Friday, January 31, 2020

UK Crown court decision naming AirAsia, AirAsiaX and directors turns spotlight on Khazanah directors, senior managers-MACC and police investigation cannot be avoided, especially after Khazanah police report attempting to cover-up MAS-Airasia deal

by Ganesh Sahathevan

On 24 January 2020 The Edge reported:

Upset and shocked by what appears to be a leak of the entire board papers on Malaysia Airlines Bhd, Khazanah Nasional Bhd wants police to act. Sources said the country's sovereign wealth fund lodged a police report on the matter yesterday.
It appears that the entire set of confidential board papers on the various options being considered for the troubled national carrier was given to the news portal which published them in a series of articles earlier this week.
The main pieces were on the proposed merger of Malaysia Airlines with AirAsia Group Bhd and AirAsia X Bhd.

It now appears, from a UK court decision, that AirAsia and AirAsiaX were themselves subject of a corruption investigation in which Airbus admitted to paying AirAsia and AirAsiaX directors and employees significant bribes.The relevant parts of the judgement are reproduced below:

Case No: U20200108
Royal Courts of Justice Strand, London, WC2A 2LL
Date: 31 January 2020
Before :
Between :

Director of the Serious Fraud Office - and -
Airbus SE
--------------------- ---------------------
Applicant Respondent
James Lewis QC, Allison Clare, Katherine Buckle and Mohsin Zaidi (instructed by the Serious Fraud Office) for the Applicant
Hugo Keith QC
and Ben FitzGerald (instructed by Dechert LLP) for the Respondent

Hearing date: 31st of January 2020 ---------------------
Approved Judgment 

  1. Count 1: Malaysia
  2. The first count alleges that contrary to section 7 of the Bribery Act 2010, between 1 July 2011 and 1 June 2015, Airbus SE failed to prevent persons associated with Airbus SE from bribing others concerned with the purchase of aircraft by AirAsia and AirAsia X airlines from Airbus, namely directors and/or employees of AirAsia airlines where the said bribery was intended to obtain or retain business or advantage in the conduct of business for Airbus SE.

  3. AirAsia and AirAsia X are two major airlines in Southeast Asia, headquartered in Malaysia and were significant customers of Airbus at the time of the offences. Between October 2005 and November 2014, AirAsia and AirAsia X ordered 406 aircraft from Airbus, including 180 aircraft secured during the indictment period by way of improper payment (made by EADS France SAS, later Airbus Group SAS), and the offer of a further improper payment. 

  4. The improper payment consisted of $50 million (and Airbus employees also offered but did not pay an additional $55 Million) paid to directors and/or employees of AirAsia and AirAsia X airlines as sponsorship for a sports team. The sports team was jointly owned by AirAsia Executive 1 and AirAsia Executive 2 but was legally unrelated to AirAsia and AirAsia X. The additional improper payment was prevented by the October 2014 freeze on payments to BPs described at para 29 above.

The extent of the cover-up , for that is what the police reports by Khazanah seem to have been intended to achieve is wide ranging ,as reported on this blog just under two weeks ago(see story below).


Monday, January 20, 2020

The AirAsia-MAS takeover proposal: Have Khazanah directors breached their fiduciary duties : RM 8 Billion in costs, plus Indian & UK investigations being treated trivially, Khazanah may need to be investigated

by Ganesh Sahathevan

Esha Gupta blasts Air Asia for changing arrival of flight without information Photo: Reuters, Twitter
Esha Gupta blasts Air Asia for changing arrival of flight without information Photo: Reuters, Twitter
Esha Gupta blasts AirAsia for changing arrival of flight without information. Calls them disgusting

If the FocusMalaysia story below is true, Khazanah Malaysia's directors and senior managers will have much explaining to do for they would seem to have breached their fiduciary duties to their shareholder, the Government Of Malaysia.

However, the RM 8 Billion cost to Khazanah is not the only problem

Air Asia faces legal problems in India.The financial and reputaional damage to MAS and the Malaysian Government from any merger into those problems seems to have been ignored.Then there are the British Serious Fraud Office issues:

AirAsia CEO Tony Fernandes. ED has pressed charges under PMLA to probe the trail of funds used to create illegal assets. (Bloomberg)

AirAsia CEO Tony Fernandes. ED has pressed charges under PMLA to probe the trail of funds used to create illegal assets. (Bloomberg)

Khazanah's management insistence on the merger needs investigation.


AirAsia’s takeover of Malaysia Airlines may cost Khazanah over RM8 bil | FocusMalaysia
 | 14 hours ago | 
AirAsia’s takeover of Malaysia Airlines may cost Khazanah over RM8 bil
AIRASIA Group Bhd’s (AAGB) proposed takeover of Malaysia Airlines Bhd (MAB) will include key exclusions which may take the initial cost to Khazanah Nasional Bhd (which owns all of MAB) to over RM8 bil, documents sighted by FocusM show.
These include an RM5.4 bil financing gap for MAB’s six A380s, the exclusion of an RM2.5 bil sukuk, costs of staff layoffs, and the cost of cancellation of 25 Boeing 737 MAX 8 orders as well as other fleet rationalisation. All these total up to well over RM8 bil that Khazanah will have to bear even if MAB is acquired by AAGB.
The documents showed that last month AAGB chief executive officer Tan Sri Tony Fernandes pitched to Khazanah managing director Datuk Shahril Ridza Ridzuan a merger between AAGB, its long-haul unit AirAsia X Bhd and MAB (MergedCo).
This MergedCo would be listed on Bursa Malaysia and be a “Malaysian/Asean champion.” These were some of the pull factors that entitled AAGB to be MAB’s strategic partner.
It is also understood that Shahril and the Khazanah management were in favour of the deal but it was shot down by the board. It is believed that the proposal is still making rounds and being considered as the fund needs to decide on a strategic partner for MAB soon.
According to Prime Minister Tun Dr Mahathir Mohamad, there are five proposals. Economic Affairs Minister Datuk Seri Mohamed Azmin Ali also said Khazanah is still on the lookout for a strategic partner. The fund will need to settle on a name soon.
AAGB’s bid is one among four bids currently on the table and is probably the leading bid, followed by Japan Airlines, the other two being Air France-KLM and Malindo Airways.
But AAGB had the leg up as Khazanah believes the synergy derived from the MergedCo would amount to roughly RM1.4 bil a year, which is sufficient to cover MAB’s operations of RM1 bil a year.
Here are the salient points of Fernandes’ initial proposal to Shahril:
1) AirAsia Group is in the process of consolidation
AAGB, through AirAsia Bhd (AAB or AK), is in “the process of acquiring” AirAsia X Bhd (AAX or D7). This will see both airlines merge into one airline operation, retiring AK and D7 and only using one IATA code AK.
This enlarged group will serve the low-cost market, covering domestic and international segments, from short to long haul. This is also the crucial step in merging with MAB to form the enlarged MergedCo.
2) MH will be retired and placed under AirAsia group
MAB will be placed under Asia Aviation Investment Ltd (AAIL) which is 100% owned by AAGB. The IATA code MH will be changed to MY but will target the “premium segment” for both domestic and international markets.
AK, which is the merged company between AirAsia and AirAsia X, will aim for the low-cost segment for both domestic and international markets.
Further, AirAsia plans to retain the blue colour of the current MH but “with a refreshed, modern image and branding” while its low-cost offerings under AirAsia Group remains with its red and current branding.
3) No golden share
Post-transaction, the Malaysian government or Khazanah should not have any golden shares, or preference shares in MAB. AAGB also is demanding for complete control of management, including the appointment of key senior personnel, including the chief executive officer.
Fernandes wants “minimal government intervention” as MAB will be under the AAGB umbrella. But Khazanah may be allowed to have a seat on the board of the MergedCo.
4) Khazanah to bear staff layoffs and settle RM2.5 bil sukuk
AAGB wants to have full discretion on who to hire and fire from MAB but Khazanah has to execute the rationalisation exercise.
This includes bearing compensation and costs related to the exercise which may involve voluntary separation schemes (VSS) and/or mandatory separation schemes (MSS).
AAGB might retain pilots and cabin crew for future growth but other divisions are subject to “further deliberation.” AAGB will also not take up the RM2.5 bil corporate perpetual sukuk issued in 2012.
5) AAGB is seeking government and Khazanah’s help for clearance from the Malaysian Competition Commission (MyCC)
Having a MergedCo consisting AAGB, AAX and MAB is expected to trigger anti-competition problems. AAGB is seeking for the proposed transaction to be approved by MyCC. This is done to protect AAGB and its stakeholders’ interests.
6) AAGB will look to cancel, exclude and retire a number of MH planes
Six Airbus A380-800 are to be sold or disposed by Khazanah prior to the merger transaction. The reason is, according to AAGB, the group does not need to use the A380s as part of its operations.
Also, these six Airbuses have yet to be fully paid for by MAB. There is an RM5.4 bil loan financing gap for the six planes. AAGB does not want to bear that either.
AAGB also wants Khazanah to cancel the 25 Boeing 737 MAX 8 orders. This is to streamline planes to ensure that they originate from a single manufacturer, Airbus. Also, AAGB is worried about “current issues associated with the B737 MAX aircraft”, so it doesn’t see the benefits of adding the Boeing fleet into its current Airbus stable.
Khazanah is to bear any penalties arising from the cancellation, prior to the proposed merger.
AAGB will also seek to retire six Airbus A330-200 which are around 10 to 14 years old. These planes, according to AAGB, operate different engines, and ultimately would impact MAB’s turnaround.
7) Firefly to be excluded, MASwings to be sold, Brahim’s to be acquired
There are two options for MAB subsidiary Firefly. First is to exclude the airline entirely from the proposed merger. The second option is to include Firefly as part of the transaction but keep it as a separate company from MH and not as a subsidiary of MH.
Firefly can come under AAGB but be transformed into a business jet arm providing connectivity from Subang Airport, similar to London City Airport.
But AAGB is proposing that the Sabah and Sarawak state governments take over MASwings and for them to operate the Rural Air Services (RAS) routes.
AAGB wants to buy over Brahim’s to streamline in-flight catering operations to ensure cost efficiency and operations. – Jan 20, 2020

Thursday, January 30, 2020

Airport workers demand ban on flights from China: NSW Emergency Management Committee inaction needs explanation from Premier Berejiklian, and her SEMC chairman Andrew Cappie-Wood ;has Cappie-Wood again been busy playing politics while neglecting his job

by Ganesh Sahathevan

Should Australia ban flights from China during the coronavirus emergency?
Should Australia ban flights from China during the coronavirus emergency?
12229 Voters has just reported:

“Airport staff, including officers stationed at security checkpoints and facility attendants, may have no choice but to stop work, after being told they are not allowed to wear protective gear because this will make customers feel ‘uncomfortable’,” the United Workers Union said in a statement.
“In some cases, workers who have made a request to wear a mask have been threatened with disciplinary action.
“Access to basic hygiene, such as soap, has also been identified by security workers at Sydney Airport as a major cause for concern.”

The warning comes as the Transport Workers Union (TWU), which represents airline and airport workers, demanded the Federal Government ban flights from China over concerns about the virus spreading.
“Suspending flights originating from China may appear to be a drastic measure. But the consequence of inaction could be even more drastic,” TWU national secretary Michael Kaine said.
“Air travel is the most efficient means for the virus to spread, and already has been integral to the spread of the virus to at least 18 other countries around the world.
“Until more information about this form of coronavirus is known, then the precautionary principle must apply.
“That means taking all possible steps to contain the virus and protect the Australian community.
“All flights from China must be suspended until this disease is under control.”

It is clear that the workers, and the public given the results of the on-line poll above, have little if any confidence in their leaders and their bureaucrats to keep them safe.
As reported on this blog last week, Sydney City failed to issue any alerts despite its Sydney City Lunar New Year celebrations becoming a security threat (see story below).

Despite the escalation in the crisis the NSW Emergency Management Committee has remained silent on the matter of the risks posed by the Sydney City Lunar New Year events, as has the Premier Gladys Berejiklian. Her SMEC chairman Andrew Cappie-Wood has also remained silent, again raising the question whether Cappie-Wood is again busy playing politics rather than doing his job.



Saturday, January 25, 2020

City of Sydney Lunar New Year 2020 Festival became an obvious security risk by mid-Jan if not earlier,but no warning from NSW Emergency Management Committee, Clover Moore and no screening at airports

by Ganesh Sahathevan


Lunar Year 2020 banners in Martin Place 

The City Of Sydney's annual Lunar New Year celebrations are designed to attract visitors from China. These probably add to the large number of visitors from China who arrive daily in Sydney via Sydney Airport.

On 31 December 2019, WHO was alerted to several cases of pneumonia in Wuhan City, Hubei Province of China. The virus did not match any other known virus. This raised concern because when a virus is new, we do not know how it affects people.
One week later, on 7 January, Chinese authorities confirmed that they had identified a new virus. The new virus is a coronavirus, which is a family of viruses that include the common cold, and viruses such as SARS and MERS. This new virus was temporarily named “2019-nCoV.”

NSW Emergency Management Committee  is responsible for community  safety but it does not seem to have had anything to say.The same can be said of the Mayor,Clover Moore, and the Premier NSW,Gladys Berejiklian.

Additionally, while airports in the US stared screening to coronavirus on or about 18 January 2020 and Thailand as early as 3 January 2020, Sydney and other Australian airports have only just started screening late last week. 

All this despite having in Sydney an annual event designed to attract visitors from China. END 

See Also

Did NSW Emergency Management Services ignore its own data, and fail to advise David Elliot of the likelihood of catastrophic bushfires? Chairperson Andrew Cappie-Wood's advise requires scrutiny

Wednesday, January 29, 2020

Activist attorneys general add to Australian climate litigation risk: More reasons why ASX companies worth $500 Billion could seek a safe haven re-listing on the Singapore Exchange

by Ganesh Sahathevan

The Attorney General of the State Of Victoria Jill Hennessy has taken the unprecedented step of demanding that the Governor General of Australia strip a  recipient of a national award of the honour. 

A woman with fair hair in a black top with a colourful pattern.PHOTO: Victorian Attorney-General, Jill Hennessy, posted her letter to the Governor-General on Facebook on Wednesday night. (ABC News: Andrew Ware)

Ms Hennessy's actions suggest a willingness on the part of at least one Australian state attorney general to use the office to further a political agenda. This adds to the risk to Australian mining, oil and gas companies of crusading judges deciding against them in climate litigation matters, which are inherently political. Ms Hennessy's actions raise the prospect of state attorneys general instigating climate litigation.
The fact that her government, lead by Premier Dan Andrews, sees itself as a leader in pursuing aggressive emissions goals raises the spectre that Ms Hennessy may soon take aim via the legal system at resource, oil and gas companies.
Victoria under Dan Andrews has already banned onshore gas exploration, which has contributed to Australia's gas shortage and higher energy costs.

There are now even more reasons for ASX listed companies worth approximately $ 500 Billion t to move to Singapore. As previously reported on this blog:

Mining, oil, gas and coal companies listed on the Australian Stock Exchange worth approximately $300-$500 Billion could seek a safe haven from the threat of climate litigation heard before Australian judges who seem to be increasingly inclined to play activist rather than judge.


Did Commonwealth and NSW agencies turn a blind eye to Villawood detainee Sirul Azhar's bank transactions, or were they simply blind? Malaysian lawyer Americk Sidhu has put in the public domain documents which raise serious questions about Australia's grossly incompetent ,if not deliberate, handling of the Sirul Azhar and 1MDB affairs

by Ganesh Sahathevan

Image result for turnbull najib

Najib and Turnbull’s budding bromance.The bromance had foreign policy implications but parochial Sydney interests may have also determined NSW AG Mark Speakman's attitude toward the matters of Sirul Azhar and 1MDB.

Malaysian lawyer Americk Sidhu has uploaded the following documents which concern Villawood detainee Sirul Azhar on his website, Delegatus non potest delegare

In  Mr Sidhu's words:

In the meantime, a bill for charges incurred in representing Sirul had been sent by (Sydney lawyer Christopher) Levingston to Sirul. Levingston issued an account summary and tax invoice dated the 23 March 2015 in which he acknowledged payment by ‘electronic transfer’ of AUD19,980.00, which he had received on the 20 March 2015.

Who paid this bill?
It couldn’t possibly be Sirul could it? He was under detention in a gated facility. It is extremely doubtful he would have paid this bill by ‘electronic transfer’ for three reasons; firstly, he didn’t have access to a computer. Even if he did, he didn’t have a bank account, but if he did, he didn’t have AUD20,000.00. Or did he?
But that didn’t matter. Levingston had confirmed with Robert Chelliah that the funds came from Kamarul Hisham’s law firm account. This was when Levingston paid Robert AUD 5,000.00 for his services from the funds he received.
Requests for comments from Sirul’s lawyers in Kuala Lumpur were eventually responded to, as follows:
“The fees was contributed by an independent source, which I am currently not at liberty to reveal, unless Sirul so permits. I have not been in communication with Sirul since last Hari Raya”

The matter of Sirul Azhar is not obscure; it has been reported worldwide for it implicates the former Prime Minister of Malaysia, Najib Razak. Najib has since 2015 been implicated and is not standing trial for misappropriating billions from the Malaysian sovereign wealth fund 1MDB. Consequently any transaction, even if it were cash in hand, involving Sirul ought to have been treated as high priority by AUSTRAC , Home Affairs , the AFP ,and all relevant authorities in New South Wales.The NSW bodies would be under the purview of Attorney General Mark Speakman who seems to have taken a curiously defensive posture on matters involving 1MDB. 
All of the above raise the question: Did Commonwealth and NSW agencies turn a blind eye to Villawood detainee Sirul Azhar's bank transactions, or were they simply blind? In either case, the Commonwealth and State Attorneys General , Christian Porter and Mark Speakman, as well as the Minister for Home Affairs Peter Dutton, owe the public and their foreign counterparts and long overdue explanation. 


Tuesday, January 28, 2020

Will the annual Australian lecture on ethics and standards for Malaysian lawyers include an explanation about community standards and the prestigious College Of Law's business in Malaysia?

by Ganesh Sahathevan

To mark the opening of the Australian Legal Year the Australian High Commission puts on a lecture by  prominent members  of the Australian legal system to which senior members of Malaysia's legal system are invited.

In March 2018 the lecture titled "The Rule of Law – What We Share and Must Defend" was delivered by Mdm Justice Michelle Gordon of the High Court, Australia's highest court.
The 2019 lecture was delivered by the President of the Law Council Of Australia, Arthur Moses SC. Delivered at the High Commissioner's residence the speech included this memorable line:

it has been 30 years since the 1988 Judicial Crisis, which saw the Lord President of the Supreme Court of Malaysia, Tun Salleh Abas, dismissed for “judicial misbehaviour”. His crime – speaking out publicly in defence of the judiciary. The crisis saw two other Supreme Court Judges also removed from the bench.

Two decades on, in 2008, an Eminent Persons Panel convened on the initiative of the Malaysian Bar found all three had been improperly removed from office, and that Prime Minister Mahathir’s involvement in the crisis had been "unmistakably a direct unabashed attack on the rule of law with intent to subdue, if not subvert, the independence of the judiciary"

As this writer pointed out, Mr Moses appeared to have missed more recent history when the Attorney General at the time, Abu Talib Othman went on record to clarify that it was he, under orders from the then King, who set in motion the process for the removal of the Chief Justice Salleh Abbas.As previously explained by this writer:

(Moses') direct attack on Mahathir is intriguing, given that he has been recently re-elected prime minister (despite it seems the disapproval of Mr Moses, the Australian Government, and the Australian legal fraternity), and given that over the the past 31 years much has been said by the key players in that incident, including the formerAttorney General Abu Talib Othman  who in January 2018 is reported to have said:
“However, he (Mahathir) was acting on the command of the then Yang di-Pertuan Agung Sultan Iskandar Sultan Ismail,” he said referring to the former Sultan of Johor.
Abu Talib said that he had seen the note – written and signed by the King – that was given to the PM commanding him to remove Salleh as Lord President and to replace Salleh with Abdul Hamid Omar.
“I went to see the PM and told him that neither he nor the King can remove a sitting Lord President, as that was against the constitution.
“It was a very challenging moment as the PM then asked, ‘can you ignore the command of the King?’. However, I advised and reminded him of the oath of office he took as PM to protect and defend the constitution,” he said.
Abu Talib said that Mahathir advised him to inform the King personally and he did that, going to Johor for the meeting.
“The King insisted that action be taken, despite me saying that neither him nor the PM could remove a sitting Lord President.
“He (the King) instead suggested that it be done in accordance with the constitution. So, I went back to the PM, and informed that any action taken must be done in compliance with the constitution......”
It is important to recall that Talib Othman made these public statements in January 2018 when almost everyone believed that then PM Najib Razak would be re-elected, despite Mahathir's determined (and eventually successful) challenge to Najib  and his party's control of the Malaysian Government. Malay politics dictate that punishment must follow any show of support for the opposition against the  ruling chieftain, and Talib would have understood that. 

Meanwhile, the Attorney General of NSW Mark Speakman, and the Chairman of the NSW Legal Profession Admission Board, Tom Bathusrt ( who is also Chief Justice NSW) have refused to explain their finding that Mahathir funded this writer in a project that involved ABC Four Corners airing a false story about former PM Najib Razak's role in the 1MDB theft. 

In fact, senior members of the Australian judiciary including the Chief Justice Of NSW seem to have formed the opinion that Najib Razak had been defamed and was justified in blocking access to stories, including those written by this writer, about Najib and the 1MDB theft. 

And then there is the matter of the College Of Law Sydney, very much part of the NSW legal establishment but was until last year determined to break into the Malaysian market.
The College went as far as to abuse the name of the Kitingan family to further its business interests in Malaysia but all that seems to have come to nothing ,and under mysterious circumstances (see story below).

The College and its CEO Neville Carter  have insisted that "community standards" excuse them from answering questions from this writer about their teaching standards, funding, and claims of having changed legal practise in Malaysia.


Bar Council education ‘JV’ must be clarified

By  , in Scandal on July 19, 2019 . Tagged width:  ,  , 

KUALA LUMPUR, July 19 – The Malaysian Bar Council launched its first education venture, a LLM in Malaysian Legal Practise (LLM), last year in collaboration with the College Of Law Australia.
The LLM does not seem to have the approval of Malaysia’s Legal Professional Qualifying Board (LPQB) but the website for the course, which is hosted in Australia, prominently displays the Bar Council crest.
bar council
The crest has not been used before to promote a course of study, and queries put to Bar Council President Fareed Gafoor about the use of the crest have been acknowledged but remain unanswered.
NMT has however sighted an email from Fareed dated Friday, May 24, 2019 with regards the LLM and the use of the crest where he states:
Dear Rajen,
We can’t remain silent on this.
Abdul Fareed Bin Abdul Gafoor
Sent from my iPad
It is understood that “Rajen” refers to  Rajen Devaraj, Chief Executive Officer of the Bar Council Secretariat in Kuala Lumpur.
The Bar has remained silent for nearly 2 months since.
Key person suddenly retired during extensive query
The College of Law used to be represented in Malaysia by its Director, Peter Tritt. Tritt have been queried extensively about the LLM and about the College’s business in Malaysia but has refused to provide answers. Tritt has been based in Kuala Lumpur since 2017 but announced on Friday that he had “retired” from the College on 30 June 2019.
It is understood that Tritt has forwarded queries sent him to his head office in Sydney and hence it appears that Tritt is under orders from his Chief Executive, Neville Carter, to remain silent.
Questionable advertising claims?
In advertising on the College’s website Carter has claimed that he had established a Professional Legal Training course for Malaysian Law students seeking admission to practise in Malaysia. There seems to be no evidence of such a course, or of any national level training course for the existing Certificate of Legal Practise.
Carter has also claimed to have produced the “inaugural” Handbook in Legal Practise for Malaysia, in the late 80s. A search of the main law libraries in Malaysia directed by the Chief Registrar, Federal Court Malaysia, has not found any such handbook.
He has also claimed to have, during that time to have identified and addressed “gaps” in Malaysian legal practise, but not even those in practice during that period and since have ever heard of him. Nor are senior practitioners aware of  “gaps” that needed that to be addressed by external consultants.
As CEO of the College Carter  has ultimate responsibility for the College’s Malaysian operation headed by Tritt and variously named the “College Of Law Asia Pacific” and the “College Of Law Asia”. A search by NMT has not revealed any entities registered under those names in Malaysia or in Australia, not even a foreign entities registered to conduct business in Malaysia.
Meanwhile the College, in collaboration with the Bar Council continues to sell its LLM and other courses in Malaysia, deriving a fee income from Malaysian courses.