The Incest Has Become An Orgy : GLCs And Government Agencies Facing Financial Threats?

 

For years and years the government's finances have gone through many beatings. The 1MDB scandal alone has cost us more than RM40 billion. Even a lembu condo scandal can cost us the taxpayer RM250 million. Duit sudah hilang.

 

We are reading now about the Offshore Patrol Vessel scandal that has already seen RM6 Billion just disappear. No ships were delivered for that RM6 billion. Now they have arrested TWO former CEOs of some defense contractors and have discovered some RM24 million stashed away in Singapore. 

Ok very good. But what happened to the RM6.0 billion? RM24 million is just peanuts. Who is hiding the balance RM6.0 Billion? Someone must have stolen the bulk of that money. Where is that RM6.0 billion?

(Singapore seems to be the top money laundering destination in this part of the world. The ex BNM governor's husband stashed RM65 million there, that former Minister stashed RM85 million in Singapore. Now these ex CEO stashed RM24 million. That is already RM174 million of our taxpayers funds stashed in Singapore. Have we recovered this RM174 million?)

 

Coming back to the SIX MISSING ships (the OPVs) what people do not realise is that they awarded another contract to China for another FOUR ships (costing about RM1.2 Billion) to replace the SIX missing ships.  Which have now been delivered by China in a record time of just THREE years. The FOUR replacement ships (LMS) are named  KD Keris, KD Sundang, KD Badik, KD Rencong to "replace" the other SIX missing ships. 

 

 

 

So we lost RM6 Billion for six ships that were not delivered. Then the government spent another RM1.2 Billion for another FOUR replacement ships (LMS or Littoral Mission Ships is just a bullshit name lah. The ships are large patrol vessels, with one cannon, no missiles.)  

 

So in total that is RM7.2 Billion of taxpayers money for six missing ships and four gunboats fitted with just one cannon each.

Just how much beating can the government system suffer before it collapses or crashes? 

When I say the government system I am referring to the ecosystem comprising of government agencies and the GLCs which are directly or indirectly involved in business and finance. Other than 1MDB, this would include the few pension funds, other government managed funds (pilgrims fund), the sovereign wealth funds, the unit trust people, the government owned banks (ie the GLC banks) etc. 

Also certain large bumiputra controlled companies which are intricately involved (for licenses, contracts, projects, funding, borrowings) in the same government ecosystem.

Ganesh Sahathevan has cobbled some facts and thoughts about the impact of the Genting Hong Kong financial debacle on our local banks here.  The numbers are all in the billions.

The other day The Edge newspaper did a good write up on that oil and gas company that is facing a major financial crisis.  The major shareholder (controlling 40%) is now that government managed unit trust. They "bailed out" that company using RM2.7 billion of public funds. Now that RM2.7 billion "bail out" has gone kaput (err...paper losses??)

But that company has over RM10.3 Billion in debt (current debt) borrowed also from some of the same GLC banks.  So that is another RM13 Billion of public funds !!  

So RM40b + RM6b + RM13b = RM59B either lost, missing or at risk. 

How much more losses can this ecosystem suffer before it crashes? Here is the threat to all of us - the GLC banks are also owned by the same government run pension funds, unit trusts, wealth funds etc. 

The incest has become an orgy. In Malay the terminology is 'sumbang mahram'. 

It is a real mess of the same pool of government run shareholders, the same pool of GLC bank lenders, the same pool of borrowers (including GLCs). And the human participants in this incest are also from the same pool. Two of the fellows who ran the banks became Finance Ministers. One wealth fund fellow now runs another fund. The Unit Trust CEO is now Chairman of something else.  It has been the same people re-assigned here and there. When one fellow messes up in one place he is given a Tan Sri and then elevated or re-appointed to another position elsewhere.

I think the system is now approaching collapse. Because this type of corrupt and incestuous destruction of tax payers and public funds by the BILLIONS OF RINGGIT just cannot be sustained.

There will be other repercussions as well. The Ringgit is now at RM4.20 to the US Dollar. If our GLC banks become "stressed' or the government runs short of cash there will be an impact on the economy.  (I know, quite an understatement).

Dont say I did not warn you. 

Get back that 1MDB money quickly. Retrace that RM6 billion for those SIX ships. Bring back that RM150 million from Singapore. Recover that RM250 million lembu condo money.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.