TNB: a den of thieves

Raja Petra Kamarudin

Reading through Mr Pillai’s article today on Tenaga Nasional Berhad (TNB) brings back ‘fond’ memories of my own experiences 15 to 20 years ago with that power giant.

I had just left Johan Holdings Berhad and George Kent (M) Bhd in 1987 after getting wiped out in the ‘Black Monday’ stock market collapse. Suddenly my vast holdings were no longer worth the paper the shares were written on and I still owed the banks RM20 million even after they had forced-sold all my shares when I failed to make my margin calls in time.

Those were certainly harrowing days indeed. I did not need any alarm clock to wake me up from my slumber, for the bankers would ring me on the dot to remind me about the margin call I had to make that day. Invariably, the more I sold the lower the shares plunged until there was nothing left to sell and no means to repay my loans.

Well, as they say, if you owe the banks one million then it is your problem. But when you owe the banks 20 million it is the bank’s problem. The banks decided it was more profitable to keep me liquid rather than getting me declared bankrupt. As a bankrupt the banks would get nothing from me. Helping me get back on my feet again meant they would have at least some chance of recovering their money.

In spite of the weak market, companies were still being listed, though no one was interested to pick up the shares anymore. I somehow managed to convince the banks that the only way they could recover their money was to lend me more money. I suppose they already stood to lose RM20 million anyway. So giving me another two or three million Ringgit did not really make any difference.

With these additional funds from the bank I picked up some ‘unwanted’ shares of a counter called Hexza Corporation. In fact, they were so happy I wanted the shares they were prepared to let me have all of them. But a few million was good enough I told them. I did not want to overextend myself again. One ‘burning is good enough for one lifetime.

The listing price was only RM0.65 for the RM0.50 share, so one million shares only cost RM650,000. With two or three million Ringgit one could pick up quite a sizeable amount of shares. This was going to be my last tango. Either I recover this time around or I would go down for good. I had nothing to lose except my whole future, so I decided to go for broke.

I handed the bagful of shares to my wife and told her to do what she wanted with them. I knew she was a shrewd market player and I had confidence in her skills. She slowly followed the market as it climbed and sold off small lots every time it moved five Sen. By the time she had sold off about one-third of the shares we had paid back the bank all the money they lent for the purchase of the shares. The balance two-thirds was now sheer profit.

Within a year I had a large stash of cash in my pocket. In the meantime I sold off all my other landed assets and was now down to only RM6 million in debts. I had somehow managed to clear about RM14 million in bank debts. Till today I still cannot figure out how I managed it, but I did. It took me another couple of years to fully repay the balance though and it was one long agony.

Armed with my surplus cash from the profit on Hexza Corporation, I flew to Paris to meet Schlumberger. I got a tip from a school friend, Yatim, of Enertrek, a Schlumberger joint venture company, that they were about to terminate their electricity meter agency with their Malaysian agent. I did not want to leave the money idle as it would soon finish. I thought that placing it in some manufacturing setup would see my money grow whereby I could then clear off all my debts with the bank.

I met the manager of Schlumberger’s electricity division, Armain Carlier, and proposed that they appoint me their new Malaysian agent. “Why?” he asked me bluntly. “Because I will set up Schlumberger’s first electricity meter factory in Malaysia and will manufacture the meters in Malaysia, under licence,” I replied

Carlier laughed and said he thought I was crazy. “But I am also crazy so I like crazy people.”

Carlier did his homework and was told there was no way anyone could penetrate the TNB market. TBN is controlled by the ‘Perak Mafia’, he was told, and no one is going to be allowed in unless they work through the Perak Mafia. The CEO then was Tan Sri Jalaluddin, the head honcho of the Perak Mafia.

Six months on and nothing happened. I then flew back to Paris and, this time, proposed a joint venture. They can take 30% of the company and I will control 70%. I will also sign a separate management agreement giving them full control of the manufacturing operations. I, however, would handle all the marketing.

Carlier was still not convinced. “Okay,” I said. “I will underwrite their 30%. If in one year we do not get any business from TNB, I will reimburse them for everything they spent in Malaysia and they can pack up and go home. This new deal was more acceptable to Carlier. It was agreed, we would set up a joint venture company with a paid up capital of RM1 million. They would take 30% of the company and I would be responsible for the marketing and they the manufacturing. I would be given one year to get the business, but all the components must come from Indonesia, another Schlumberger joint venture, until such time the components could be locally done. Within three years we would achieve 35-45% local content, said Carlier.

The deal struck and the factory set up, I went along to TNB to get our meters registered. And for 15 months nothing happened. In the meantime our bank account was drying up as RM1 million cannot really go a long way when there is no income. Carlier flew in to meet me and he gave me another three months extension. That’s it, 18 months — if by the end of 18 months there is still no business they are packing up and going home. And I lose my RM1 million plus all the other expenses incurred which by now was getting very scary. Looks like I was now back to square one — no cash, no property, and the only home I got left mortgaged three times to the bank.

Probably through divine intervention or what, I don’t know till today, Tan Sari Jalal opted for ‘early retirement’. Phew…what a relief. If he had stayed till the end I would have been dead within three months.

Dato Ibak took over and I immediately went to see him to cry on his shoulder. He had been a ‘spectator’ the last 15 months so he knew what I had gone though — I did not need to explain my predicament. I got my first contract from TNB, RM2.7 million. The next four years I got a couple more contracts. The total was now hitting RM40 million. And, know what? Dato Ibak did not ask me for one sen ‘commission’. Even when we occasionally went out for dinner, with wives, he paid.

Then Dato Ibak retired. Of course I had made plenty of enemies in TNB during Dato Ibak’s tenure as the CEO. They were very pissed I was getting so many contracts without greasing any palms. The day Dato Ibak walked out the door I lost every tender I participated in. Some of the TNB boys — I don’t know who they are till today — met up with Schlumberger (by then Carlier had been promoted so a new chap was in charge) and told them that as long as Raja Petra was still their partner, Schlumberger would never get any business from TNB.

And what was my crime? According to TNB, I had been awarded RM40 million in contracts but had not passed any money around. So TNB wanted me ‘banned for life’.

Schlumberger decided to ‘divorce’ me and tie up with the TNB ‘nominees’ instead, the same bunch that was involved in the privatisation of the Lumut Naval Base. I packed my bags and walked out of Metertek Schlumberger Sdn Bhd, the Malaysian joint venture company I had set up with Schlumberger as my partner.

TNB won. I lost. But at least I managed to clear all my bank debts though I was now broke again. If only I had kicked back some of the profits to the TNB boys I probably would still be in business today instead of running this website. Well…at least whatever little I have is clean. And at 55 what else do I need?

Oh, and one more thing, the transparent meter that you see hanging in your house was first introduced by Metertek Schlumberger. I used to call it the see-through or ‘sexy’ meter.