MAS probes graft claims in cargo unit, boss put on leave

By Jahabar Sadiq
Editor

December 21, 2011

KUALA LUMPUR, Dec 21 — Loss-making Malaysia Airlines (MAS) is investigating allegations of kickbacks in its cargo unit which has led to MAS Airlines Cargo (MASkargo) managing director Shahari Sulaiman to go on leave since early last month, sources said.

The Malaysian Insider understands that an internal investigation report has been sent to the MAS board although the unprofitable flag carrier has not lodged a police report over the issue.

“It is related to kickbacks in MASkargo and the board already has a report on the matter,” a source told The Malaysian Insider.

The source added new managing director Ahmad Jauhari Yahya and the top management have been going through the books for all divisions in the national carrier that has posted losses of some RM1.2 billion in the three quarters of the current financial year. MAS is not expected to make profits until 2013 despite a new business recovery plan.

“They are cleaning up the company. This is just the start,” he added.

However, it is not clear why MAS has not lodged a police report over the alleged kickbacks in MASkargo, which made a record pre-tax profit of RM142 million in 2010.

The Business Times had reported that Shahari has been away since early November 2011 after fresh allegations about problems in the cargo unit.

The new MAS board had begun looking into all aspects of the airline operations after a share swap between the national carrier and Asia’s biggest budget carrier, AirAsia in early August. It is understood that investigations started and a domestic inquiry was done but fresh allegations revived the probe.

MAS had told Business Times early this month that “Encik Shahari Sulaiman, managing director of Malaysia Airlines subsidiary MASkargo, is currently on leave.

“In his absence Encik Mohd Yunus Idris, senior vice president Global Sales & Government Affairs MASkargo, is overseeing thedaily operations of the subsidiary,” it said in response to queries on the matter.

Shahari was named managing director of the profitable division in September 1 2007 replacing Datuk Ong Jyh Jong. Before that, Shahari was the general manager of cargo operations for MASkargo. Under Shahari’s management, MASkargo won the Best Air Cargo Carrier in Asia title at the 23rd annual Asian Freight and Supply Chain Awards 2009 in Hong Kong.

He also initiated upgrades for the Material Handling Cargo System used in the warehouse complex in KLIA, to ensure smoother handling of cargo and an increase in capacity from 650,000 tonnes to one million tonnes per annum.

MAS unveiled a 44-page business plan early this month that focuses on its core premium business by spinning off ancillary activities including the cargo unit, suspending loss-making services and through better cost management. It announced the suspension of eight routes last week.