Amokh, Tony, Danny & Nazir should pay

Those who areresponsible and should pay this RM10 million fine for Malaysia Airlines

Those who areresponsible and should pay this RM10 million fine for Malaysia Airlines

We were right. The ‘Malaysia Airlines – Air Asia Share Swap’ that we opposed two years ago, not only turned out to be a failed business call, has now been proven to be commercially disastrous. Both companies were fined RM10 million each for the monopolistic collaboration.

The NST story:

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06 September 2013| last updated at 07:48PM

MAS, AirAsia fined for RM10mil each

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KUALA LUMPUR – Malaysian authorities on Friday fined Malaysia Airlines and AirAsia for anti-competitive conduct during a short-lived tie-up.

The Malaysia Competition Commission (MyCC) said in a statement that the  country’s two dominant carriers would each have to pay a RM10 million (US$3 million) penalty for collaborating to integrate some routes in which they had  earlier competed.

“When businesses agree to share markets, they are agreeing to stop  competing, at the expense of the consumers,” said commission chairman Siti  Norma Yaakob.

AirAsia, the region’s largest budget airline, agreed in August 2011 to hand  over a 10 percent holding to a state investment fund in exchange for a 20.5  percent stake in the ailing flag-carrier Malaysia Airlines.

The deal was aimed in part at eliminating mutually harmful competition on  some routes.

But it was unwound just eight months later following pressure from Malaysia  Airlines’ powerful employees union, which feared it could result in possible  job losses and other cost-cutting at the national carrier.

Both airlines recorded profits in the second half of 2012. Malaysia  Airlines, however, has been in the red this year while AirAsia has seen sharply  lower profits.

MyCC said the penalties were decided based on revenue earned between  January to April 2012 on four routes and that it equalled less than 10 percent  of their respective worldwide turnovers.

Both parties have 30 days to respond to the decision. — AFP

Read more: MAS, AirAsia fined for RM10mil each – Latest – New Straits Timeshttp://www.nst.com.my/latest/mas-airasia-fined-for-rm10mil-each-1.350607?cache=03%2F7.218073%2F7.282683%2F7.288063%2F7.288063%3Fkey%3DMalaysia#ixzz2e88dCBNs

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The so-called right wing bloggers community who are commercially sensitive with corporate con-jobs such as the ‘share swap’ because it was clear that the corporate exercise was to allow Air Asia Supremo Tony Fernandes to enter and start to devour on the national carrier using ‘Salami Tactics’, slice by slice. We were vehemently against it the moment it was announced via mainstream media.

We doubt the ‘share swap’ would benefit Malaysia Airlines at all. The stupid lemon that they tried to sell for what already seemed to be a corporate con-job was that “Fernandes and his team did well and Malaysia Airlines should benefit from his experience and rapid growth” and “Government had no choice”. What came as a surprise that it didn’t take much to prove we us right.

Fernandes did scheme to take over Malaysia Airlines with Malaysia Airlines Director Mohamed Rashdan “Danny” Yusuff. It was all too clear the moment they got themselves in as BoD members, Fernandes and his partner Kamaluddin Meranun established an Executive Committee that decide on the operations of Malaysia AIrlines.

Malaysia Airlines was rogered from behind by Fernandes to commit for the GBP3million sponsorship of QPR

Malaysia Airlines was rogered from behind by Fernandes to commit for the GBP3million sponsorship of QPR

They immediately started to fiddle things around. People were moved. People they wanted out of AirAsia were strategically placed in Malaysia AIrlines. Fernandes was quick to commit Malaysia Airlines GBP3 million in sponsorship for his own private venture of EPL bottom-rung club Queen’s Park Rangers.

He was actually very itchy to the ‘grand standing’, of the new conquered domain.

Malaysia Airlines routes were cancelled in favour of AirAsia. Like Bandung. Any aircrafts that AirAsia ordered but were unable to take due to AirAsia or any of the sister companies’ lowered capacity, they tried to hive off to Malaysia Airlines. This include two A330-300s, that AirAsia were supposed to take deliver from Airbus Toulouse in March-April 2012.

The engineer and architect of ‘Malaysia Airlines-AirAsia share swap’ deal: Nazir and Fernandes

CIMB Group President Dato’ Seri Nazir “Bastardise NEP” Razak was the middle man of the corporate exercise. His team did the corporate work and rationalised the deal for Prime Minister Dato’ Sri Mohd. Najib Tun Razak  as Chairman of Khazanah Holdings Bhd. to give the final green light. Of course CIMB earned the handsome fee for the ‘share swap’ deal.

Of course, at the top of the heap is Khazanah Managing Director Tan Sri Azman Mokhtar. He is the Chief Executive of Federal Government’s  investments and corporate arm. He is responsible of preparing the papers that Khazanah Holdings Bhd. BoD which is chaired by Prime Minister Najib is supposed to approve.

This is not the first time  a corporate exercise which came from Azman and Danny where Malaysia Airlines was devoured.

Binafikir founders, Azman Mokhtar and Danny Yusuff

The first one was when both of them were partners in Binafikir Sdn. Bhd. and provided the consultancy work for the Widespread Assets Unbundling (WAU) program ten years ago where assets of Malaysia Airlines were stripped and hived off, in the excuse to stop the ‘financial hemorrhage’ and further losses by reducing the burden to servicing the financial commitments of these assets.

Malaysia Airlines did not have a say then when their assets, which include the prize corporate HQ in Jalan Sultan Ismail, were sold off. Neither did when the ‘share swap’ deal was forced down their throat.

By God al Mighty’s grace, the ‘share-swap’ corporate con-job ended less than nine months later.

Azman and Fernandes agreeing to a deal

Khazanah’s Azman and Danny are both chartered accountants. They are expected to know the all the commercial laws of the land. It is totally unacceptable for them plus Nazir who is a GLC banker to engineer and commit Malaysia Airlines, a GLC, into being fined for unfair commercial practice.  As custodians to public funds, it is morally wrong for them to tarnish the national carrier’s image as an institution.

Since the ‘share-swap’ deal came and put together by Fernandes, Danny, Nazir and Azman, therefore they also should joint and severally bear responsibility for Malaysia Airlines’ RM 10 million fine imposed by the Malaysia Competition Commission.  After all, they were those who had the fiduciary duty as directors for comprehensive responsibility, which include to look into all the finer things, security, commercial practices and anti-trust laws.

Making them pay out of their own pocket would be fair thing to do, considering that Malaysia Airlines was fined for ‘unfair’ market practices that they were reluctant right from day one.

*Updated 0300hrs

Published in: on September 7, 2013 at 00:30  Comments (58)