Why cronyism is impossible to eliminate

Agong failing to put his shareholdings in a trust or nominee company exposes how crony capitalism operates

Listed companies Reneuco and Citagloble via a 50:50 joint venture company have just won a tender to develop an independent power production (IPP) project the East Coast Rail-Link (ECRL) network.

Citaglobal’s major shareholders are Norza Zakaria, and extremely well-connected Malay financier and businessman, and the Yang Di-Pertuan Agon Sultan Abdullah.

Citaglobal BhdAnnual Report

The consortium according to a Citaglobal press release on 21st December stated that the corporation accepted a Letter of Intent from MRL for the planning, design, development, construction, installation, commissioning, and operation of an IPP for the ECRL network. This project is worth hundreds of millions of Ringgit.

One very interesting aspect of Citaglobal Bhd. Is that the YDPA’s shareholding is as an individual. Why he was not advised to hold any corporation shares in a trust of nominee company is a mystery. This would remove him from any accusations of being ‘hands on’ or active in any business enterprise. This would clear him of any accusations of breaching Article 34 (3) of the constitution which states the YDPA ‘shall not actively engage in any business activities.’

As a consequence, we are able to obtain some insight of how cronyism works within the upper echelons of the establishment. The establishment has the power to create projects, plan and issue relevant contracts stemming from a project and select, the contractors.

In the Citaglobal case, we see how the establishment gains and monopolizes these contracts. Tender processes can be manipulated, and companies which don’t have the specific technical expertise to fulfil the contracts outsource to third parties. Most major government contracts are awarded to these locally owned consortiums rather than outside companies that may have the specialised and needed expertise.

This is how the establishment monopolises mega-business opportunities in Malaysia.

In most cases this is not transparent, although many do know what is going on. The Citaglobal case offers us an insight.

With the nation’s establishment are the ones involved in crony capitalism, how can this be eliminated in Malaysia?

Its like asking children to look after the cookie jar.

This is a glimpse into what the deep state is really about.

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