Another scholarship crises for MCA to yelp at

So MCA has been blasting Yayasan Selangor over only 12 chinese students getting scholarship from Yayasan Selangor.

--------------------------------------------------------------------------------

http://www.themalaysianinsider.com/malaysia/article/mcas-ti-raps-kok-over-scholarship-application-figures/

KUALA LUMPUR, Nov 23 — MCA’s Datuk Ti Lian Ker rebuked Teresa Kok today for accusing his party of misleading the public over the low number of Chinese students receiving aid from Selangor’s education fund.

MCA leaders, including Ti, had accused the Pakatan Rakyat (PR) state government of dispensing aid from the education fund to “only 12 Chinese students out of 4,000 applicants”.
------------------------------------------------------------------------------

Ok, since MCA kicked off the game, I suppose I can only do a bit of benchmarking here.

Which brings me to Yayasan Negeri Sembilan.

http://www.yns.gov.my/v6/







YNS has stated this as their objective:
-------------------------------------------------------------------------------
Tujuan penubuhan Yayasan Negeri Sembilan adalah bagi membolehkan Yayasan Negeri Sembilan menjalankan aktiviti sosial dan ekonomi terutama dalam aktiviti menaja dan memajukan peluang mendapat pendidikan di kalangan rakyat Negeri Sembilan melalui pinjaman pendidikan, biasiswa dan bantuan kewangan.
----------------------------------------------------------------------------------
Great, wonderful, no race orientated remark like Perkasa, BTN or Siti Inshah brigade. Now let's look at the application.

The full list is available at:

http://www.yns.gov.my/v6/images/stories//peminjam_aktif-sesijanjun10.pdf

According to the latest list of successful loan applicants for Jan - June 2010, of the 274, there were 7 Indians (2.6%), 2 Chinese (0.8%) and the rest, 265 (96.6%) are Malays.


Note: successful Indian applicants are listed as number 40, 43, 46, 227, 234, 258 and 255 while the 2 successful Chinese applicants are 44 and 264




Hello MCA, any comments?

Another stripping of rakyat's voice in Parliament?

There is this interesting nugget from Azmi Khalid that the PAC cannot investigate Sime Darby losses despite "urges to investigate" from "many quarters" because the investment was from private investors

http://www.bernama.com/bernama/v5/newsgeneral.php?id=544979

The Chairman's argument does not hold water at all.

The "many quarters" probably consist of Malaysians. Parliament is a place to discuss and resolve Malaysians' problems be it public utilities, economic conditions, social security, commercial opportunities etc.

So why can't a matter of public concern be looked into by PAC? Investors, big or small timers, in Sime Darby's shares may have less dividend while the banks from whom Sime Darby borrow from would have lost depositors' money and EPF dividends would be lost as well.

The Speakers have constantly rejected Pakatan Rakyat MPs' motion or even evict them denying the rakyat's voice to be heard through their elected representatives....and now this. I have that sinking feeling that we are being barred from being heard in the Parliament.

Similarly, Azmi is saying that since it is a private enterprise the government has no business looking into it.

Wrong. If the government taxes the business community via income tax, stamp duty, custom duty, real property gains tax, service and sales tax and even on credit card ownership, plus setting up laws and regulations to government the conduct of commercial entities hence why the inconsistency here?

An extract from Sime Darby's Internal Control Statement included in its June 2010 annual reports stated that:

---------------------------------------------------------------------------------------------

ESTABLISHMENT OF THE BOARD OIL & GAS PROJECTS WORK GROUP TO REVIEW CERTAIN PROJECTS IN THE ENERGY & UTILITIE S DIVISION

The Board of Directors, on 18 September 2009, established the Oil & Gas Projects Work Group (OGPWG) to review the operations of the Energy & Utilities Division with the objective to assess the corporate governance and performance of the division, following its results in the financial year ended 30 June 2009.

The OGPWG reviewed, in particular, the four projects (collectively referred to as the projects), namely:

• The Bulhanine and Maydan Mahzam project with Qatar Petroleum (QP project)
• The Maersk Oil Qatar project (MOQ project)
• The Bakun hydroelectric dam project (Bakun project)
• A project on the construction of vessels for use in the MOQ project (Marine project)

The Projects contributed a total loss for the year of RM1,645.6 million, inclusive of the loss of RM963.8 millionannounced in the third quarter

--------------------------------------------------------------------------------------------

Can you spot the sore thumb there? Surely that is a government project paid by tax payers?

What or who Azmi is trying to protect? Citing the procedural restrain is at best a lame excuse or at worst another obvious attempt to frustrate tax payers and Malaysians to get an explanation or redress.

Anyone with some knowledge of commercial law will be familiar with the concept of lifting the veil of incorporation. A director and his company are 2 separate legal persons and the director is not suppose to assume all liabilities of the company.

However, under certain circumstances, if the court views that it is unjust to uphold this concept, the court then can ignore this separate identity concept and pin the liability on the director; e.g. I set up a company to cheat via a ponzi scheme and I will have to go to jail for that, regardless if I used the company's name and not mine to deal with the victims.

Otherwise, to escape the scrutiny of the Parliament on application of public money, one only needs to privatise some governmental function...like Padiberas Nasional Berhad?

Sekinchan rice farmers were complaining about the unsustainable price they were told to sell to Padiberas Nasional Berhad was overshadowed by the disgusting physical assault on Sekinchan State Assemblyman YB Ng who went over to hear them.

If Najib administration's pet rallying call is "Performance Now" among other things, Azmi is sadly lacking in this respect, I think. If the Constitution can be changed hundreds of times, why not a part of the Standing Order?

If the above are not good enough reasons, then look at the top 10 Sime Darby shareholders and you will find Amanah Saham Bumiputra, Permodalan Nasional Berhad, EPF, Felda, :

So Azmi has to consider whether PAC has to look into this Sime Darby for the sake of Malay rights (the Tuan has the right to know), security of government funds and investment as well as the retirement basket of all Malaysians

Azmi would do well to look into Ahmad Zaki Berhad as well. If you look at the 2009 annual accounts of this UMNO-linked company, the joint venture between AZB with its JV partners incured net liabilities of exceeding RM28 million which includes highway and school construction work in Malaysia. Isn't that direct usage of tax payers' money?

Tradewinds (M) Berhad: your rice and sugar daddy

Previously, I wrote about Tradewind (M) Berhad borrowing RM1 billion to acquire shares of Padiberas Berhad at interest around 5.20-6.50%.


It is also interesting to note this:
------------------------------------------------------------------------------------


http://www.theedgemalaysia.com/first/17961-working-out-a-new-role-for-bernas.html

Working out a new role for Bernas
Written by Cindy Yeap
Monday, 29 June 2009 00:00

Hong Kong-based Wang Tak Co Ltd, which has been actively mopping up Bernas shares on the open market since early 2006, continues to be a buyer. Wang Tak, which is linked to IGB Corp Bhd’s Tan family, held a 14.34% stake in Bernas in late 2006; it has since doubled its holdings to 30.14% as at June 16

Wang Tak’s* average investment cost — RM1.75 per Bernas share — while above the prevailing market price, is 0.88 times Bernas’ net asset per share of RM1.98 at end-March.
* no relationship with the author

---------------------------------------------------------------------------------

On page 52 of Tradewinds(M) Berhad's 2009 annual reports and accounts, it has this disclosure:

----------------------------------------------------------------------

2. Material Contracts Involving Directors and Major Shareholders

(a) a Share Sale agreement dated 28 august 2009 between Tradewinds (M) Berhad (“TWS” or the “Company”) and Wang Tak Company Limited (“WT”) for the acquisition of 148,281,100 ordinary shares of RM1.00 each in padiberas Nasional Berhad (“Bernas”), representing 31.52% of the total issued and paid-up share capital of Bernas from WT for a total purchase consideration of RM308,424,688.00. The said acquisition was completed on 2 November 2009.

-------------------------------------------------------------------------------------

hence TW paid an average RM2.08 per share and base on the average cost of investment reported above at RM1.75 per share, a cool profit of RM56.35 million has been shifted to good old Hong Kong while Malaysians will foot the loan repayment and interest. Another consequence of privatising something that the federal government should be overseeing.


TW is also a major player in Malaysia's sugar supply chain. According to its Managing Director, Bakry Hamzah in his operations reports included in the annual accounts and reports,
---------------------------------------------------------------------

" For the financial year ended 2009, the Sugar Division generated total revenue of RM976.2 million as against RM862.2 million posted in the previous year.......

....presently, Malaysia has only four sugar refineries, of which two are owned by TWS i.e. Central Sugars refinery Sdn Bhd (“CSr”) at Batu Tiga Shah alam, Selangor and Gula Padang Terap Sdn Bhd (“GPT”) at Kuala Nerang, Kedah."

------------------------------------------------------------------


According to note 29 of its 2009 accounts, government grant /tax payers money of RM287 million was received by TW Group for rice and sugar.

Amazingly, this was disclosed in the accounts:

RM203.6 million or roughly 21% of the subsidized sugar was sold to......Bukhary Sdn Bhd

And on what trade terms? According to the accounts, normal trade terms for TW is 7 to 90 days. At RM203million per annum, average daily sales is about RM550K to Bukhary Sdn Bhd and the balance of RM118 million owing by Bukhary Sdn Bhd amounts to 212 days of sales, about 7 months owing. For 2008, TW sold RM165 million worth of sugar to Bukhary Sdn Bhd and the receivables not collected from Bukhary Sdn Bhd of RM170 million even exceeded the whole year sale of sugar!

I wonder what does Bukhary Sdn Bhd do with so much sugar? Can they assist in the sugar shortage that we are facing in Malaysia?

http://english.peopledaily.com.cn/90001/90777/90851/6743421.html

Syed Bukhary has apparently benefited for a few years from his shareholdings in Padi Beras Berhad by way of dividend pay outs plus disposal of Budaya Generasi Sdn Bhd's substantial 145 million shares to TW.

Further examination of TW's operating expenses is interesting. In 2009, RM20 million was paid out to Albukhary International University.

This is a private university located in Kedah and provides scholarship to many studens from all over the world.
------------------------------------------------------------------------------------------------
http://www.aiu.edu.my/sponsorship.html

The Albukhary Foundation Scholarship
Albukhary International University (AIU) is fully funded by the Albukhary Foundation, Malaysia and all students attending AIU shall be sponsored through the Scholarship described herein.

The Albukhary Foundation intends to make available ten (10) scholarships for each country to assist disadvantaged youths, mainly Muslim youths, to graduate with a degree from the Albukhary International University.

Instituted in 2003, the Albukhary Foundation Scholarship has been offered to 382 students from almost 50 countries of whom many are currently studying at the International Islamic University Malaysia.

------------------------------------------------------------------------------------------------

Fine, if a very successful and rich man wants to be charitable with his earning but when a lot of the money comes from tax payers' subsidy and revenue from sales of staple diet of Malaysians i.e. sugar, rice and palm oil, there is an element of public interest we are talking about.

In the light of the annual brain drain and insufficient scholarship for all top scorers outcry plus the "Rakyat Diutamakan" rally call, the lucky foreign recepients includes Afghans, Albanians, Laotians, Yemenians, Ethopians, ...would we get any benefit out of this?

Who is behind Padi Beras Nasional Berhad

In the previous post, I wrote

Who are the major shareholders who benefited from the payout? A review of its 2008 annual report shows that, Budaya Generasi (M) Sdn Bhd held 145 mil shares or 30.79%, Serba Etika Sdn Bhd held 29.8 million shares or 6.39%. I do not know these people who I have to belanja every time I eat white rice, fried rice, nasi lemak, nasi dagang, nasi kandang, pulut etc

Well after some surfing, I found the folllowing:

http://anilnetto.com/agrobusinessgm-food/whos-profiting-from-higher-food-prices-certainly-not-the-rice-farmers/

Budaya Generasi is controlled by Syed Mokhtar Al Bukhary.

http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a6bf/a2053c675fee4ccc4825709100287f0d/$FILE/PUTERA-DirectorsProfile(1.2MB).pdf

profile of Encik Ahmad Feisal :-

He is currently the Executive Chairman of Major Crest Management Consultancy Services Sdn Bhd, which is mainly involved in corporate secretarial, accounting,taxation, auditing, financial consultancy and corporate advisory. He is an Executive Director of Medan Arau Sdn Bhd and sits on the Boards of Yayasan DPM Berhad, Hicom Dewan Development Sdn Bhd and Malaysian FirstCapital Partners Sdn. Bhd. He is also the Honorary Treasurer of Malay Chamber Of Commerce Malaysia, Pulau Pinang, Treasurer of Lembaga Dana Amanah Biasiswa & Kebajikan DPM and the Chairman of the Finance Steering Committee and Tender Committee ofthe Chambers.

He started his career as an Internal Auditor with Ban Hin Lee Group in 1996. Subsequently in 1999, he joined amanufacturing company as the Financial Controller and Administrator prior to his appointment as an Internal Auditor with Hong Leong Bank Berhad. In April 2000, he served as the Head of Finance & Treasury of Realmild (M) Sdn Bhd, a major shareholder of Malaysian Resources Corporation Berhad (MRCB). He was later appointed as the Senior Manager of Bernas Overseas (L)Ltd, a wholly-owned subsidiary of Padiberas Nasional Bhd (Bernas). He also served as the company representative of Budaya Generasi Sdn Bhd, a major shareholder of Bernas Group (Padi Beras Nasional Berhad). He was also the Special Assistant to theExecutive Director of Sharikat Permodalan KebangsaanBerhad in 2002.

GST for Dummies

By merely increasing the service tax from 5% to 6% in 2011, the Government need not implement Goods and Services Tax (GST) next year. By the stroke of a pen, the additional revenue from the 1% service tax increase has almost achieve the estimated additional revenue of RM1 billion expected from the first year of implementing the GST.

What is GST?
The GST is a broad-based tax consumption tax. Broad-based means almost every person on the street is taxed when one consumes (buys) goods and services (type of goods and services taxed depending on items the Government decides to be taxed). The argument for GST is that is 'fairer' than income tax- GST is incurred only when one buys goods or services. If you don't buy, you don't get taxed. As opposed to income tax whereby if one has income derived in Malaysia on the tax band the person gets tax as he/ she earns regardless of that person's spending habits. Hence which is fairer- get taxed when you earn or get taxed when you consume goods? The answer is neither. It depends how the GST is implemented- if essential goods are part of the GST list then everyone gets taxed- high-income people, low-income people and no-income people. The next question is then who can weather the GST storm better- the high-income people or the low-income people?

By the way what is 'high income' and what is 'low-income'? These are the questions you'll want to point-blank Najib if he pulls a Badawi-petrol-price-increase-adjust-your-lifestyle act for GST.

On paper, not taking into account social structures, not taking into account the taxable workforce, not taking into account unemployment benefits or anything else, Malaysia looks alright when compared against countries across the globe in terms of tax rates. In fact Malaysia's proposed GST rate of 4% is low.

A common trend amongst countries which has GST implemented is that the GST percentage usually never stayed put- the governments increase the tax rate from time to time (haha- from year to year for certain countries to be exact). Singapore's GST was 3% when it was first implemented; it is now 7%. This October, the New Zealand Government increased its GST to 15% from 12.5%. UK's GST will be increasing from 15% to 17.5% in 2011. GST increase is a global trend. So, don't bet on a decrease in rates once the GST is implemented.

Why GST?
The answer is simple. The Malaysian Government needs more cash to finance its expenditure and petroleum revenue (tax and royalties) are dwindling.

The line graph above (Source: Bank Negara Malaysia)- blue line denotes government revenue; red line is government expenditure and the yellow dotted line is government revenue without petroleum tax and petroleum royalties.  The yellow-dotted line drops consistently below the red line after year 2003 which shows that if the tap turns off right now (no petroleum revenue)- well, we just have to find other ways of financing the cost to run this country. Reading between the lines from what the government says the easiest way to do this is to implement a broad-based consumption tax.

The pie charts below displays how revenue from petroleum tax, corporate tax, individual income tax and service tax are sliced out of the revenue pie over 4 decades (Source: Bank Negara Malaysia). It is interesting to note that corporate tax and personal income tax has grown over 16 fold and 15 fold respectively over the last forty years, contributing to 19% and 10% in 2009 to government revenue respectively. Though dwindling (what I mean is increasing at a less than proportionate rate compared against Government expenditure) petroleum tax is a prominent contributor of income at 17% (2009). The rest is service tax at 2% and stamp duties, excise duties, import/ export duties depicted in the big slice highlighted in yellow (52%- 2009). If you run across the pie charts you would have noticed how corporate tax and personal income tax  have decreased in terms of percentage contribution of the last 40 years- the two components have dropped to more than half.

How much tax can be derived from companies (where corporate taxes decrease by 1% every year) depends on how well the companies are doing. Similarly, the amount of tax collectible from personal income (without an increase in personal income tax rates) generally depends on the number of taxable persons. This number is not big however- only about 2 million people of the total local registered workforce of 12 million pay tax. The Government reckons that somehow the other 10 million people has to start contributing to the national coffers one way or another and GST is a 'good' way to start it off.

However so long the BN Government does not improve its weak enforcement in curbing or reducing corruption in Malaysia, the cost of running the country will always be high, no matter how much money is churned out from the rakyat in terms of taxes and no matter how much Petronas is contributing tax to the Government. Unless there's a big massive protest on the streets, GST will be implemented by the year after next.

It does not take rocket science to guess, that the GST will have a big impact on families earning below RM10,000 per month. The impact will be more significant for families earning below RM5,000 per month. They will find it increasingly difficult to meet ends meet, Bumiputera and non-Bumiputera alike. So much from a racist political party.