Sunday, September 21, 2008

Big blunders. What are the immediate remedies?

1. While the media is obsessed about covering BN crossovers and BAR council held an EGM to propose for the abolishment of ISA (even though it was an act passed in Parliament legally), there is not much progress in the Gulf of Aden on the fate of our Malaysian hostages, although French together with German and Malaysian commandos raided one ship and rescued two French hostages earlier.

2. After the loss of Pulau Batu Putih or Pedra Branca, it remains to be seen what the fate is for Pulau Pisang. Singapore has been operating the light house for decades. Are we to lose another island (this is would be a monumental loss, all 154 hectares of it) to Singapore. Johor MB Dato' Sri Abdul Ghani said that Johor has strong proof of Malaysia ownership.

3. What are the financial exposures to Malaysia after the collapse of AIG and Lehman Brothers and the huge Federal bail out amounting to USD700B? Meanwhile, Temasek has been purchasing interests in Meryll Lynch. Does this merit further scrutiny?

4. It's weird that the first highlighted story on the Edge Daily was the release of Teresa Kok from ISA. What does that have to do with Finance?

5. After the humiliating bluff to form the new Federal Government on Sept 16th, now Pakatan Rakyat is seeking audience with the Agung to propose the formation of a new government with the list of soon-to-defect BN MPs. If Pakatan Rakyat claims it has mass national appeal, why can't it wait for the next election? Do Malaysians really want another snap election? Don't we have a financial crisis to tackle and a new Finance Minister to support?

6. What would be the fate of CTRM and other agencies making huge financial blunders based on the recent Auditor General's report for 2007?

from the Edge 8th Sept:

"One of the most damning examples of flawed governance in the report is perhaps that involving Composite Technology Research Malaysia SB (CTRM). This entity, in which the govt has 90% equity worth RM117.8M, is in the business of designing and manufacturing aircraft components, and marketing and maintaining aircraft.

Among CTRM's investments, one in the US-based Columbia Aircraft Manufacturing Corp (CAMC), in which the Minister of Finance Inc took a controlling stake in 2002 when the company was experiencing financial difficulties, is of particular interest.

As at Sept 2007, the report states, the govt of Msia had spent US149.42M (RM537M) in the form of investment and loans in CAMC. However, the govt failed to achieve its investment objective in the aircraft manufacturing company due to weaknesses in the mgmt of CAMC, extravagant expenditures by its top mgmt, the failure of CAMC board of directors to address aircraft manufacturing issues immediately and lack of monitoring by officers from MOF.

As a result, it notes that CAMC suffered accumulated losses totalling US132M as at end-2006. Due to heavy debts, the company on Sept 24, 2007 filed for bankruptcy in the Oregon court.

Consequentyly on Nov 27, 2007, Cessna, a two-seater aircraft manufacturing company, bought CAMC for only US16.5M. Out of this, US7.33M was
paid back to the govt of Malaysia".

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