Monday, January 3, 2011

The Untouchables at Khazanah, TM and Axiata-Part 1

Posted by sakmongkol AK47
(Comments in WHITE colour are by sakmongkol AK47)

The Untouchables at Khazanah, TM and Axiata-Part 1

The version of the story does NOT match the internal notes we have. Are we going to see similar statements coming from Khazanah, TM and Axiata?
 From October 2004 to February 2006, Alcatel bribed government officials in Malaysia to obtain confidential information relating to a public tender that Alcatel ultimately won, the result of which yielded a telecommunications contract valued at approximately US$85 million. It was also reported that the TM employees who received bribes were "foreign officials" within the meaning of the US Foreign Corrupt Practices Act and "were in a significant position to influence the policy decisions Telekom Malaysia made." It added the Basel-based Alcatel Standard made significant lump-sum payments through US bank accounts to two consultants labeled "Malaysian Consultant A" and "Malaysian Consultant B", purportedly for market research. "Alcatel Standard paid US$200,000 to Malaysian Consultant A in 2005 for a series of 'market reports' describing conditions in the Malaysian telecommunications market. Similarly, Alcatel Standard paid US$500,000 to Malaysian Consultant B in 2005 for a 'strategic intelligence report'. "However, the work product these consultants prepared could not justify the size of Alcatel Standard's payments. In fact, Malaysian Consultant A and Malaysian Consultant B did not appear to render any legitimate services to Alcatel Malaysia in connection with these

In other words the two buggers who received USD 700,000 conned Alcatel into paying them the money. The giver has admitted their crime. They admitted they bribed. They have been fined and legally prosecuted. See here? Unless a charge is related to a crime, then the charges stick. Otherwise you waste public money and time. As a passing mention- we charged Khir Toyo for securing a piece of land at a much cheaper price that when it was first obtained? Stupidity is not a crime. If it is, then we should castrate the seller. Pull out all of Khir's teeth. Court order him from eating tempe. Where is the crime? That charge must relate to a crime.
Same thing with Sime Darby. Why didn't it just report to the police? Or to MACC? Unless the charges are related to some crime, the charges will just be a wipe-out.
Unless we have a different set of laws which say what the two guys did wasn't a crime, we will actually see the statement at the beginning of this article. It will be a committee hastily assembled to cover the backsides of many people. People from Khazanah, people from TM then, people from MOF even.
So, it is very perplexing, that we are only starting with an investigative committee. It would appear that what TM and Axiata are doing is to assemble a team to cover the misdeeds of some people. TM or Axiata shouldn't waste their time and money (whose money?) to whitewash this episode and should just make a police report about a crime having been committed.
Telekom Malaysia Bhd (TM) has set up a board sub-committee to investigate the Alcatel Lucent SA (ALU) kickbacks scandal which implicates two Malaysian officials in a US$85 million (RM263.5 million) contract given out by the local telecoms giant. Regional mobile phone service provider Axiata Bhd has also promised to investigate the bribery case as it occurred in 2006 when it was a TM division known as Telekom Malaysia International (TMI). Both public-listed companies, which share a common shareholder —sovereign wealth fund Khazanah Nasional Berhad — announced their respective investigations in filings to Bursa Malaysia last night.
Bursa Malaysia? Wasn't this the organization headed by a former Shell Legal Manager who has actually once said, that anything sanctioned by Khazanah should be treated as gospel truth? That those much admired denizens at Khazanah are the Malaysian version of The Untouchables?
Let's go beyond the obvious. Any decision on capex expenditures by any of the Khazanah owned companies must have been referred to Khazanah. Azman Mokhtar who swears by the various coloured manuals that Khazanah operates by, will never allow any capex expenditures passed without notice. He is after all an honorable man. He has brought a new culture of managing Khazanah. His style is cheese compared to chalk of previous stewards of Khazanah.
It's a new age Khazanah that acquires shares and sell down in the open market. It doesn't want to sell to PNB? Isn't that strategic? To me, what Khazanah is doing is also similar to the typical BUmiputera who gets shares and then cash out. Same sting operations. Khazanah is then as rotten as those Bumis who got shares and sold RM52 billion of the 54 which were issued to them under NEP. It's a new age Khazanah that is also debt ridden and issues sukuk and bonds here and there.
As to CAPEX spending especially if they are huge decisions on who to appoint as vendors must also be made within the full knowledge of Khazanah.
When TM got the license to operate the 3G services, it carried out tender exercises to secure the best vendors. Vendors must have been evaluated in terms of acceptability, track record and technical reputability. Hence, when TM called for tenders to supply them with the equipment, many were invited including those with lesser track record such as Huawei of China. Well known players such as Erickson, Nokia were also invited.
In the first phase of installing the 3G services Huawei of China appeared to be a favorite vendor. The appointment of Huawei as the vendor for the Klang Valley was pushed hard by several directors of TM. It was almost accepted but for the tenacity of some people who insisted that Huawei lacked a track record. The solution offered by Huawei was accepted by only one or two countries at that time. On the other hand the solutions offered by other well-known and tried vendors such as Nokia and Erickson were applied in many more countries. As a compromise, it was decided that Nokia would be appointed vendor for the Klang Valley and Huawei can be used to test its technical capabilities in peripheral areas such as Penang and Johor.
To recap: in phase one which is base period, Nokia and Huawei were the vendors.
We come to the second phase. When time came for expanding the 3G services, following the more or less compromised approach at the first phase, the same protocols were followed. Huawei and Nokia and others with proven track records were invited to bid for tenders for the expansion of the 3G services.
Read carefully this. When everyone of the solutions providers had been called, Azman Mokhtar received a gentle nudge from someone in MOF to " tolong Alcatel kalau boleh". This someone from MOF (remember during this time, MOF has MOF1 and MOF2) must have been a persuasive nudger; because Azman MOkhtar interpreted that tolong kalau boleh tolong as mesti tolong.
But Azman Mohtar is an honorable man. He swears by the yellow book, green book and what books.

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