It can’t be described by just a word — Yew Lee Kim |
- It can’t be described by just a word — Yew Lee Kim
- And now rice comes under a monopoly of an individual? — Dzulkefly Ahmad
- Next Media: Town mayor shot dead at Manila airport
- When The Heat gets too hot to handle in Malaysia — Mustafa K Anuar
- US charges three more people in Silk Road website case
- Morgan Stanley sells oil trading business to Russia’s Rosneft
| It can’t be described by just a word — Yew Lee Kim Posted: 20 Dec 2013 04:57 PM PST
The word aptly reflects the feelings of many Malaysians, with prices of petrol and sugar, assessment rates, electricity tariff and toll charges all about to increase. The public and business operators are covered under a miserable atmosphere. Food prices, closely related to people's living, have been repeatedly increased. The average price of a bowl of noodles at a hawker centre is RM5 and the most economical food is nasi lemak, which is being sold at RM1.20 per pack. From years of observation, when the people are financially comfortable, high-priced food is more popular. During economic downturn, however, nasi lemak sells fast as everyone starts to tighten their pockets. Cheap and delicious nasi lemak has then become the first choice of students and low-income earners. The sales of nasi lemak can actually become an alternative economic indicator. In recent days, even nasi lemak prices have quietly surged, meaning that even the minimum consumption has been increased and the value of money has shrunk. The country has gone through a few times of price hikes this year and some businesses have raised several times the charges for their goods. Some who originally planned to increase prices during the Lunar New Year were unable to wait any longer and thus, raised good prices. The price hike tide is expected to reach its peak during the Lunar New Year but who knows whether it is really the peak. Price hikes bring impacts not only to local people but also foreign investors. Since the country is going to implement the minimum wage system and raise electricity tariffs next year, a few foreign manufacturers might move to other countries. It cannot be considered as isolated cases as the withdrawal of foreign investment could bring long term effects to the country's economy. The domino effects brought by price hikes should not be underestimated. Inflation will weaken national purchasing power and even though everyone's tolerance for inflation varies, they will inevitably spend carefully. It hits domestic demand and thereby, affects various industries, as well as economic growth. The year 2014 is expected to be high in inflation and low in growth. If the situation goes out of control, we might have to face a depression era. It means that other nine candidates for the Chinese character of the year 2013, namely 黑 (black), 亂 (chaos), 變 (transform), 選 (electione), 貪 (greed), 憂 (worry), 換 (change), 苦 (suffering) and 爭 (fight) might also be able to describe the situation in the future. Inflation brings the people suffering and worries. Why inflation? It might due to activities in the dark and corruption driven by greed. Since people can no longer stand for the inflation, they ask for transformation and changes through election. There might be people creating fights and chaos amidst inflation. Perhaps, the word 漲 can be re-elected since the people have been hit by waves after waves of price hikes. — mysinchew.com * This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.  |
| And now rice comes under a monopoly of an individual? — Dzulkefly Ahmad Posted: 20 Dec 2013 04:49 PM PST
The company would also like to go private should it feel that it is undervalued by the market. It may believe that the requirements of conforming to various regulations by the authority namely the Security Commission in the case of Malaysia, is too burdensome. Going private would surely allow for it to pursue new strategic approaches in line with a longer timeline objective and hopefully be more competitive. But conversely, it also carries the risk of the company incurring more debt later on if the private company could not get enough private capital or new strategies fail to turn around the company. The delisting of Dell and more recently of Blackberry provided for both interesting academic and strategic discussion on the subject of a listed company going private. But such exciting discourse on the local shore however, especially of late, is faced with a very grim picture of greed as the overarching reason for 'privatisation'. This is extremely unfortunate to say of the least and scandalous at worst. Padiberas Nasional Berhad or Bernas is a very illustrative case in point. Bernas which has played the role of regulator and distributor of the country's rice industry was first privatised in the heyday of privatisation by Tun Mahathir. The original intention was to ensure the nation's growing rice demand be fulfilled through the management of a National Stockpile and the Padi Price Subsidy Scheme. Besides, the privatisation exercise should also empower the bumiputera farmers, rice distributors and the workers of Bernas with equity ownership. This was again highlighted by the Opposition Chief in his recent press release on the question by the then Finance Minister in December 1995 in an answer to Mr Lim Guan Eng. The consortium of Budaya Generasi Sdn Bhd formed in Jan 1996 that was made up of associations of farmers including KADA, MADA, NAFAS, NEKMAT (fishermen) and Bernas workers indeed owned more than half of Bernas' equity back then. Fast forward into the end of 2009, all these shares appeared to have been bought over by an individual, namely Tan Sri Syed Mokhtar Al-Bukhary through his companies Gandingan Bersepadu Sdn Bhd and Tradewinds. He now effectively holds 53.7 per cent of Bernas shares, an acquisition he effected via Maybank Investment Bank Berhad amounting to RM526 millions. Nett profits at Bernas averaged at RM164 millions while revenues grew from RM 3.3 billion to RM 3.6 billion over 2009 to 2012. Currently Bernas controls 24 per cent of the padi market and 45 per cent of the local rice demand. Tradewinds directly owns nearly 341.4 million shares (72.6 per cent) I Bernas, while Persepctive Lane (M) Sdn Bhd has 50.71 million shares, Restu Jernih Sdn Bhd has indirect shares of 392.1 million shares (83.3 per cent) and Syed Mokhtar holds 392.1 million shares. In March, Bernas announced a takeover offer worth RM477 million or RM3.70 per share from Perspective Lane, Kelana Venture Sdn Bhd, Seaport Terminal Sdn Bhd and Acara Kreatif Sdn Bhd. All these companies are believed to be controlled by Syed Mokhtar. This deal suffered a setback after it failed to get sufficient acceptance from Bernas' minority shareholders. But last Tuesday, a lawyer for Bernas minority shareholder confirmed that its April case against three of the four parties namely Bernas, Syed Mokhtar and his company Tradewinds (M) Bhd was struck out on November 27. With that news, Tan Sri Syed Mokhtar would be closer to privatising Malaysia's sole rice distributor, Bernas. Nay, it is now almost inevitable. A responsible Federal Government would actually dismantle the monopoly and renegotiate some of the long-term positions within the existing contract and perhaps pay for the penalties in the bigger interest of the public or rakyat. Contrary to the above strategic consideration of why a company, especially a struggling one is taken private, Bernas doesn't come close to any of those attributes. It is evident that driving this privatisation of Bernas is arguably and ostensibly plain greed. That one individual is now allowed to gain monopolistic control over the nation's strategic rice business is a continuing marvel. But more importantly and now begging the answers from the Prime Minister who also is the Finance Minister are the following intriguing questions. With privatisation, the national strategic asset is now taken away from public scrutiny. Yes like all companies going private, the intention is to allow the company not to be scrutinised by the public. The freedom was supposedly to allow for the company to strategise and be competitive. But here we have the case of our strategic resource and asset that is now in the hands of individuals driven only by business consideration and 'bottom-line'. Taking it private means that Bernas is no longer responsible nor do want to share information with the public as opposed to being a listed entity. When privatised, all negotiations as the sole monopoly of rice distributor with the government would be on a closed-door basis. This 'sheltered monopoly' opens up to all kinds of abuses. Perhaps it is timely to remind the Finance Minister that while Islam enjoins and advocates trade and open trade, Islam despises monopoly especially for staple food of the people or rakyat. So much for the recent hype on Ahli Sunnah Wal Jamaah brand of Islam that Umno claimed to champion - why now is it going against all the principles of Good Corporate Governance in Islam namely crony capitalism, monopoly, endemic corruption and wastages, to cite but a few examples? Sheltered monopoly of this sort might also arguably encourage deregulation (rice is a regulated commodity) i.e. against the benefits for the consumers which subsequently could lead to higher prices and less quality products. Similarly there could also be incentive to do creative restructuring where it can blatantly increase share ownership, transfer all jewel assets, strip excess and re-float with leaner assets. Exercises of this nature have been known to be done in the Bursa Malaysia. Maxis is arguably a case in point. The recent spate of monopolistic acquisition by one individual is surely very much against the notion of distributive justice and 'shared wealth' deepening the divide. It is noteworthy that Bernas (agro +rice) has maximum cost and revenue synergy with Tradewinds (agro + sugar). The enlarged group's revenue can arguably swell 500 per cent to RM6 billion within five years. It is hardly surprising for Tradewinds, which has a RM3 billion debt, not to ride on and 'strip' Bernas of its non-core assets estimated at RM500 mil. It is surely in the interest of Syed Mokhtar to control cash cow companies and stocks. This could very well be leveraged later and endorsed by the government, for it to reduce Tradewinds' systemic risk (gearing by the likes of MMC/DRBHicom/Malakoff) to the entire financial industry in Malaysia. For how long more should the rakyat in this resource-rich nation allow the power-that-be working hand-in-glove with the rentier-class to plunder her wealth and resources? We do it at our own peril! — harakahdaily.net * Dr Dzulkefly Ahmad, Executive Director, PAS Research Centre. ** This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online. |
| Next Media: Town mayor shot dead at Manila airport Posted: 20 Dec 2013 04:45 PM PST Four people, including a town mayor who had survived two previous assassination attempts, and his wife, were shot dead outside Ninoy Aquino International Airport in Manila yesterday morning. ― Reuters Related Articles |
| When The Heat gets too hot to handle in Malaysia — Mustafa K Anuar Posted: 20 Dec 2013 04:41 PM PST
This action clearly goes against the principle of freedom of expression. The concerns of the rakyat about the antics and policy decisions of their leaders should come under close public scrutiny via the media and, in this case, through The Heat. Indeed, making leaders, whether from the Barisan Nasional or Pakatan Rakyat, accountable for their actions is part and parcel of democracy. Responsible media have a social role to play in this resgard. That is why concerned Malaysians would have expected Najib, or his representative in the Cabinet, to respond to such criticism in a democratic and civilised manner through the news weekly itself – and not by resorting to sledgehammer tactics. The suspension of The Heat shows that the recent amendments to the Printing Presses and Publications Act, supposedly aimed at liberalising the Malaysian press, have come to naught. If anything, this suspension, the reason for which has not yet been specified, makes a mockery of the much touted amendments or repeals of laws supposedly to promote democratic 'transformation'. This episode also suggests that the Home Minister still has the political clout to intimidate the mainstream press to the point that newspapers would eventually practise self-censorship and consequently be less accountable to their readers. Aliran urges the federal government to lift the suspension of The Heat immediately. Otherwise, our political leaders should leave the kitchen if they can't take the heat. * Dr Mustafa K Anuar, the honorary secretary of Aliran, is concerned about issues of press freedom and freedom of expression in our society. — aliran.com ** This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online. |
| US charges three more people in Silk Road website case Posted: 20 Dec 2013 04:30 PM PST
The Justice Department said an indictment was unsealed in New York for the three, following the arrest of the alleged mastermind of Silk Road in October in San Francisco. Officials said the individuals in the indictment are Andrew Michael Jones, 24, a Virginia resident; Gary Davis, 25, of Wicklow, Ireland; and Peter Phillip Nash, 40, of Brisbane, Australia. Nash was arrested in Australia and Jones in Virginia, officials said. Davis is believed to be in Ireland, according to the Justice Department. The news blog TechCrunch reported earlier yesterday than one person was arrested in Ireland in connection with the investigation. The three face charges of money laundering, drug trafficking and conspiracy for their alleged roles as moderators of Silk Road. Officials in October arrested Ross William Ulbricht, who was said to be "Dread Pirate Roberts," the website's mastermind. Ulbricht, who is awaiting trial in New York, has denied the charges and also claims he is not "Dread Pirate Roberts." Last month, a message appeared on the social media site Reddit claiming Silk Road had reopened weeks after it was shut down by the FBI. The message was signed "Dread Pirate Roberts." The message said Silk Road had implemented "a complete security overhaul" to keep the marketplace out of the reach of authorities. The site is accessible only through online encryption offered via a service known as Tor. Federal agents announced on October 2 they had shut down the website, which used privacy-protecting Tor and Bitcoin digital currency to shield the identities of buyers and sellers. Authorities said that from about January 2011, Ulbricht ran a marketplace that hawked heroin, cocaine, LSD and methamphetamine, as well as hacker tools such as software for stealing passwords or logging keystrokes on people's machines. Silk Road took in commissions ranging from eight to 15 per cent of sales, raking in at least US$80 million (RM263 million) on more than US$1.2 billion worth of transactions, the criminal complaint estimated. US Attorney Preet Bharara said the investigation is ongoing. He said US officials have received cooperation from authorities in Ireland, Iceland, Australia and France. ― AFP |
| Morgan Stanley sells oil trading business to Russia’s Rosneft Posted: 20 Dec 2013 04:23 PM PST
The deal represents a bold move into the US market by Russia's top oil producer, which is headed by Igor Sechin, a powerful ally of Russian President Vladimir Putin. The Russian state owns almost 70 per cent of Rosneft. The deal includes more than 100 traders and shipping schedulers in London, New York and Singapore, over US$1 billion (RM3.28billion) worth of oil, and the bank's 49 per cent stake in tanker company Heidmar. The terms of the deal were not disclosed. Morgan Stanley said it was not expected to have a significant impact on its financial results. The purchase will not include Morgan Stanley's oil storage, pipeline and terminalling firm, TransMontaigne Inc., which may help avoid significant scrutiny of the deal in Washington. The United States has often been hostile to state-owned companies from countries such as Russia and China buying up US energy and infrastructure assets. News of the deal raised alarms in Washington. Senator Edward Markey, a Democrat who is a member of the Senate Committee on Foreign Relations, called on the US government to "closely review" the deal to ensure that a Russian state-owned oil company "cannot manipulate our markets and harm the United States and its citizens." Morgan Stanley plans to submit the sale for review by the US Committee on Foreign Investment (CFIUS), an inter-agency executive branch panel that examines foreign investment for potential threats to national security, a source familiar with the matter said. The sale is also subject to regulatory approvals in the United States, the European Union and certain other jurisdictions, the bank said in a statement. The deal comes as US relations with Russia have been strained in recent months over Moscow's decision to grant temporary asylum to US spy agency contractor Edward Snowden and the conflict in Syria. A spokeswoman at the US Treasury declined to comment on the sale. Morgan Stanley has been trying to sell or spin off its physical commodity business for over a year as it faces increased regulatory pressure and higher capital requirements. The bank said it would continue to look at "strategic options" for TransMontaigne. Restrictions on proprietary trading introduced to prevent a repeat of the 2008 financial crisis have made commodity markets less attractive for many banks, with total revenues in the sector down sharply on Wall Street in the last five years. Deutsche Bank announced two weeks ago that it was largely exiting commodities trading, while JPMorgan is selling its physical trading operations. Goldman Sachs, which pioneered Wall Street's entry into commodity markets alongside Morgan Stanley almost three decades ago, has also looked at selling parts of its business, but has repeatedly said it remains committed to commodity trading. "I think it's a confirmation of a trend that Wall Street is exiting the business," said Craig Pirrong, a finance professor at the University of Houston and an expert on commodity markets. "Rosneft has indicated it was going to try to become more like an international player. This is a way for them to build out and become more like other oil companies." Go east? In buying the operations, the Russian oil producer will get its first foothold in the United States and expand its modest trading business. About 100 front-office Morgan Stanley personnel will transfer to Rosneft under the deal, including oil traders and shipping schedulers comprising about a third of the bank's total commodity team. The bank will remain in other commodity markets including gas and power trading, agriculture and metals, according to a person familiar with the matter. The bank will also retain a client oil trading business that will be able to execute both physical and financial deals. The majority of oil traders transferring to Rosneft are based in London, New York and Singapore but are expected to remain in their current cities. The bank said in the statement it is targeting the second half of next year to complete the deal. Shares of Morgan Stanley closed up 0.2 per cent at US$30.93 on the New York Stock Exchange. Rosneft became the world's biggest listed oil producer in March after the US$55 billion acquisition of Anglo-Russian oil firm TNK-BP. Its oil output accounts for over 40 per cent of the total in Russia, the global leader in crude production. Rosneft has amassed assets abroad in the past few years, including refineries in Germany and Italy, but has bought no significant assets in the United States. Rosneft has an oil trading division in Geneva, which helps supply its refining assets in Europe. Antitrust experts don't expect the deal to hit any regulatory hurdles, but allowing a state-owned Russian firm access to oil terminals and the US home heating oil market is likely to get a deep look from the US government. A Washington-based policy analyst said the government watchdog was sure to take a hard look, especially after it blocked a privately owned Chinese company, Ralls Corp, from building wind turbines in Oregon last year. "If CFIUS flags wind farms to China, it's hard to imagine that commodity trading to Russia gets by without a blink," said Kevin Book, at ClearView Energy Partners, LLC in Washington. ― Reuters |
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