“Brace! Brace! Brace!”

It is unclear how brash and rude should the Malaysian Government or any of it agencies do to treat China or any major firms from one day would to be the global’s leading economy but this ought not to be a foremost option.

The Straits Times story:

Malaysia seizes $328 million held by Chinese state-owned unit in HSBC

Leslie Lopez

Regional Correspondent

In Kuala Lumpur

Malaysian authorities have seized more than RM1 billion ($328 million) held by China Petroleum Pipeline Engineering Ltd (CPP), a Chinese state-owned company.

In an unprecedented move in Malaysian banking, the Pakatan Harapan (PH) government ordered global banking giant, HSBC, early this month to transfer the funds held in CPP’s account in Malaysia to Suria Strategic Resources Sdn Bhd, which is wholly owned by the Ministry of Finance.

The moves came against the backdrop of an ongoing dispute involving two multi-billion-dollar energy pipeline projects that were suspended last July, said lawyers and bankers familiar with the situation.

In response to queries from The Straits Times, CPP, which was the lead contractor for the pipeline projects awarded in November 2016 by the previous government of prime minister Najib Razak, confirmed that the funds were transferred out.

“CPP firmly abides with the laws of Malaysia and is perplexed by the unilateral transfer of monies without notifying CPP,” said the company, a unit of China’s state-owned oil and gas giant China National Petroleum Corp.

The HSBC corporate office in Kuala Lumpur declined comment, citing client confidentiality.

It is currently unclear why the money was seized nor what powers the government used to seize it.

CPP added that it is currently speaking to the relevant parties in a bid understand the basis of the transfer.

“Once we have further information, CPP will take the necessary and appropriate actions to protect its rights. We hope that our Malaysian counterparts can resolve this with us through amicable means,” the company said.

Bilateral ties between Beijing and Kuala Lumpur turned tense shortly after the PH government came into power in May last year and started reviewing or cancelling a series of high-profile deals with China reached during the Najib administration. Prime Minister Tun Mahathir Mohamad ordered the suspension of the multi-billion-dollar East Coast Rail Link (ECRL) and the two CPP-led pipeline projects.

The ECRL project – which will stretch along the east coast from Kota Baru, in the north-east, to Kuantan before cutting across the peninsula to Port Klang on the west coast along the Strait of Malacca – has since been revived under refined (CHECKING: Should we use “revised” instead of “refined” CAN CHANGE TO REVISED) terms and will now be built at an estimated cost of RM44 billion, down sharply from the original price tag of RM66.5 billion.

But the CPP pipeline projects – a 600km multi-product pipeline along the west coast of Peninsular Malaysia costing RM5.35 billion and a gas pipeline network in the east Malaysian state of Sabah costing RM.4.06 billion – have remained in limbo.

The PH government is also questioning why roughly RM8.3 billion, or 88% of the contract value of RM9.41 billion, was paid out by the previous government through the Ministry of Finance-owned Suria Strategic Resources despite only 13% of the work purportedly being completed.

Bankers familiar with the situation said that following the suspension of the pipeline project certain bank accounts held by CPP, including the monies in HSBC, were frozen by the Malaysian government.

At the time of the suspension of the pipeline projects, Malaysian press reports alleged that the monies initially paid out by Suria Strategic Resources were diverted to third-party Cayman Island companies linked to the scandal at 1Malaysia Development Bhd (1MDB). But CPP has strenuously denied those allegations.

Malaysian Anti-Corruption Commission (MACC) chief Latheefa Koya did not respond to queries about the latest government move.

*********

Giving face and providing grace is very important for business, if not global international diplomacy. Especially more so for China.

Unless the intent is a direction beyond the boundaries of friendship.

Malaysia is in a very precarious trade and foreign relations which China. Upon the 9 May 14 GE took over last year, Gerontocracy Prime Minister Tun Dr Mahathir Mohamad took very tough and ‘unfriendly’ gestures with China.

Finance Minister Lim Guan Eng was even more arrogant when it comes to all dealings by firms, from China.

The much coveted ECRL was cancellation was announced unilaterally, that brought forth a knee-jerk reaction.

Then Gerontocracy Prime Minister and some of his Cabinet colleagues, which include the Chairman of the Council of Elders went to China and smoothen out all of these bad blood between us and the Super Power.

Otherwise, the Malaysian people would start to get use to the international air travel instruction before an aircraft do a very rough landing.

Published in: on July 13, 2019 at 19:00  Leave a Comment  

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