Ahad, 26 Februari 2012

Philosophy Politics Economics

Philosophy Politics Economics

All NFC & Its Directors Assets Must Be Frozen

Posted: 26 Feb 2012 07:23 PM PST

The Police and MACC must immediate freeze all the assets of National Feedlot Corporation Sdn Bhd as well as that of its directors not only in Malaysia but also internationally to ensure public funds have not been used for personal gains

After hastily announcing that the Police did not find any evidence of criminal breach of trust (CBT) by the directors of NFC as early as 1st December 2011, the Police has finally recommended to Attorney-General yesterday for them to be charged.

What has been blatantly obvious to Malaysians at large has taken the Police more than 4 months to complete their investigations.  It is clear from the NFC loan agreement made available yesterday that NFC has breached the terms of the loan agreement by utilising funds for purposes other than that approved.  It has already been widely proven and admitted that the directors of NFC had used monies from the loan to acquire properties in Kuala Lumpur and Singapore.

Following the confirmation by the police and to prevent the transfer of assets illegally obtained via alleged criminal breach of trust, we call upon the police to freeze any transfer or sale of assets owned by both the NFC and its directors.

We understand from the statement on the 14 January 2012 by the Prime Minister, Dato' Seri Najib Razak that the assets of the NFC have been frozen. However, from the exposes made to date, many of the assets acquired either directly or indirectly with NFC funds are made in the names of the individual directors.  These would include properties in Malaysia and Singapore, as well as companies in Singapore such as MeatWorks (Singapore) Pte Ltd.

To ensure that these assets are not disposed off at the expense of the tax-payers who funded the RM250 million soft-loan, the Police must now initiate actions to have these properties and assets frozen since they are recommending that the Directors be charged for CBT.

The failure of the police to do so, and should it be discovered later of such disposals, then the enforcement agencies will have to be taken to task for jeopardising public interest.  The police must take all necessary actions to ensure that the public funds would be recoverable in the event of a charge and conviction.

NFC Loan Agreement Exposed!

Posted: 26 Feb 2012 09:39 AM PST

Haven't NFC Defaulted on its RM250 Million Loan?

Posted: 26 Feb 2012 09:19 AM PST

NFC has defaulted on soft loan, claims MP
Kuek Ser Kuang Keng | 4:31PM Feb 25, 2012

The agreement between National Feedlot Corporation (NFC) and the government reveals that the company has defaulted on its RM250 million government soft loan for over a year, claimed Petaling Jaya MP Tony Pua.

According to the much-sought agreement leaked to Pua (right) by an unnamed source, NFC enjoys a three-year installment and interest-free grace period from the day it obtains the first drawdown.

Earlier on, NFC had said that the first drawdown of RM7 million was in January 2008.

Hence the repayment should begin as early as January 2011 when the three-year grace period ended, Pua pointed out.

"We are now in February 2012. Our understanding is that they have not paid a single sen. They are long beyond the grace period," he said.

However, NFC claimed that it will start servicing its loan repayment beginning this year as stipulated in its loan agreement.

The DAP national publicity secretary then took to task the Finance Ministry (MOF) for not doing anything to recover its loan and freeze the project as NFC had clearly defaulted on the loan.

No penalty

On the penalty stated in the agreement in the event of a default, he flashed a wry smile and pointed out that Clause 11 of the document states that NFC only needs to pay default interest on the outstanding loan at a non-compounding flat rate of two percent annual interest.

This is the same interest rate as for the whole loan.

"This is one of the worst loan agreements I have ever seen," said Pua, who was a CEO and founder of a Malaysian IT company listed in Singapore before venturing into politics.

During the press conference at the DAP's Kuala Lumpur national headquarters today, Pua distributed copies of the agreement to reporters.

The agreement was signed by NFC chairperson Mohamad Salleh Ismail and his son Wan Shahinur Izran who is also NFC director, and two senior MOF officials representing the government, on Dec 6, 2007.

Salleh is the husband of Women, Family and Community Development Minister Shahrizat Abdul Jalil who has been under tremendous pressure to resign from cabinet after the scandal exploded.

In a related development, the Bukit Aman Commercial Crime Investigation Department (CCID) today announced that the police have recommended to the attorney-general to charge several NFC directors for criminal breach of trust.

35-page NFC loan agreement
Source: http://www.malaysiakini.com/news/190260

National Feedlot Loan Agreement Prohibits Property Purchase

Posted: 25 Feb 2012 09:08 AM PST


Pua reveals NFC's controversial loan agreement
Kuek Ser Kuang Keng | 1:03PM Feb 25, 2012

Petaling Jaya MP Tony Pua today revealed the contents of the much-sought loan agreement between National Feedlot Corporation (NFC) and the government, affirming the perception that it was lopsided and the purchase of luxurious properties breached the agreement.

The 35-page document clearly states that the purpose of the RM250 million government soft loan at two percent annual interest is solely for the National Feedlot Center project.

"The Borrower shall use the Loan Facility to part finance the Project as described in the First Schedule of this Agreement," read Clause three of the document under the topic 'Purpose'.

Hence the earlier statements made by NFC directors that the loan can be used for property investment, said Pua, were "complete rubbish".

"The fund can only and strictly used to part finance and set up the center, nothing else," he said.
Clause 18.1 of the agreement under the topic "Particular Covenants", it was again stated that as long as the loan is still not repaid, NFC shall use the loan for the purpose of the project.

During the press conference at the DAP's Kuala Lumpur national headquarters today, Pua distributed copies of the agreement to reporters which he described as "one of the worst loan agreements I have ever seen".
He claimed that the document is genuine and provided by an unnamed source.

According to Pua, the parliamentary Public Accounts Committee (PAC) where he is a member, is supposed to disclose the agreement at the next meeting but its chairperson Azmi Khalid has yet to call for one after last November's.

Although the agreement contains provisions for the government to monitor NFC's operations, it was not fully utilised by both the Agriculture and Agro-Based Industry Ministry (MOA) and the Finance Ministry (MOF), claimed Pua.

The agreement requires the NFC to submit a project progress report before being allowed to withdraw funds from the special loan account.

The report has to be certified by an authorised technical committee comprising four representatives, one each from the MOA, the veterinary department, Universiti Putra Malaysia (UPM) and Universiti Kebangsaan Malaysia (UKM).

However, Pua noted that despite the Auditor-General's Report revealing that the project had failed to meet its target, NFC continued to draw from the loan.

"The Agriculture Ministry is equally culpable for the mess," he said.

At the same time, the MOF took no action although NFC is required to provide monthly bank statements of the special loan account to the ministry on a quarterly basis, detailing how the loan was used, Pua noted.

"Unless NFC submitted false reports... We don't know if they submitted false reports. The MOF has to verify the reports," said Pua, adding that MOF officials had told the PAC that no NFC report mentions the purchase of condominiums.

Apart from the ministries' failure to supervise the project, the agreement gives favourable conditions to NFC should there be a default by the company.

The agreement was signed by NFC chairperson Mohamad Salleh Ismail and his son, Wan Shahinur Izran, who is also NFC director, and two MOF officials representing Malaysian government, on Dec 6, 2007.

Salleh is the husband of Women, Family and Community Development Minister Shahrizat Abdul Jalil who has been under tremendous pressure to resign from cabinet after the scandal exposed.

In a related development, the Bukit Aman Commercial Crime Investigation Department (CCID) today announced that the police have recommended to the attorney-general to charge several NFC directors for criminal breach of trust.

35-page NFC loan agreement
Source: http://www.malaysiakini.com/news/190242 © 2012

BN fiddles with Budget Deficit

Posted: 19 Feb 2012 08:21 AM PST

When the 2012 Budget was presented in October 2011, the Prime Minister Dato' Seri Najib Razak had announced that the Federal Government will reduce the budget deficit from 5.4% in 2011 to 4.7% in 2012.  The figure is also reduced from a deficit of 5.6% in 2010 and 7.4% in 2009.

On the surface the reduction in deficit has been commendable despite it being still significantly higher than our medium term target of less than 3%.

However the Barisan Nasional (BN) Federal Government budget deficit figure is a complete sham, or in layman's term, "legalized accounting fraud".  Under pressure to reduce the Government's deficit to appease international investors and to demonstrate financial prudence, Najib's administration has chosen to deploy creative means to finance the Government's financial extravagance.

Taking the 2012 Budget as an example, if one were to parse through the hundreds of pages of expenditure allocation, he or she will be shocked that some of the big ticket expense items promised by the Federal Government is completely "unbudgeted" for.

Malaysia's single largest infrastructure project, the Klang Valley MRT which works have commenced and is expected to cost a record RM53 billion is not provided for in the 2012 Budget.  The first MRT line, the Sungai Buloh – Kajang line alone is expected to cost RM20 billion, and billions of ringgit of contracts have already been awarded.

The expenditure is not included in the budget because the project is expected to be funded from loans raised by Dana Infra, a Ministry of Finance (MoF) owned special purpose vehicle (SPV) and guaranteed by the Federal Government.

Similarly, Syarikat Prasarana Bhd, another wholly-owned MoF company has already awarded RM6.5 billion of contracts for the LRT Line Extension Projects since the end of last year with more expected to be awarded this year, and yet, none of these expenditure items were provided for in the 2012 Budget.

Furthermore, another wholly-owned subsidiary of the Government, Pembinaan BLT (PBLT) has been given RM10 billion federal government guaranteed financing to build 74 police stations which will subsequently be leased back to the Government.  Many of these stations will be built this year and next and yet again, none of these expenditure items are found in the 2011 or 2012 Budgets.

Because all these large ticket items have all been excluded from the Government's budget, Najib is able to claim false credit that his government has been prudent in managing expenditure and has been able to "reduce" its deficit from a high of 7.4% in 2009 to the projected 4.7% in 2012.

The only reason why the government has been able to "reduce" the deficit is because Government expenditure has been "externalized" to wholly or majority-owned Government agencies which is in turn not reflected in Malaysia's annual budget.  As a result, this form of "off-balance sheet" financing mechanism has been used with increasing size and frequency in recent years causing Malaysia's contingent liability or funds guaranteed by the Government to increase from RM84.3 billion in 2009 to RM96.9 billion in 2010.  This figure would have increased significantly beyond RM100 billion in 2011.

The Government is under pressure to spend more in part to support many of Barisan Nasional crony businesses who are not able to secure projects competitively, as well as to increase public investment to cope with the decline in private investment in the country.

If all of the "off-balance sheet" expenditures cited above and more which has not been accounted for, are taken into consideration in the Federal Budget, then the real budget deficit for 2012 will easily be in excess of 7%.  This creative manipulation of our federal budget is sheer legalized accounting fraud to present a false picture of financial competence and prudence.  The accelerated increase in size of our hidden debts, if unchecked, will sooner or later cause a massive shock to our financial system, not too different from what the Greeks are suffering from today.  When the shit hits the fan, Malaysians and our children will certainly be made to pay for it.
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