Saturday, August 1, 2015

Why KLIA 2 is sinking now?

This was written almost four years back. Read for yourselves on the possible reason why KLIA2 is sinking now.

Why was a new masterplan drawn up in 2008 for the expansion of the low-cost carrier airport (KLIA2), resulting in the airport being built on soft soil, when an earlier plan circumvented this problem?

This question lies at the heart of the current outcry over the ballooning cost of the airport from an estimated RM1.7 billion to up to RM3.6 billion today.

Referring to the KL International Airport Masterplan 1992, Petaling Jaya Utara MP Tony Pua (left) said today the move also remained the main cause of the construction deadline for KLIA2 to be extended from September 2011 to April 2013.

“The transport minister and Malaysia Airports Holdings Bhd must answer why they made a hard-to-fathom move to the new site. This is the reason the cost went up by more than RM2 billion,” Pua said.

According to the 1992 plan, the current construction site of KLIA2 “mainly comprises saturated marine clay with an overlay of peat material, which varies in thickness from two to three metres”.

“It has poor load bearing qualities and is not suitable for airport construction without undertaking significant engineering measures… which include improved drainage, removal of the peat layer and the introduction of fill material with good load bearing qualities (a minimum of three metres deep),” Pua said, quoting from the report.

The earthworks required to make the site suitable, he said, cost an estimated RM1.2 billion. This could have been saved if the 1992 masterplan, drawn up by Anglo-Japanese Airport Corporation Bhd, had been followed and the KLIA2 had been built on the original hard land area marked out.

The area marked out in the 1992 plan is a hilly area, which had already been prepared during the construction of the main terminal (KLIA) at the time.

Double watch towers and extra runway

The 2008 plan, drawn up by Netherlands Airport Consultants BV and KLIA Consultancy Services, led to further consequences on costs:
A third runway, estimated to cost RM270 million, has to be constructed as the new site would not allow KLIA and KLIA2 to share two runways. However, the third runway will also need to be built on soft soil, raising questions as to when it will be ready.

“Airlines would not want to move to KLIA2 if they have to taxi longer in order to use KLIA’s runways,” Pua said.
A second control tower, estimated to cost RM500 million, needs to be constructed as KLIA’s tower would not be able to see some parts of the third runway. The 1992 plan had both terminals sharing the same tower.

“This would make it the first modern airport, built after the 1960s, with two control towers within two kilometres of each other,” Pua said.

While conceding that he was not an expert in the field, Pua said an engineering expert who was consulted had said the deadline of April 2013 was “iffy” at best, mainly due to the poor soil.

In comparison, he said, the current low-cost carrier terminal (LCCT) had cost RM232 million and had taken about 15 months to construct, including upgrades.

“Of course it’s not fair as (KLIA2) would have a third runway, etc, but it gives a comparison of contrast in cost from the new airport and the current terminal. The current one was built in budget fashion, the new one is as good as a premium terminal.

“We are not disputing the need to move to a bigger terminal as the LCCT is close to capacity. Nor do we mind shifting the location, but not at such a ballooning cost,” Pua said. LCCT currently caters to 15.4 million passengers, 400,000 more than its capacity.

Tuesday, July 28, 2015

"Facing corruption scandal, Malaysian PM fires officials investigating him"

Malaysian Prime Minister Najib Razak, stung by allegations that he received some $700 million in government money, fired the attorney general who had been investigating him and a deputy who has been among his most prominent critics on Tuesday.

Najib is under increasing pressure over leaked confidential documents that allegedly show the money, from state investment fund 1MDB, went into his personal accounts.

Najib announced over national television Tuesday that his deputy Muhyiddin Yassin will be replaced by Ahmad Zahid Hamidi, a Cabinet member who will also retain his home minister portfolio. Earlier Tuesday, the government announced it had terminated the services of Attorney General Abdul Gani Patail.

Najib said he also dropped four other ministers to strengthen his administration and ensure they can “work as a team.”

“I can accept differences in opinion and criticisms as part of the decision-making process, but these differences in opinion should not be made in an open forum that can affect public perception of the government and the country,” he said.

Critics slammed Gani's abrupt removal and cast it as an attempt by Najib to avoid prosecution.

“The purge commences. The Attorney-General is replaced. Any flicker of hope that the prime minister might be charged for misdeeds is extinguished,” opposition lawmaker Tony Pua tweeted.

“The fact that he is not answering the allegations but instead removed his critics is not a good sign,” said Wan Saiful Wan Jan, who heads the Institute for Democracy and Economic Affairs think tank. “It shows deep desperation on Najib's side.”

Muhyiddin, the deputy, has been critical of the government's handling of 1MDB's massive debt and on Sunday night repeated his call for Najib to explain the alleged funds transfer.

Najib said, “The decision to replace Muhyiddin was a very difficult one, but I had to do it so that a strong team can move forward.”

Gani was replaced by a federal court judge, Mohamed Apandi Ali, months before the attorney general had been due to retire in October. The government said Gani was leaving for health reasons, but when contacted by Malay Mail Online, Gani said he had not been aware of the decision.

Gani confirmed earlier this month that he had received documents from investigators that linked Najib and 1MDB. The existence of the documents, which allegedly show $700 million was wired from entities linked to 1MDB into Najib's accounts, were first reported by The Wall Street Journal.

Najib has not disputed the existence of the accounts or the receipt of the funds. He has only said that he has never used government funds for personal gain, and called the allegations a political sabotage. Officials with 1MDB also have denied wrongdoing.

The documents sent to the attorney general pave the way for possible criminal charges, which would be a first for a Malaysian prime minister.

Apart from Muhyiddin, Najib also dropped Shafie Apdal as rural development minister. Shafie, a vice president in Najib's ruling Malay party, has also been critical of the government's handling of the 1MDB saga. On Tuesday he defended his comments, saying in a statement that they were aimed at strengthening the party and putting the country on the right track.

Najib's ruling National Front coalition has been in power since independence from Britain in 1957. However, support for the coalition has eroded in the last two general elections. In 2013, it won the polls but lost the popular vote for the first time.

Wednesday, July 22, 2015

"The Scandal That Ate Malaysia" by Bloomberg's Yoolim Lee & Elffie Chew

In the spring of 2013, Song Dal Sun, head of securities investment at Seoul-based Hanwha Life Insurance, sat down to a presentation by a Goldman Sachs banker. The young Goldman salesman, who had flown in from Hong Kong, made a pitch for bonds to be issued by 1Malaysia Development Bhd., a state-owned company closely tied to Malaysian Prime Minister Najib Razak.

It was enticing. The 10-year, dollar-denominated bonds offered an interest rate of 4.4 percent, about 100 basis points higher than other A-minus-rated bonds were yielding at the time, he recalls. But Song, a veteran of 25 years in finance, sensed something was amiss. With such an attractive yield, 1MDB could easily sell the notes directly to institutional investors through a global offering. Instead, Goldman Sachs was privately selling 1MDB notes worth $3 billion backed by the Malaysian government. “Does it mean ‘explicit guarantee’?” he recalls asking the Goldman salesman, whom he declined to name. “I didn’t get a straight answer,” Song says. “I decided not to buy them.”

The bond sale that Song passed up is part of a scandal that has all but sunk 1MDB, rattled investors, and set back Malaysia’s quest to become a developed nation. Najib, who also serves as Malaysia’s finance minister, sits on 1MDB’s advisory board as chairman. The scandal’s aftershocks have rocked his office, his government, and the political party he leads, United Malays National Organisation, or UMNO. A state investment company trumpeted as a cornerstone of Najib’s economic policy after he became prime minister in April 2009, 1MDB is now mired in debts of at least $11 billion. Former Prime Minister Mahathir Mohamad, a one-time political mentor who’s turned on Najib, says “vast amounts of money” have “disappeared” from 1MDB funds. 1MDB has denied the claim and said all of its debts are accounted for. The prime minister’s office declined to comment for this article.

From the moment in 2009 when Najib took over a sovereign wealth fund set up by the Malaysian state of oil-rich Terengganu and turned it into a development fund owned by the federal government, 1MDB has been controversial. Since the beginning of this year—with coverage driven by the Sarawak Report, a blog, and The Edge, a local business weekly—the scandal has moved closer and closer to the heart of government, sparking calls for Najib’s ouster and recalling Malaysia’s long struggle with corruption and economic disappointment.

Mahathir, who was prime minister from 1981 to 2003, now accuses Najib of “hijacking” the Terengganu Investment Authority, or the TIA, from the state government. Not so, 1MDB said in a statement: The state government willingly “decided to withdraw from the TIA” after the federal government guaranteed the TIA’s bonds.

That didn’t end the argument. Beginning in March, as public pressure grew, the country’s auditor general, the parliament’s public accounts committee, the central bank, and the police have all homed in on 1MDB. The force of the scandal helped topple the ringgit, the worst-performing currency in Asia as of July 16, down 8.1 percent against the dollar since the start of the year. Foreign reserves plunged 20 percent in June from a year earlier.

On July 3, the Wall Street Journal, citing documents from government probes, reported that investigators believe almost $700 million in cash moved through state agencies, banks, and companies linked to 1MDB before eventually finding its way into Najib’s personal accounts. The money reportedly included two transactions—one worth $620 million; another, $61 million—made in March 2013, two months before a general election returned Najib to power as part of the Barisan Nasional, or National Front, coalition.

In a country with no public campaign financing and few strictures on political donations, the alleged cash flows caused alarm. Before the 2013 election, on March 12, 1MDB Chairman Lodin Wok Kamaruddin and Khadem Al Qubaisi, then chairman of Abu Dhabi’s Aabar Investments, signed an agreement to form a joint venture. The following month, 1MDB announced it had raised $3 billion for its share of the partnership. “1MDB opted for a private placement to ensure the timely completion of this economic initiative,” the company said in a statement on April 15 of that year.

The timing was controversial. “1MDB may have been created with one of the key objectives being to raise a slush fund to finance Barisan Nasional’s election campaigns,” says MP Tony Pua, of the opposition Democratic Action Party. A statement from the prime minister’s office dismissed the allegations in the Wall Street Journal, saying they amounted to “political sabotage” at the hands of “certain individuals to undermine confidence in our economy, tarnish the government, and remove a democratically elected prime minister.” In a statement, 1MDB said it “has never provided any funds to the prime minister.”

Malaysia’s biggest-ever financial scandal has spotlighted a colorful cast of characters—some connected to 1MDB, some not. A politician since the age of 23, the mustachioed Najib is the eldest son of the country’s second prime minister following its independence from Britain in 1957, Abdul Razak Hussein, and a nephew of the third, Hussein Onn.

Najib’s wife, Rosmah Mansor, is an influential figure in her own right. A former executive at Island & Peninsular, a real estate company, she’s often lampooned in the local media for her bouffant hairstyle and penchant for luxury.

Najib’s stepson, Riza Aziz, far left, joins Leonardo DiCaprio and others at the London premiere of The Wolf of Wall Street on Jan. 9, 2014. Photograph: Paul Hackett/Reuters/Landov

Riza Aziz, Rosmah’s son from her first marriage, is close to a Kuala Lumpur man about town who’s been linked to 1MDB named Low Taek Jho. Jho Low, as he’s known, is a whiz-kid dealmaker who exploded onto the gossip pages in 2009. One photo shows the moon-faced Low partying with California socialite Paris Hilton and clutching a bottle of Cristal champagne. The prime minister’s stepson co-founded a Los Angeles company that produced The Wolf of Wall Street, the 2013 film about lifestyle excesses and criminal exploits in the world of finance; Low got a full-screen “special thanks” credit at the end of Wolf. Low helped set up 1MDB’s first joint venture, with PetroSaudi International, according to reports in The Edge and the Sarawak Report.

An additional touch of glamour comes from Goldman Sachs executive Tim Leissner, a lanky, blue-eyed German who’s married to former U.S. fashion model and designer Kimora Lee Simmons, the ex-wife of Russell Simmons, co-founder of New York hip-hop music label Def Jam Recordings. In September 2013, when Najib and Rosmah traveled to San Francisco to open a new office of Khazanah Nasional, Malaysia’s sovereign wealth fund, Rosmah and Simmons were photographed together. Leissner, now Goldman’s Southeast Asia chairman, was a fixture in Malaysian dealmaking in the late 2000s. Goldman helped manage billionaire T. Ananda Krishnan’s 2009 initial public offering of Maxis, Malaysia’s biggest mobile phone service provider.

Goldman established a close and profitable relationship with 1MDB. From 2012 to 2013, the bank arranged three bond sales for the company, totaling $6.5 billion. Fees, commissions, and expenses for Goldman totaled $593 million—about 9.1 percent of the money raised—according to a person familiar with the sales. “These transactions were individually tailored financing solutions, the fee and commissions for which reflected the underwriting risks assumed by Goldman Sachs on each series of bonds, as well as other prevailing conditions at the time, including spreads of credit benchmarks, hedging costs, and general market conditions,” says Hong Kong–based Goldman spokesman Edward Naylor.

In 2013, Goldman arranged 1MDB’s $3 billion bond sale, the one passed up by Hanwha Life’s Song. The note is included in JPMorgan’s benchmark Asian and Emerging-Market Bond indexes. Goldman’s commissions, fees, and expenses from the sale were $283 million, or 9.4 percent of the amount raised, according to the prospectus. The person familiar with the transaction says Goldman’s take was high because the bank bought bonds from 1MDB, assuming the risk, and then resold them to customers.

In many ways, 1MDB’s star-crossed existence mirrors the misfortunes of this country of 30 million people. Najib set up 1MDB at a time when the Malaysian economy was on the mend; it expanded by 7.4 percent in 2010, becoming one of the fastest growing in Southeast Asia. The company—supported by the advisory board chaired by Najib and including high-ranking government officials from China, Saudi Arabia, and the United Arab Emirates—set out to be a state-owned strategic development company that would forge global partnerships, draw foreign investment to Malaysia, and build up the country’s industrial base.

Early on, 1MDB formed joint ventures with Saudi and Abu Dhabi companies. On a visit to Malaysia in July 2013, Japanese Prime Minister Shinzo Abe attended a signing ceremony that was meant to initiate discussions on 1MDB’s plan to issue Samurai bonds guaranteed by the Japan Bank for International Cooperation. None of these plans panned out as they were supposed to. Over time, to its growing number of detractors, 1MDB looked more and more like a giant black box, its inner workings echoing the mysteries suggested by the wayang kulit, traditional shadow puppets, that frolic on the office walls of the Kuala Lumpur–based company.
Left to right: Nigny/Splash News/Corbis; Eugene Hoshiko/AP

1MDB, which has announced plans to wind itself down, is reducing its debt, according to President Arul Kanda. “1MDB has undertaken various initiatives to reduce the company’s debt levels and ensure that maximum value is generated for its 100 percent shareholder, the Ministry of Finance,” Kanda said in a statement to Bloomberg Markets on July 16. As part of the plan, 1MDB has repaid a $975 million loan, while more than 40 potential investors have shown interest in one of its property developments, Bandar Malaysia. He said the company also intends to sell its power plants. “We are focused and are making good progress,” he said.

The 1MDB story begins in 2008. In December of that year, Terengganu, a sultanate located across the Malay Peninsula from Kuala Lumpur, got federal government approval to set up its sovereign wealth fund, the TIA. Goldman Sachs and Boston Consulting Group advised the TIA in its early days. Jho Low advised the TIA from January to mid-May, according to a statement released on his behalf to local media in May 2014.

In May 2009, the TIA raised 5 billion ringgit ($1.3 billion) through the sale of 30-year Islamic bonds. Guaranteed by the federal government, they were offered at an interest rate of 5.75 percent. In fact, according to Mahathir, the bonds were sold at a discounted price that effectively yielded bondholders 7 percent. “Who approved such terrible terms for a loan to a government-owned company?” the former prime minister asked on his blog. 1MDB said in response that the effective yield was actually 6.15 percent and was reasonable considering that these were Malaysia’s first 30-year notes.

Two months later, the Najib government quietly took over the TIA and renamed it 1MDB. As the new company was getting up and running, the well-connected Low laid the groundwork for 1MDB’s dealings with the Saudis, according to reports in The Edgeand the Sarawak Report. The son of a wealthy Malaysian businessman, Larry Low, Jho studied at Harrow, an elite London boarding school. While there, he met Najib’s stepson, Riza Aziz, who was studying at the London School of Economics and Political Science, and came to know Riza’s mother, Rosmah, when she visited London, according to a New York Times report in February. Later, at the Wharton School at the University of Pennsylvania, he took a semester off to start a company called Wynton Group, managing $25 million pooled mostly from his friends’ families, according to an interview he gave to Malaysia’s Star newspaper in 2010.

Police raid 1MDB’s offices in Kuala Lumpur on July 8, seizing computers and other equipment. Photograph: Mohd Rasfan/AFP/Getty Images

In a similar vein, Low’s role at 1MDB involved “OPM”—other people’s money, says a former business associate in Kuala Lumpur. By now, Low had assembled an impressive array of connections. On Sept. 7, 2009, Low met Patrick Mahony, an executive of PetroSaudi International, in New York, according to a report in The Edge. Tarek Obaid, a co-founder of PetroSaudi, had introduced them to each other via e-mail on Aug. 28, the report said. It didn’t take long for 1MDB and PetroSaudi to cobble together a $2.5 billion joint venture. Mahony didn’t respond to e-mailed questions. Obaid couldn’t be reached for comment.

As it got off the ground, 1MDB worked with more than a dozen financial institutions, but it forged especially close ties with Goldman. A helping hand came from Roger Ng, Goldman’s head of Southeast Asia sales and fixed-income trading, a Malaysian national well-known for his connections to politicians and tycoons, according to two people who know him. Leissner, then based in Singapore as Goldman’s co-president for Southeast Asia, played a key role in expanding the bank’s business in Malaysia. He declined to comment for this article. Ng, who left Goldman last year, didn’t respond to phone calls or a text message.

In December 2009, Goldman won a license from Malaysia’s Securities Commission to set up fund management and corporate finance advisory operations in the country. “The future outlook for Malaysia’s capital markets and its asset management industry is very positive,” Leissner said in a statement released by the commission at the time. “Through our local presence, we look forward to playing a larger role in their development.”

For 1MDB, Goldman played multiple roles. In 2012, it advised the firm on its acquisition of Tanjong Energy Holdings from Malaysian billionaire Krishnan and domestic power plants from Genting, a conglomerate. The following year, the bank helped 1MDB purchase the Jimah Energy Ventures power plant in Selangor, Malaysia, a deal that was completed in 2014.

The true extent of the trouble at 1MDB didn’t become apparent until late last year. Scandal aside, 2014 was a difficult year for Najib and his government. First came the disappearance of Malaysia Airlines Flight 370 and all 239 people on board in March. Then, in July, Flight 17, also operated by the state-owned airline, crashed near Donetsk in strife-torn eastern Ukraine, possibly after being hit by a surface-to-air missile; all 298 passengers and crew died. It was around that time that the Sarawak Report and The Edge, under longtime editor Ho Kay Tat, began their exposés of 1MDB, adding to Najib’s woes.

The Sarawak Report was founded by Clare Rewcastle Brown, who was born in Sarawak, a state on the island of Borneo, of British parents and now runs the site out of London. (Her husband, Andrew Brown, who recently retired as the head of media relations at EDF Energy, is the brother of former U.K. Prime Minister Gordon Brown.) Earlier this year, the website claimed to have obtained e-mails and other documentation showing how Jho Low and several business associates siphoned $700 million from 1MDB’s venture with PetroSaudi Holdings, which was registered in the Cayman Islands in the Caribbean. Low, who has denied playing any role in 1MDB after the work he did for the TIA, didn’t respond to requests for an interview or to e-mailed questions. The government, without giving any details, has tried to discredit the e-mails as reported by the Sarawak Report, saying the communications may have been tampered with. Then on July 19, the Malaysian Communications and Multimedia Commission said it had blocked the Sarawak Report’s website in Malaysia for publishing content that could "destabilize the country." Rewcastle Brown said she won’t be impeded by the government’s action, describing it as the “latest blow to media freedom.” 

In an unprecedented crackdown, Malaysian authorities this year have arrested more than 150 journalists, activists, opposition politicians, and lawyers on sedition charges or under a peaceful assembly act that strictly regulates public protests. One of Malaysia’s best-known political cartoonists, who goes by the name Zunar, has been charged with nine counts of sedition and faces up to 43 years in prison.

On June 22, Thai police arrested a tattooed Swiss national named Xavier Justo, a former executive at 1MDB investment partner PetroSaudi International, on the resort island of Koh Samui. Police said they suspected Justo of trying to extort money from PetroSaudi and leaking e-mails about the oil company’s dealings with 1MDB. Justo denied the allegations, the Bangkok Post reported.

Adding to a climate of fear and tension, the Malaysian police launched an investigation into whether government officials, including central bank personnel, were behind the leaking of documents that allegedly showed 1MDB money turning up in Najib’s accounts. The central bank on July 12 denied any impropriety.

As allegations swirl around him, the stakes for Najib are high. Not only is he prime minister and finance minister; he’s also president of a political machine, UMNO, that has been in power since Malaysia’s independence. What’s more, he’s chairman of the Khazanah Nasional sovereign wealth fund, which had $29 billion under management at the end of 2014. “Power is too concentrated to one person,” says Zaid Ibrahim, a former law minister who built the country’s largest law firm. He says the total lack of checks and balances in Malaysia has led to abuse of power.

In the early days of Najib’s rule, Malaysians had more cause for optimism than now, says Danny Quah, an economics professor at the LSE. Like many successful Malaysians overseas, Quah has maintained ties with his native country. He served on Malaysia’s National Economic Advisory Council from 2009 to 2011, and he still vividly recalls a day—March 30, 2010—when Najib stood in front of global investors and promised a “1Malaysia” where all Malaysians of different races would work together toward one goal—turning Malaysia into a developed nation by 2020. At the time, Najib had enough popular support to aim high. “Right then, it was a golden opportunity,” Quah says. “It’s a moment that passed.”

Mahathir, 90, shows no signs of letting his erstwhile protégé off the hook. After a poor showing by UMNO in the March 2008 elections, Prime Minister Abdullah Ahmad Badawi stepped down the following year and was replaced by his deputy prime minister, Najib. Over time, Mahathir said later, he became disillusioned with Najib’s management of the economy. He said he expressed his doubts first privately and then publicly.

With the 1MDB scandal gaining momentum, outright war broke out between Mahathir and Najib. Najib, Mahathir said in June, had crossed the line. “1MDB is the straw that broke the camel’s back,” said Mahathir, who has repeatedly called for Najib to resign. Najib, who says he won’t step down, lashed back at Mahathir, known by the honorific Tun. “The ‘mess’ that Tun refers to is largely of his own making as a result of his attacks and his echoing of opposition lies and slander,” Najib wrote on his website.

As words flew between Mahathir and Najib in June, the Malaysian Volunteer Lawyers Association organized a forum to hear from Najib on 1MDB. It was called Nothing2Hide. Mahathir saw a chance to speak his mind about 1MDB and the money he said was missing. “I feel obligated to explain to the people what really happened and why I’ve decided not to support Najib any longer,” he said to the gathering. “This is not about me or Najib. It’s about the whole nation because what was lost belonged to all of us. I am just a spokesperson. Many people have come to me, asking me to do something.”

About 10 minutes into Mahathir’s speech, uniformed police moved in and stopped the aging but still spry former prime minister from speaking. Whatever Najib thought of the action taken against his mentor-turned-rival may never be known. Amid police concerns about “public order and national harmony,” he didn’t show up.

This story appears in the September issue of Bloomberg Markets magazine. With assistance from Ye Xie in New York.

Tuesday, July 21, 2015

"We could not walk away on finding out about the scheme to cheat Malaysia of billions of ringgit" by Ho Kay Tat


The Edge had reported extensively on 1Malaysia Development Berhad (1MDB) in 2013 and 2014 as it emerged that the government-owned entity had run into financial difficulties.

Information was, however, scarce and limited because its annual audited financial reports were consistently late.

Our journalists have met various contacts and pored through whatever available information they could get hold of in search of the truth. Early this year, we were told someone was willing to share information that will shed light on 1MDB’s joint venture with PetroSaudi International. We were not told who he was before we met him.

This person, whom we shall not name, showed us thousands and thousands of emails and document attachments.

We read scores of them and were convinced of their authenticity because of the sheer volume and the email trails.

We subsequently had an IT forensic expert confirm that there was no reason to worry that they were fakes.

What we read shocked us. What was supposed to be a joint venture that will bring economic benefits to the country was nothing more than a scheme to scam billions of ringgit from Malaysia by a small group of Malaysians and their foreign partners.

At that point, we could do one of two things:

1) Drop the matter like a hot potato and walk away, or

2) Get hold of everything so that the truth can be uncovered.

We decided we had to pursue the truth.

As Tun Dr Mahathir Mohamad, Tun Musa Hitam and Tengku Razaleigh Hamzah said recently, those who have information that can lead to the truth must speak out and not look the other way. Not reporting a wrong doing is a crime.

Even Prime Minister Datuk Seri Najib Razak and Deputy Prime Minister Tan Sri Muhyiddin Yassin have said they want to get to the truth.

As a media group, we believe we have a public duty to do, no matter how difficult and dangerous it may be for us.

Meeting contacts to gather information is what media professionals do all the time in pursuit of a story. There is nothing wrong or sinister.

We were not involved in any theft, we did not pay anyone, and we did not tamper any of the emails and documents we were given.

In fact, we have secured the data so that no one can tamper with them. This can be independently verified by the authorities.

Some of the information have been used in articles we have published in the last few months. Some were just too sensitive to be used. None of the articles have been challenged by anyone named in these stories.

Indeed, we believe our articles have been of help to the various government agencies looking at 1MDB.

There is no political agenda or conspiracy in what we have done. In fact, we have engaged with various politicians and government officials who have sought our help to get a better understanding of what had happened and the situation 1MDB is in today.

The easiest thing we could have done after coming across what we found, was to walk away. Why look for trouble? But we could not do that.

We chose to take the difficult path, one that we knew will be fraught with risks to ourselves personally and to our organisation, which now faces the possibility of action by the Home Ministry.

On Monday, we handed documents, printed emails and a hard disc to Bank Negara. Today, the same set was given to the Commercial Crime Investigation Department (CCID) of the Police. I also gave a statement to CCID.

We are comforted that the various investigators, the Auditor-General, the Public Accounts Committee, Bank Negara, the police, the Malaysian Anti-Corruption Commission and the Attorney-General have given their commitment to uncover the truth without fear or favour.

It is, indeed, their responsibility and their duty to the people of Malaysia to do just that. Just as it was our duty to pursue the story.

Ho Kay Tat

Publisher & Group CEO
The Edge Media Group – July 21, 2015

Monday, June 15, 2015

MESEJ UNTUK RAKYAT MALAYSIA (By HRH Brigadier General Tunku Ismail Ibni Sultan Ibrahim, The Crown Prince of Johor)


Kebelakangan ini, saya hanya menyuarakan pandangan supaya mereka yang diberikan amanah jangan salahkan rakyat kerana hilang keyakinan dan kepercayaan terhadap anda, tetapi fikirkanlah mengapa rakyat telah hilang keyakinan dan kepercayaan terhadap anda. Nampaknya teguran saya secara baik ini telah mendapat maklum balas yang kasar daripada seorang menteri. Kalau saya mendapat jawapan sedemikian, apa harapan untuk teguran rakyat lain didengar?

Anda seorang menteri, bukannya tuhan dari syurga yang tidak boleh ditegur. Jangan fikir rakyat negara ini wujud untuk memberikan anda jawatan dan kekayaan, tetapi jawatan tersebut wujud supaya anda memberikan khidmat kepada rakyat. Apabila saya bersuara, saya melakukannya sebagai pemimpin rakyat saya, rakyat Johor dan Malaysia. Saya hanya mengingatkan para pemimpin negara ini bahawa mereka mempunyai tanggungjawab untuk berkhidmat kepada rakyat, dan nampaknya oleh sebab itu saya diserang.

Dalam aturan dunia yang baru, saya membayangkan masa depan di mana setiap orang mempunyai hak menyuarakan pendapat masing-masing. Namun, keadaan di Malaysia pada hari ini tidaklah begitu, menteri-menteri pantang ditegur. Saya rela dicemuh untuk mempertahankan perkara yang benar, daripada disanjung untuk membela perkara yang salah.

Saya bukan ahli politik. Saya hanya bertanggungjawab kepada Allah, Sultan saya, dan rakyat Johor. Saya bukannya menjalankan suruhan seperti boneka. Johor hanya mempunyai tempat bagi mereka yang mahu berkhidmat kepada rakyat, bukan untuk mereka yang mahu meraih undi demi kepentingan peribadi.

Akan tiba suatu masa, di mana rakyat Johor perlu membuat keputusan demi kebaikan masa depan kita dan generasi yang akan datang. Kita akan bersatu dan membuat keputusan tersebut sebagai Bangsa Johor, untuk menempa masa depan kita. Bersatu kita teguh, bercerai kita roboh. Saya berdiri untuk rakyat saya, bukan untuk merebut kuasa, bukan untuk menumbangkan kerajaan, tetapi untuk menjaga kesejahteraan rakyat saya.

Saya tidak pernah menyuruh sesiapa berundur atau meletak jawatan, hanya sekadar memberi ingatan kepada ahli politik berkenaan peranan dan tanggungjawab mereka. Sekiranya perkara seperti itu pun anda tidak boleh terima, jelaslah kepada seluruh rakyat betapa angkuh dan sombongnya anda.

Alhamdulillah, saya telah dikurniakan dengan kehidupan yang selesa. Kalau hendak diikutkan, saya boleh hidup dalam dunia saya sendiri tanpa menghiraukan permasalahan rakyat, tetapi saya di sini berdiri teguh bersama mereka. Jadi kepada mereka yang ingin mencemar imej saya dan menjadikan saya musuh awam nombor satu, sesungguhnya rakyat lebih bijak dan mampu menilai sendiri.

Jangan gunakan saya untuk mengalihkan tumpuan daripada isu-isu nasional yang lain. Negara ini memerlukan ahli politik yang bersih dan telus, yang menjalankan tanggungjawab mereka dengan keikhlasan dan integriti.

-DYAM Brigadier Jeneral Tunku Ismail Ibni Sultan Ibrahim, Tunku Mahkota Johor.



Of late, I just voiced out my opinion and a reminder that people who has been entrusted with the responsibility to not blame the people for losing trust and confidence in them, but think of why the people no longer have the confidence and trust in them. Apparently my gentle reminder has been met with a rather hostile response from a minister. If I got such a reply, then what chances does the rest of the rakyat have?

You are a minister, not a God from the heavens who lord above everybody. Do not think the people of this country exist to provide you with position and wealth, but the position exists for you to serve the people. When I voice out, I do it as the leader of my rakyat, on behalf of Johoreans and Malaysians. All I did is to remind the leaders of the country that they have a responsibility to serve the people, and for this, I am attacked.

In the new world order, I envision a future that every person has a right to voice their opinions. However, that is not the case in Malaysia today, where ministers think they are untouchable. I am willing to be cursed for standing up for what is right, rather than be loved for defending what is wrong.

I am not a politician. I am only answerable to Allah, my Sultan and the people of Johor. I do not do the bidding of some puppet-master who pulls the strings. Johor only has place for those who want to serve the people, not for those who want to garner votes for their own interests.

There will come a time, when the Johorean people must decide what is best for us and our future generations. Decide and unite we will, as Bangsa Johor, to forge our future. United we stand strong, divided we fall. I stand for my rakyat, not to joust for power, not to topple the government, but to ensure the well-being of my people.

I never told anybody to step down or resign, only to remind politicians of their roles and responsibilities. If you cannot deal with that, it just shows your arrogance to the people. Alhamdulillah, I have been blessed with a comfortable life, and I can just live my own life and be oblivious to the worries of my people, but here I am, standing firm by their side. So for those wanting to tarnish my image and make me public enemy number one, the people are smarter than that, and they can think for themselves.

Do not use me to divert the attention from national issues. This country needs politicians who are clean and transparent, who carry out their duties with sincerity and integrity.

-HRH Brigadier General Tunku Ismail Ibni Sultan Ibrahim, The Crown Prince of Johor.

Tuesday, March 24, 2015

WisdomTree Europe Hedged Equity Fund (US$66.15) - Riding the EU equity bull

If you are interested to have some exposure to the European equity market, this is a suitable ETF to go into. 

Short Summary:
  • A dividend weighted index designed to provide exposure to European equity securities, particularly shares of European exporters, while at the same time neutralizing exposure to fluctuations between the value of the U.S. dollar and the euro.
  • Selection criteria: At least $1 billion in market capitalization and derive at least 50% of their revenue from countries outside of Europe. Countries historically represented in the Index include: Germany, France, the Netherlands, Spain, Belgium, Finland, Italy, Portugal, Austria and Ireland.
  • Currency hedge: The Index applies an applicable published WM/Reuters one-month currency forward rate to the total equity exposure of each country in the Index to adjust the value of the euro against the U.S. dollar. Forward currency contracts or futures contracts are used to offset the Fund’s exposure to the euro. The amount of forward contracts and futures contracts in the Fund is based on the aggregate exposure of the Fund and Index to the euro.
  • Closely tracking Stoxx 600 index: Based on historical 5-year data, the Fund’s market price and NAV closely tracked Stoxx 600 index with correlation of 0.984 and 0.991 respectively.
  • Premium/Discount of market price to NAV: Over the past 5 years, the gap between the Fund’s market price and NAV narrowed from around ±3% in 2010 to around ±1% currently. This implied that the Fund’s market price is tracking its NAV more closely.

  • Recommendation: Around US$65 level (slightly below 20MA line) could be a good price to enter (if any correction) as price was trading at US$64.50 before 4 Mar 2015 ECB meeting.

For more info on this fund, visit here.
Bloomberg ticker, click here.

Thursday, March 12, 2015

Insas (RM0.87): Still stuck while Inari flies to the sky?

Just a short note. 

Inari uptrend continues, leaving Insas behind 
Just look at the chart above. Inari was bashed down from RM3.10 level (adjusted) to below RM2.10++ in last Oct and December. At the same time, Insas was down to 80 sen from RM1.25 level. Nonetheless, since then, Inari climbed to all-time high of above RM3.30 while Insas was hardly up by comparison. At the same time, Insas' NAV continued to go up to RM1.82 now. Why the dichotomy? 

Reasons for Insas' sluggishness? 
Holding company discount? Insas not doing anything for shareholders (No dividend policy, meager dividends)? Value trap (It acts like Thong's own sole-proprietorship)? Unstable earnings (A lot of liquid investments such as bonds and equities which have changing market values all the time)? 

Insas' share of Inari is more than its own market cap: 
Insas' 27.7% share in Inari mother share is worth RM650mil already and we have not included Inari warrants which could be at least RM20-30mil. Both of these holdings are already 10% more than Insas' own current market cap. This means the rest of Insas' assets are totally free, including Insas' financial investments (Bonds, equities etc) and net cash total about RM500mil, associate companies worth RM160mil  and RM160mil worth of investment properties. 

Unlocking value? 
The immediate catalyst I see is probably disposal of Inari to realize gains from its Inari holdings. Recently Insas disposed 3.2mil++ shares in Inari. Hopefully more to come. Koon Yew Yin also blogged about it last year. 
Will Insas do more going forward? We'll just have to ask Dato' Thong.

Final comments: 
Enter if you have patience to wait for Insas' price to catch up. For now, I see tremendous value that can be unlocked from Insas. However, its price will remain depressed as long as the major shareholder has no intention to unlock value at all. Will Dato' Thong do it? Why should he? When? 

I've no answer. Invest at your own risk :p 

All the best!

Market Data: 
Market Cap: RM600mil
NAV: RM1.82