December 20, 2012, 12:12 am
Filed under: Airlines, Corporate Governance, Rakyat's concerns | Tags: , , ,

It was certainly amusing to see the Singapore authorities scrambling to contain the “Olam” fall-out arising from the ‘Muddy Waters’ attack on Olam’s perceived strong financial standing.

That’s because Temasek (the Singaporean equivalent to Malaysia’s Khazanah), the Singaporean government investment arm, has a significant stake in Olam, a commodity supply chain entitiy listed on the Singapore Stock Exchange, SGX.

To scramble means there must be credence in the view taken by Myddy Waters’ head, Carson Block…..that the manner Olam accounts for its profits and strong financial position…..tantamounts to what Carson Block describes as ‘legalised fraud’!

Of course the more polite ones would call it overly aggressive accounting.

Whatever one would call it, the profits aren’t real…..i.e. the money’s not in the pocket….although the company’s financial statements call it profits!!!

Hey, has the sub-prime mortgage loan fiasco, which precipitated the economic crisis in the US an Europe, been forgotten?

It certainly was interesting when Bloomberg quoted Carson Block (of Muddy Waters) about companies recognising the future profits of an asset (just acquired) in the current financial year…..causing these companies to perpetually buy such assets, if they can!

Well, Air Asia, for one, CAN!

Notice their recent announcement of acquiring another 100 planes…..leading to close to 500 planes in the pipeline!

Click HERE for MA Wind’s excellent coverage of the Olam matter in his CGMalaysia blog-site.

Is it no wonder that the Hongkong Stock Exchange has dis-allowed the inclusion of such unrealised profits in the computation of “profits” in order to qualify for listing?

Shouldn’t the same principle be applied in the valuation of a company’s share in the computation of ‘Earnings per Share’ and correspondingly, the ‘Price Earnings Multiple’?

Reading a set of financial statement of a public listed company is certainly NOT like what it used to be!



Times are never the same. You can kid people some of the time………but technology does not allow you to do that all the time.

Tony Fernandes, The Snake in Suit a.k.a. Snake Charmer, can charm the westerners with his put-on Queen’s English accent…….but it surely ‘cuts no ice ‘ with those used to his rhetoric and false ‘can-do’ attitude.

His bullying approach in calling his F-1 team Lotus when it was already owned by someone else……and having the temerity to go court and drag the matter, highlights a character of high-handed cockiness bound to be exposed!

As far as his F-1 exploits are concerned, it is drawing to a close with his now pathetically named Caterham F-1 team reduced to having wild celebrations when both their cars manage to finish a race!!

It obviously points to the fact that he had no blinking right to use the name ‘Lotus’ in the first place.

His collaboration with Khazanah by swapping his AirAsia shares for Malaysian Airlines (MAS) shares has caused a furore……not so much because of his ‘arranged’ awards and achievements, but more to do with the fact that he will spare no effort to fudge whatever that needs to be fudged… order to meet his objectives.

This has caused immense fear amongst the career MAS staff for their jobs….with Tony perceived as the hatchet man to do the bidding of the Government in ‘rationalizing (read: down-size) it’s work-force……after having the likes of Tajuddin Ramli and co allegedly depleting  whatever useful assets and resources that MAS had then!

Tony F has certainly stirred a hornets’ nest…….resulting in many coming up in arms to expose these cretins for what they really are!

One such act is this ‘alternative’ AirAsia web-site highlighting the airfares of AirAsia compared to other airlines including those full-fare airlines.

The result?

AirAsia is put to shame – a seemingly budget airline charging more than a full-fare airline.

Isn’t there some authority or commission that we can refer these twisted cretins to?

Click HERE for the airfare comparisons.


It is quite unbelievable that a paper like the Singapore Business Times could support the Malaysia Airlines-Air Asia share swap and the proposed restructuring without fully knowing how the collaboration plans are to be implemented in substance. 

It is also quite unfair to villify the unions representing the 20,000 or more people working in Malaysia Airlines (MAS).

Yes, it is inevitable that MAS requires restructuring ….. structural and financial …… as it is close to the precipice where falling over would mean a journey downwards of ‘no return’!

However, one can really empathise with the ‘feelings’ of the people who have worked and sacrificed so much for the airline since its split back in the 1960s with Singapore under MSA i.e. Malaysia Singapore Airlines.

Why should MAS employees feel aggrieved?

Well, to start with, there is this person, Tajuddin Ramli who was given control of MAS ……. apparently to make it more profitable by ‘instilling professionalism’ into MAS.

Instead, and ably assisted by the likes of Lim Kheng Yew and Malik, the outcome was totally the opposite …… in the most negative of sense!

And did they pay for it?

No ……. instead the government bought back the MAS stake from Tajuddin Ramli at the same price that he bought it for ……. although the market price was way below it!

And when all the damage had already been done …….. you will recall the resulting suit brought by Danaharta (and others) against Tajuddin Ramli …… and quite rightly receiving judgement recently to recover close to RM589 million from him.

However, lo and behold, the government decided to ‘settle the matter out of court’ with Tajuddin …… details of which have not been revealed.

And after the Tajuddin era, we had another set of management put in place ….. that is, after having implemented the WOW scheme (or was it WAU?) …… the brain-child of those thinkers at BINA FIKIR ……. whereby the ownership of and borrowings for MAS’ planes were taken over by the government and MAS, the company, only having to operate the airline!

And even then, MAS could not make money ……. as the alleged plundering continued e.g. the lucrative catering business was outsourced to an individual who was related to a past Prime Minister …… you know, that kind of nonsense.

Now with all (these nonsense) that had taken place, can you understand why MAS employees become livid when they are told of the need to undertake a cost cutting exercise (read: lay-offs) in order ‘to save MAS’?

They are screaming blue murder …….. “you politicians screw up a company in which  we have been earning a decent living so that we can put food on the table for our family  …… and now this UMNO led government has the audacity to even think about taking away our rice bowl (or periuk nasi in Malay)”.

Blue Murder, it sure is!!

I wouldn’t want to vote in such a government at the next General Elections!


We have been reading recently that, as political appeasement to some portion of the Malaysian electorate, the share swap between Khazanah and Tune Air of 20% in MAS and 10% in Air Asia may be unravelled.

MAS chairman, Md Nor Yusof has now been quoted as saying that irrespective of whether or not the share swap is to be unravelled …….. “the special collaboration between the airlines would continue”!

If collaboration was the over-riding consideration, why was the share swap concocted and made part of the deal in the first place?

Not only that, the run up in Air Asia’s share price was unbelievably steep and closed at its historical high of RM3.95 when the swap was priced in!

At the same time, MAS’s share price had fallen to a low of RM1.60.

And lo and behold, at those prices, 10% of Air Asia’s market capitalization  conveniently equated to 20% of MAS’ market capitalization ….. when the swap was made!!

Many are questioning as to why individuals have not been hauled up for the widely perceived fiddling and manipulation of the share prices of the two stocks.


OK, let’s assume that the share swap is now reversed by the government and both shareholders of MAS & Air Asia ….. i.e. Khazanah and Tune Air, are returned to status quo.

It sure doesn’t seem as though there is any effect or improvement to the scheme of things

What’s the catch then?

Well the catch is that ………. the horse has already bolted!!

When Air Asia’s share price was somehow stratospherically (relatively speaking) surging towards its high of RM3.95 ……. it allowed our dear’ol Tony Fernandes to cash out!! 

Do you recall the June 2011 report that a 2% block of Air Asia shares was sold by Tony’s private company, Tune Air that netted him about RM150m ….  that’s RM2.85 per share? Click HERE

The MAS-AirAsia share swap was announced in August 2011.

Interestingly, the Malaysian pension fund, EPF had increased its stake in Air Asia by about 2.85% in 2011!

Now, we all know many major shareholders of Malaysian PLCs have additional stakes in their respective PLCs via nominee companies.

Is Tony Fernandes any different?

Of course not!

Looking at the volume of shares traded during 2011, Tony F could have netted a much larger sum than the RM150m ……. vide the selling of Air Asia shares held by  his nominee companies to other ‘interested parties’ in portions of less than 2% (of Air Asia’s paid up capital) …… such that those ‘interested parties’ do not need to identify themselves through  filings to Bursa Malaysia.

As an illustration, if Tony F had privately through nominees, flogged off an additional 10% of AirAsia i.e. 285m shares  at an average of RM3.50, it would have netted him a cool RM1.0 billion!


And who are these ‘interested parties’ that Tony F had sold to?


Bottom line is that the shares were pushed up to justify Tony F’s ‘exit’ at those high prices paid for by ‘institutions’ that are not in their interests. 

Bottom line is that it may explain how Tony F (even after paying ‘expenses’ to his ‘comrades-in-arms’) could afford to take over an English Premier League football team, QPR, and finance the acquisition of players like Shaun Wright Philips, Bobby Zamora, Djibril Cisse and Joey Barton to name a few!

Maybe, just maybe, the share swap between Khazanah and Tune Air was just a smoke screen of sorts ……. to be reversed at the appropriate time!


Maybe the real losers (and suckers) are EPF, the manager of the Rakyat’s (people’s) retirement funds and those ‘interested parties’ that CIMB can shed light on!

Maybe that’s why there are so many angry people in Malaysia when it comes to the MAS-AirAsia share swap deal …… except for those who concocted it ……. possibly for their own self-interests!

December 10, 2011, 7:55 am
Filed under: Corporate Governance, Rakyat's concerns | Tags: , , , , ,

Some people say the darndest thing.

They do so during a moment of weakness ……. similar to then PM Tun Mahathir when George Soros publicly rebuked the former in 1998 …… resulting in Mahathir, in a moment of weakness, conceding to problems/failures in the Malaysian economy in an open interview with Malaysian TV.

Tony Fernandes has had quite a few of these moments recently ….. like telling the press he is on his way out of Air Asia…….. after realizing that he did not have the clout (read: political backing) that he used to have during the Pak Lah administration.

Furthermore, Tony Fernandes or Tony F. to his detractors is now only an employee of the UMNO led government.

He is no different from Sunrise’s Tong Kooi Ong (who is now in UEM Land), E&O’s Terry Tham (who runs to the beck and call of Sime Darby) and SP Setia’s Liew Kee Sin (whose new political master has changed from Tun Daim to the institution PNB).

Why employee?

I still maintain that Air Asia has now been taken over by the government (read: EPF).

Otherwise, the price of Air Asia would not have been allowed to rise to the ‘stratospheric’ price, relatively speaking, of RM3.95.

Let’s not forget that Air Asia’s price was languishing at around 68 sen ……. and Tony F was then looking for buyers to take over the airline.

That was when EPF came into the scene …….. around the same time the foreign shareholders were cashing out.

Tony F has done quite well, in cash terms …… as he has managed to sell at an attractive price ….. just below RM4.00!

And who had to cough the money?

EPF of course!

That’s our money!

This is how OUR money has been treated and is it no wonder that Malaysians are now desperate to withdraw as much as they can from EPF …….. lest we will be paid an annuity sum in future, instead of enjoying a lump sum withdrawal at 50 years of age or 55 years old.

Of course, the perennial question persists – why should the government acquire Air Asia in the first place?

Admittedly, the UMNO led government’s handling of the recent crisis (or any crisis for that matter) has always been based on a KNEE JERK response.

Their objective is to quickly ‘manage’ the situation so that it does not get out of hand and sully the ‘good name’ of the UMNO led government.

Not anymore …… thanks to technology.

The other reason for the Air Asia purchase …….. is also to manage the perpetual loss making MAS problem!

As in most Government Linked Companies, they are entrenched with dead woods that are so difficult to extricate.

You can put in Chairmens and CEOs, but the power really lies behind these Little Napoleons that wield their influence when implementing and administering the policies – will it be done in reality or just on ‘an appearance’ level?

Air Asia will be used to marginalise MAS in the long term.

Just as CIMB was used to marginalise the cash printing Bank Bumiputera enterprise until its ‘usefulness’ had expired!

Just as Proton is being marginalised (read: SOLD) to the likes of DRB-Hicoms, Nadzmis etc. Even the Toyota controlled Perodua does not want to have anything to do with Proton!

So could things be handled better?

Of course, my friend.

Can it be done under this UMNO led government?

You be the judge of it ……. after reading behind the pictures, stories and figures!!

Click HERE and HERE of Tony F.’s impending departure and subsequent denial.



In my mind, there has been too much ‘hot air’ and over-speculation about the acquisition by Government Linked Companies (GLCs) of public listed companies owned, in particular, by Malaysian Chinese entrepreneurs:

  1. It all started with UEM Land taking over listed Sunrise Berhad from Tong Kooi Ong, who had made a name for himself in Malaysia (Allied Bank, properties and securities) and Canada.

  2. Then there was the widely believed takeover of Air Asia Bhd by government agencies …. that explains the share price support up to RM3.95 …… and culminated in Tony Fernandes’ “rescue” of Malaysia Airlines (MAS).

  3. This was followed by the controversial takeover by Sime Darby of boutique developer E&O Berhad from major shareholders led by Terry Tham.

  4. And finally, PNB’s apparent ‘hostile’ takeover of SP Setia led by Liew Kee Sin.

First and foremost, I think this is part and parcel of the government’s plan to pare down its holdings in GLCs.


Because the government requires cash and Foreign Direct Investments are only trickling in …… and even then, it’s going to opposition controlled Penang and Selangor!

The monies will be needed for the government to stimulate and prop up the economy since it cannot export its way out of recession as it did in the late 1990s downturn …. the economies the world over are in trouble!

At the same time, the government realises that they cannot just arrange for cronies to buy these ‘significant’ stakes and run the companies profitably …… they will generally run them down; if not seek government ‘help’ in meeting their skewed KPIs.

Therefore, the government buys up these Malaysian owned, well run, profitable listed companies …. (I’m not too sure about Air Asia though!)

This is with the proviso that the previous controlling shareholders (Tong Kooi Ong, Tony Fernandes, Terry Tham and Liew Kee Sin) help run the bigger entity (UEM Land, MAS, Sime Darby and PNB respectively).

Effectively, the GLCs have the ‘bullets’ but they need these ‘marksmen’!

As a result, we now see Tong Kooi Ong is already in the Exco of UEM Land.

Same in the case of Tony Fernandes who sits on MAS’s Board and Exco.

As for Terry Tham (who worked for Wan Azmi in Land & General Berhad then), the collaboration agreement is not revealed in detail but it was mentioned he would still be there for E&O for the next three years.

As for Liew Kee Sin, he was effectively working for UMNO (read: Rashid Manaf) by building up the SP Setia group for his political master. The arrangement does not seem to change ….. as long as it enriches him.

Of course, this will face the brunt of the fury of right wingers in UMNO and condescending racists ….. but that’s how Malaysia works!

At the same time, it is assumed that these ‘successful entrepreneurs’ will act in the best interest of the larger government owned entity.

Well, most of us live on a wish and a hope!

This is at best, the start of the Malaysian meritocracy regime ……. in its own convoluted way!


Not many may recall Ismail Zakaria.

One couldn’t even easily get his photo online until Malaysian Business Times published it recently.

Ismail Zakaria’s name then (up to the late 1990s) was so highly thought of that he was actually touted for the position of CEO of Maybank, which he eventually lost to Ahmad Don.

Ismail Zakaria (or IZ as he is known), joined Sime Bank as CEO after a short stint with RHB Bank.

But what we read about now is IZ’s acquittal from court charges of acting beyond his authority in lending up to RM175m to companies back in the late 1990s when CEO of Sime Bank, a subsidiary of Sime Darby Berhad.

Sime Bank was previously UMBC Bhd (United Malaysian Banking Corporation Bhd).

It’s amazing that such a matter would take over a decade to be dealt with ….. and even that, at the level of the Session’s Court!

But I do recall of the amazement at the way monies were expended by a bank supposedly controlled by a world renown company with fantastic governance and checks & balances – SIME DARBY BERHAD.

It is equally amazing (and galling) that in a relatively short period thereafter, we could witness the same scenario in Sime Darby’s Oil & Gas Division …… losing close to RM3.0 billion resulting from slip-shod management practices.

Actually, my point in this posting is that Malaysia’s corporate mentality still seems to be very much that if one appoints a high profile individual as CEO to a company ……. it is bound for success.

The actual track record of that person appears to be secondary.

As long as he/she has had their profile raised, CV’s polished, references ‘corroborated’ …… they appear acceptable, so to speak.

That seems to be the case for IZ then ……. and we seem to see it even to this day?

Look at the short-list for the Managing Director’s post for MAS as reported.

They were Ahmad Jauhari, Rashdan Yusof, Kamaruddin Meranun and Shazali Ramli.

Just what exactly has each and every one of them actually achieved?

Ahmad Jauhari was a member of the Sikap Power team that got the mandate to build an IPP plant in Port Dickson.

Naturally, it would be built and financed by others and resulted in the project being flipped first to MRCB and then to Malakoff.

Those who originally got the mandate would make a ‘killing’ from the flipping!

Ahmad Jauhari, then spent a time as MD of Malakoff, whose control (vide MMC)  by then had moved from the government to UMNO financier Syed Mokhtar Al Bukhari.

As for Rashdan Yusof ….. besides being with an audit firm and then the Thinking Company (Bina Fikir), Rashdan was also a director and shareholder of listed company, Megan Media Berhad, which collapsed so calamitously around the same time as Transmile Berhad.

And what about Kamaruddin Meranun?

Before he got his break, thanks to Snake Charmer, Tony Fernandez, what did Kamaruddin Meranun actually achieve?

He did spend some time with the Innosabah Securities Bhd Group, a stock broking firm in Sabah with subsidiaries involved in related activities eg. options and futures.

Innosabah collapsed under the same exposure that Sime Bank had then!

As for Shazali Ramli, well, he’s an apparently good marketing man especially known for his oily rolled back hair!!

Therefore, there seems to be a serious dearth of good quality CEOs for the Malaysian corporate community!

Or is it that the post of MD for MAS was earmarked for a pliant, financially secure individual who would do the bidding of the puppeteers behind the scene?

Just like Ismail Zakaria?

Ex-Sime Darby Berhad CEO, Zubir Mursid, who is facing his own court charges, must be quite positive with IZ’s acquittal.

Click HERE for BTimes report on IZ’s acquittal.