Unmasking the masquerade of probity
WORLDVIEW<br>Harun RashidPublished: Mar 25, 2001 9:21 PM | Updated: Jan 29, 2008 10:21 AM
In Malaysia there is a stock exchange. Shares in about 700 public companies are offered each trading day. The value of the shares fluctuates. At the moment the valuation tends to drift lower each day. This is the result of an imbalance between buyers and sellers.
In Malaysia there is a stock exchange. Shares in about 700 public companies are offered each trading day. The value of the shares fluctuates. At the moment the valuation tends to drift lower each day. This is the result of an imbalance between buyers and sellers.
On occasion it appears there are only sellers, and the market falls steeply. When the selling stops, the buying of a relatively few shares changes the mood. The market jumps to life.
The buyers are local savings and retirement funds whose investment activities are influenced by the minister of finance. He wears three hats. When he wears the finance minister's hat he controls the powerful public purse. When he wears the Umno treasurer's hat he is protecting the interests of the party in power. When he wears his own personal hat as a private businessman he is protecting his own interests.
It is difficult to determine which hat he is wearing at any given moment. In any modern country the situation would be forbidden for conflict of interest. Malaysia is not a modern country, and such behaviour is accepted as a matter of course.
In his personal affairs, the finance minister has partners of many years standing. When he wears the finance minister's hat and directs that large sums be paid to one of his business partners, there is an appearance of impropriety. He recently paid (wearing the finance minister's hat) to one partner an enormous sum for a controlling interest in the national airline.
The price is over twice what the open market was willing to pay. The excuse is that the airline is failing and needs to be rescued. He says the high price is necessary to wrest control from his partner, who was supervising the loss of over RM1 million per day.
The problem with this answer is that it fails the test of logic. A failing enterprise does not command a premium price. The government already holds what is known as a golden share in the airline, giving it effective management control. The government can do as it likes without any consideration of the shares. The finance minister thus looks to be rescuing himself and his partner in a difficult and losing proposition.
A comedy
In another recent transaction, the finance minister oversaw the transfer of money from a retirement fund under his influence to rescue a consortium of banks in the underwriting of an IPO. The direct recipient of the funds is another long-time business partner.
The finance minister pretends he is not a party to this transaction, but he cannot escape responsibility, as the explanation he offers is transparently false. The public was offered the shares, but when only 25 percent could be placed, the fund secretly accepted almost half of the shares, again at a grossly inflated price.
In Malaysia there is a pretense of probity. The pretense becomes more shabby by the hour, as even the government-controlled media now sees. The public only buys government mouthpiece newspapers for laughs, finding in them a form of comedy. The papers are seriously sold as truth, but the public knows shoddy goods, and the media is certainly peddling shoddy goods.
The editors have publicly announced their helplessness to defy the heavy hand of the government. They plead for release from half-truth and falsehood in the effort to mend falling circulation. It is too late. The pretense of probity has destroyed all media credibility.
The number of deaths in a recent incident cannot be reported in the mainstream media without public suspicion. Rumours abound. The government reacts by threatening prosecution of anyone who questions the facts as presented by the police.
The police have no credibility. Nothing could generate more public suspicion. The unwillingness to report even the most minor fact of daily life in Malaysia makes the media meaningless.
Candor lacking
The Malaysian press has not been allowed to acknowledge that the national airline endangered public safety through its imprudent fly-on-fumes practice for several years. The pilots complained from the first, but only the strong objections of London aviation authorities finally put a stop to this insanity. The passengers were blithely unaware. Only good weather prevented a tragedy. A free press would print the story.
The foreign minister of Malaysia has spoken this week in Geneva of human rights violations in Malaysia. He says these rights must be abridged in order to maintain stability. The same argument has been made by every despot. The oppressive laws are not amended, at least until the new generation assumes political power. In the meantime, investigative journalists probe to penetrate the pretense at probity.
HARUN RASHID is a scientist avidly interested in the application of Islamic principles in international affairs. The promotion of goodwill through civilisational dialogue motivates his writing. His Worldview column is a personal analysis of Malaysian affairs from a global perspective.
On occasion it appears there are only sellers, and the market falls steeply. When the selling stops, the buying of a relatively few shares changes the mood. The market jumps to life.
The buyers are local savings and retirement funds whose investment activities are influenced by the minister of finance. He wears three hats. When he wears the finance minister's hat he controls the powerful public purse. When he wears the Umno treasurer's hat he is protecting the interests of the party in power. When he wears his own personal hat as a private businessman he is protecting his own interests.
It is difficult to determine which hat he is wearing at any given moment. In any modern country the situation would be forbidden for conflict of interest. Malaysia is not a modern country, and such behaviour is accepted as a matter of course.
In his personal affairs, the finance minister has partners of many years standing. When he wears the finance minister's hat and directs that large sums be paid to one of his business partners, there is an appearance of impropriety. He recently paid (wearing the finance minister's hat) to one partner an enormous sum for a controlling interest in the national airline.
The price is over twice what the open market was willing to pay. The excuse is that the airline is failing and needs to be rescued. He says the high price is necessary to wrest control from his partner, who was supervising the loss of over RM1 million per day.
The problem with this answer is that it fails the test of logic. A failing enterprise does not command a premium price. The government already holds what is known as a golden share in the airline, giving it effective management control. The government can do as it likes without any consideration of the shares. The finance minister thus looks to be rescuing himself and his partner in a difficult and losing proposition.
A comedy
In another recent transaction, the finance minister oversaw the transfer of money from a retirement fund under his influence to rescue a consortium of banks in the underwriting of an IPO. The direct recipient of the funds is another long-time business partner.
The finance minister pretends he is not a party to this transaction, but he cannot escape responsibility, as the explanation he offers is transparently false. The public was offered the shares, but when only 25 percent could be placed, the fund secretly accepted almost half of the shares, again at a grossly inflated price.
In Malaysia there is a pretense of probity. The pretense becomes more shabby by the hour, as even the government-controlled media now sees. The public only buys government mouthpiece newspapers for laughs, finding in them a form of comedy. The papers are seriously sold as truth, but the public knows shoddy goods, and the media is certainly peddling shoddy goods.
The editors have publicly announced their helplessness to defy the heavy hand of the government. They plead for release from half-truth and falsehood in the effort to mend falling circulation. It is too late. The pretense of probity has destroyed all media credibility.
The number of deaths in a recent incident cannot be reported in the mainstream media without public suspicion. Rumours abound. The government reacts by threatening prosecution of anyone who questions the facts as presented by the police.
The police have no credibility. Nothing could generate more public suspicion. The unwillingness to report even the most minor fact of daily life in Malaysia makes the media meaningless.
Candor lacking
The Malaysian press has not been allowed to acknowledge that the national airline endangered public safety through its imprudent fly-on-fumes practice for several years. The pilots complained from the first, but only the strong objections of London aviation authorities finally put a stop to this insanity. The passengers were blithely unaware. Only good weather prevented a tragedy. A free press would print the story.
The foreign minister of Malaysia has spoken this week in Geneva of human rights violations in Malaysia. He says these rights must be abridged in order to maintain stability. The same argument has been made by every despot. The oppressive laws are not amended, at least until the new generation assumes political power. In the meantime, investigative journalists probe to penetrate the pretense at probity.
HARUN RASHID is a scientist avidly interested in the application of Islamic principles in international affairs. The promotion of goodwill through civilisational dialogue motivates his writing. His Worldview column is a personal analysis of Malaysian affairs from a global perspective.
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