What is behind the termination of Bandar Malaysia deal?

Growing tension at Bandar Malaysia

KUALA LUMPUR (May 20): Tension appears to be brewing among high ranking government officials over the axing of Iskandar Waterfront Holdings Sdn Bhd (IWH) and its partner, China’s state-owned China Railway Engineering Corp Sdn Bhd (CREC) from the RM12.35 billion Bandar Malaysia development project.

The Edge Malaysia, citing a well-placed source, reported in its cover story for the week of May 22-May 28 that a key adviser of the prime minister on the entire IWC CREC debacle is Tan Sri Irwan Serigar Abdullah.

Irwan, who did not reply to calls or messages left by The Edge, has come under fire from certain bloggers while 1Malaysia Development Bhd president Arul Kanda Kandasamy was removed from the board of Bandar Malaysia around the same time as the deal with IWC CREC fell through — sparking talks that Irwan was in a feud with Arul.

Some news portals cited “potential conflicts of interest”, though no elaborations were provided. Sources told The Edge that Arul was with Tan Sri Lim Kang Hoo in China earlier this month at the One Belt One Road Forum, and that Arul had helped to pacify the Chinese government, who were apparently not happy with the failed deal.

For perspective, Prime Minister Datuk Seri Najib Razak, it seemed, was adamant to remove Lim and his vehicle IWH from the development at the weekly Cabinet meeting last Wednesday, despite repeated attempts by government officials to salvage Lim and CREC’s positions in Bandar Malaysia, according to The Edge. “I wonder what Lim did to aggravate the PM to this extent,” an official close to the prime minister told the weekly.

IWC CREC’s Dec 31, 2015 share sale agreement to buy 60% of Bandar Malaysia for RM7.41 billion lapsed after the joint venture failed to meet conditions set, involving 12 payments, despite having been given 12 extensions. But even government officials acknowledged that in such large-scale deals, extensions — even 12 of them — are common, the weekly wrote.

The manner in which the deal was ended was also a topic of conversation. No notice of termination was apparently given to IWH CREC.

Instead, the government issued a public statement on May 3 to say: ““This [termination] is because, despite repeated extensions being granted, IWH CREC failed to meet the payment obligations outlined in the conditions precedent under the share sale agreement (SSA). As a result, the SSA between the parties stands null and void with immediate effect.”

The Chinese, several sources told the weekly, have not taken well to the allegations, and “were especially irrirated with the statement that the consortium was not able to make the payments, as CREC is a state-owned company”.

The weekly wrote, citing sources, that Chinese government officials were even reluctant to accept the refund of the deposit of RM741 million and interim payment of RM44.88 million for the relocation of the air force base, Pangkalan Udara Kuala Lumpur.

They were even upset with Lim for cashing the cheque for the deposit refund. But Lim had other issues to handle, with publicly traded Iskandar Waterfront City Bhd’s (IWC) shares hitting limit down on May 8, after a 92 sen or almost 30% plunge to RM2.16 in early trading, the weekly noted.

On top of that, another Chinese company, Dalian Wanda Group, owned by China’s second richest man, Wang Jianlin (he was overtaken by Alibaba Group’s Jack Ma on May 14), was tipped to come into Bandar Malaysia, replacing IWH CREC.

However, talk of Wanda coming in has died down. The Edge heard that the Chinese authorities were not too pleased with Wang for what seemed like a sabotage of state-owned CREC’s deal, and IWH CREC were said to be back in the picture.

A local daily, linked to the ruling Barisan Nasional coalition, also reported that “Chinese Prime Minister Li Keqiang told Najib that China hopes the deal on Bandar Malaysia stays unchanged. Najib may have to take the Chinese wishes into consideration,” quoting a government source in Beijing.

Growing tension at Bandar Malaysia
May 20, 2017 – theedgemarkets.com


Those who just smile with no shame

Dr M: Japanese willing to kill themselves out of shame, but…

Dr Mahathir Mohamad has been touring the Malay heartlands in a bid to convince them to vote for his Parti Pribumi Bersatu Malaysia (Bersatu) in the next general election instead of Umno.

In his latest blog posting, the former premier decided to touch a raw nerve.

He noted how the Japanese were willing to kill themselves out of shame when unable to perform a task or for doing something which is considered wrong.

However, he argued that the feeling of shame is different among the Malay race, whom he claimed are not perturbed when failing to execute a task given or entrusted to them.

“They do not feel shame even when embezzling money entrusted to them…. There is little shame amongst the Malays.

“Today, this feeling of shame has eroded further. Though having sufficient income, when there is an opportunity to embezzle money, shame does not prevent them from committing this wrongdoing.

“Many are willing to accept whatever that is given for free without reservations. The source (of the funds) is never questioned,” he added.

The former premier also criticised the act of apple polishing, stating that some are willing to do certain things out of the desire to earn praise from their master.

“There is no shame when the person’s action is detected. The person feels no shame in abusing rights to apple polish his master,” he added.

‘Smile with no shame’

Mahathir said there are also those who just smile with no shame when accused of thieving.

“A feeling of shame should envelope society when an individual or a group among them is involved in a crime.

“But today, the Malays feel no shame in being led by those who are known to have committed theft and various other crimes.

“Instead of distancing themselves from such leaders, many are willing to share the spoils. There are those who help cover up the crimes, claiming that the leader had no knowledge or was duped.

Dr M: Japanese willing to kill themselves out of shame, but…
18 May 2017


How safe is BN’s 1.6 million civil servant vote bank?

How safe is BN’s 1.6 million civil servant vote bank?

AKHMA opted for the top bunk in the smallest room in a three-bedroom flat in Precinct 9, Putrajaya. It wasn’t cheap at RM280 a month, but still cheaper than a room or a whole unit to herself. The lower bunk costs RM20 extra.

Though a civil servant, she had to share the flat with five housemates.

“My flat is in the most undesirable location in Putrajaya, where most of the foreign workers live. I have been living here for 1½ years now and it’s not cheap either,” she told The Malaysian Insight at one of the government complexes in the administrative capital.

The 27-year-old from Gombak said she had to relocate to Putrajaya because of work demands, the same reason she bought a Proton Saga.

“I could’ve chosen to live in a bigger place or buy a Myvi, but I want to save at least RM300 a month,” she said, adding that she spent most of her salary on patrol and food.

She said the cost of living would be one of the major factors when it comes to voting in the next general election.

“I don’t really follow politics but I will look at their election manifestos and see which one will benefit people like me,” the undecided voter said.

Political analyst Mohamad Hisomuddin Bakar of the Ilham Centre said unlike those with perks at the top, civil servants aged 35 and under were the ones struggling to make ends meet and more willing to vote in change.

The 1.6 million civil servants, who make up 12% of registered voters, are considered Barisan Nasional’s vote bank.

“We can even see the trend in the previous election and if situation does not change, we expect a bigger swing from the civil servants,” he told The Malaysian Insight.

Factors like low salaries, rising cost of living, high housing prices and weak ringgit have changed the voting pattern even for those from hard-core Umno families, he said.

Last December, The Sun reported Congress of Union of Employees in the Public and Civil Services Malaysia (Cuepacs) president Azih Muda as saying about 700,000 to 800,000 civil servants could be categorised in the bottom 40% (B40) group.

GDP effects not trickling down

Socio-Economic Research Centre Sdn Bhd executive director Lee Heng Guie said despite forecast of stronger gross domestic product (GDP) growth in the first quarter of 2017, people were still worried about the current economic situation.

“There is a disconnection between what the data shows and what consumers are feeling. People still feel that conditions have not improved as they look at the overall economy and see that growth has slowed down for the last two years,” he said.

Lee added that the scenario could be reflected in Malaysian Institute of Economic Research (MIER)’s consumer sentiment index (CSI), which is still below the 100-point optimism threshold. Malaysia’s consumer price inflation also hit an eight-year high in March, at 5.1%.

“Despite petrol prices dropping in the last three weeks, the cost of living is still high and that will continue to pinch on the low income and the middle income. This is due to price stickiness as traders will not lower prices even though petrol prices have come down.”

RAM Ratings expects the economy to grow 4.8% in the first quarter, a higher figure than the 4.5% in the Q4, 2016. The ratings agency cited stronger exports as the major factor for the Q1 growth rate. Bank Negara will release the Q1 growth rate today.

Hisomuddin said only senior civil servants, such as those who in premier grades or JUSA (public service premier post) are worried about a change in government.

“The dogma of civil servants must vote (ruling party) has changed but for senior officers or JUSA, it’s still about Malay Muslims who must lead the government, not a party like DAP,” he said.

Crackdown on civil servants

Despite the recent Malaysian Anti-Corruption Commission (MACC) crackdown on immigration, customs and police personnel in recent weeks, political scientist Dr Wong Chin Huat does not think it will figure during elections.

The Penang Institute fellow said the majority of government employees were not decision-makers, law enforcers or gate-keepers in any licensing or application process.

“Hence they have no power to extract bribery or embezzle public funds. I doubt they will identify with the corrupt officials who live way beyond their legal incomes.

“Najib’s civil servant votes are shaken, not so much by crackdown on graft, but because he has no buy money to give subsidies and pay rise to buy their support,” Wong said.

How safe is BN’s 1.6 million civil servant vote bank?
19 May 2017 – Malaysian Insight


PKR: Najib wrong in not condemning assault on David Teo

PKR: Najib wrong in not condemning assault on David Teo

Padang Serai MP N Surendran urges IGP to open investigation into criminal act which occurred at a forum in the presence of prime minister.
PETALING JAYA: A PKR lawmaker criticised Prime Minister Najib Razak’s lack of condemnation for an assault which occurred in front of him and also disrupted the TN50 dialogue in Seri Perdana yesterday.

Referring to the physical attack by actor-comedian Sulaiman Yassin against TV and film director David Teo, Padang Serai MP N Surendran said it was shocking that Najib did not make any immediate statement at the forum to express his disapproval on the matter.

“It is shocking and unacceptable that the Prime Minister of Malaysia, having witnessed at close quarters this act of criminal violence, said nothing to condemn or disapprove of the assault to the audience present.

“At the time of the assault, Teo was holding a microphone and merely trying to ask a question to the PM from the floor,” Surendran said.

What shocked the PKR vice-president further was the nonchalance with which Najib wanted the event to proceed just after the incident.

“Najib can be heard saying in the aftermath of this violent assault, ‘shift it to somebody else’,” Surendran said.

He also took the prime minister to task for asking Teo and his attacker to shake hands to resolve the matter.

“When a criminal act has taken place, neither the PM nor anyone else has any business trying to settle the matter between them.

“The police must investigate and the law must take its course. Failure to take action or trying to ‘settle’ between the parties is tantamount to condoning criminal violence and public hooliganism,” Surendran said.

He also reminded that any form of assault or mob justice is illegal in Malaysia, and that it did not matter if someone was rude, as there was no justification for a physical assault.

“The attacker has, in full view of TV cameras, committed criminal offences for which he can be charged under Sections 351 and 321 of the Penal Code. These offences are respectively, assault and voluntarily causing hurt.”

PKR: Najib wrong in not condemning assault on David Teo
May 18, 2017 – FMT


Looks like Najib’s making up Bandar M’sia plans as he goes along

Looks like Najib’s making up Bandar M’sia plans as he goes along

MP SPEAKS | Over the past two weeks, Prime Minister Najib Razak and the Finance Ministry (MOF) have been making a whole series of announcements, varying them along the way.

First, MOF surprised the markets with the sudden termination of the sale of 60 percent interest in Bandar Malaysia to the consortium led by Iskandar Waterfront Holdings (IWH) for RM7.41 billion. According to MOF, IWH and it’s partner, China Rail Engineering Corporation (CREC) failed to fulfil their financial obligations under the agreement despite more than 10 extensions granted.

However, despite the purported breach of contract by the IWH consortium, which should have led to an event of default requiring the forfeit of the 10 percent deposit paid, the MOF decided to refund the RM741 million deposit paid in full.

Then the markets were fed “rumours” from official sources that the agreement was terminated as the prime minister, Najib Razak was expected to sign an agree with China’s Dalian Wanda, owned by China’s richest man, Wang Jianlin for Bandar Malaysia. The expected agreement was purportedly worth more than US$8 billion.

However, during the Beijing meet between Najib and Wang on May 13, the latter offered nothing other than polite, diplomatic and measured praise for Malaysia. The prime minister had to return home empty-handed, not even with a perfunctory, non-committal memorandum of understanding (MOU) as is typically signed during such high-profile events.

Ad-hoc decisions

Suddenly, with the embarrassing failure by the prime minister to secure any deal with Wanda, The Star reported on May 15 that according to a government source in Beijing, “Chinese Prime Minister Li Keqiang told Najib that China hopes the deal on Bandar Malaysia stays unchanged. Najib may have to take the Chinese wishes into consideration.”

It was further reported that Najib said then that the formula for equity stakes in Bandar Malaysia would be changed and that foreign participants would not be just Dalian Wanda Group alone. “We will take into account the position of CREC and other groups that are interested, including Wanda,” he said.

However, yesterday, back in Malaysia, the prime minister appeared to have changed his tune again. He said, contrary to some erroneous reports, the termination of the previous agreement with IWH CREC Sdn Bhd is final, and will not be reinstated.

“The selection process for the master developer will involve very strict criteria, including a proven track record, speed of delivery, content creation, and the financial capability to deliver a project of this scale. The highest possible value will be sought to ensure the best deal for the taxpayer is obtained,” he added.

It appears very clear that the Bandar Malaysia development lacks any direction, and Najib Abdul Razak is making up plans has he goes along. And as policies get varied by the day, the market reaction can only be best encapsulated by the wild gyrations of the Iskandar Waterfront City Bhd over the past two weeks.

Such ad-hoc policy making pronouncements are completely detrimental to the MOF’s objective of snaring a new investor for the project. Instead, potential buyers will only be frightened off by the policy flip-flops which can take place in Malaysia, providing them with little confidence and certainty over their investment in the country.

Looks like Najib’s making up Bandar M’sia plans as he goes along
Tony Pua
18 May 2017 – malaysiakini


No legal action means documents regarding SRC funds must be true

No legal action means documents must be true, says Rafizi

To date, none of those PKR vice-president Rafizi Ramli alleged to be recipients of SRC International’s funds had lodged a police report against him.

PETALING JAYA: The lack of a substantiated denial from those he named as the recipients of SRC International’s funds has led PKR vice-president Rafizi Ramli to believe that his allegations, which were based on documents obtained from a blog called SPRMInsider, are true.

“If even a small part of the SPRMInsider’s documents and the revelations I’ve made so far were false, I’m sure I would’ve been arrested and charged (for it),” he said in an announcement broadcast live from his Facebook page today.

“But to date, no one has lodged a report against me, nor has anyone refuted my allegations with evidence.”

The Pandan MP had since last month, used the documents he obtained from SPRMInsider to allege that a huge sum of SRC’s funds had been funneled into Prime Minister Najib Razak’s personal accounts, before they were transferred to other individuals.

These include former PAS deputy president Nasharudin Mat Isa. Nasharudin denied receiving the funds and said that he has sought legal counsel to initiate legal action or “any other appropriate actions deemed reasonable, expedient and in accordance to the rule of law”.

But in a May 3 report by Malaysiakini, Rafizi was quoted as saying that he has yet to receive any letter of demand or legal suit from Nasharudin.

“The most important individuals have also failed to deny my allegations,” Rafizi said this afternoon.

Among these “important individuals” were Najib, his aide who Rafizi said received RM2 million of SRC-originated funds, Bank Negara Malaysia which failed to investigate a man whom Rafizi claimed had, in January 2015, cashed several cheques amounting to RM43 million in just three weeks, and Tabung Haji.

“When none of those I named had openly denied (my allegations) or lodged a police report, I’m more confident that the SPRMInsider’s documents were true.

“Even more so that the Attorney-General (Mohamed Apandi Ali) himself had refused to deny the accuracy of the documents,” Rafizi said.

He was referring to a report by Malaysiakini yesterday, which claimed that Apandi had declined to respond over the documents found on the SPRMInsider blog.

No legal action means documents must be true, says Rafizi
May 16, 2017 – FMT


Strange to return RM741 million deposit for Bandar Malaysia if consortium broke deal

‘Strange to return Bandar M’sia deposit if consortium broke deal’

It is unconventional for the Finance Ministry to return the RM741 million deposit paid for the Bandar Malaysia land, if it insists that the payment deal was breached, said Petaling Jaya Utara MP Tony Pua.

Project owner TRX City Sdn Bhd said it cancelled the contract with the Iskandar Waterfront Holdings-China Railway Engineering Corporation (IWH-CREC) consortium because it did not meet the payment obligations.

TRX City Sdn Bhd belongs to the Finance Ministry, which in March took over the land it had sold to 1MDB for a sweetheart price of RM1.6 billion in 2010.

“The question is, if the contract with IWH has been cancelled, who will reimburse the deposit? Not 1MDB but the Finance Ministry.

“But this is strange. The Finance Ministry said the contract was cancelled because IWH did not fulfil its contractual obligations.

“In conventional contracts, if a contract is breached, the deposit is forfeited. So why should the deposit be reimbursed? They (IWH) did something wrong but we have to repay the deposit?” Pua asked.

He raised the question at a forum on 1MDB in Petaling Jaya last night.

The RM741 billion deposit came into question at the Johor state assembly as IWH is partly owned by the Johor government.

Sold to 1MDB at low price

Pua said the RM741 million deposit is only a portion of the liabilities the Finance Ministry had to foot after taking over the Bandar Malaysia land.

He noted that 1MDB had, upon obtaining the land in 2010, used it as a collateral for a loan of RM2.4 billion.

“The auditor-general’s investigation found that not a single sen of that loan was invested into Bandar Malaysia. So, when the land is returned to the ministry, it is the ministry that foots the debt,” he said.

This is on top of the RM2 billion still owed to a subsidiary of the Armed Forces Fund (LTAT), which was contracted to move the air force base from the Bandar Malaysia land, Pua added.

He said the contract was RM2.7 billion but 1MDB only paid about RM700 million.

“So, in total, the MOF will be footing RM5.2 billion when it takes back the land.”

‘Strange to return Bandar M’sia deposit if consortium broke deal’
16 May 2017 – Malaysiakini

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All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
Do you hear the people sing?