 15 in 2018 from 24 in 2017. Ease of Doing Business in Malaysia averaged 18.18 from 2008 until 2018, reaching an all-time high of 24 in 2017 and a record low of 6 in 2013, it was reported.

Although we may have lost crucial time, we still have a year to make Malaysia look good because two major events take place next year.

Highlights for 2020 include Malaysia celebrating Visit Malaysia Year, and hosting the Asia Pacific Economic Cooperation (Apec) leaders’ summit, some 22 years after doing so for the first time.

Let’s do it right and make Malaysia proud. It’s not just an occasion befitting Dr Mahathir, but all Malaysians as stakeholders.

The government’s proverbial tale of empty pockets isn’t an excuse anymore. It just doesn’t work that way. If we need to spend, we need to find the money, because we expect a return on investments.

We need to finance-telling a good story internationally, it’s that simple.

However, the lack of momentum to galvanise the nation hasn’t been motivational.

The world doesn’t want to keep hearing our negative stories and neither do Malaysians.

Tell the world we have fixed it and now we’re on the road again.

Come May, and it’ll be crunch time for underachieving ministers.

Everyone invariably tries their best, but those who are unfit just shouldn’t get the nod. After all, the last thing PH needs is painting a picture of a failed administration, but the coalition should be wary of many Malaysians believing the Barisan government fared better.

It’s unfair how some ministers are passing the buck to the PM because they lack the confidence to decide or are just indecisive because the responsibilities of their portfolios exceed their ability.

Visitors to Dr Mahathir’s office have noticed the growing mountain of uncleared documents, which is surely too much a task for anyone, what more a 93-year-old man.

We need to take advantage of the new Malaysia to construct a fresh national narrative which emphasises Malaysia and Malaysians.

There is a need to build national pride over the coming years, one which makes trust and integrity its main framework.

A shared vision beyond 2020 is crucial. Also, to bring Malaysians together and not let race and religion hijack the national discourse.

The question now is, do our leaders have the gumption for this, or will they just let New Malaysia be another piped dream?

By the time world leaders take the stage in KL, Malaysia should be ready to display a new sense of direction, purpose and plan.

Wong Chun Wai

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

chunwai@thestar.com.my https://twitter.com/chunwai09 http://www.wongchunwai.com/

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Five people, including two former senior officers of Felda, are in remand for seven days from today for investigations into alleged misappropriation in connection with a sturgeon fish rearing project worth RM47.6 million. — Bernama

https://youtu.be/LYHqhmC5oek

Five Felda officials linked to Felda, one of them a 'Datuk' have been arrested in a sting operation dubbed 'Ops Caviar' , as the Malaysian Anti-Corruption Commission zeroes in on a RM47.6 million sturgeon farming project which failed to take off in Pahang.

PETALING JAYA: Felda is the latest government-linked company (GLC) to be investigated by the Malaysian Anti-Corruption Commission (MACC), which saw three current and two former officers, one of them a Datuk, being arrested for alleged corruption over a project worth RM47.6mil.

Three of them were former senior executives, who held positions of power when they were still with the GLC.

They are the GLC’s former director-general, ex-deputy director-general (strategic resources), and the former operations officer in charge of the sturgeon project.

Two others detained were its head of London Properties and an assistant administration officer.

All five were picked up in a sting operation, dubbed Ops Caviar, by officers from the anti-graft body between 11.30am and 6pm in several locations around Klang Valley yesterday.

Many valuable items were seized during the raids, including a luxury car and jewellery, estimated to be worth millions of ringgit.

More items are expected to be seized as anti-graft officers visit their homes and obtain details of their assets and personal accounts of their immediate family members to be frozen as part of investigations.

They are being investigated for alleged corruption, abuse of positions and using the GLC for personal gain.

It is learnt that the investigation was zeroing in on the implementation of technology transfer in relation to the sturgeon fish rearing project with a Korean firm.

“We believe all the five suspects are directly involved in the project worth US$10mil (RM47.6mil) since 2014.

 

Penchant for bling bling: Some of the jewellery seized from the suspects.

 

Major haul: Some of the items sized by MACC

“Checks showed that in early 2013, a meeting was held to discuss the project.

“But the Felda board of directors told the 53-year-old suspect to first come up with a detailed report and a proposal on the amount of investments for the project before making a decision,” said a source.

But unknown to the Felda directors, financial and legal divisions, a company – Felda Carviative Sdn Bhd (FCSB) – was set up in January 2014.

An agreement, worth US$45mil (RM146.25mil), was then signed between the company and a Korean firm, in relation to sturgeon rearing deal.

Checks by the MACC showed the project did not receive accreditation from the Pahang Department of Environment as per the SOP.

“We found payment made to the Korean firm about one week after the FCSB was set up.

“This was despite no approval being obtained from the Felda directors,” added the source.

So far, funds amounting to RM47.6mil from Felda have been disbursed by the suspects.

It is learnt the deal with the foreign firm involved technology transfer, service agreement and design and construction agreement.

The agreement was said to have been inked by the Datuk and the 53-year-old suspect, both of whom were former directors of FCSB.

Then, the financial division was also under the purview of both suspects.

MACC director of investigations Datuk Simi Abd Ghani confirmed the arrests of the five.

Simi said stacks of documents relating to the project had been seized to assist in the probe.

“The investigation is still in the initial stage. We will need time to sift through the documents and call in more witnesses to gather evidence. Give us some time to work on the case,” he said.

All the five suspects, held overnight at the MACC Putrajaya headquarters, will be remanded today.

 Source: The Star/ANN

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Tan Sri Ambrin Buang

KUALA LUMPUR: Mismanage­ment and corruption in publicly funded construction projects have caused potential losses of up to 30% of a project’s investment value, according to the Auditor-General (pic).

Tan Sri Ambrin Buang said a study by the Organisation for Economic Co-operation and Development (OECD) and the World Bank showed how corruption in the infrastructure and extractive sectors had led to misallocation of public funds and services that were substandard and insufficient.

“It is difficult to measure the exact cost, but it has been estimated that between 10% and 30% of the investment in publicly funded construction projects may be lost through mismanagement, and about 20% to 30% of project value is lost through corruption,” he said at the Combating Procurement Fraud in the Public and Private Sectors Forum 2017 yesterday.

The forum highlighted the issues in public procurements in Malaysia – a process where the government obtains works, goods or services from companies and one that Ambrin said is most vulnerable to corruption.

Ambrin’s speech was read out by the National Audit Department’s research, corporate and international relations division director Roslan Abu Bakar.

Ambrin also observed that procurement fraud in the public sector is a complex issue, covering a wide range of illegal activities from bid-rigging during the pre-contract award phase through to false invoicing in the post-contract award phase.

He noted that last year, the Malaysian Anti-Corruption Com­mission had opened up a series of investigations involving government procurements.

“One of these involved senior government officials making false claims and fraud amounting to RM20mil last year, and this was followed by a case involving a senior Youth and Sports Ministry official amounting to RM107mil.

“Another case involved a Sabah Water Department official for fraud amounting to RM153mil, and the latest arrest involved a federal ministry secretary-general,” he said.

The Auditor-General added that based on experience, he could not entirely dismiss the existence of bid-rigging in Malaysia’s public procurement.

“One of the signs is when an equipment price is quoted higher than market value.

“If procurement officers do not research market prices, they will believe that the given price is reasonable.

“For example, in the Audit Report, we highlighted significant differences in prices of certain equipment, ranging from RM1,000 to RM7,200 additional cost for the same types and specifications,” he said.

Post-contract fraud is also a common problem, and Ambrin said the department had identified cases where payment control systems were bypassed to allow for fraud to occur.

Source: The Star/ANN

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