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SET MAS FREE FROM CRONIES, CONSULTANTS AND GREEDY BANKERS

May 9, 2012

PAKATAN RAKYAT CALLS ON THE GOVERNMENT TO DISCLOSE THE FEES PAID TO CIMB AND OTHER CONSULTANTS AND ADVISERS IN PURSUIT OF THE POORLY THOUGHT OUT MAS-AIR ASIA “COLLABORATION”

After 8 months and enormous damage to MAS and Firefly, the government has finally made a U-turn on the Malaysian Airline System Bhd (MAS) and Air Asia Bhd share swap exercise. What began as much touted brainchild of the Prime Minister has come to an unceremonious end, especially for an ailing MAS.

Many sensible Malaysians had strongly opposed this exercise from the outset. Government-linked corporations (GLCs) Khazanah and CIMB are responsible for this ill-thought out scheme that brought previously fierce competitor Tan Sri Tony Fernandez into the fold of MAS to ‘collaborate’ to the loss of thousands of Malaysians striving to earn a living and struggling for a better life.

It is an acknowledged fact that successful airlines must have extensive flight networks in Asia as Asian economies continue to grow faster than the rest of the world, whilst building good partnerships globally. Air-Asia’s success was attributed to executing good penetration strategies in these markets such as providing connectivity in major non-tradition routes in China, India, Indonesia, Thailand and Vietnam.

This merger and the presence of Air-Asia’s shareholders on the Board of Directors had invariably prevented MAS from expanding into these fast growing markets/territories and a clear case of a conflict of interest.

This exercise subsequently resulted in fewer flights, less travel options and higher ticket prices for Malaysians. MAS low-cost subsidiary Firefly was transformed into a full-service short-haul carrier and also ceased its jet operations to Sabah and Sarawak. Parliament has been told that thousands of Johoreans have been frustrated by flight cancellations.

Fewer flights and higher ticket prices do not just inconvenience travellers. It is bad for the entire economy. Not-for-profit research institute Research for Social Advancement (REFSA) has pointed out that:

1. Fewer flights means less work for airline crew and airport ground personnel. Which leads to less employment and smaller incomes and less spending power;

2. Fewer travellers also means less income and employment opportunities for taxis, hotels, cafés, hawkers and all the businesses that provide the services that travellers need;

3. Less tangible, but in the longer-run, just as importantly, high air-fares and fewer flights means fewer opportunities for people to meet, collaborate, innovate and generate economic activity. Especially hard-hit are our fellow Malaysians in Sabah and Sarawak. For example, the Sandakan-Kuala Lumpur route is now a monopoly by Air Asia .

Where there are losers, there are also winners. In this case, the winners are Air Asia, bankers and consultants. Air Asia, which previously faced competition from Firefly, is now the sole player in the domestic low-cost segment.

Khazanah likely helped this along by masterminding the hasty departure of Firefly’s respected managing director Datuk Eddy Leong in November last year. He left abruptly with just over two weeks notice to join destination Resorts and Hotels, a unit of Khazanah.

MAS’ woes are further compounded with the recent nod by Singapore for AirAsia to start a hub in the island republic soon, allowing AirAsia to expand its network in the ever growing regional low-cost market segment.
Clearly, MAS’ loss is the GLC CIMB’s and other financiers gain. CIMB must also have earned hefty consultancy fees running into millions of ringgit. We shall be asking in parliament the total amount of fees and commissions paid to bankers, consultants and advisers in the pursuit of this extremely ill-conceived exercise.

MAS had been at the mercy of cronies and consultants for too long. Our once proud national airline has lost so much altitude since the entry of Tajudin Ramli engineered by then prime minister Dr Mahathir. Subsequently, the Widespread Asset Unbundling (WAU) exercise in 2002, the entry of Idris Jala and his Business Turnaround Plan in 2006 and this latest collaboration agreement have all failed to restore the fortunes of our national airline. In fact, the situation is worse.

Khazanah Nasional, being the major shareholder of MAS, must take responsibility for this mess. For a start, we call upon Tan Sri Azman Mokhtar and Mohammed Rashdan Yusof (better known as Danny Rashdan) of Khazanah Nasional to disengage themselves from MAS before they inflict further damage. Their earlier idea of the WAU exercise for which they were handsomely paid, didn’t actually turn-around MAS.

Ten years later, Khazanah Nasional enters into this terrible share swap arrangement to save MAS. In the process, Danny Rashdan, who is also now a Khazanah director, was appointed to MAS’ board. Standard and Poor’s aviation analyst Shukor Yusof said, “MAS is still in a dismal position, probably even worse in terms of staff morale ”. This view is widely shared by many aviation experts.

The government must make its position clear. MAS must be stewarded by a professional board, and run by professional managers with operating experience. Most importantly, there will be no further bail outs by the government. No more taxpayer money must be wasted, especially on consultants and bankers.

All stakeholders must work together for the betterment of the airline and our country.

ISSUED ON BEHALF OF PAKATAN RAKYAT SECRETARIAT
By party representatives:

YB LIEW CHIN TONG, MP FOR BUKIT BENDERA
Democratic Action Party

YB NURUL IZZAH ANWAR, MP FOR LEMBAH PANTAI
Parti Keadilan Rakyat

YB DR. DZULKEFLY AHMAD, MP FOR KUALA SELANGOR
Parti Islam SeMalaysia

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3 Comments leave one →
  1. sputjam permalink
    May 9, 2012 2:46 am

    If MAS suffers so much, just imagine how much money the cronies and consultants have gained from Petronas. Due to its size and revenue, any losses in Petronas is not reverberated like it did in MAS. Even a cheating case involving USD700mil in its subsidiary Petco did not even cause a blip in Petronas. Instead of taking criminal action against its staffs, petronas took civil action in Singapore and only one executive was implicated for accepting RM2 mil in bribes.

  2. Anak Malaysia permalink
    May 9, 2012 3:38 pm

    Salam Dr,

    Kalaulah yang diberi amanah ini berfikiran macam Tuan Guru Nik Aziz, nescaya tak akan ada masaalah besar berlaku, bahkan MAS Airline akan menjadi lebih maju dan lebih maju dari Singapore Airline.

    Pokok pangkalnya senang : hati dan iman yang bersih jauh dari sifat tamak haloba dan rasuah. Tidak ada dengki dan khianat.

    Yang susah akhirnya RAKYAT yang menanggung.

    Gajah sama Gajah berperang, Pelanduk mati ditengah.

  3. May 10, 2012 3:29 pm

    consultants and probably a plethora of other so-called ‘relevant’ bodies/organizations must have been used pre-swap to plan and implement the process through, that fact is a no-brainer. so, yes, please pakatan mp’s, query who and how much each was paid fees for that exercise. we are getting impatient to know.
    however, we are also itching to know: who and how much each is paid or going to be paid, for undertaking the reversal process??? although they announced that the respective shares themselves are gonna be returned as per original price and ratio thus conserving from any cost difference, but all these are not achieved simply by a crack of the magic wand! certainly man-hours are involved, heaps of administrative work required, the same set of original consultants engaged. dont tell us the reversal costs us nothing?

    bongkar bongkar bongkar!

    -average joe-
    klakka-la.blogspot: DON’T HAVE A COW = TAKDE LEMBU?

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