CONSPIRACY BUBBLE HAS BEEN BURST
I came across this article in the Singapore Business Times, written by its KL Correspondent S. Jayasankaran (formerly of The Far Eastern Economic Review).
MALAYSIA INSIGHT

Bursting conspiracy bubbles
Petronas is neither hiding accounts nor squandering assets; central bank chief quit Khazanah board to head off conflict
HERE seems to be an increasing trend towards conspiracy theories and finding scapegoats in Kuala Lumpur these days.

And the latest, going by remarks uttered over television, relates to Petroliam Nasional, or Petronas.

There are two distinct themes here. The first, echoed by First Son-in-Law and Umno deputy youth chief Khairy Jamaluddin is that the oil corporation isn't transparent because it allegedly does not publish its annual accounts. In short, by being deliberately obtuse, Petronas could be playing fast and loose with the people's money.

The other alleges that the national oil company is making obscene profits at a time when the ordinary people are reeling from a 41 per cent hike in fuel prices.

Both themes are incorrect, although the first could have been true back in the 1980s when Petronas seemed very secretive. Not any more.

The national oil corporation is an international borrower, having raised money through both Yankee and Samurai bonds and international bondholders expect nothing less than complete transparency from issuers.

Petronas bonds have always been snapped up and generally held until maturity. Its accounts are also lodged with the Companies Commission and can even be downloaded from its website. As a former investment banker, Mr Khairy should have checked before shooting from the hip.

There is no denying that Petronas is making record profits - which have risen to RM46.4 billion (S$19.4 billion) for the year ended March 31, 2007 from 2003's RM15 billion.

Out of that amount, however, it gave RM20 billion back to the government in dividends. It has over RM102 billion cash and investments and it will probably make net profits of over RM70 billion for 2008.

But the company should not be attacked for using some of that money to forage for new supplies here and abroad. New investment is the key to its survival so it should be commended for doing so, not pilloried.

On another matter, we might want to consider the sudden resignation last week of Bank Negara governor Zeti Akhtar Aziz from the board of federal government investment agency Khazanah Nasional, an event that set tongues a-wagging in the capital because the central bank governor has traditionally sat on the agency's board and, indeed, chaired its audit committee.

Actually, Ms Zeti resigned from the audit committee more than a year ago and her resignation from the board was always just a matter of time given the potential conflict of interest following Khazanah's increasing investments in the banking sector, both locally and abroad.

Ever since Azman Mokhtar took over as the agency's head in 2004, Khazanah has expressed its intentions to increase its exposure to the financial sector.

Indeed, it immediately went about this by increasing its interest in the Bank of Commerce to over 25 per cent from 8 per cent and then engineering the consolidation of that bank with Bank Bumiputra to form CIMB, Malaysia's second largest bank.

One can only imagine Ms Zeti's discomfort when CIMB set about its hostile takeover of Southern Bank almost two years ago. The latter had even appealed to the central bank for help at one stage.

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