Nightmare of an “Investment”


After investing RM537.04mil in the US-based Columbia Aircraft Manufacturing Corporation (CAMC) through Composites Technology Research Malaysia Sdn Bhd (CTRM), the Government only managed to get back RM25mil.

The Star – 3 Sept (read here)

What a shocker! This reflects such horrible management of public funds where the Government is the caretaker.  If Maybank’s investment position in BII in Indonesia is a bad decision, this one with CTRM in CAMC is far worse.  Is this the tip of the iceberg of mismanagement of public funds?

Certainly, in any investment, there are its associated risks.  However, in every investment of such magnitude, prudent management must be part of its practice.  How in the world can an investor, namely our Government, lend such a large sum of money with no financial oversight in CAMC?

The 2007 Auditor-General’s Report stated that CTRM, owned by the Finance Ministry Incorporated and Petronas, invested and lent RM537.04mil to CAMC as of September last year.

CAMC filed for bankruptcy last year and has since been bought up by Cessna for RM56.27m.  For Cessna to pay this amount means there’s some residual value to the work that was done by CAMC and we would not be surprised that Cessna can make much more from this acquisition else they would not have bothered with CAMC.  How much more can our Government agencies learn from Cessna?  Wait for someone to pump hoards of money, do the relevant R&D to create worthwhile Intellectual Property, mismanage the company and pick up the gold for a song.  Unfortunately, in this case, our Government apparently squandered away the opportunity.

The Auditor-General pointed out a few very eye opening reasons for this fiasco.

  1. unscrupulous spending by CTRM senior management officers
  2. CACM’s board of directors unable to tackle production of aircraft quickly
  3. Finance Ministry Incorporated’s lack of monitoring of CACM

These 3 points can be summarized into 1 horrible business and financial management on the part of our Government.  Here are some questions to ask CTRM and Finance Ministry Inc.

  1. Did CTRM senior management officers went on a long term spending spree?  Why were they appointed in the first place if they are such poor managers with no honor and principles?  Where did they spend the money on?  Whose money were they spending – their own or ours?  Does this amount to CBT?  Who is investigating further into this to recover the sum lost if it was CBT?
  2. Why was CACM’s board of directors held responsible for production of aircraft?  The CEO and his team should be fully responsible for the business and its continued viability but what really happened?  If the Auditor-General found the CACM board of directors responsible, did they interfere with the CEO and team when the board (were they from Finance Ministry Inc and Petronas?) probably didn’t know anything about production of aircraft and hence, causing the failure of the company?  How can CACM lose so much money without a proper accountability over the years?  Such loss cannot have happened in a single year and if it was accumulated, how is it the board of directors not put a stop to the loss but allowed CACM to get into an insolvent position?
  3. How can the Finance Ministry Inc not be monitoring CACM?  If so much money was lent to CACM through CTRM, wouldn’t the Finance Ministry Inc be required to be on the board of CACM and CTRM?  If so, how can their representative not have cut the losses long before the insolvent position?  If not, how can this even happen?  Wouldn’t this be construed as a major oversight of public funds?  Where did the money go?  Was it misappropriated?

One wonders then how public accountability goes in Malaysia.  There isn’t any.  If public money is to be spent, it has to be accounted for.  Every project, every investment must, without hesitation, be made public because public funds are used.  Otherwise, how can the Government even be trusted with our hard earned tax money?  In a private sector investment, the management will have been crucified by the shareholders.  In Malaysia, the Government can easily be written off quietly and the Malaysians will never know.

Many of such activities are classified under the Official Secrets Act (OSA) and we will never ever know what black hole our money has gone.  This shows that the Government has no concern over the hardship of Malaysians in having to go through tough times and paying taxes only to find out that we have no right to know how our money was spent or lost in this case.

Isn’t it about time that the ACA investigated such cases rather than little stuff like Puspakom only?  When the ACA tackles the tough cases, only then will Malaysians believe that the ACA is serious and be worthy of respect for their zealousness to safeguard the interests of all Malaysians.

So much hard earned money, so easy to lose it without being held accountable!  In the private sector, such would not have happened especially to investment firms but it so happened that our Finance Ministry Inc is trying to play a wannabe investor role without any accountability.

Reading such news would have made the tea time of Morgan Stanley and other investment companies more hilarious!.  Malaysia Government would be the butt of jokes for sure.  Would this happen to all the BILLIONS of RINGGIT in our 2009 Budget?

Another sad day for Malaysia.  This is not what we expect from the “Malaysia Boleh” cheer. 😦

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3 Comments to “Nightmare of an “Investment””

  1. It seems that everything the government does is just for show. Its all wayang kulit!!

  2. Thinking allowed but alas, not loud nor critical enough.
    Another whopping surprise on how Malaysia really boleh! 🙂

  3. losing moneys of the country without justification should be deemed as a treason to the country. God forbids

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