Frankly Speaking

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Put it to the voteThe Kedah government has been in the news lately over the possibility that more state assembly members from the Pakatan Rakyat (PR) coalition may defect. The situation is tenuous because Barisan Nasional (BN) needs just three more assembly members on its side to form the state government.

Rather than maintain a precarious rule, Menteri Besar Datuk Seri Azizan Abdul Razak has taken the stand that if one more PR representative quits he will call for fresh elections. That should be the path to take, because it is important for leaders in a democracy to get a fresh mandate from the people before they occupy public office.

Political parties on both sides of the divide need to reconcile themselves to the idea that, after all these decades, a two-party system is taking shape in Malaysia. With this development must come the acceptance of a healthy contest among political parties that espouse differing ideologies and different positions on a whole range of issues, including economic policy, social philosophy and development priorities.

It is time that our political parties learn to deal with our plurality in a mature manner and accept the people’s will until the next election comes around. Let us not have a repeat of the Perak State Assembly fiasco which has not stopped reverberating through the court system to this day, more than one year after the PR government was toppled.

The grand words we may use to describe our ambitions for developed country status will carry little weight unless we take pains to preserve the basic pillars of democracy, including fundamental freedoms, the principle of separation of powers, transparency and accountability and rule of law.The journey may appear daunting at this stage, but there are no short cuts.
Corporate exercise must be whiter than white  Last week, Petra Perdana Bhd proposed a private placement of up 10% of its share capital to shareholders to be identified at a later date. It came together with a proposed renounceable rights issue with free detachable warrants as a sweetener.

The proposals are to raise funds to facilitate the financing of new vessels, repay borrowings and to be used as working capital.

Petra Perdana added that the private placement is likely to be completed by the second quarter of the year, prior to the company’s next annual general meeting, while the rights issue is slated to be concluded by year-end.  

While the company has specifically stated that placees would not be related to any of the directors, major shareholders and/or persons connected to them directly or indirectly, the exercise should be conducted on a whiter-than-white basis.

This is because it was not too long ago that Petra Perdana had an ugly boardroom tussle resulting in the removal of certain directors who are also substantial shareholders. 

While there have been news reports that the placement would be made to an East Malaysian shipbuilder, the entire process has to be as transparent as it can be made. Effectively, it should not be viewed as an exercise of any one of the warring factions increasing their shareholding in the company.

Without doubt, the authorities will scrutinise the proposals. But it would be better if the management explains why the placement is taking place now and if it can be postponed to another time when things are more settled among the company’s shareholders.
Where is the open tender?Increasingly land belonging to the federal government is being privatised or sold to government-linked organisations. First, the government announced that the Employees Provident Fund (EPF) will be mandated to develop the Rubber Research Institute’s land in Sungai Buloh.

Now, we hear that the old airport in Sungai Besi, that currently houses a Royal Malaysian Air Force (RMAF) base, will be given to a consortium comprising 1 Malaysia Development Bhd, Lembaga Tabung Angkatan Tentera (LTAT) and the investment arm of the Qatar government.

Although the land is effectively given to government-related agencies, it is not what Prime Minister Datuk Seri Najib Razak promised when he assumed the position of finance minister more than a year ago.

In one of his first statements, he had said that land belonging to the federal government would be one of the new sources of income for the government. The development of the land would be done in an open and transparent manner, meaning tendering it to the highest bidder.

In fact, this is how governments in other countries maximise the value of their land. In Singapore for instance, the government sets the overall-plan. The detailing is so fine that it goes up to determining the plot ratio.

Then bids are invited from the private sector. The highest bid gets the project. That way the development is controlled and the government gets maximum revenue. The key to the entire scheme is the government determining exactly how the land should be developed and its density.That way the estimated profit returns can be gauged, enabling the government to ensure they do not give away too much to the private developers.

By giving away the land to government-linked agencies, the government in some ways has left the development to the related agencies. The argument is that it will enable these agencies to play a direct role in the economy.

But it still does not resolve the question of maximising revenue from land development for the government.
This article appeared in Corporate page of The Edge Malaysia, Issue 806, May 17-23, 2010