Ringgit’s slide may have been engineered

TTF: The Malaysian ringgit has dipped to an 11-month low (see news item below) amid speculation that the decline was engineered to facilitate the redistribution of shares in key government-linked entities.

The widely held notion that the Government of Malaysia (GoM) is faced with crisis owing to the revocation of the GST is a gross misconception, given that the GoM is at liberty to sponge off the RM45.52 billion profit that Petronas recorded for the full financial year of 2017.

The state-owned oil company’s earnings rose 61.6% year-on-year (YoY) to RM18.21 billion for the final three months of 2017 as impairment provisions dropped drastically owing to higher oil prices and the strong-ringgit factor.

People must understand, that if Tun Dr Mahathir Mohamad could use Petronas’ earnings back in the nineties to bail-out debt ridden companies belonging to his cronies, there is nothing to stop him from doing so now, what with his appointment as Khazanah Nasional Berhad chairman and all.

Perhaps The Star Online’s 27th of July 2018 report could help shed some light on what’s truly going on behind the scenes.

On that day, the paper reported that Khazanah and Petronas would come under the purview of the Prime Minister’s Office (PMO) under the new Pakatan government structure, meaning, Mahathir would get to dictate terms to Petronas both as chairman of Khazanah and Prime Minister of Malaysia.

Khazanah happens to be a major shareholder of Petronas alongside Putrajaya Holdings Sdn Bhd and Kumpulan Wang Amanah Negara.

On the 20th of May 2005, Lim Kit Siang wrote:

Petronas owns 64.4 per cent of Putrajaya Holdings. The other two major shareholders are Khazanah Holdings and Kumpulan Wang Amanah Negara. The latter is an oil reserve fund set up in the late 1980s in the aftermath the then UMNO crisis between Team A and Team B. The fund is shrouded in secrecy since its inception. All three institutions are not private companies by any definitions.

They are GLCs, or Government-linked corporations. The term GLC has become fashionable recently,  introduced to the Malaysian lexicon by the Prime Minister. While there have been a lot of discussions on the performance of various GLCs, not much has been said about Petronas or the national oil reserve fund corporation.

Petronas is probably the most cash-rich GLC in the country. It has funded most of the mega-projects of the Barisan Nasional government, including Putrajaya and KLCC.

Petronas is not only funding Mahathir’s grandiose  projects while he was at helm of government, it is still funding Mahathir’s grand  lifestyle after his retirement. Immediately after stepping down as Prime Minister, Tun Mahathir flew to Spain with his extended family on a Petronas executive jet. He was later appointed the Advisor to Petronas.   I understand, subject to correction, that Petronas has bought or is buying a special jet for Mahathir’s personal use.

Petronas is also the major funder for the  Perdana Leadership Foundation. Malaysian taxpayers are  not told the cost of funding this “Presidential Library” of Mahathir, but according to news reports, the building cost of the Foundation’s grand complex itself costs RM 20 million.

It is time for the government to make Petronas, Putrajaya Holdings and all other GLCs (including the national oil reserve fund corporation) under the purview and scrutiny of Parliament. Parliament should be informed of the performance  of those corporations. It should also be  told of the cost of funding Mahathir’s lifestyle in retirment.

As the stake is extremely high, the Opposition should be consulted on the executive appointments of GLCs to ensure checks-and-balances. If the government is serious about appointing experts to helm GLCs, the first thing it should do  is to review the chairmanships of Tan Sri Azizan Zainul Abidin at both Petronas and Putrajaya Holdings. Tan Sri Azizan was the principal private secretary to the former Prime Minister and was the KSU of Home Ministry when Mahathir launched Operasi Lalang in 1987 – which are not the best  expertise or credentials for  managing the national oil company and Putrajaya. 

So you see, even Lim Kit Siang – who seems to have suddenly developed a severe case of “foot-in-mouth” disease – is keeping his mouth shut, knowing that Petronas is a cash-cow Mahathir is at liberty of ‘sponging’. 

Perhaps he himself stands to gain something from the whole affair, I can’t say.

To be continued…

KUALA LUMPUR: The ringgit today continued its slide against the greenback for the eighth trading day in a row.

At 9am, the local unit stood at 4.1740/1780 versus the US dollar, from 4.1730/1770 on Friday.

Meanwhile, the ringgit traded mostly lower against a basket of other major currencies.

It was down against the Singapore dollar to 3.0222/0256 from 3.0154/0189 on Friday, but rose slightly against the Japanese yen to 3.7281/7327 from 3.7282/7321.

The local note contracted against the British pound to 5.3544/3612 from 5.3419/3495, and declined against the euro to 4.7538/7596 from 4.7384/7438.

Source: NST Online

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