Correct, correct, correct YB Kit.

“Retrospective ratification of past illegal decisions by previous Transport Ministers” only serves as an encouraging precedent for present and future minisiters of any ministry to continue making illegal (ultra vires) decisions with impunity to the detriment of government’s credibility, depletion of national coffers and subversion of rakyat’s interest.

Datuk Ong Tee Kiat, we await with abated breath for you to give a full report on the RM4.6 billion Port Klang Free Zone (PKFZ).

“ministers”.

Oknyua,

Re your question – “Is there “ultra vires” in accepting the “letter of support” from a quasi body, set up under enactment?”

From what we know the “Letters of Support” were allegedly issued by the Transport Ministry to PKFZ turnkey contractor to raise RM4 billion bonds rated triple “A” by RAM from the market structured by investment bank (true???). They were also allegedly “ultra vires” (ie in excess of authority) as, we were informed, that the Ministry of Finance (“MOF”) had to prior authorise such “Letters of Support” if they were intended as a guarantee to commit the Government of Malaysia financially in such a scale, and such prior approval by MOF was not given at the time of issuance of “Letters of Support”. That being the case, of course it is a strong point to ask whether RAM was right to award AAA before checking the facts of MOF’s support. Also whether the market (ie the bond holders or their financial advisor and the financing banks) should be allowed to call on the Letters of Support, as if they were a guarantee or indemnity, when they or their legal advisors knew or at least ought reasonably to know or at least to enquire if MOF had given approval. To the extent that they failed to do so, an argument may be made out that they could not rely on the Letters of Support as recourse.

As I understand it the above questions become academic because in spite of the ultra vires nature of the Letters of Support’s issuance, the Government of Malaysia, in the interest of credibility or for other reasons better known to the decision makers, subsequently elected to ratify ie adopt these Letters of Support issued ultra vires as if they were originally intra vires (ie within authority and also approved by MOF), so what can we say now??? You can’t deprive the Market the benefit of the Letters of Support that government, knowing all the facts of their being ultra vires, elected to ratify and confirm.

At most we can only ask for accountability – why adopt and ratify ultra vires acts of two Transport Ministers issuing the Letters of Support, thereby increasing exposure to government to an aggregate of RM4.6 billion???

I do agree with you that there should be an audit and investigation but the problem is who has the expertise and impartiality to do it??? The ACA may not have sufficient personnel having an integrated grasp of such a transaction. The proper investigating agency ought to be the Securities Commission (SC) but the problem where it comes to the raising of RM4 billion bonds by PKFZ turnkey contractor, the SC’s approval must have already been earlier given so could the SC become an independent investigator?

I think we need a high-powered Royal Commission comprising reputable auditors, accountants, corporate and banking lawyers of integrity and impartiality to get to the bottom of this – provided there is political will to form it. How could we, when the Royal Commission on Lingam Video clip still have not completed findings and made suggestions???

Godfather is right that the rating agency is not RAM but Malaysia Rating Corporation Bhd (“MARC”).

Nobody contends that the bonds issued by the turnkey contractor – Kuala Dimensi Sdn Bhd (KDSB) – were ultra vires, the contention being that the letters of support issued by Ministry of Transport in their support were not that of the Ministry of Finance (MOF), and hence the letters of support were ultra vires, in excess of authority of Minister of Transport to issue them.

Here however Godfather said that “the legal opinions (from two of the biggest firms in town) said that the letters of support issued by MOT and acknowledged by MOF, represent the full faith and credit of the government”.

Then there is a serious dispute of fact here YB Kit because if what Godfather said is true, the letters were acknowledged by MOF which could be argued as good as MOF’s directly issuing them!

I mean if MOF did not approve, why acknowledge without further confirming that it did not approve the issuance by Ministry of Transport, another agency/ministry of the Government of Malaysia?

Everybody then knew that the development of PKFZ was in line with the Government’s stated policy to develop Port Klang as a regional distribution hub as well as a commercial, industrial and logistics center.

‘Unviability’ (if there’s such a word) for mega projects is always same story : no proper feasibility study, no or insufficient market demand, gross mismanagment, creative accounting, conflicts of interest and too many rent seekers in between having their cuts and hence costs over runs, inflation of values, and nothing spilled because everybody important is holding everybody else, with all guilty fingers in the pie etc

///Is that what the Malaysian government has come down to? The business of the government is to govern and not to do business! This was the Tunku-Siew Sin doctrine until Mahathir came along and introduced Malaysia Inc. and made himself first the CEO and later Chairman/// – Kickbutt.

Malaysia Inc. unlike normal corporations is not subject to company laws’ safeguards against breach of directors fiduciary duties, secret profits, conflicts of interest, disclosure and minority oppression….There’s also no oversight by any regulator. “Shareholders” are always taken for a ride. Even in banking, there is Banking & Financial Institution Act to take to task bank executives who lend beyond their designated approving authorities and limits but not the directors (ministers) of Malaysia Inc.

That is why to prevent innate human propensity to abuse power and self aggrandize, there should be institutional check and balance as regards political and social governance structured around broad and general “separations” of:-

· Government from business;

· Religion from government;

· Powers between legislative, executive and judicial branches – and fifth estate (media);

· Private morality from public morality; &

· Morals from criminal laws.