Two well known bloggers. Dato’ Mohd Ariff Sabri the former ADUN of Pulau Manis, Pekan who blogs under the name Sakmongkol AK47. His latest post, "Who is minding the Store?" describes a looming issue. Also included below is blogger Aisehman’s post on the same issue in his own blog. It appears the country is still exposed to being robbed in big chunks…it also appears that thieves have gotten more sophisticated. Please read:
MONDAY, 14 DECEMBER 2009
Who is minding the Store?
Who is minding the store?
We haven't heard of the 1 Malaysia Development Fund nowadays. Yes, I am referring to the RM5 billion that is managed by the 1 Malaysia Development Board 1MDB. Yes, it's that Fund formerly known as Terengganu Sovereign Wealth Fund. Just who came up with the idea is uncertain. Rumors have it, that it was a young man called Mr. Low from Penang. Mr Joe Low.
Creative ideas are most welcome. PM Najib has said that creativity will be a main element in his coming economic model. Anyway, the Fund started with RM 1 billion. It later became RM 5 billion obtained through the issue of bonds guaranteed by the government. Normally an entity is allowed to issue bonds if it is rated highly by some credit evaluating bodies. Like Moody's Investor Services for example. The accreditation body is satisfied the bond issuing entity can repay the bonds when they mature.
There are cases too, when the bond issue is underwritten by GOD- government of the day. Governments of course can never go bankrupt. The 1 Malaysia Development Fund- just call it the 1 Malaysia Fund will get additional RM6 billion when the oil royalties due to Terengganu will also be directed into it. This means it will have RM 11 billion war chest to play around with.
Just who are controlling the 1 Malaysia Fund? We know it reports directly to the PM. Although 1MDB reports directly to the Prime Minister, the sovereign fund will still have an eight-member board of advisors and a five-member board of directors.8 + 5= 13 members.
But will they be given a free hand to manage the fund? Or are they there just to grace the window? These people are drawn mainly from statutory bodies such as LTAT, Tabung Haji, FELDA etc. I have been informed some have already resigned from the board because they cannot stand excessive meddling.
But you retort- why should we tell you what we are doing? Especially to busy bodies like you people? Then we answer you- because we have been dismayed so many times when public money is treated as a private property. We have PKFZ which is the subject of intensive forensic investigation now and has become a public scandal. We are also disturbed by the customary practice of keeping everything very quiet until it becomes bad and blows off the lid. Most importantly we believed that public disclosure is the best form of accountability. Let it out in the raw and let the people judge. Some of the busybodies out there are pretty smart and perceptive.
The sovereign fund is said to be thought of by a character called Low. He is known among financial circles as Joe Low. He comes from Penang. He takes over where Patrick Lim left. I can imagine him say over a glass of Martini- hi, my name is Low. Joe Low. I prefer my drink shaken, not stirred.
He brought the idea of creating a sovereign wealth fund. It was probably meant as a solution to prevent the dissipation of Terengganu's Oil Royalties.
Now, this is another issue. Why did the TSWF- Terengganu Sovereign Wealth Fund suddenly become 1Malaysia Fund? HM The King seemed to have given his consent to the renamed entity. This federal wealth fund now takes over the money raised by KTIA headed by Shahrol Halmi. HM The King was very much interested when the TSWF was set up as he was royally chagrined over the usage of oil royalties due to Terengganu.
Because I think it's not safe to have the money parked in Terengganu. Warring factions in Terengganu will be fighting all over the place to gain control over the Fund. He must have realized that the previous state government spent the money frivolously. A lot too went missing and unaccountable. Even if the monies are placed under KTIA- meddling politicians can still make life for the managers miserable. And also perhaps, it is wiser to have the money under a federal entity because Mr. Low thinks; BN will not be the next state government.
Anyway- some other states may be thinking to set up their own SWF. Then they will ask the government to guarantee them. If you can do it to Terengganu, you most certainly can and must do for other states.
PM says, if these jokers come up with these equally creative ideas, his government will have nothing to do but issue guarantees and commit resources to ensure the fund is managed properly. He can't afford to, because the majority of his officers in the Treasury are more at home at eating kuacis ( eagle brand preferred) and chewing on chips at meetings. No way Jose, he says- let's have a Federal Sovereign wealth fund. And it's not Jose- its Joe. Joe Low that is.
We are not sure where this Low brought the idea to. To the PM or to his Majesty the King.
He probably brought the idea to both. As both his majesty and the PM are concern about the application of the oil royalties, it is logical that Low brought the idea to both. He goes over to the PM and tells PM, the King has sent him. He then goes over to see the King and says, PM sends him. Nice. Very nice.
I mean, it's not every day, HM the King calls up- Yo DSN, did you send Low over to me to speak on this and that? It's not every day PM calls up the King to say- A thousand pardons Your Majesty- did Your Majesty sent this sinkeh over?
This brings us to the interesting question- just who the heck is this Joe Low? Is he our Warren Buffet? The main stream media says he is a low key person. Well, after he splashed USD170k to fete the PM and his entourage in New York recently, he is not low-key any longer. He is a Big Key now. Which doors is he opening? And last week, he gave a private birthday party to the PM's wife at a leading hotel in Kuala Lumpur.
Much has been written about the merits of a SWF as a concept. I shall not repeat the observations made by many commentators. For example the Blogger Analyst at Large has written something noteworthy about this. Forget the fact that he doubles up as economic advisor for the DAP. He has raised cogent criticisms which deserve notice.
I am more concern about the shadowy group of young boys moving behind the scenes and appear to exert considerable influence on the PM. Most prominent is this Joe Low character.
We have seen the debilitating effects such intrusion and meddling on the morale of the officers and the damage caused to the previous PM. He was criticized by being overly compliant with the investment advice of one Patrick Lim. And the treasury people and even ministers were run over roughshod by a group of young highly educated boys infamously known as the 4th Floor boys.
Now and here, we have another shadowy group. Maybe it's not formal. But not less significant. Among them are Joe Low, one young Indian, and the son of a prominent Chinese tycoon. All of them are young and are said to be have unhindered access to the PM's wife.
They are said to have even attended briefings by treasury and Bank Officials. We need to recognize the dangers from the experience of the previous administration.
Obtrusive and incessant meddling into the running and management of the Funds can see our money being dissipated. Already at the inception of the 1 Malaysian Fund, RM 300 million has already leaked. For what purpose? To where?
If credible investments have not been made on account of meddling, we shall have to incur the payment of interest. That means our borrowed capital has not work to earn revenue from which to service interests let alone earn a conservative return of 5%. (That was what Sharol Halmi said) and I hope, this conservative expectation on returns is still adopted by the board members.
Some board members have left or resigned. They say this fund is too hot to handle. It could actually be, they saw the writings on the wall and could see where the Fund could end up. So, rather than being held accountable for something that will eventually be bad, better relinquish the honor of serving in that Fund.
The other cause of concern is why is the PM hesitant to exercise full control over the Fund? I mean, not personally but investing the board with total and unfettered discretion. Let the fund be answerable to Parliament.
Posted by sakmongkol AK47 at 11:06 AM
Anonymous, 14 December 2009 12:45
Here we go again now this chinese boy who has shaken up the night life in nyc entrusted with billions,well let the party begin at our expense only in BODOHLAND.
walla, 14 December 2009 12:55
If the reason to federate the fund was to move it out of the orbit of group conflicts within the state, then letting it now be externally guided will only deepen the perception that wherever funds are umnofied they will be swallowed wholesale.
To avoid such shenanigans, just make everything transparent. Let's say a fund is federated and the centralizers want to tap new ideas on how to grow and use it. Let's also assume the motivation is to lift up the state to which the fund is assigned, in particular to create jobs for the people and to add value to state activities which can translate to future earnings.
Just do an open tender with broad remits along the lines of the above para. Then more than just one vested party can provide their ideas which may end up even more investible than those submitted in enclosed settings. If this is not tried, how are the rakyat let alone a government to know there aren't better ideas out there?
So doing will put a stop to politicking for carta blanche favours that reek of kleptocratic practices which have sunk bigger governments elsewhere.
After the deadline, post the details on the web. Then after due process preferably with independent monitoring, make the decision with reasons provided.
If this is not done, people will think it's the same rigmarole of creating personal opportunities at high opportunity cost expenses of the rakyat. There has been too many such cases in the past. The olive in the stirred not shaken martini would have shriveled by the time we finish tabulating even half of them.
Always remember what someone had said when asked whether he had fueled cronyism. His reply? "How can i award contracts to people i can't trust?"
That reply cost this country mega-billions.
This post, for the dear old makcik selling goreng pisang by the roadside in Besut.
Anonymous, 14 December 2009 17:46
malaysia under the three spendthrift prime ministers havewasted the oppurtunity to make our country as great as our neighbour down south, which inescapbly will always be the yardstick by which the progress of the country and the achievement of our leadership must be measured.
For 22 years under tdm we were pursuing 'development'agenda which appeared grandiose and visible at the outsetbut in my view wanting in substance. KLCC, putrajaya andsome mega projects are all that we have to showfor something like RM 400 billions of oil money?
The relevant social engineering questions that we need toask would include?
> have we met the objectives of RMP 4,5, and subsequent rmp 's. I believe the gomen have skipped asking whether such objectiveswere ever met? Now we are in 9th mp without realising the effectivenessthe 6th,7th, 9th malaysia plans. Can we say that we have less poor peoplein this country compared to the 1980's?
Statistics indicate that out annual incomes improved tremendously.But would this translate into a meaningful lives of ordinary peoplewho make up 80 per cent of the population? From the terriblestate of 'uncollected municipal rubbish ' in Terengganu I would imagine people in oil -rich Terengganu are among the hard core poor of this country
>Has the ministry of housing met the housing need of the population?We do not know what the declared objectives? But comparing thestandards and quantity of housing with our neighbour's surely is like comparing the pumpkin and the small wild berry found wild.Not having funds cannot be an excuse because we could afford a newairport, a F1 track and fancy putra jaya!
>So far we have build all the grand infrastructure projects with foreign labour. Now can we build future buildings and infrastructureswith our local expertise from our youth? Our social engineering in the youth sector is emphasized with lots of songs/videos on the rakan themewith no visible success in any area. A few years ago menteriAzalina reported that there were a million drug addicts , and probably90 per cent of them were Malays. The story that a deceased toppolice officer left a legacy of rm 47 million fuelled therumours that the assets could be ill gotten -the result of a failure in drug enforcement!
Why in the world did the top leadership spend money for the monsooncup? An investment in goodwill as I cannot see any viable finacialreturns. Spending rm 800 million over 10 years to get a couple of millions a year for the local economy?
Is the local politico thick in the head or plain unashamedly corruptlike the deceased police chief who left a rm 47 million legacy?
Building silly stadiums [which collapsed embarassingly] andfancy cristal mosque where there is no population to use the facilty are the worst crime committed by tun dollah and his highfaluting level 4 morons .
The present pm najib is investing in a Formula 1 which I think isextravagant considering the state of the economy today. It cost Sterling 40 million to participate and another 40 million to run at the lowest levelin a year. This is big money for the whole country. Is the investment going to bring in rm 10million in touristdollars in a year? Possible but a poor strategy for resource allocation. . There areother pressing needs that need to be addressed.
Employment ,crime which are related to the lack of employment need urgent attention.
The free wheeling financial exuberance policies of tdm in the 90's cost all malaysians dearly even today . A sialan that parents whohave childrens overseas have to lived with. No thanks to tdmthe exchange rate for the usd have risen from the wonderful rm 2.20to the 3.60 that we are suffereing now. Why ? We want to sellmore protons? Is selling 30 000 protons or even less with falling exports the reason why parents whose children are studying overseas must suffer the extra cost of exchange rate? notoktok
Non-partisan, 14 December 2009 17:50
Well written and I hope someone in the corridors of power does listen.I have heard of similar 'rumours' within the Chinese corporate circle and they are not happy.Similarly many within UMNO will not be happy too once it is exposed and proven that the Chinese guy Joe Low is given the carte blanche to operate such huge fund. It is the rakyat's money.It doesn't augur well for UMNO/BN.
Anonymous, 14 December 2009 20:19
Singapore put their money into GIC and Temasek which invests their money... to generate more money for generations.We used it to build buildings (that need maintenance) and for pockets and dig more oil for more oil.Now you know we do not know how to run a country?
Peter Chen, 14 December 2009 20:35
Sakmongkol, you now have been appointed by Malaysians (actually just me) to make sure PKFZ twins or lesser do not ever happen again or risk hawking the future of our children and grandchildren and great grandchildren.....
telur dua, 14 December 2009 21:03
'A fool and his money is soon parted.' But not quite like the Red Sea.The fool being the Rakyat. They voted in this Government, didn't they? The 4th Floor boys most probably moved up to the 14th. They can make a hasty exit through the windows if the situation warrants it.Bye bye Ringgit, Hello poverty.
Anonymous, 14 December 2009 23:12
14 December 2009 106 views
It’s kinda intriguing to read about Hair, J Low, 1 Malaysia Development Bhd and a bunch of fuckin’ Arabs.
You would think the characters in this drama couldn’t be more disparate but they all got one thing in common.
One thing to rule them all. One thing to find them.
One thing to bring them all and in the darkness bind them.
This from the latest issue of The Edge:
One of the key peopke who had advised the King in establishing Terengganu Investment Authority (TIA) was Low Taek Jho, a young merchant banker with strong links to the Middle East. Known as Jho Low to his friends, the young man is also said to have done a few major corporate deals.
His lavish lifestyle in New York was the subject of a feature article in the New York Post last month. Jho, the son of Penang businessman Datuk Larry Low – a former shareholder and director of MWE Holdings Bhd – has however denied that it was he who had splurged on a lavish celebration as had been reported.
Coming back to TIA, the idea was to establish a fund along the lines of Mubadala, the sovereign wealth fund of Abu Dhabi. In fact, Khaldoon Al-Mubarak, CEO of Mubadala and chairman of Abu Dhabi Executive Affairs Authority, still sits on the board of 1Malaysia Development Bhd (1MDB).
Lots more stuff in there.
Including indications that some dealmakers made a killing in 1MDB’s RM5billion bond issue.
I’d by partying in the Big Apple too if it was me.
So where does Hair come in? I see strands of it all over the wrong places.
Watch this space. You ain’t see nothing yet.
I GIVE fair warning.
I hit the previous PM hard on this blog. Really hard.
It would only be fair if I uphold the same standards for Jibby.
This involves public money. Lots of it.
If you or anyone around you fucks around with our shit, Datuk Seri Mohd Najib bin Tun Abdul Razak, I will fuck you in the ass, regardless of whether you are partial to it or not.
ALSO READ Sakmongkol AK47: Who is minding the store?
enuff said for now.