Short Position


 

Big task ahead for Bakke

TAN Sri Megat Zaharuddin Megat Mohd Nor lasted only 11 months as chairman of the Federal Land Development Authority (Felda). He was roped in to improve the governance in Felda and resolve its cash-flow problems.

He should have improved the governance in Felda, considering he came from Malayan Banking Bhd and Shell Malaysia before that. Both companies are known for their high governance standards. However, Felda’s debt issue of RM8bil remains unresolved.

It lacks the cashflow to finance its development programmes. And Felda is sitting on RM5bil worth of investments that was done through Felda Investment Corp (FIC) that is not yielding the desired returns. FIC’s investments are in properties, hotels and equity stakes in listed companies.

The new chairman of Felda is Tan Sri Mohd Bakke Salleh, who comes from Sime Darby Plantation Bhd. Bakke’s rise to prominence was in the late 1990s when he was in Pengurusan Danaharta Sdn Bhd.

He later went to Lembaga Tabung Haji to clean up the fund before being moved to Felda Holdings Bhd, which is the commercial arm of Felda. Bakke restructured Felda Holdings, which saw the emergence of FGV Holdings Bhd.

Before the listing, he was moved to Sime Darby Bhd.

Bakke is also known as the first chairman of 1Malaysia Development Bhd (1MDB) who resigned in a huff after the first board meeting in 2009. He resigned because the management of 1MDB had transferred a sum of US$1bil (RM3.4bil then) to PetroSaudi International without board approval.

His move to resign was viewed as “not wanting to be part” of 1MDB, which was the brainchild of Datuk Seri Najib Razak, who was the prime minister then.

In Felda, Bakke will not find it easy, as it is asset-heavy and light on cashflow. An asset sale is the best option, but prices are depressed now.

Cementing issues in Sarawak

ARE cement prices higher in Sarawak compared to other parts of the country?

That is the question that arises from the brief exchange between Finance Minister Lim Guan Eng and Cahya Mata Sarawak Bhd (CMS) chief executive officer Suhadi Sulaiman.

Lim had said that cement prices in Sarawak were significantly higher and suggested an investigation if it was due to a monopoly situation in the state.

Sarawak’s sole cement plant belongs to CMS, which belongs to the family of former Chief Minister Tun Abdul Taib Mahmud, who is the Yang di-Pertua Negeri of Sarawak.

Suhadi of CMS replied that the company has not increased prices since 2016 and welcomes an investigation into the matter. He said that investigations would show that the price disparity is purely due to aggressive competition that has led to mergers in the peninsula.

Suhadi further contended that there has never been a monopoly in Sarawak, as the market is open to other cement producers to set up their plants there. However, he said that no company has ventured into the state.

Considering that the chief executive of CMS is prepared to be investigated to show that the company has not raised prices since 2016 seems to indicate that there may not have been a price hike of the material in Sarawak.

However, it is highly unlikely that the Finance Minister could have made a mistake in his statement on cement prices in the state. He did not say it off the cuff, but issued a statement through the ministry.

Hence, the matter warrants an investigation to determine the real situation.

Probably cement prices have not increased, but the producers have stopped giving discounts due to consolidation in the industry.

Reap what you sow

IT was painful to see photos of children gasping for air following the recent pollution scandal in Pasir Gudang for the second time in three months. To have a repeat of toxic fumes permeating the air is a complete failure on the part of the authorities, whose job is to ensure that such scenes did not even happen the first time.

The lives of innocent children are once again in danger because of unscrupulous industries that have chosen to dump toxins into the environment. The disruption to the lives of parents and school-going children needs to be quantified in ringgit terms to show just how costly ignoring the environment is to the economy.

But we have also seen how a disregard of the environment has had its effect on surrounding areas. Stories of Malaysia being the rubbish dump of the world is a total embarrassment and the authorities who say there is big money in that need to have a rethink.

In highly industrialised zones, the question is just how stringent are our environmental laws compared with countries that have increasingly paid more attention to enforcing legislation to ensure that damage from pollution does not cost society and the economy.

One big part of the economy that is paying attention to environmental concerns is the palm oil industry. This is because of the pressure put by Europe and Western buyers, where the image of palm oil is unpleasant.

Indiscriminate felling of forests, open burning to clear land for replanting and wildlife suffering are increasingly being carved in the minds of those buyers. Societies there have taken notice and the disregard of the environment in the past when it comes to oil palm is hurting the cash crop.

There is no point in arguing that those Western buyers are wrong. They are the customers of our crop and the buyer, as they say, is always right. It is good to see action is now being taken to ensure that responsible planting is being practised in the industry and that practices of the past are changing towards greater care for the environment to allay the concerns of such buyers.

It is an uphill battle, though, that the country must continue. As the world increasingly focuses on the environment and with the younger generation more aware of the need to protect what we have and ensure sustainable development, it is high time authorities here start expanding environmental protection laws and guidelines to ensure that best practices are being enforced in various industries.

That will give confidence to not only the local population, but also international clients that the goods bought from Malaysia do follow the best standards in responsible production.

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