Hundreds of billions 'hijacked' from Petronas: Why is Najib keeping silent?

Petronas is one of those mighty companies that are destined to turn in a profit every other year. It has total monopoly over all petroleum activities in Malaysia and suffice to say, Malaysia has benefitted since its incorporation via the Petroleum Development Act 1974.

Yet it is also a company shrouded in mystery. It is 100% state-owned and there is no intention, as yet, to privatise it. Thus, all profits are retained by the state, which in this case is Malaysia. But is that really the case?

"Since 1974 to 2010, Petronas reports show it has made profits totalling RM700 billion. Now, this is a joke. For Petronas to make so little money over such a long period of 36 years, it is an insult to the intelligence. Then when you compare against the WikiLeaks disclosure that Petronas is the 13th most profitable company in the world, it becomes even more impossible and you realize how mind-boggling the corruption really is," PKR vice president Chua Jui Meng told Malaysia Chronicle.

So, have all of Petronas' profits been duly channelled back to the state? If not, who has hijacked the money halfway, so to speak? The answer to the questions sparked by Jui Meng’s statement rests with the Prime Minister. No, Najib Razak cannot shirk this responsibility.

Section 3(2) of the Petroleum Development Act 1974 states : (2) The Corporation shall be subject to the control and direction of the Prime Minister who from time to time issue such direction as he may deem fit.

Key questions that Najib must address

What Section 32(2) means is that the CEO of Petronas is effectively the Prime Minister and in this day and age, that means Najib Razak. Being the vested power of the executive, the Prime Minister is assured of control over Petronas by this Act. Thus, both in truth and in effect, he is the person who decides or is responsible for decisions on all petroleum dealings and he certainly has a lot to answer for.

The first and most important question of all for Najib to answer and for the whole of Malaysia to get a reply on - is it true that 80% of the oil produced by Petronas is not sold directly to the world market but is channelled through six 'option holders' who obtain the supply from Petronas at below market prices?

If it is true, then these option holders are the ones reaping the benefits, especially from the oil price hikes. And this brings us to the second question, who are these option holders, are they the same coterie of cronies that fawn over ex-premier Mahathir Mohamad?

Third question: why was such a system set up when it clearly disadvantages the country and Petronas? Who proposed it and who approved it?

Fourth question and immediate action. What is Najib going to do about it? How is he going to stop the daylight robbery and re-direct the gravy train back to our shores?

Royal Commission of Inquiry

There are no two ways around this. Najib must answer these questions because it involves the llivelihood and welfare of all citizens especially the poor and disadvantaged. He cannot pretend that there is no basis for such suspicion, hence there is no need for him to answer. The figures just don't jive and the Pakatan Rakyat opposition must push for a Royal Commission of Inquiry into the books of Petronas if Najib refuses to lift the veil.

The global recession is due to hit our shores and Malaysians will suffer tremendously. Long and medium terms plans are not swift enough to yield the solutions needed to transform the economy. Stopping the diversion of Petronas' profits is not only one quick-fix but something that must be done before national wealth is plundered to the bone and future generations deprived of their rightful propserity.

If appropriate action is taken swiftly, billions of ringgit can flow back into the Malaysian system, alleviating pressure on the government and enabling it to farm out more aid to the lower-income groups who are suffering from crushing inflation and incomprehensible price hikes.

Time to lift the veil

Section 6(1) of the Petroleum Development Act 1974 gives the Prime Minister full authority in determining downstream operations.

Section 6(1) states: Notwithstanding the provisions of any other written law, no business of processing or refining of petroleum or manufacturing of petro-chemical products from petroleum, may be carried out by any person other than PETRONAS unless there is in respect of any such business a permission given by the Prime Minister.

And the nail in the coffin comes from Section 7 - The Prime Minister may make regulations for the purpose of carrying into effect the provisions of this Act and, without prejudice to the generality of the foregoing, such regulations may, in particular, provide for— (a) the conduct of or the carrying on of— (i) any business or service relating to the exploration, exploitation, winning or obtaining of petroleum; (ii) any business involving the manufacture and supply of equipment used in the petroleum industry; (iii) downstream activities and development relating to petroleum; (b) the marketing and distribution of petroleum and its products; (c) penalties in the form of a fine not exceeding one hundred thousand ringgit or imprisonment not exceeding five years or both for breach of any of the regulations and for noncompliance with any term or condition of any licence, permission or approval issued or granted under the regulations; (d) the forfeiture of anything used or intended to be used in the commission of any such breach or non-compliance.

It is crystal clear that through the Petroleum Development Act 1974, the prime minister is in full control of ALL petroleum-based business operations in Malaysia. From the extraction and all the way down to the selling of petroleum based products.

Yet, almost everything about Petronas is deemed a ‘state secret’. Due to the Act, it is a simple matter for the government to classify anything directly related to Petronas as 'secret' even-though as a state owned corporation, Petronas owes the people of Malaysia a full account of its profits and dealings.

Noose is closing in, there is no escape

It is telling that BN parliamentarians from MCA's Chua Soi Lek to Gerakan's Koh Tsu Koon have never dared to raise issues pertaining to this - why? Is it because the head of Petronas is the Prime Minister and the Prime Minister is the leader of the BN parliamentarians? Would the BN parliamentarians dare question their boss?

There is no reason for Petronas to be secretive with its profits nor to hide its annual reports under a veil of secrecy. Unless, someone with power is deliberately hiding something from the public eye. Whoever that person and his cohorts may be, the Prime Minister of the day still has full authority to disclose all.

Najib cannot escape giving the nation these crucially needed answers.

Indeed, as a petroleum producing country, Malaysia could have provided free petroleum to its people or at least cheap petrol like Venezuala or Brunei. With such a wealth of a resource, Malaysia could have achieved a ‘high-income nation’ status much earlier in its history. With more than 30 over years of oil production under its belt, Malaysia is more than able to qualify as a developed nation, which is mostly quantified by income per capita considerations.

If only the money had not been hijacked!

The choice is now with the current Prime Minister. Come clean, seek forgiveness from the people and help to rebuild the country before it is too late. Or continue to participate in the Umno old-boys-club and enjoy a huge slice of the corruption pie, whilst the people sweat and toil for basic necessities.

Malaysia Chronicle