Penang CMI may lack the necessary checks and balances for financial prudence
Penang CMI may lack the necessary checks and balances for financial prudence
Preventing potential corruption and poor investment and financial management in GLCs is very important
With the Bagan MP Lim Guan Eng’s call for Penang to be declared a Special Financial Zone (SFZ), Penang’s existing GLCs must be evaluated for the adequacy of checks and balances.
One such investment arm of the Penang State Government is the Chief Minister Incorporated (CMI).
Professor Terence Gomez criticized CMI, and similar GLCs in other states as vehicles controlled by politicians to provide themselves with near absolute control over the distribution of resources in their respective states. Gomez further elaborated that this is particularly the case in states like Melaka, Penang, and Sabah, which don’t have sultans. There is little oversight of how CMIs are run and what they do.
In Penang, a special oversight committee was set up to oversee CMI’s activities. However, the current chief minister Chow Kon Yeow is the chairman of both CMI and the body set up to oversee it, a clear conflict of interest.
Unlike some other states, CMI doesn’t appear to have a dedicated website, even though the corporation is involved in a large number of activities, which are in the public interest. The only Penang government information that can be found is a page on the official Penang Government website, providing the registered address of CMI at Komtar, and a broad list of areas of interest and activities the corporation can ben involved in.
These include economic generation projects in tourism, agriculture and fisheries, public transport, and infrastructure development. This is in stark contrast to the MBI website in Selangor, that displays all the projects the Selangor MBI is involved in.
Of most concern is the breath and scope of powers CMI has, as found in the Penang Government Gazette, Enactment 9, Chief Minister of Penang (Incorporation) Enactment 2009. Under the enactment, partially reproduced below, CMI doesn’t report to any higher body. It appears to be completely autonomous, except for the oversight committee mentioned above.
The accounts are not made public, nor audited by the Auditor General. CMI is not restricted in the types of contracts it can enter into, and may buy and sell assets without any institutional scrutiny.
Terms such as ‘the corporation still have the power to do all things that are necessary for, or expedient, or incidental to, the discharge of the duties of the corporation’ are wide.
Exert of Enactment 9
Such wide powers without the necessary scrutiny and auditing, may lead to potential abuses of power, corruption, or misappropriations of funds and assets.
Fiscal prudence for GLCs must be tightened.
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How many of us are aware the genesis of these GLCs which no democratic Western nation will permit ? It all began in 1968 in the Jurong Industrial Park. Singaporean traders were encouraged to set up factories which failed by 1970. Names like Fair Lady Hair Wigs, Regency Hair Wigs, Starlite Ceramics, Eupoc, my latest Swiss biscuit factory etc because the mentality of a trader was unlike that of an industrialist and the was no market I was there and noted the Singapore Government was very keen to provide employment for the Malays. With the collapse of private Singaporean enterprise in Jurong, the advice of UN economics expert Dr Albert Winsemius, a Dutchman and Adviser to the Singapore Government 1962-1984 was accepted to turn Singapore Government monopolies into Public entities like SIA, NOL, UIC, DBS, Keppel, Sembawang, Far East Levingston, Asian Dollar etc.. By the early 1980s, all were profitable because these were monopolies. Lee Kuan Yew coined the words Government linked corporations or GLCs. In 1982, Deng Xiao Ping dropped by Singapore and thought he had found the perfect solution to part transform a Communist economy into a Capitalist economy. He said,' We will do better than them !' Russia followed suit. Little were they aware that it was difficult to control the digits as Russia and China were vast lands. Soon 100 Chinese were on the run from GLCs for corruption. Both countries toned down their enthusiasm for GLCs. Under Lee Kuan Yew, Singapore a tiny place was controlled firmly by him. A phone call would reveal all ! Even the Singapore GLC Keppel is alleged to be in corruption in Brazil. ! As for Malaysia, my 1972 Concept to capture Sime Darby PLC to fast track the Malays into big business was supported by the PM Tun Abdul Razak and YBM Tengku Razaleigh Hamzah. Vide Far East Economic Review 1975. The first GLC in the World. Tun Abdul Razak's intention was to pull Malaysia up a tier by the further capture of British light engineering entities and more. Unfortunately, Tun Abdul Razak died young. After 1981, Sime Darby was turned into a fine trading British like trading house with no risk but only to sell goods for other countries. From the excesses of the Sime Darby Malaysian Management 1982-2010, copy cats were a'plenty. Over 1,800 GLCs had to be closed down as a former Minister of Finance told me recently. I reckon today, there are still over 300 GLCs remained. In the World, only authoritarian Russia, China, Singapore and DEMOCRATIC MALAYSIA have GLCs. Democratic Western countries forbid these corruptible institutions with Governments involved in business !
THE GLCs WILL KILL US ALL IN MALAYSIA AS NONE MAKE MONEY MANAGED BY AMATEURS WHO ARE NOT THE OWNERS AND ALL OUTSIDE THE GOVERNMENT'S OFFICIAL DEBT AND BUDGET ! The money locked up in the GLCs is unproductive in Private Sector terms by occupying a 'GLC' requirement' space in Malaysia's financial institutions GUARANTEED BY THE GOVERNMENT !
huge space in the financial institution as well !
At the heart of all problems with government in Malaysia is the way in which legislation is drafted in Malaysia.
For most countries in the commonwealth and in common law countries there is a guide to drafting legislation which drafters rely on to perfect drafting of legislation. Not so in Malaysia it seems. The absurdity of poor sub standard legislative drafting and the impact of its vagueness and ambiguity is evident in the specific example re printed in this article.
That one page taken from a piece of legislation and published here in this article demonstrates the point. It is pregnant with potential for mischief for its lack of clarity or purpose. The grammar is shocking considering it may have been the handiwork of lawyers. A lawyers skills lie in their ability to articulate and express points of law, orally, in writing and in clear languge. There are more than half a dozen errors of drafting which renders the legislation in this regard otiose and redundant.
Perhaps critics of the legislation and the Penang government ought to familiarise themselves with defects in the law and legislation first before commenting critically or adversley on the government or the legislation.
This may well be the case of 3 blind men in a room with an elephant trying to guess what an elephant is by merely feeling its body parts.