Thursday, August 20, 2015

Arul vs Tony Pua: What is the limit to transparency?

After a short hiatus, Tony Pua emerged after Arul Kanda's TV3 interview to revive a past issue on 1MDB. He had previously accused Arul as lying. Now he seek explanation on the redeemed US$1.1 billion Cayman Fund and challenged him to a debate.

His intention is not to seek explanation but to accuse the Cayman Island fund has disappeared. And, the challenge for a debate is typical politician ploy, in which a corporate man with a task to do like Arul should not waste his time.

Arul replied to tell Tony Pua that he is recycling issues already answered. Tony Pua said it was not and resorted to a name calling "chicken challenge". Arul duly replied to indirectly described him as "monkey" living in a jungle without rules and order.

Essentially, Tony Pua's antic is what Transparency Initiative website here described as "accountability politics" which is "the arena of conflict over whether and how those in power are held publicly responsible for their decisions."

Accountability means ensuring that officials in public, private and voluntary sector organisations are answerable for their actions and that there is redress when duties and commitments are not met.

Part of accountability is the practise of transparency. It means "public officials, civil servants, managers and directors of companies and organisations and board trustees have a duty to act visibly, predictably and understandably to promote participation and accountability".

The bigger question to issues raised by Tony Pua is what is the limit of transparency or how much disclosure is allowable?

In the midst of the much hurrah over Jullian Assange and Wikileaks, there were groups that cherish the leak as necessary to combat corruption.

But when posed with the question as to should government reveal all it's information, there is an agreement to oppose full transparency in order to prevent abuse and from being falliable to anarchy. [Read discussion in here]
In areas such as securities, the public right to know come together with public right to not know. As one US conservative think tank in an interview in US News said, "The public has a right, through electing a government, to have some information kept from them and from our enemies."

That is quite clear cut but before our GE 13, DAP and NGO like SUARAM were raising issue on defense spending in which the correct answer would essentially be giving away security and military capability information.

Something of more direct public interest would the demand for more disclosure in the management of the state pension fund in Kentucky last year.

The public demanded for more transparency in the way investment proposals are solicited from fund managers, management fee charged, and banning of third party placement agents.

The argument against such proposal was fund manager would shy away than to disclose their fee and allow proprietary knowledge be made known to the public. Also, those getting state pension would not want their financial details be made known to the public. [Read here]

The view that the inner mechanics of government is none of the public business was shared by the Texas Health and Human Services Commission (HHSC) in the hiring of consultants to undertake the consolidatation of 11 state agencies into five. [Read here].

If every other government decisions and operational matters need to get public approval or need prior feedback, there is no need to have elected representatives, select capable individuals to head the civil service and in the various structure of government.

Since public has entrusted that responsibility to their elected officials, civil servants and enforcement personnel, there is not need to divulge details and over scrutinise their judgement.

Tony Pua's expectation on Arul to give away the valuation of the unit of sovereign fund held at BSI could be seen in a similar vein. The entity responsible to investigate should be left to deal with the various issues. Making it public encourage discussion but it delays decisions, will not achieve the solution and only complicate matters.

In the private sector, the public right to know has it's limit. The level of disclosure and transparency ends at the point it involves company's proprietary knowledge, confidential information and when the interest of the company is at stake.

Under the Company Act, the only public disclosure requirement is the Audited Accounts. For publicly listed companies, there will be the Annual Report, Quarterly Report, and a bit more disclosure requirement by the Bursa to announced any market sensitive information.

There could be demand for more openness within companies  to the staff in order to help them understand the company direction, and promote inclusiveness. The tricky bit is to keep information internal especially in this leaky digital information era [Read FP here].

Read more here:

In the event of some wrongdoing, it is companies' responsibility to report to the authorities and cooperate in the investigation. The enforcement authorities will have access to information, ability to investigate, to prosecute or not and the court to make the judgement.

The public should neither have access nor comment on the investigation for fear it will disrupt or influence investigation. The big publicity on SRC was an example. Three officials seek by investigator disappeared because of the big publicity.

Extensive negative publicity on 1MDB put pressure on investigator or could influence them to decide one way.

It is understandable to expect criticism and doubt on public institutions arising from the removal of certain high officials, investigation on leak seen to divert investigation and disbanding of Special Task Force. Taken also the trust deficit on government and public institution.

However, there are reasons for the existing limitation in transparency. Till there are amendment to the law and policy, that is the how things operate and the expected conduct.

In the meanwhile, the ruling party need to convince the public that there exist the collusion by politicians and public officials to topple the government. Otherwise, the argument that there should be limit to transparency will fall on deaf ears.

As for the doubting public, they should not "mudah lupa" (easily forget) but back their doubt by pursuing an agenda for more disclosure. Otherwise their concern is only politically motivated. Transparency, accountability and disclosure should pursued based on genuine concern and mere political manipulation. 

The political motivation behind Tony Pua's statements can only be expected of politician. He is asking questions not for answers but doing public interrogation with changing goalpost. By right, he should appreciate that the current management of 1MDB headed by Arul is tasked to solve the problem of over gearing and mismatch cashflow than to get into political cat fight.

Tony Pua's allegation that the Cayman fund is missing is as close to openly doubting MACC's conclusion that the RM2.6 billion transfered into Dato Najib's private account is not linked to 1MDB.

As a member of PAC, he should not as he has the PAC platform to do so already. In the PAC session, he could pose the hard questions and enquire for the informations as no information could be withheld.

One could expect that questions and answer in the PAC are intentionally not shared with public as it is not the short easy soundbytes for political mileage. 

Tony Pua has the advantage of access to reports like the Interim Auditor General report and the PAC sessions. Since the reports could not be made public, is he trying to disclose without being caught breaking the PAC rule?

Tony Pua's questioning may have the intention to make other accusations against 1MDB but are too afraid to do so.

For one, he may not have the proof to back the conspired allegations. His name turned up in a report of a Fullerton Hotel, Singapore meeting which was attended by Xavier Justo, Clara Rewcastle, and other conspirators on the 1MDB issue.

On Monday, Xavier Justo admitted guilty to charges of blackmailing and extortion. Say the wrong thing and Tony Pua may leave a clue that he has in possession illegally obtained information.

Tony Pua's latest antics is to cast doubt on the explanation given by Dato Rahman Dahlan on Petrosaudi. The argument is even if the investment was a bad decision, 1MDB got back their investment. No money disappeared but it was in fact profitable.

Tony Pua have come close to accuse the BSI account transfered to IPIC has no money in it. He will have to prove it or run the risk of being sued.

He cannot keep posing recycled questions with the hope Arul will erred. There is a system of law and order in Malaysia. It is does not adhere to the law of a jungle filled with monkeys and other wild animals.


Capcha said...

So, let me get this straight so there is no room for misunderstanding. Are you saying that everything is 100% A-ok with 1MDB, with no ifs and buts?

Second, exactly what is 1MDB? As someone wrote on Big Dog's blog, is 1MDB a sovereign wealth fund (SWF), GLC, private equity firm or a private limited company? What is it's provenance? Under what laws was it set up?

Third, was the "seed money" to set up 1MDB sourced from public funds or was it from private sources? If it was the former (i.e.public funds), isn't the public (and it's elected representatives) entitled to know what has happened to those funds?

Fourth, if 1MDB is a SWF, why has it amassed substantial borrowings in order to acquire assets and build up it's portfolio? Can you name any other SWF that has adopted a similar strategy?

Fifth, if everything is A-ok with 1MDB, why has Arul Kanda said that it needs 6 months to pare down it's debts and "rationalise" itself? Which other SWF has done/is doing likewise?

These are valid questions that need honest answers. Nothing less.

Or let those who set up 1MDB at the very beginning stand up and say publicly and categorically that NO public funds were used to set it up.

That isn't asking too much, I'd it?

A Voice said...

Yes too much.

Suggest you comb thru some of our past postings for answer to your first question. Hate to recycle answer too :)

1mdb issues started from allegations. Subsequently the bad publicity and poor response became problem for the company.

Anonymous said...

Since 1mdb is in order from the beginning, they shouldn't hire Arul.

Anonymous said...


No doubt there had been bad decisions made in 1mdb. Risky gearing model. The only question is was money swindled.

Tun m said rm42 billion disappeared but no proof brought forward. Many of his allegations turned out wrong.

The allegation thst money from 1mdb was diverted into najib's personal account rest on the assumption that good star ltd belongs to.jho loh.

1mdb has denied that and it turn out good a subsidiary.of petrosaudi.

Then there is this issue of planned, conspiracy. So who are we to believe?

Could all this be fabricated to topple najib? Or cud it be a coverup.

Anonymous said...

"1mdb issues started from allegations"
Yes, you're right here. Most allegations remain just that but here, material facts have turned out to be true!!!

"Subsequently the bad publicity and poor response became problem for the company"
- Shit will smell like shit, roses will always smell good no matter what is said.
- allegation and bad publicity? didn't the govt and pm himself admit they need some time?
- they admitted cash flow problem, problem repaying loan, need to raise more, need to sell assets given CHEAPLY to them.


Capcha said...

#A Voice 6:28 PM

What about answers to my second, third, fourth and fifth questions?

And I beg to differ from your opinion that "1mdb issues started from allegations"?

What was the rationale to set up 1MDB in the first place? Why have another SWF when Khazanah is already well-established?

And if it is a SWF, why borrow money in order to fund it's acquisitions?

Surely it's promoters (whoever they are) should have injected their own funds to get 1MDB up and running and to fund it's acquisitions?

What are the answers to all of the above?

Anonymous said...
This comment has been removed by a blog administrator.
A Voice said...

Sorry was not looking at the blog for few days. Just released comments.

2.20 AM, 8.09 PM


But have removed 8:09 PM's "idiot" comment. No insults please. Just lay out what's your point? You have a problem with differing views????


The questions are not something you do not know. It is obviously leading questions.

Like we our reminder before your leave comments, "plainly state your opinion". It is easier to answer or reply when we have a clear idea where you are going.

9:39 AM

Mind telling us where did we spin? Which part of the facts are manipulated to mean differently? Do differentiate facts and your personal understanding of facts or issues.

Sometime people confuse between spinning and opinion. Everyone entitled to an opinion. You have problem with me having an opinion?


Heavens! Can't we have a civilised discussion and respect each other's opinion without insults and bad language whenever there is differences.

Hate to remove comments all the time

My Say