7 Reasons Why PM Should Step In Now

ARCHIVES 2012

By admin-s On Feb 27, 2012

KHAZANAH must be INSANE to think that to save MAS is to invite its ‘commercial enemy’ to come on its Board and be privy to all its trade secrets and strategies in order to help it.

mastroubleshooters

1. THE SHARE SWAP EXERCISE WAS AN OBVIOUS CONFLICT OF INTEREST AND IF THE GOVERNMENT CANNOT SEE THAT, THEN WE HAVE SERIOUS GOVERNANCE ISSUES IN OUR INSTITUTIONS OF INVESTMENT.

Most citizens and all that are watching this fiasco know how seriously flawed the share swap deal is. For KHAZANAH and the government to try to justify its merits, is taking the rakyat for being fools and would further erode the confidence in the ruling government and its ability to make the right decisions. This will really test the resolve of the Prime Minister in making tough and correct decisions which would gain the respect of the people and augur well for the country in terms of its ability to admit wrongs and correct them.

2. MAS WAS ‘PROFITABLE’ FOR 4 YEARS IN A ROW FROM 2007 – 2010 AND SO WAS AIR ASIA. WHY DO YOU NEED TO DO A KNEE JERK SHARE SWAP JUST BECAUSE THE FY2011 RESULTS WAS NOT POSITIVE?

The share swap was being done after the announcement of a bad 1^st half year results and was done in haste to supposedly save MAS. What is ironic is that MAS had reported ‘profits’ from year 2007 – 2010 and therefore if we were to use the profitability angle, why should KHAZANAH do this deal at all. The issue was of course of cash-flow and if we think that Air Asia was good then we have not read their accounts correctly. They too have cash-flow problems, if not now but in the very near future so it was obvious that this deal was done with knee jerk reaction and timed to take advantage of the reporting of bad results from MAS to undertake the share swap. It looks very sinister and opportunistic.

3. IN ANY CORPORATE EXERCISE, THE ONLY WAY TO HAVE A COMPETITOR ON YOUR BOARD IS IF THE COMPETITOR PAYS MONEY TO ACQUIRE SHARES AND EITHER MERGES OR BUYS OVER A COMPANY VIA A FRIENDLY OR HOSTILE TAKEOVER.

KHAZANAH must be INSANE to think that to save MAS is to invite its ‘commercial enemy’ to come on its Board and be privy to all its trade secrets and strategies in order to help it. In business you either fight to outdo your competitors or exit the business if you cannot fight. Otherwise, in this case of MAS being a public listed company, either a friendly or hostile takeover of the company is done via the acquiring company mopping up shares from the stock market to a level where it can trigger a general offer.

THIS HAS TO BE DONE BY WAY OF BUYING UP SHARES OF A CERTAIN PERCENTAGE IN CASH AND NEVER THROUGH A SHARE SWAP WHERE MANIPULATION AND COLLUSION CAN HAPPEN ESPECIALLY IN THIS CASE WHEN THE ACQUIRER AND THE ACQUIREE GOT TOGETHER SECRETLY TO NEGOTIATE A CORPORATE EXERCISE OF PUBLIC INTEREST.

Any sane person can see this is an injustice and abuse of process so IF KHAZANAH DOES NOT REVERSE THE SHARE SWAP, THE BIGGER IMPACT WILL BE THE POLITICAL AND ECONOMIC RAMIFICATIONS TO THE GOVERNMENT FOR NOT UNDOING THIS BAD DEAL.

4. KHAZANAH HAS FAILED TO SAFEGUARD PUBLIC INTEREST. IF THE AUSTRALIAN NEWSPAPERS CAN ADMIT A MISTAKE ON PRINTING AN ERRONEOUS REPORT, THAN FOR US TO BECOME A TRULY FIRST CLASS COUNTRY, KHAZANAH SHOULD ADMIT ITS MISTAKE ON THE SHARE SWAP AND REVERSE IT.

KHAZANAH has a duty to protect public funds and national net worth of the country. By continuing to press on, KHAZANAH has failed its duty and charter to the people who are relying on officers of the highest integrity to protect and enhance the country’s net worth and assets.

If the Australian press can admit their reporting mistakes and reverse or print a retraction, there is nothing wrong with KHAZANAH ADMITTING ITS MISTAKE AND REVERSING THE SHARE SWAP AND RETURNING THE ASSET TO THE PEOPLE OF MALAYSIA. By not doing so, when there is clear evidence of questionable intent, action and vested interest, shows we are moving towards being a banana republic where we can justify anything that we do whether right or wrong.

5. KHAZANAH HAS CREATED A MAJOR INVESTMENT BLUNDER BY A CREATING A PRECEDENCE WHERE A NATIONAL ASSET CAN BE COMPROMISED AND IN ANY OTHER INCIDENT COMPROMISING A NATIONAL ASSET IS AN ACT OF TREASON.

What KHAZANAH has done is to create a dangerous precedence where an entrepreneur can acquire a national asset without having to put a single sen or RM on the table. If this is the case, since there are many, for example oil and gas entrepreneurs, can they come to the government and say that they want to swap 30% of their company for 10% of Petronas?

In any other deal once an entity is classified as a national strategic asset, it cannot be owned by individuals or entrepreneurs.

6. IT IS TIME FOR THE COUNTRY TO APPOINT TRUE PROFESSIONALS TO RUN COMPANIES AND STOP THE ‘4^TH FLOOR BOYS MENTALITY’ AND RESTORE CORPORATE ORDER IN GLCS BY NOT HAVING ANYMORE PARACHUTE CEOS AND YOUNG UPSTARTS RUNNING OUR NATIONAL ASSETS.

In order for the country to progress, every sector of industry must be run by professionals who have invested their time and energy to be the best in their industry. They should be promoted within their industry where they obtained the seat of power by garnering and earning the respect of their peers, staff and industry watchers. True successful companies globally invest heavily on succession planning to ensure the best from within them rises to the top to lead their ‘troops’ into the ‘ commercial wars’.

We have to stop parachuting individuals into so many GLC CEO positions that caused a whole generation of professionals to be bypassed by this practise. Most if not all of the current young upstarts come from either rich families or ‘academic’ background and have little appreciation of what happens in the engine room of most industries. They will impose their ideas not through sound and tested innovations, but by abusing the power of their positions as they will hide their lack of knowledge through coercion. These parachute CEOs have no track record in the industry.

IF THE GOVERNMENT IS INTERESTED TO KNOW WHY THERE IS A BRAIN DRAIN IN THE COUNTRY, THIS IS A MAJOR CAUSE OF IT, I.E. WHEN TRUE PROFESSIONALS CAN BE BYPASSED AND USURPED BY OTHERS WHO DO NOT HAVE THE CREDENTIALS IN THEIR INDUSTRY.