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Thursday, August 16, 2018

Dr Mahathir's visit to China tomorrow to witness signing of 3 MoUs


Malaysia welcomes China's participation in transport projects: People stand beside the high-speed trains built by China Railway Rolling Stock Corporation (CRRC) in State of Perak, Malaysia, July 9, 2015



PM’s special visit to China


PRIME Minister Tun Dr Mahathir Mohamad is scheduled to be in Chi­na from August 17 to 21, during which he is expected to meet President Xi Jinping and Premier Li Keqiang.

The visit is special because Dr Mahathir is returning to China once again as prime minister after a 17-year gap. His last official visit to China as prime minister was in October 2001 to attend the Apec CEO summit.

Dr Mahathir is a regular visitor to China. In the 22 years of his first stint as prime minister (1981-2003), he visited China seven times. He visited nine more times after he retired, making it a total of 16.

This coming visit has an added significance because he is leading a different government and there are several touchy issues standing in the way of good relations between the two countries.

In his previous official visits, he was leading the Barisan Nasional government. In this visit, he is leading Pakatan Harapan which ousted Barisan in the May 9 general election.

Chinese leaders are familiar with Barisan. Back in 1974, it was the leader of this newly-formed coalition Tun Abdul Razak Hussein who made the ground-breaking visit to China. That visit resulted in Malaysia becoming one of the earliest countries in South-East Asia to recognise China.

Bear in mind that although Indonesia recognised China in 1950, their relationship soured and was suspended between 1967 and 1990. Singapore, a predominantly Chi­nese nation, recognised China only in 1990, and Brunei did so in 1991.

It was not an easy decision for Malaysia because it already had diplomatic relations with Taiwan since its independence in 1957.

The recognition of Taiwan was reflective of Malaysia’s pro-Western stance and staunchly anti-communist policy. The armed communist insurgency starting in 1948 did not help to endear Malaysia to China.

With the disbanding of the Malayan Communist Party (MCP) following the 1989 peace accord, which involved the MCP and the governments of Malaysia and Thailand, the Malaysian Chinese Association (MCA) became the last remaining vestige of the Chinese revolution in Malaysia.

It was no coincidence that while the MCP was fashioned after the Chinese Communist Party (CCP), MCA was the mirror image of the Chinese Nationalist Party, Kuomintang.

Abdul Razak’s own party, the United Malay National Organisa­tion (Umno), was staunchly anti-communist. Still, Abdul Razak pulled it off and received overwhelming endorsement from voters at the 1974 general election in which the enlarged Bari­san coalition was contesting for the first time.

So, given this very long history of mutually beneficial relationship and Dr Mahathir’s own affinity with China, his visit is not only special but also offers the two countries the opportunity to clarify and sort out issues that could stand in the way of good relations.

Dr Mahathir had wanted to visit earlier but time was not favourable. Proving his seriousness about wanting to put the relationship between the new Malaysian government and China on a good footing, he sent Tun Daim Zainuddin as his emissary.

Like Dr Mahathir, Daim is a familiar face in Beijing. Back in the 1980s during his first stint as Finance Minister, Daim took an active part in supporting China’s new role in international financial organisations like the Asian Deve­lop­ment Bank, World Bank and the International Monetary Fund.

During his visit to Beijing on July 18, Daim handed over Dr Mahathir’s letter to Premier Li and had discussions with Foreign Minister Wang Yi.

It is clear that neither China nor Malaysia would want the 44-year relationship to be jeopardised by issues that cropped up during the time of former Prime Minister Datuk Seri Najib Tun Razak.

Among these are the Chinese loans for the construction of the East Coast Railway Line (ECRL) and the little known Suria Strategic Energy Resources Sdn Bhd (SSER) pipeline project.

It is highly possible that China, in extending these loans and entering into construction agreements for the projects, was acting in good faith in line with its One Belt One Road (OBOR) policy but along the way, this was perverted by irresponsible elements in Malaysia and China.

Neither China nor Malaysia should suffer the embarrassment and financial losses caused by these people and their associates. The relationship between the two countries is too precious to be allowed to be soured by their irresponsible and criminal actions.

Dr Mahathir said in a recent interview with the Hong Kong-based South China Morning Post that his less-than-favourable view of some Chinese-backed deals, deemed overpriced and lopsided against Malaysian interests, did not mean he was hostile towards Beijing.

More recently, he said Malaysia would seek to do away with these projects if they continue to be unfavourable to the country and a burden to the people.

The Pakatan administration and the people of Malaysia must not be made to shoulder the burden of irresponsible acts of Najib and
As Dr Mahathir has pointed out, ­Malaysia and China developed “a very good relationship” during his first tenure as prime minister and there is no reason why this would not continue during his comeback era.

A. KADIR JASIN

akadirjasin.blogspot.com/akadirjasin.com

Dr Mahathir to witness signing of 3 MoUs during China visit


KUALA LUMPUR (Aug 16): Prime Minister Tun Dr Mahathir Mohamad will make an official visit to China from tomorrow until Tuesday (Aug 17-21, 2018) at China's Premier of the State Council Li Keqiang's invitation.

Malaysia's Foreign Affairs Ministry said in a statement today Dr Mahathir and Li will witness the signing of three memoranda of understanding (MoUs) to mark the strengthening of the Kuala Lumpur-Beijing strategic partnership. The MoUs are in the areas of agriculture and agricommodity, the statement said.

According to the statement, Dr Mahathir will be accompanied by his spouse Tun Dr Siti Hasmah Mohd Ali. The delegation includes Foreign Affairs Minister Datuk Saifuddin Abdullah, Primary Industries Minister Teresa Kok Suh Sim, International Trade and Industry Minister Ignatius Darell Leiking, Agriculture and Agro-based Industry Minister Datuk Salahuddin Ayub, Minister in the Prime Minister's Department (Law) Datuk Liew Vui Keong, Entrepreneurship Development Minister Mohd Redzuan Md Yusof and Perak Chief Minister Ahmad Faizal Azumu, according to the statement.

"This is the maiden visit by YAB Prime Minister to the PRC (People's Republic of China) after assuming office in May 2018. YAB Prime Minister visited the PRC seven times during his term as the 4th Prime Minister of Malaysia from 1981 to 2003.

"During the visit, YAB Prime Minister will be visiting Hangzhou and Beijing. In Hangzhou, YAB Prime Minister is scheduled to meet provincial leaders, undertake a visit to Alibaba Group Corporate Headquarters and Zhejiang Geely Holding Group. In Beijing, YAB Prime Minister will be meeting Premier Li Keqiang and President Xi Jinping respectively to discuss bilateral issues as well as regional and international issues of mutual interest," the statement said.

Chong Jin Hun / theedgemarkets.com

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Monday, August 13, 2018

Malaysia needs more childcare & daycare centres

https://www.thestar.com.my/news/nation/2018/08/13/malaysia-needs-more-childcare-centres-dpm-we-are-also-in-dire-need-of-qualified-workers-to-ensure-sa/
https://youtu.be/N6GSfiHN6mw

PUTRAJAYA: There is a dire need for more qualified childcare workers and registered childcare centres in the country, says Datuk Seri Dr Wan Azizah Wan Ismail.

The Deputy Prime Minister said that these shortages could adversely affect the safety and quality of care for Malaysian children.

“Data from the Welfare Department showed that up to June this year, the number of childcare workers looking after children four years and below is 16,873.

“Out of this, only 3,173 of them have the minimum qualification of a childcare course,” said Dr Wan Azizah, who is also Women, Family and Community Development Minister.


She was speaking at the launch of the National Childcare Centre Day 2018 themed “Equality” at the IOI City Mall here yesterday.

Dr Wan Azizah added that the rest of childcare workers in the country, all 13,700 or 80.19% of them, did not have the minimum qualification for the job.

She said the lack of qualified childcare workers contributed to the lack of registered childcare centres in the country.

“Calculations based on a census done by Malaysian Statistics Department showed that we need to have 38,333 registered childcare centres.

“However, the actual number at present is only 4,302,” she said.

Dr Wan Azizah said her ministry took a serious view on the safety of children at childcare centres and at the homes of childcare providers. “We are looking at the need to improve on the Child Care Centre Act and regulations on childcare centres to fit the current needs and situation,” she said.

She added that her ministry was also studying how to utilise information and communication technology to be included in the childcare system in the country. The Star

Sunday, August 12, 2018

GST vs SST. Which is better?


MALAYSIA’s decision to revert to the Sales and Service Tax (SST) from the Goods and Services Tax (GST) will result in a higher disposable income due to relatively lower prices it will incur in most goods and services.

Consumers will have a choice in their consumption – by paying service taxes based on their affordability and ability.

The coverage of GST was comprehensive and it covered too wide a sector. While it was able collect a sustainable sum of RM44bil for the country, it was not people-friendly.

The narrowing scope of the SST will at most, collect approximately RM23bil for the country but it will indeed relieve the people – so SST is needed by the people.

Methodology of SST

The Sales Tax Bill and the Service Tax Bill have just been passed at the Dewan Rakyat and are expected to get approval from the Dewan Negara when it convenes on August 20.

This leaves little room for businesses and entrepreneurs to get ready for the new tax regime in less than a month’s time.

Therefore, it is of utmost importance to understand the concept and mechanism of SST as stated in both the Bills.

SST comprises two legislations. The sales tax is imposed on the manufacturing sector as governed by the Sales Tax Act 2018 while service tax is imposed on selected service sectors, with one of the most notable ones being the food and beverage (F&B) service providers.

The Service Tax Act 2018 would govern the selected service providers and the details would be gazetted in the subsidiary legislation, PU(A) Service Tax Regulations 2018.

Finance Minister Lim Guan Eng has announced that the threshold for F&B providers is set at annual turnover of RM1mil.

This would mean that those who operate with less than RM1mil turnover would not charge service tax at 6%.

This translates into hawker food, cafes, take aways or food trucks being able to provide F&B at lower prices as compared to the GST regime of 6%. Consumers are deemed to be given an option to pay service tax or not, depending on their consumptions at places such as fast food outlets, restaurants or food courts.

Generally, living costs will be relatively lower in the SST era as the B40 group of consumers would certainly be relieved in their daily eating affair.

The existing GST regime sets up the threshold at RM500,000 per year, meaning that almost all restaurants, including simple mixed rice outlets, would have a GST of 6% imposed. The service tax regime would not impose service tax of 6% on service charge rendered in any restaurant or café operator.

Service charge in its true essence, represents tips or gratuity to the waiters working in the restaurant and it is entirely at the discretion of the F&B operators.

These operators may choose to charge from 5% to 15% or even free of charge. In summary, in the event service charge is imposed, it would not be subject to service tax.

SST is people friendly as the daily consumption of food and beverages would be much lower in price as compared to the GST regime. The imposition of service charge is not governed by any law and it is entirely at the discretion of the F&B operators.

In order to avoid disputes, it is advised that notice be placed outside the premises if the F&B operator is imposing a service charge ans the rate determined by them.

SST is one stage

Sales Tax is only imposed one time on the manufacturing company when a sale is made to a trading company. The subsequent sales of the goods by the trading company would have no sales tax imposed.

Business entrepreneurs must be mindful and careful in the cost management as Sales Tax – although imposed at 10% – would eventually result in a much lower pricing of goods as compared to the GST regime.

GST is operating on a value added concept with input tax available as deduction. The supply chain moving from manufacturers to distributors, dealers and to consumers would result in higher pricing as GST is imposed on final stage, comprising of value add and profit margin.

SST is a business cost

Under the GST regime, input tax is available as a credit or deduction against output tax based on tax invoice received from GST registrant suppliers.

This would mean that GST is never a business cost as deduction is available against output tax even though there is no sales generated. Sales Tax on the other hand, would be paid by the trading company purchasing goods from the manufacturing company.

It is a business cost and deduction is only available when there is a sale. This would mean that business cost would be higher as Sales Tax is part of the inventory cost and to be deducted as cost of sales when goods are sold or exported. In simple terms, no sales, no deductions.

Businessmen are urged to carefully analyse the cost and not overprice the goods for the benefits of the people and the sustainability of their businesses. The reduction of GST from 6% to nil would immediately translate a price reduction of 6%, which is a must for a businesses to adhere to.

Failure to adhere to the pricing would expose the operators to the fines and penalties on anti-profiteering governed by Price Control and Anti-Profiteering Act 2011.

As the breakdown shows, SST is well suited in the Malaysian environment, to both the business communities and the people.

Source: Dr Choong Kwai FattDubbed the Malaysian tax guru, Dr Choong Kwai Fatt is a tax specialist and advocate.

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    Implications of the 'RM19bil GST collected, RM18bil taken’ and RM19.4bil shortfall !

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    Saturday, August 11, 2018

    Go-ahead likely for Penang LRT


    GEORGE TOWN: The approvals from the federal authorities for the RM8.4bil Bayan Lepas light rail transit (LRT) and the massive Penang South Reclamation (PSR) scheme on the southern coast of the island are expected to be obtained before the end of the year.

    Sources told The Star that the approvals would be from the Department of Environment, the federal regulator overseeing Environmental Impact Assessment (EIA), and the Transport Ministry.

    The sources said if everything goes on as scheduled, the reclamation project for the three man-made islands would start early next year.

    “The LRT project might begin in January 2020,” they said.

    The LRT, together with a monorail, cable cars and water taxis, is part of the state government’s RM46bil Penang Transport Master Plan (PTMP).

    It will begin from Komtar in the northeast corner of the island and pass through Jelutong, Gelugor, Bayan Lepas and Penang International Airport before ending at the proposed PSR development comprising three man-made islands totalling 1,800ha near Teluk Kumbar.

    It is expected to provide a fast route to the airport and will traverse densely populated residential, commercial and industrial areas.

    There are 27 LRT stations along the alignment, with the maintenance depot located on the first island that is to be reclaimed on the island’s south coast.

    The alignment also factors in interchanges with future LRT, Sky Cab and monorail lines that are being planned, including one that will cross the channel to connect Gelugor on the island with the Penang Sentral transport hub in mainland Butterworth. The success of the PTMP depends on funding from property development on the PSR scheme.

    The Pan Island Link (PIL) 1 is another component which came to light recently as its Detailed EIA was on display at 10 locations in Putrajaya, Kuala Lumpur and Penang until yesterday.

    The proposed 19.5km highway links Gurney Drive to the Penang International Airport.

    SRS Consortium Sdn Bhd, the Project Delivery Partner (PDP), will call for the tender of the LRT and PSR via a Request for Proposal (RFP) exercise early next year, the sources said.

    SRS’s role is to supervise the projects until their completion and scale down the cost.

    It is learnt that there are currently six or seven companies interested in carrying out the LRT project and the reclamation work for the islands.

    “SRS will scale down the cost of the urban rail transport link connecting Komtar and Bayan Lepas, and also consider alternative proposals such as a monorail,” said sources.

    It is learnt that Scomi Engineering has recently proposed a monorail project costing about RM6bil, to the state government.

    A China company has also proposed to build a LRT link costing less than RM6bil.

    On the three man-made islands, it is said that more than RM4bil would be spent on the reclamation.

    “The cost is estimated to be over RM4bil because there will be a need to construct a dam and three power plants for the islands.

    “One of the islands will be used for indus­trial activities. There will be industrial lots developed for sale to overseas and local investors to generate funds for the urban rail transport link.

    “The other two islands will be used for building commercial and residential properties,” sources explained, adding that about RM17bil, which includes the cost for the LRT and PIL 1, has been approved.

    On the viability of trams as an alternative to LRT, the sources said the move would require relocating underground sewage infrastructure, power and telecommunications cables.

    “They have to be relocated because laying the rails for trams involves a lot of costly road digging. The LRT is constructed on an elevated platform and does not involve digging into the ground.

    “Furthermore, the roads in Penang are narrow, so using trams with other vehicles on the same road could cause accidents,” a source added.

    SRS Consortium, a 60:20:20 joint venture involving Gamuda Bhd, Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd, was appointed by the Penang government as the PDP for the implementation of the PTMP.

    Meanwhile, Chief Minister Chow Kon Yeow said he has written a letter to Prime Minister Tun Dr Mahathir Mohamad on June 29 to seek funds for the LRT project.

    “We have yet to receive a reply.

    “If the South island reclamation projects are not carried out, the state has no choice but to seek federal funds for the LRT,” he said during his speech at the state assembly yesterday.

    Chow had earlier said the major components of PTMP would be fully funded by revenues generated from the sale of reclaimed land of the PSR project.

    He said the fully funded nature of the components – the LRT and the PIL 1 – was unlike any other mega infrastructure projects currently being critically reviewed by the Council of Eminent Persons.

    The SRS Consortium was concluded to have the best overall proposal among six local and international bidders, which were evaluated based on qualities such as transport master plan proposal, delivery track record, financial standing and funding/business models.

    By David Tan The Star

    Implications of the 'RM19bil GST collected, RM18bil taken’ and RM19.4bil shortfall !

    https://youtu.be/Ew5Fk-ml6Mo 

    The immediate concern is the budget deficit for 2018 spiking to 4% if the GST refunds are made this year


    ON May 31, when Finance Minister Lim Guan Eng announced that the new government would be able to meet the budget deficit of 2.8% for this year, the sum of RM19.4bil that is to be refunded to companies since the goods and services tax (GST) was discontinued, never came into the equation.

    Now, since that money is not in a trust account that was specifically set up to meet the refund obligations, does the government need to borrow more to ensure it meets the refunds? In doing so, would it incur a bigger budget deficit than had been envisaged?

    There are wider implications on the shortfall of the RM19.4bil, assuming the refunds are to be done this year.

    The biggest challenge for Lim is to cover the shortfall to maintain the budget deficit for 2018 at 2.8%.

    The hallmark of the Pakatan Harapan government’s first 100 days of rule is to bring down the cost of living and cost of doing business. Towards this end, it has subsidised the price of petrol and diesel and removed the GST.

    The cost of keeping up with the Bantuan Sara Hidup and subsidy for petrol and diesel is estimated to be about RM6.2bil between June and December.

    Revenue loss due to discontinuing the GST from June 1 onwards is estimated at RM21bil.

    The shortfall is made up of cutting down government expenditure by RM10bil, increasing dividends from government agencies such as Khazanah Nasional Bhd and Petroliam Nasional Bhd, a higher petroleum income tax of RM5.4bil and proceeds from the implementation of the sales and service tax from September onwards.

    Nowhere was the RM19.4bil figure that is to be paid back to companies under the GST that was discontinued mentioned.

    Lim has said that the money was supposed to be in the trust account, but is not there and has gone “missing”.

    Former Finance Ministry secretary-general Tan Sri Mohd Irwan Siregar Abdullah has said that all proceeds from the GST went into the consolidated fund of the federal government. The amount to be refunded is allocated to the trust account monthly based on the requirements of the Customs Department and the financial position of the government.

    Customs director-general Datuk Seri Subromaniam Tholasy has revealed that since the GST was implemented on April 1, 2015, the total refunds amounted to RM82.9bil and the amount allocated to the trust account from the federal government consolidated fund was only RM63.5bil – representing a shortfall of RM19.4bil.

    Generally, refunds for the GST are to be done within 14 days. But the amount allocated is less because not all refunds are paid within the two-week period.

    At times, refunds are held back up to one year, pending investigations. Hence, the cash allocated to the trust account maintained by the Customs and the Inland Revenue Board (IRB) is less than the total amount due for refunds.

    For instance, in 2017, the amount allocated to the IRB trust account for refunds was RM7bil when the total amount to be refunded was more than that.

    In the case of the Customs, the outstanding refunds for 2017 was RM15bil, but the amount allocated was less.

    Under the previous government, the GST provided a steady flow of cash every month. The thinking was that the money for refunds should be allocated when it comes due to best manage the cash-flow position of the government.

    However, the view of Lim is that money meant for refunds should have been put into the trust account, irrespective of whether there is a need to pay immediately or otherwise.

    Hence, the issue is not really the question of the RM19.4bil meant for refunds going “missing”.

    It is whether the money is still in the consolidated accounts or whether it has been utilised. If it was utilised, did the government have the right to use it for other purposes in the name of cash-flow management?

    The bigger implication for the Pakatan government is how it is going to cover this RM19.4bil shortfall.

    One of the ways the government can cover the RM19.4bil hole without increasing the deficit is to cut more of the excesses.

    On this score, the Pakatan government has so far handled public funds in a more judicious manner compared to the previous government. It has cut down the budget for inflated infrastructure projects and stopped unnecessary spending.

    The light rail transit 3 and East Coast Rail Link projects are only some examples. It has stopped prestigious projects such as the KL-Singapore high-speed rail and the less glamorous mass rapid transit line 3 project. The government of today has earned full marks for being transparent and diligent in handling public finances.

    Despite declaring that the federal government debt is at RM1.07 trillion, business sentiment is at a seven-year high, while consumer sentiment is at a 21-year high.

    The stock market is looking good so far, much better than the likes of China and Hong Kong, although the improved sentiments are likely to be temporary.

    As for the ringgit against the US dollar, its performance is better against many of the Asian and emerging-market currencies. The tumbling of the Turksih lira and Russian rouble is testimony that the ringgit is not that bad after all.

    The government can probe, produce a White Paper or do anything else to look into the RM19.4bil shortfall, but the bottom line is that Lim and Prime Minister Tun Dr Mahathir Mohamad will have to face the reality of making up for a RM19.4bil shortfall in government finances for this year.

    Economists are predicting that the federal government budget deficit would be higher than the 2.8% estimated on May 31 this year on the assumptions are made this year. Some are looking at the budget deficit to be as high as 4%

    Would there be an impact on Malaysia’s credit rating and the ringgit?

    Yes, a spike in the budget deficit would have an impact for the short term.

    However, the government of the day will score brownie points in its drive to bring about reforms and governance in the management of public funds. Rating agencies would appreciate any government that promotes transparency and improves on its finances purely by spending within its means.

    So far, the government has done away with the GST and taken measures to put more cash into the hands of the people and business to improve domestic spending. The stabilisation of petrol prices and threemonth (June to September) tax-free period between the implementation of the GST and SST has put RM20bil into the hands of the people and businesses. This should help improve the domestic economy for a few months.

    However, for the longer term, investors and rating agencies will be looking at how the RM19.4bil hole in the federal government finances will be covered. What are the government assets that will be sold?

    Certainly, we are not looking at an expansionary budget come November this year.

    Source:  The Alternative view by M.Sshanmugam The Star

    RM19bil GST collected, RM18bil taken’




    KUALA LUMPUR: The previous government has not been able to refund companies their tax credit that came about following the implementation of the Goods and Services Tax (GST) because 93% of the money was not placed in the correct account, Finance Minister Lim Guan Eng revealed.

    He said some RM18bil of the RM19.4bil input tax credit under the GST system since 2015 was “robbed” by the previous administration.

    “I was very shocked when informed that this happened because the previous government had failed to enter the GST collection in the trust account specifically meant for the repaying of GST claims.

    “Instead, the Barisan Nasional government pilfered the trust account and entered cash GST collection directly into the consolidated fund as revenue to be spent freely,” he said when tabling the GST (Repeal) Bill 2018 during its second reading in Parliament yesterday.

    He said that as of May 31, the outstanding GST refund stood at RM19.397bil whereas there was only a balance of RM1.486bil in the repayment fund.

    Lim said from the total input tax credit, RM9.2bil or 47% was recorded between Jan 1 and May 31 this year, RM6.8bil or 35% in 2017, RM2.8bil (15%) in 2016, and RM600mil (3%) in 2015 (from April 1 to Dec 31, 2015).

    Under GST, the input tax credit allowed businesses to reclaim credit for taxes paid on purchases, subject to filing of input tax documents.

    In his winding-up reply, Lim said a comprehensive investigation would be carried out to determine the cause of the missing funds.

    When debating the Bill, Lim also said he had asked for documents to show how the input tax had ended up in the consolidated fund.

    “I asked the Chief Secretary to the Government for the Cabinet papers on the matter.

    “However, he told me he could not remember anything of such,” he added.

    Lim said former Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz, when told of the missing funds, said it was imperative that the money was returned to the claimants as it was fiscally moral to do so.

    Later, at the Parliament lobby, Lim said a former Treasury secretary-general may have been aware of the missing RM18bil.

    The previous government, he said, had committed wrongdoing over the missing funds.

    “I would assume the previous KSP (ketua setiausaha perbendaharaan/Treasury secretary-general) would have known about this.

    “We want something definite because we want to look at the circle of decision-makers,” he said.

    By martin carvalho, hemananthani sivanandam, rahimy rahim, and loshana k shagar The Star

    Khairy urges gov't to bring 'GST robbers' to book




    BN MPs want Najib, RM18b GST 'robbery' claim investigated





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    Wednesday, August 8, 2018

    Here is how 1MDB money was used to buy Equanimity

    https://clips.thestar.com.my/Interactive/EquanimityYacht/EquanimityYacht.mp4

    KUALA LUMPUR: Super yacht Equanimity of fugitive financier Low Taek Jho (Jho Low) fame, was bought using four tranches of funds totalling US$262.4 million misappropriated from 1Malaysia Development Bhd (1MDB) between January and June 2014, according to lawyers representing the Malaysian government who “arrested” the billion-ringgit vessel in Port Klang yesterday.

    In fact, US$140.6 million or just over half the yacht’s price tag was paid in early June 2014 using proceeds of a US$239.9 million Deutsche Bank bridging loan taken by 1MDB’s then 100%-owned unit 1MDB Energy Holdings Ltd (1MEHL) on May 26, 2014, according to information from Sitpah Selvaratnam, from the firm Tommy Thomas Advocates & Solicitors and lauded as one of Malaysia’s best maritime lawyers. [See Chart 4]



    Two days after getting the loan, 1MEHL transferred most of the cash to Aabar BVI (British Virgin Islands), also known as the fake Aabar. The money then went through Affinity Equity and Alpha Synergy before reaching Jho Low, who on June 3, 2014 transferred US$140.6 million to WorldView for the fourth and final payment of the yacht. The earlier three tranches originating from 1MDB also went to WorldView.

    “WorldView Ltd is a family trust of which only the Low family are beneficial owners of,” according to Low’s email in June 2015 to a lawyer at Hill Dickinson LLP and a senior BSI banker cited in the 251-page filing by the US Department of Justice (DoJ) in June 2017 to seize 1MDB assets, including the Equanimity.

    The same filing said Jho Low and his parents Low Hock Peng (LHP) and Evelyn Goh Gaik Ewe on Sept 9, 2013 flew from Barcelona to Rotterdam — near where the Equanimity was being built — to view the shipyard and the yacht the following day.

    The DoJ filing also said Jho Low laundered over US$200 million in misappropriated funds traceable to 1MDB’s 2013 bond sale into a US account belonging to US-based law firm DLA Piper.

    The US$29.1 million second payment for Equanimity made on Feb 5 and 18 as well as April 2, 2014 was part of the US$56.5 million that went from DLA Piper’s account to LHP — who with Jho Low participated in the Condor joint venture (JV) through Strategic Resources (Global) Ltd (SRG) to acquire Houston-based Coastal Energy with International Petroleum Investment Co (Ipic) and Ipic’s Spanish unit Compañía Española de Petróleos SA.

    The first and third tranches of payments for Equanimity made on Jan 7, 2014 and April 11, 2014 originated from US$2.72 billion bond proceeds raised in March 2013 by 1MDB Global Investment Ltd, which found their way to another Jho Low-linked offshore entity, Tanore Finance Corp.

    The bond proceeds were intended for a JV with Ipic’s unit Aabar Investments PJS called Abu Dhabi Malaysia Investment Co. But instead of funding the Tun Razak Exchange development, the cash ended at Tanore instead. The money in the Tanore account was also used to buy artworks and the Park Lane hotel in New York, according to the DoJ filing.

    When questioned by reporters yesterday, former prime minister Datuk Seri Najib Razak said he has never been on the Equanimity and has no knowledge that the yacht was bought using 1MDB money.

    “Why we didn’t pursue [to get back the yacht] earlier [was] because we were interested in the full settlement with United Arab Emirates on Ipic … that is worth much more than this Equanimity. That is the biggest sum; we wanted [this] big settlement to be settled first, that’s why we didn’t pursue the yacht,” Najib said, adding that the Equanimity “is being used as a populist move”.

    “I have no knowledge whatsoever as to the yacht and also the yacht itself is subject to litigation. It’s not a clear-cut matter,” Najib added.

    Source: Cindy Yeap The Edge Financial Daily

    Equanimity most expensive yacht to be auctioned

     

    PETALING JAYA: Equanimity could smash the world record for the most expensive superyacht ever to be sold at auction in the event it goes under the hammer.

    With the vessel now in Malaysian custody, all eyes are on the fate of the luxury yacht reportedly worth US$250mil (RM1bil).

    Finance Minister Lim Guan Eng had said on Monday that his ministry wanted to get the best value from the Equanimity
    “Our aim is to draw back as much money as we can from the asset,” Lim had said, adding that the immediate plan was to ensure that all paperwork was in order and that all proper controls were imposed.

    An online search of prices fetched so far by superyachts suggest that Equanimity could create a new record if the government decides to initiate an auction.

    An article on the website of British publication Boat International listed the sale of the 72m Lürssen Apoise as the most expensive yacht ever auctioned.

    At an auction in 2010, the yacht was sold for US$34.75mil (RM164mil), which is much lower than what Equanimity could be worth.

    VesselsValue, a London-based online ship-­valuation database firm, when contacted, said it valued Equanimity at US$175mil (RM712mil).

    “Looking through our system, we also have the Apoise as the superyacht which has achieved the most at auction,” said Vessels­Value associate director Claudia Norrgren.

    The Apoise and Equanimity fall under the category of a superyacht or mega yacht, which refers to a commercially operated luxury yacht which is over 24m long.

    Asked about the long term, Norrgren said superyachts don’t really go up in value.

    “If it goes for auction it never realises its full potential as it is a distressed sale,” she said, adding that there have been times when a superyacht could go up in value from its ordered price.

    “Pre-2018, people wanted a yacht imme­diately and there was a premium for very young superyachts, around one or two years old.

    “Nowadays, it is a pretty stable market for second-hand superyachts, with changes in value set by market depreciation rather than being influenced by economic factors,” explained Norrgren.

    The market for superyachts comprises the super-rich, also known as ultra-high net-worth individuals, said a luxury yacht broker.

    The broker said it was in the best interest for the government to keep Equanimity in good condition in order to sell it easily.

    The selling price of a used superyacht such as Equanimity, he said, would depend on a number of factors including how many people have been on the ship and used it daily.

    The broker said offering Equanimity for charter service could diminish its value.

    “The condition (of the yacht) will deteriorate. It will bring in charter income but the resale price of the yacht will be reduced,” added the broker.

    Despite its eye-watering value, Equanimity is not the most expensive when it comes to superyachts.

    In an online CNN article last month, which listed 10 of the most expensive superyachts, the top spot went to Serene, a 134m stunner that was reportedly bought by Saudi Crown Prince Mohammed Salman for US$550mil (RM2.24bil).

    In 10th position is Octopus, a US$200mil (RM814mil) vessel commissioned by Microsoft co-founder Paul Allen.

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