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Rafizi’s day in court will put
Sapura Energy under scrutiny...
Former Sapura Energy Berhad CEO Shahril Shamsuddin, upset with remarks by Rafizi Ramli, has taken the former Pandan MP to court. Rafizi had issued the statements because he disagreed with Najib Razak’s suggestion on March 21 that the government inject funds to save Sapura Energy. He said he would defend his remarks about Shahril’s remuneration in court, adding that what he had said was to “protect public interest”.
Many Malaysians would welcome the trial so that Sapura’s alleged mismanagement will be put to public scrutiny. They want to know if the alleged excesses of its former CEO and the failure of the board and managers to save the company from near bankruptcy are true. The oil and gas company had achieved an unprecedented rise since its founding in 2012, but by 2015, trouble was brewing.
Attempts to turn the company around were made by corporate board members, who previously worked in other big-name companies like Petronas Carigali and Royal Dutch Shell. They were unsuccessful.
In 2019, Sapura was given a cash injection of RM2.68 billion by Permodalan Nasional Berhad (PNB) in return for a 40% stake in the firm. Why should the rakyat agree to yet another cash injection? Why waste more good money? Despite the continuing resurgence of crude oil prices (after the dip in prices over five years ago), and PNB’s help only three years ago, why is Sapura’s performance still bad?
Najib wants to save Sapura from bankruptcy, but who will help the rakyat if the government has no money? We are aware that the country is heavily in debt. Why should a nation in debt help out rich people and their ailing companies, so they do not go broke?
Many Malaysians are out of jobs, and businesses have been forced to shut down. Many struggle just to put food on the table, with some holding two or three jobs to earn enough. To survive, many have used up their life savings and are now digging deep into their EPF reserves.
With the trial – if it takes place – the rakyat will be able to know how public listed companies are run. They will be able to find out about the wastage, the exorbitant salaries and perks, the poor decision making, the choice of investments, and the losses incurred.
Last year, The Edge reported that speculation was rife that Sapura’s shareholders were furious with Shahril’s remuneration package. His take-home pay was said to be RM84.24 million in 2017 and RM71.92 million in 2018.
In March 2021, Anuar Taib, who has about 30 years’ experience in the oil and gas industry in Sarawak Shell Bhd, was appointed Sapura Energy’s CEO to try and save the company.
One year later, despite the cash injections, the change in members of the board, a new management team, refinancing, and selective bidding for jobs, he warned that the group may have to make tough calls if it is unable to reach workable compromises with its customers to recover or limit losses.
If the government agrees to save Sapura with public funds, the rakyat may wonder why the company should be bailed out yet again. It is not as if it has not been helped before; PNB already gave it a cash injection in 2019. Perhaps the trial – if it takes place – will throw light on what really went wrong. - Mariam Mokhtar
The return of GST – PM Ismail’s Audemars Piguet watch worth RM292,553 can subsidize thousands of chicken...
You know this country is in serious financial trouble when Prime Minister Ismail Sabri floats the crazy idea of restoring GST (Goods and Services Tax) in the middle of global inflation. Either he was extremely desperate because the national coffers are already empty, or he had no idea that Najib Razak’s advice to re-introduce the tax regime is a trick to trap him.
If the GST miraculously works, Najib will claim credit. But if it fails, Ismail will take all the blame. You can bet your last dollar that the tax regime will definitely fail again because the previous Barisan Nasional government had already proven that it did not work during its implementation from April 1, 2015 till the new government of Pakatan Harapan abolished it on June 1, 2018.
During the 4 years of GST, about RM135 billion (2015 – RM27 billion; 2016 – RM43 billion; 2017 – RM44 billion; 2018 – RM21 billion) had been collected. Yet, prices of goods had continued skyrocketing, despite assurance from a genius like Ahmad Maslan that GST will lower prices based on the argument that SST (Sales and Services Tax) was 10% while GST was only 6%.
On average, Najib government had collected RM4,218 from each of 32 million populations. Assuming the average household size is 4 people per household. It means a whopping RM16,872 were collected from each family over the period of GST. If all the GST collections had been used to help the people, did you ever feel RM16,872 richer from 2015 to 2018?
Even if the government had taken half of the RM135 billion to provide subsidies or cash handouts, did you feel the government had helped reduce the cost of living to the tune of RM8,400 (that’s about RM175 extra pocket money every month) during the period of GST? Equally troubling, even the increased tax revenues have not stemmed the growth of Malaysian debt.
Yes, the country’s debt exploded from RM376 billion (2009) to RM1 trillion (2018) during Najib administration, despite the disgraced prime minister’s dubious claims that the GST reform would increase government revenue and make the country’s fiscal condition more independent from vulnerable oil prices. So, where had all the GST revenue disappeared to? One word – leakages.
The best part was when the previous Pakatan Harapan government discovered that GST refunds for businesses to the tune of RM19.4 billion went missing from government coffers during former Prime Minister Najib Razak’s tenure. The “missing money” had been quietly moved to the government’s consolidated account instead of the GST refund account.
Why did crooked Najib secretly transfer the money elsewhere? That’s because the corrupt and spendthrift government ran out of money, hence the GST refund money was diverted to pay for development and management costs. However, it’s also true that had the Pakatan Harapan not taken over the government, part or the entire RM19.4 billion could be siphoned overseas into Najib families’ pocket.
As a result, GST refunds were not paid for two years because 93% of the money had not been placed into the correct account – showing how easy it would be for PM Najib cum finance minister to plunder the GST revenue. Of the RM19.4 billion meant for refund, RM9.2 billion was from 2018, RM6.8 billion from 2017, RM2.8 billion from 2016 and RM0.6 billion from 2015.
One of the popular arguments presented by the United Malays National Organization (UMNO) politicians and pro-GST fans that the tax regime should be resurrected is because only one out of every 10 Malaysians pay their income taxes. Another argument is that GST must be good because is has been adopted by over 170 countries around the world.
The reason why only one out of every 10 Malaysians pays their income taxes is precisely why Malaysia is not ready for GST – majority of the people are too poor to pay taxes, hence GST will certainly burden them, as proven during 2015-2018. Why countries like Singapore can implement GST, so much so the government had even hiked the rate from 7% to 9% in its Budget 2022?
The primary reason is because Singapore is an efficient, competent and a developed country that possessed very strong purchasing power. The purchasing power of Singapore Dollar is three times more than Malaysia Ringgit. Dollar-to-dollar comparison, an iPhone 13 Pro starts from SGD1,649 in Singapore, while the same gadget will cost a leg and an arm – RM4,899 in Malaysia.
Meaning one Singapore Dollar can be stretched much further than equivalent one Malaysian Ringgit. Therefore, even if people from the “little red dot” pay 9% GST, they still can buy more groceries than neighbouring Malaysians who earn the same salary, dollar-to-dollar. More importantly, countries like New Zealand, South Korea and the U.K. lowered personal income tax rates – even removed excise taxes – before implementing GST.
Malaysia, on the other hand, is being burdened with not only uncompetitive personal income tax, but also multiple layers of taxes – ranging from excise taxes or import duties, in addition of AP (import permits) to enrich cronies and families of the elite. To make matters worse, “cartels” also exists, so powerful they caused a shortage of chicken crisis, leading to a ban on chicken exports to Singapore.
Najib’s plan when he vigorously promoted GST was to take RM1 from ordinary folks before giving away 10 sen under the pretext of subsidizing and helping people. The tax regime was too complicated for illiterate and gullible people to realize that the corrupt government was actually robbing them. At the end, it was the people who subsidized the government, not the other way round.
Even though part of the GST was used as BR1M (1Malaysia People’s Aid) handouts, the purchasing power of these cash handouts was quickly eroded by rising prices. And there were 7 million households that desperately needed BR1M cash aid, including over 3.7 million households with a monthly income of RM3,000 and below – voters who can easily be bought with cash.
Still, not all rich countries need such tax regime. Hong Kong SAR does not have VAT (Value Added Tax), GST or any other sales tax. Malaysia isn’t the only country that had made a U-turn and scrapped its poorly implemented GST. Countries like Malta, Grenada, Ghana and Belize too had abolished the GST soon after introducing it after the tax regime went wrong.
Now, even Nazir Razak, who was caught helping his crooked brother ex-PM Najib Razak in the 1MDB money laundering, has become a strong promoter of GST. Observe carefully and one can clearly see those elite politicians who strongly wanted the return of the regressive tax regime are actually very wealthy. Do you really think a crook like Najib will feel the pain of paying 6% GST.
Prime Minister Ismail Sabri does not need to worry about paying an extra RM330 (6% GST) for a piece of Burberry shirt costing RM5,500. But the same cannot be said about ordinary folks, who saw how a famous “nasi kandar” restaurant hiked the price of its “roti canai telur” from RM1.80 to RM2.50 (almost 40%) when the GST was implemented in 2015.
So, it’s absolutely false to say the Malaysian version of GST will not burden the poor because essential items will be exempted. Otherwise, how do you explain that basic staple food like roti canai and teh tarik saw huge price increases during GST? Like it or not, the government cannot control the impact of GST because the authorities are simply too incompetent.
When Mr Ismail was published on June 1 saying that the government may re-introduce GST, he was caught wearing an expensive designer watch – Audemars Piguet Royal Oak Offshore Chronograph 44MM Blue Cameo – worth a whopping RM292,553. The watch alone can subsidize hundreds of thousands of chicken – 60 sen per kilogramme for poultry farmers.
The turtle-egg PM whined, groaned and bitched about how the government had lost RM20 billion in annual revenue after the GST was abolished. Yet, at the same time, he has the cheek to show off his RM5,500 Burberry shirt and RM300,000 Audemars Piguet watch, telling the people to be understanding with the financial difficulties faced by the government.
Why doesn’t the government tax the country’s “super rich”, including the prime minister himself, as well as all the former prime ministers, the same way the government had slapped a windfall tax on companies to raise revenue? How could the clueless and incompetent government justify the return of GST, but at the same time, continues wasting money on projects like a new “Shariah compliance commission”?
To convince the public, as a start, the government should stop wasting public money on the super bloated 73 ministers and deputy ministers, 90% of whom are incredibly unproductive and were sleeping on the job. Hong Kong has shown that GST isn’t the only right prescription to raise revenue for a country, especially for a country as toxic as Malaysia.
The right prescription is political reform without the need to suck blood like a vampire from the people, who are struggling to make ends meet. The revenue of RM20 billion can be easily recovered by improving governance, boosting productivity, promoting human capital and eliminating bribes and leakages. Corruption eradication – not GST – is the essential in reducing government financial burden. FT
cheers.
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