Abdullah should explain whether the hold-back of four issues of FEER is because of an article revisiting the RM10 billion government bail-out of  Renong and whether it is a warning against independent international economic reporting of Malaysia 

Media Statement
by Lim Kit Siang

(Penang,  Wednesday): Malaysiakini reported today  that while the Home Ministry had released the three issues of The Economist of April 26, May 3 and May 10 which had been held back after the UMNO furore over its April 5 special survey of Malaysia,  it had held back four issues of Far Eastern Economic Review (FEER) cover-dated April 24, May 1, May 8 and May 15.   

The arbitrary punishment of foreign publications, by holding back their release in the news-stands, is not a practice which can contribute to the elimination of the “First World Infrastructure, Third World Mentality” Malaysian malaise which the Deputy Prime Minister  Datuk Seri Abdullah Ahmad Badawi had so brilliantly diagnosed as a major obstacle to the achievement of Vision 2020 and the development goal of Malaysia. 

Abdullah, who is also the Home Minister, should establish a new standard practice requiring the Home Ministry to issue a statement specifying the problem article or feature which has led to the hold-back of any foreign publication – which is the minimal duty owed to the citizens on the part of a government which genuinely  believes in the principles of accountability, transparency and good governance. 

In the case of the hold-up of the four issues of FEER, Abdullah should explain whether it  is because of an article revisiting the RM10 billion government bail-out of  Renong in its April 24 issue,  and whether it is a warning against independent international economic reporting of Malaysia.  

The FEER featured its  article entitled “Turning Back The Clock” by S. Jayasankaran on the restructuring of Renong and the Liong Group, “two of Malaysia’s biggest conglomerates that went from boom to bust in the go-go 1990s”,  as follows: 

Restructuring of the country's two most-indebted conglomerates may have come a little late for the companies involved. Investors who were burned in their collapse are not showing much interest” 

In its opening, the article said:

Both Renong and Lion ran aground in the Asian financial crisis and restructuring them was seen as pivotal to the health of Malaysia's corporate sector. But to the chagrin of the Renong and Lion conglomerates, the recent restructurings haven't won them applause, only indifference. ‘No one gives a hoot,’ says the head of a foreign
brokerage in Kuala Lumpur. ‘They have no institutional followings whatsoever.’

Even so, the restructuring of both conglomerates marks the end of a period of reckless growth where companies raced to expand amid easy credit and political patronage. And the government's continuing and key role in managing corporate change illustrates how the state remains committed to preserving the country's corporate giants.”

Tracing the history of Renong,
”the poster child of an affirmative-action policy favouring ethnic Malays” and “seen as a crucible for the creation of a Malay
industrial and managerial class”,  it received “a slew of privatization awards and contracts from the government that, by early 1997, it had over 60 billion
ringgit in assets and 11 listed companies involved in everything from banking and telecommunications to infrastructure development, oil and gas”.

By the time the Asian financial crisis broke in 1997, Renong  was the country's largest corporate debtor which  owed over 25 billion ringgit in group debt, or 5% of the entire loans portfolio of the banking system. 

What must have offended the government’s sensititivies resulting in the four-issue hold-up was that the article went on to describe how the government had to eventually take over Renong’s problems when its restructuring exercises failed, by “wholly, and forcibly”.acquiring United Engineers. a listed infrastructure company that owned 32% of Renong and taking it private.

It said:

In late February 2003, the government took Renong private and transferred its listing status to a new company, UEM-World. To ensure UEM-World's viability, United Engineers sold it its four most profitable companies and assumed all of Renong's loss-making assets.”

In addition, the seven-year Plus bonds were rolled over for another 10 years at much lower interest rates--an indication of the state's near risk-free credit profile with the banks. But Renong's salvage came at  great cost to the government. So far, it has spent over 10 billion ringgit rescuing the company and the final figure could well be way above that.” 

In Parliament next month, the government should present a White Paper detailing the full costs to the taxpayers of the government’s bailouts of Renong and other crony conglomerates.


* Lim Kit Siang, DAP National Chairman