NEP and the Chinese success – the UMNO connection ?

Posted on August 15, 2010

0


From Zaid Ibrahim blog : The success stories  of the Chinese under NEP  are plentiful and are well known. NEP for this purpose means hugely lucrative patronage  preference system. As the Prime Minister’s brother Nazir Razak himself says, the NEP has become bastardised. What he doesn’t say explicitly is that the NEP, which was set up with noble aims of eradicating poverty irrespective of race, has become a system that is opaque, corrupt,  non-accountable and highly secretive.

Through this system which was corrupted by UMNO leaders, there are quite a few Chinese who have made it very big because of the NEP. These include Vincent Tan, Francis Yeoh, the young 28-year-old Jho Low (Low Taek Jho) and Liew Kee Sin of SP Setia fame. How did they do it? We should know so that we can learn and so that other Chinese can emulate them.

Mr Liew who is so happy with the NEP and admits he is one of the NEP’s success stories. He was an officer at a small merchant bank. But he knew how to move in the right circles. He befriended two lawyers – Rashid Manaf and Zaki Azmi (now the Chief Justice). Both Rashid and Zaki did not have any business  history, but they were nice people and friendly.  They didn’t make much from the law practice either. Neither did I. But somehow, as businessmen, they were successful when they became lawyers to UMNO. Their friendship with Mahathir, Daim, Samy Vellu benefitted their business. Wasn’t SP Setia previously owned by SPK which was controlled by Mahathir’s friends Abdullah Ahmad (Kok Lanas) and Ramli Khushairi? And Liew became a shareholder with Rashid and Zaki? Didn’t they say that SPK used to belong to UMNO leaders and civil servants? Yes, Liew is an NEP success story.

Vincent Tan made it big because he was able to convince then PM Mahathir Mohamad in the 1980s that gambling was bad for Muslims and the Islamic Government Mahathir was touting then should not be involved in it. It was a simplistic argument which was acceptable to Mahathir because Mahathir wanted his friend Vincent Tan to make money.

So he privatised Sports Toto and other “haram” activities, such as slot machine licences and sports betting to Vincent. But to be successful, Vincent had to have  a Mahathir relative as his “partner”. Vincent asked a nice gentleman, Mahathir’s nephew, who headed the national news agency Bernama then, to be his partner, with Mahathir’s blessings. But I doubt this nice guy got much in the end as Malay partners dont last very long in this high stakes game. The rest is history. Vincent built his fortunes on these “haram” activities. An NEP success story, certainly.

Francis Yeoh’s father Yeoh Tiong Lay started a construction company which for 30 years could not make the top grade. Until Francis convinced Mahathir in the 1980s to give him the construction of hospitals in the peninsula. Then came the lucrative Independent Power Plant (IPP) where, till today, YTL is given the highest payments for the Power Purchase Agreement where Tenaga buys all power from YTL, whether they need it or not. Then Tenaga chairman Ani Arope objected and Mahathir forced his resignation. Today, YTL has cash reserves of more than RM9 billion and where is it going – buying expensive power plants in Singapore, paying the highest price for land in Orchard Road, and owning probably half of Sentosa Island… Another NEP success story. Oh, yes, the Bumiputra partners for Francis? Maybe people should ask Mokhzani and Mukhriz Mahathir…

They say young Jho Low is close to the PM; or more importantly his wife. And  perhaps, Rosmah Mansor’s eldest son.  He is here, there and everywhere. I must congratulate The Star on its “worldwide exclusive” with Jho Low. Wonder who made the call for Jho to be interviewed?

Jho was there when IMalaysia Development Fund was launched by Najib; he was on holiday with the PM in Monte Carlo last year and also just two weeks ago in St Tropez. Foreign news reports say young Jho (friend of Paris Hilton) had a hand in getting the Government to guarantee the IMalaysia Development fund raising RM5 billion on a 30-year Islamic notes at coupon rate rate of 5.75% when the normal debt sovereign risk of a country like Malaysia can easily be issued at 4.1 to 4.2% interest. Why pay the extra 1.6 to 1.7% on a RM5 billion loan over 30 years which means an extra interest payment of about RM2.4 billion? (How the lenders must be happy with that extra income! And I am sure they were generous to those who helped approve this).

And now rumours are swirling in banking circles about 1MDB’s annual accounts that show only RM4.3 billion of that RM5 billion remaining on its books. Wonder how that RM700 million was spent? There we are – Jho Low, suatu lagi kejayaan Dasar Ekonomi Baru (NEP).

So the Chinese knew all along what to do and they did not need Liew Kee Sin to tell them the benefits of the patronage under the so called NEP. But how many “Chinese-putras” get to know the well-connected “UMNO-putras”? That is the question.

So a more enlightened and equitable economic system is needed; where everyone has a fair chance to strike gold without having to be well connected…. without having to have someone as your lackey or point man in Putrajaya. Is that too much to ask?