Khairy hits back: PKR's load of bull

Over the past couple of days the PKR machinery has gone into overdrive to paint a picture of power abuse surrounding the National Feedlot Corporation (NFC).

I have systematically engaged, both in Parliament and through my blog, many of the accusations and insinuations. I took care to be clear and detailed about why this picture the likes of Saifuddin Nasution and PKR director of strategy, Rafizi Ramli, are keen to paint does not stand the test of scrutiny.

Through a comprehensive examination of the facts, each allegation has been conclusively rebutted and exposed as founded on a fatal combination of shoddy mathematics, cherry-picked figures and outright lies.

I will subject Rafizi’s latest attempt to flog the dead horse to the same process below.

Something that has become terribly clear to me is that throughout this debate, Rafizi has shown himself to be disingenuous, dishonest and in the habit of shifting the goalposts the very moment he realises a line of attack is broken down. Let me explain why.

First, he alleged that NFC was given 5,000 acres of land in Gemas, Negeri Sembilan, for free. As I have stated, this is categorically false – NFC was only offered 1,500 acres on lease by the Negeri Sembilan Menteri Besar Incorporated.

Two major errors: on the acreage of the land in question and the fact that it is on lease, not handed out for free. You will notice that he makes no mention of this in his Malaysiakini piece on Nov 10, although there is still the Nov 1 blog entry with the words ‘1 lembu = 5 ekar’. Great math.

Secondly, he was also absolutely caught out on the allegation that – and I quote him here – “the (NFC) beef is only being supplied to luxurious restaurant chains owned by Shahrizat’s family called Meatworks, Senor Santos and Brawns in Singapore”.

S’pore prohibits M’sian beef

More about where NFC beef is supplied to later. But for the moment, I reiterate what I have said repeatedly: NFC simply could not have supplied meat to Senor Santos and Brawns because the Singapore government prohibits the import of raw beef from Peninsular Malaysia due to fear of foot and mouth disease.

When I directed this to his attention on Twitter, Rafizi (left), perhaps excitably, sought to correct me by posting a link to the Singaporean Agri-food and Veterinary Authority website purportedly showing that Malaysia is amongst the countries approved to export beef to the Republic.

What he failed to do – and I suspect this was more out of incompetence more than anything else – was to scroll down to the footnote on the list, which clearly shows that Malaysia may only export processed, and not raw meat, which relates to NFC. Again, you will not see this allegation in his more recent remarks.

Incidentally, in his desperation he did try to deny ever saying NFC sold beef to the restaurants in Singapore. (This was his tweet on Nov 8: “I never said NFC sold its raw meat to Senor Santos/Brawn in Singapore”). You would’ve thought a strategy director knows that direct quotes are quite easily searchable on the Internet. He was unceremoniously exposed as a liar within minutes. That jig too, was up.

He then quickly shifted to the question of the RM250 million government loan to NFC. On this matter, he was wrong to say that all RM250 million had been spent or disbursed; to date, the total drawdown available for use by NFC is RM181 million, consistent with the reply given by the prime minister, the minister of agriculture and agro-based industries, and verified by the Auditor-General's report.

The remainder of the loan is still in the Special Loan Account (SLA) in which the loan was placed initially or put into fix deposit instruments in order to gain returns while waiting for further operational drawdowns from NFC. I have written about this process extensively on my blog.

Rafizi then tried to kick up a storm over the disbursement of the RM81.2 million to a related company of NFC, the National Livestock & Meat Corporation Sdn Bhd (NLMC). But there is no fuss to be made. Such disbursements are reasonable, considering that NLMC is tasked to operate the abattoir, develop the supply chain and market for NFC’s products, as well as purchase cattle from satellite farms.

This tie in with the feedlot project’s broad overall goals, spanning from infrastructure, processing to distribution and marketing. In PKR's original allegation, they characterised NLMC as only handling marketing hence queried why that would require such a large sum of money. I have explained previously and once again here that NLMC is involvement spans the entire supply chain from processing to marketing. Another allegation explained away by fact and reason.

RFC discounts already explained

Shifting his sights to another NFC’s sister company, the Real Food Company (RFC), Rafizi questioned why RFC was given pricing discounts totalling RM3 million – insidiously employing the term ‘subsidy’ for a particular effect. I provided a straightforward explanation for that discount in my earlier blog entry.

RFC is the sole distributor of NFC meat; the discount allowed the final product to be sold to wholesalers, wet markets and hypermarkets at competitive prices, which most will recognise as a fairly common aspect of any market entry strategy – the discount was not given to engineer a larger profit margin for RFC but rather passed through to retailers and consumers.

When demand is established and economies of scale attained, prices can be normalised. And in any case, is it not the consumers who ultimately benefits through that discount? Where’s the beef?

But of course, Rafizi only banged on this just so he could link it to his earlier remark about NFC supplying only to luxurious restaurants owned by the Minister's family. In his recent article, he wrote, “NFC was entitled to subsidise the operations of Meatworks through a scheme that cost taxpayers nearly RM3 million in 2009”. (Note again the conspicuous absence of the two restaurants in Singapore after being exposed on that allegation).

This is another lie, because alongside the likes of Carrefour, Giant and numerous wet markets, NFC beef is also supplied to restaurants like Jake’s Charbroil Steak, Tony Roma’s, Dome Café, Smokin Salma and Jarrod & Rawlins – all of which enjoy the benefits of the discount as Meatworks does.

Sure, these are up-market establishments, but premium meat accounts for only five percent of a cow carcass anyway. Most of the rest of the cow are sold in hypermarkets and wet markets and also enjoy this discount that Rafizi so desperately wants to link only to Meatworks. So this talk of “a subsidy for the elites who have expensive taste buds” is absolute nonsense on multiple levels.

Having been proven wrong on every single point despite jumping around from one baseless accusation to another, Rafizi’s final throw of the dice was to press on over this same issue of disbursements and discounts, but without at all challenging the reasons I offered.

SLA not escrow

Running out of arguments that he can cook up, he accused me of saying that the SLA was an “escrow account but not an escrow account” – even managing to slip in a comment about how he “had spent many years as a chartered accountant and an auditor”.

I’m not too sure how much good those years did him in terms of understanding the simplest of analogies – we already know from above they didn’t help much in building meticulousness or attention to detail.

I never said the SLA was an escrow account – it is what it is, a Special Loan Account, not an escrow account. In my press conference on 9 November, I merely drew a comparison to an escrow account to illustrate the strict processes involved in any drawdown from the SLA, which requires approval from several parties, in this case both the Ministry of Agriculture and the Ministry of Finance.

Sure, there is no independent third party disbursing money as per an escrow account, but the principle I was establishing is that monies in the SLA cannot be freely accessed by NFC without the approval of two government ministries. Surely that reference to the principles of trust and accountability also found in an escrow arrangement is not too difficult to comprehend?

Despite his lies, deceit and incompetence, Rafizi is right about one thing: “it’s not about the cows”. It is about his and PKR’s politicisation of the NFC issue, simply because it is linked to a minister’s family.

Make no bones about it, I fully expect the opposition to play a role in pursuing the truth, especially when there is suspicion of wrongdoing. But once facts are provided that do not support that suspicion, the honourable thing is not to demand for the minister’s resignation, but to accept that you are wrong and move on.

By the way, Rafizi closed his latest article by saying that this debate “is not about technicalities”. I disagree. In many ways, it is precisely about technicalities, details and facts – only through rigorous examination and reasoned argument can one decide whether to make the charge of abuse of power. But perhaps you can tell that someone is out of his depth when he relents – no longer wanting to engage you on facts and details, appealing instead to unsubstantiated sentiment.

P.S. You're probably wondering where the explanation for the condominium purchase is since that's the latest salvo from PKR. Admittedly its a great issue to spin. It is easily distilled to a sensational punch line: "Feedlot uses government money to buy luxury condo". People who are prejudiced will be attracted to PKR's cheap shot without wanting to hear an explanation.

Anyway, the explanation is provided separately. It is in Bahasa Malaysia and separate from my reply to Rafizi above for reasons of consistency. Rafizi's last article, which the above is a response to, first appeared in English and did not refer to the apartment purchase. Hence my reply above is in English and excludes an explanation for that.

The apartment purchase was raised by YB Saifuddin Nasution in a press conference at Parliament yesterday. So, to be consistent, I have responded to that in Bahasa Malaysia.

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KHAIRY JAMALUDDIN is the Rembau MP and the Umno Youth chief