Friday, 5 April 2013

The problem with Petronas - not the CEO or the staff but Dr M: PR to send in an audit team - Kee Kwong

Thursday, 04 April 2013 15:41
The problem with Petronas - not the CEO or the staff but Dr M: PR to send in an audit team - Kee Kwong
Written by  Wong Choon Mei, Malaysia Chronicle

It looks like the salvos fired by the Pakatan Rakyat at the way national oil firm Petronas has been plundered and mismanaged by the leaders from Prime Minister Najib Razak's government including his predecessors Abdullah Badawi and Mahathir Mohamad are starting to draw blood.
It cannot have escaped notice that Najib has of late been assiduous in courting Petronas staff and trying to distance himself from the longstanding and widespread accusations of corruption and pilferage at the national oil firm.
"A few months ago, I decided that all the tenders be decided by the board's wisdom ... I don't want to make the decision," the PM had told a special townhall session with some 4,000 Petronas staff earlier this week. He then announced a special RM1,000 bonus for all the oil firm's staff.
Not the CEO or the staff but ... MAMAKUTTY!
Yes, Malaysia's 13th general election is around the corner and Najib needs to make a show that his government has been transparent while Opposition's claims are wild and outrageous.
But really, the problems at Petronas go far deeper and wider than Najib has made them seem to be. Even the huge annual dividends that Petronas pays to the government, and which its CEO has asked the government to leave behind enough for "reinvestment", are the tip of the corruption iceberg at the oil firm, ranked 68 in the Fortune 500 list of top companies.
From the manner in which land for Petronas' current headquarters was purchased, to its hush-hush annual accounts and the "special special special" middle-men who were allegedly allowed to cream the bulk of its oil profits, the ruling Umno-BN government has been challenged to provide answers. Sad to say, few responses have been given despite the Opposition taking their questions all the way to Parliament itself.
As PKR candidate for the Wangsa Maju parliamentary seat, Tan Kee Kwong said in a recent ceramah (small political rally) in Taman Melati, Setapak:
"The Petronas story highlights exactly what is wrong with our country. There is no problem with the CEO or staff at Petronas. What is wrong is the crony system especially under Mamakutty (Mahathir Mohamad). He should stop talking and go look after his grandchildren. Mahathir set up Petronas using the Petroleum Development Act and under the PDA, only the prime minister can check the Petronas accounts. Even the Cabinet cannot do so. Why is this when Petronas is a government-linked-company and we are all shareholders of Petronas?"
Eye-opener: Don't under-rate the intelligence of the 'kampong' Malays
The response that Kee Kwong, a medical doctor and former three-term parliamentarian, drew from the 95% Malay crowd that came to his ceramah was an eye-opener. While not exactly rural, few would have thought the people - given their humble demeanor - would be able to follow Kee Kwong as he rattled off figures to support his accusations. But they did and not only that, they cheered when he demanded accountability.
Taman Melati is actually an Umno stronghold. But as the Opposition has warned, the arms of Umno's corruption have spread too wide and even the common folk are alarmed. Perhaps, this is why Najib - in the last lap to GE13 - has made it a point to address the issue but if he wants to be taken seriously, he had better give more serious and detailed answers and not the vague generalizations that he has provided so far. That would only make voters, like those in Taman Melati, even angrier with his Umno party for under-rating their intelligence and knowledge of what was going on in their country and elsewhere in the world.
"What is wrong at Petronas and the BN government becomes worse when we compare with Taiwan. Now, Taiwan island is about the same size as Peninsular Malaysia. When I was there on an official visit in 2005, we had the same population of around 23 million people. In Taiwan, the majority of the land there cannot be used because it is too hilly, only about 40% is usable. Here we have abundant land of about 2 million acres. And according to the official statistics from the Taiwan government, Taiwan does not produce a drop of oil, let alone 'satu tong' (one barrel). Whereas we have been producing and we now have production in Vietnam, Sudan.
"So why is it that Taiwan has zero borrowings and yet Najib Tun Razak says we are adhering to a very good economic transformation program. Five years ago, our government borrowings stood at RM250 bil but now it has reached RM520 billion. If we include the borrowings of GLCs such as MAS, TNB and others, total borrowings would hit almost RM700 bil. Is this something to be proud of? Such borrowings will burden on our children, grandchildren and future generations."
Sending in an audit team: If you know what I know, you would faint and die!
Kee Kwong also warned that the Pakatan Rakyat coalition of PAS, PKR and DAP parties would deploy an audit team to probe the accounts for answers to the corruption allegations against Mahathir, his cronies and Umno colleagues.
"Highest cash reserve in the world, No. 1 is China, no. 2 Japan, no. 3 Taiwan, where is Malaysia? The illicit money taken away from our country by 'unknown' people in 2010 was RM200 billion. This shows there is a lot of wrongdoing and mismanagement in our country. As a past MP who has held office for 3 terms, I can testify that the accounts of Petronas have never been checked by Parliament. Why is this so, why the need to hide?
"Compare this with what our future prime minister Anwar Ibrahim (currently the Opposition Leader) has pledged. If Pakatan Rakyat wins, not only will the accounts be tabled in Parliament but published on the Internet. And one warning to the current (Umno-BN) leaders, we have prepared an audit team to enter Petronas. If you have not done anything wrong, that's fine but if you, you won't be able to sleep tonight.
"This brings me to a story I was told be a friend who works as a senior accountant in Petronas. He said, Dr Tan, cool down lah. You know a little bit about Petronas and you want to get so angry. We have worked in Petronas for 30 years and know the accounts inside out. If you know what I know, you will faint and die."
Knowing the right people can make you RM600mil in 3 months
In his speech, Kee Kwong again demanded answers to Petronas' purchase of land for its famed Twin Towers headquarters in downtown Kuala Lumpur. Transacted in the 1990s, Mahathir who was then the prime minister has till now not given transparent answers to the very serious allegations raised.
Was the purchase mechanism designed so as to benefit a "special special special" crony? Till now the question still rings loudly in the business circles around the country and it looks like it has already filtered down to the ordinary folk, given their ease in following and comprehending the issues involved.
"It is alright if Petronas wants to buy land to build KLCC and so on. But the manner in which it did so was 'busuk' (dirty). The land that Petronas bought to build the Twin Towers was from the Selangor Turf Club. All sorts of excuses were given to shift the Turf Club to Sungei Besi including that it would cause massive traffic jams on weekends.
"The point is the purchase should have been done directly between Petronas and the Turf Club or through compulsory land acquisition. But no, cannot. The deal had to go through a special crony. Who is this special crony? So the Turf Club land was sold to this special special special crony for RM300 million, the whole of KLCC. After 3 months without adding any value, it was sold again. First transaction price RM300mil, second transaction price RM900 mil. In 3 months, the crony made RM600 mil. Pandai gasak dan sapu (how clever to steal and rob). So let me ask because the people want to know - who is this special crony."
Where has the bulk of the Petronas money gone?
Among the latest 'hot' or controversial issues dogging Petronas are the slew of foreign news reports that it is being forced to sell its oil through "special" middlemen with close ties to the top Umno leaders, given that the national oil firm comes under the direct purview of the Umno president who by convention is also the country's prime minister.
According to Kee Kwong, this alleged 'creaming' of the bulk of the oil profit may be why Petronas is actually 'poor' by comparison with its peers. If there had been no corruption, the national oil firm would be much wealthier than it was now, said Kee Kwong, citing the example of fellow oil producer Norway.
"Then we hear talk that Petronas is being forced to sell its oil to some middlemen - about 5 or 6 of these special middlemen. Who are they? Now, we have already posed the question. Jeffrey Kitingan has written about this matter, so has Chua Jui Meng and Tan Kee Kwong. But no answer.
"The current price of oil in the international market is about US$90 to 92 per barrel. The cost from its deep sea exploration is very expensive and about US$25 to 30 per barrel. But Petronas if forced to sell to the middlemen at US$40 only. If this is not true, then deny. Open up the accounts, prove it. Is the government scared? This is the people's money. Imagine, cost US$30, sold to middlemen at US$40 and these contracts are for 5 to 8 year periods.
"Look at Norway. It has been making money from oil for about 40 years, something like Petronas. But the profit from oil in Norway cannot be spent. Only the 'faedah' (interest or dividend) can be spent. This is why the pension fund of Norway, a tiny country of 10 million population, is the largest in Europe. But where is our Petronas money? We really have to put our foot down and demand the answers from Dr Mahathir, Abdullah Badawi and Najib."
Malaysia Chronicle