Call for all-party Parliamentary Select Committee to hold hearings to recommend whether Parliament should approve the RM6.1 billion MAS restructuring in another round of government bailout of the national airline and whether it is another example of Malaysia's unique privatisation to "privatise the profits but nationalise the losses"
(Penang, Saturday): I fully agree with the Deputy Prime Minister, Datuk Seri Abdullah Ahmad Badawi that there should be no witch-hunt against former Finance Minister, Tun Daim Zainuddin and businessmen linked to him - but disagree if this precludes the dispensation of belated justice to the people and the nation, especially in terms of restoring accountability, transparency and good governance in the various controversial decisions taken during the tenure of Daim as Finance Minister.
One such controversial decision is the RM1.79 billion government buy-out bailout of the 29.09 per cent MAS stake of the former MAS executive chairman and key shareholder, Tan Sri Tajudin Ramli at the ridiculous price of RM8 a share when the market price was only RM3.68, without any independent professional valuation and in double breach of the government's bail-out guidelines in not imposing "appropriate haircuts" but instead giving Tajudin a bonanza at taxpayers' expense for his mismanagement of MAS transforming the exercise into a personal rescue for Tajudin instead of a public rescue for MAS.
The country is still suffering from the outrageous government buyback bailout of Tajudin's MAS stake at such an exorbitant price, for the RM1.79 billion for relieving Tajudin of his MAS stake has proved to be only one of many government bailout measures necessary to keep MAS above water, as there had been three other rounds of government bailout measures for the national airline since the Tajudin buyout bailout, viz:
the government provision of up to US$1.95 billion or RM7.41 billion to cover MAS' shortfall for third-party risks after its insurance coverage was reduced to only US$50 million after the September 11 terrorist attacks;
five-year extension of tax exemption to MAS on its income, dividend and interest income by the Ministry of Finance until year of assessment 2005; and
RM6.1 billion restructuring exercise of MAS with the government using taxpayers' monies to assume the national airline's debts and financing risks by buying over the eight MAS aircrafts and other MAS properties.
When commenting on my proposal that Daim should be referred to the Parliamentary Committee of Privileges to inquire as to whether he had deliberately misled MPs when answering questions in the Dewan Rakyat on March 21, 2001 on the RM1.79 billion government buyback bailout of Tajudin's MAS stake, Abdullah said the decision made by the Government was correct and arrived at based on considerations and factors available at that time.
It is not for Abdullah, although he is presently the acting Finance Minister, to maintain that the government decision on the RM1.79 billion buyback bailout of Tajudin's MAS stake was correct based on considerations and factors available at the time, but for all these considerations and factors available to the government at the time to be made public so that the Malaysian taxpayers can make a judgment whether the such an outrageous decision in retrospect was defensible under the circumstances at the time or whether there had been gross negligence if not abuse of power and reckless disregard of the national interest in coming to such a decision.
In fact, Abdullah should be careful in his less-than-a-month tenure as acting Finance Minister, not to give total endorsement to the RM1.79 billion buyback bailout of MAS, as it must rank as one of the worst government decisions in the nation's 44-year history which had done so much to undermine national and international investor confidence in the country.
Was the Cabinet fully informed, for instance, that the RM1.79 billion buyout bailout of Tajudin's MAS stake would not be a one-time bailout of the national airline, but would have to lead to other bailout measures using public funds to keep the national airline afloat, such as the RM7.41 billion government back-up for MAS as insurance coverage, the five-year extension of tax exemption to MAS on its income, dividend and interest income and now a new round of RM6.1 billion bailout of MAS under the euphemism of "restructuring" of the national airline.
In view of the repeated rounds of government bailout of MAS, Parliament must insist when it reconvenes next month that it reserves the final say as to whether public funds to the tune of RM6.1 billion should be used for another bailout to "restructure" of MAS and that the RM6.1 billion MAS "restructuring" involving public funds should not proceed without specific parliamentary sanction and vote.
The RM6.1 billion MAS restructuring exercise, which involves the two key elements of assets sale of RM3.9 billion for the sale and leaseback of eight aircrafts and the disposal of properties worth RM2.2 billion, is to enable the national carrier to retire some of its debts and provide RM820 million as working capital.
This restructuring exercise has been described as a "smart" move, and even "heaven-sent", as it would lay to rest MAS' financial problems - and it is undoubtedly a great deal from the point of view of the national airline.
But the Malaysian taxpayers, and in particular Members of Parliament who are entrusted with the task of protecting the public interest, are entitled to ask as to why public coffers should again be raided for another round of MAS bailout - and in particular, whether Cabinet had been informed when it decided on the first RM1.79 billion bailout of the national airline, that it would have to be followed with a series of other bailouts, including the RM6.1 billion to relieve MAS of its assets to enable it to fast-track recovery back to profitability?
This is why the first thing Parliament should do when it reconvenes on March 11 is to set up an all-party Parliamentary Select Committee on MAS to hold hearings to recommend to Parliament before its adjournment in April whether public funds should be approved for use in the RM6.1 billion MAS restructuring in another round of government bailout of the national airline and whether it is another example of Malaysia's unique privatisation to "privatise the profits but nationalise the losses".
In its hearings to make its recommendation to the Dewan Rakyat as to whether to recommend approval for the latest round of RM6.1 billion bailout of MAS using public funds, Daim should be summoned to appear to testify on the prudence, propriety, responsibility, integrity and accountability of the government's RM1.79 billion buy-back bailout of Tajudin's MAS stake, and in particular, why no independent valuation had been made before the decision was taken and why Tajudin got away with a bonanza instead of being forced to get a "hair-cut" for the government bailout.
Furthermore, Daim should be the "star" witness for the Parliamentary Committee to ascertain whether the former Finance Minister had deliberately misled MPs when answering questions in the Dewan Rakyat on March 21, 2001 about the RM1.79 billion government buyback bail-out of Tajudin Ramli's MAS stake, particularly when he made the following statements and suggestions:
that no special considerations were given to Tajudin in the buying of MAS shares from Naluri.
that the purchase was not to save Tajudin or Naluri but to save MAS.
the suggestion that the RM8 per share for Tajudin's MAS stake was the best price possible in the national interest, when he said that if the people and MPs "are not happy with this purchase decision, the Government can sell the shares back to Naluri".
when without producing any supporting evidence, he popped up the figure of RM15 for the first time ever and gave the impression that Tajudin was quite reasonable in wanting to release his MAS stake to the government at not less than RM15 and that there was foreign investor interest in MAS at this price - which was most outrageous as Tajudin had told a foreign news agency when the deal was concluded that he was lucky in getting a good price of RM8 a share to enable him to settle Naluri's entire debt of RM927.4 million, while the balance of RM864.5 million would be for new business ventures but would in the meantime be placed in banks to earn RM24.2 million a year.
In its hearings, the Parliamentary Select Committee on MAS should also sub-poena the Transport Minister, Datuk Seri Ling Liong Sik to explain his statement to Parliament reporters on 25th March 2001 that the new MAS management had drawn up a masterplan to return the national airline to the black within two years, and why this new masterplan had proved to be another failure with a restructuring proposal requiring another RM6.1 billion bailout of the national airline with public funds.
The Parliamentary Select Committee should also probe into the allegation by the MAS Executive Staff Association (MESA) of other mismanagements and irregularities in the national airline, which were not confined to the MASKargo division but several other areas such as the yacht business (Golden Holidays), insurance underwriting (Cendanasari), off-shore aircraft leasing, the Langkawi hotel project and the setting up of an IT-based company called Trifinity, involving the loss of millions of ringgit and valuable time and why their complaints to the authorities, including to the Transport Minister, at the time had been completely ignored.