☕️ Najib Razak: Bank account that received USD70 mil for CSR use only

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

National O&G company Petronas turned 50 back on Aug 17. With a RM10 mil seed capital, Petronas has given back RM1.47 tril to the government as of 2023 - RM621 bil in dividends, RM237 bil in cash payments, taxes of RM539 bil and export duties of RM28 bil. The company has grown into a company with RM796.3 bil in assets by Mar 2024, generating a net profit of RM80.7 bil on revenue of RM343.6 bil for its financial year ended Dec 2023. How would Malaysia turn out without Petronas?

The most recent outbreak of blackchin tilapia, dubbed the the “most invasive species” to hit Thailand is estimated to cost the Thai economy at least THB10 bil (RM1.28 bil) and has impacted 17 provinces so far. This fish prey on small fish, shrimp, snail larvae, which are among Thailand’s important aquaculture products. Amongst the initiatives to combat this invasion is the Thai government doubling the amount that it will pay people who catch the fish at THB15 per kg, resulting in people in Bangkok’s suburbs picking up fishing with their plastic bins. The fish, native to West Africa, is suspected to be brought into Thailand by food conglomerate Charoen Pokphand Food (CPF) 14 years ago. CP’s parent acquired Tesco Malaysia, which was subsequently rebrand to Lotus’s, netting Sime Darby Bhd RM270 mil in profit from the sale of its 30% stake in Tesco Malaysia.

Japan’s credit card companies are facing significant financial strain as international visitors surge, leading some to consider raising fees for foreign-issued cards. When foreign cards are used, Japanese card companies must pay fees to both overseas issuers and international brands like Visa or MasterCard. These costs often surpass the merchant fees collected, resulting in projected losses of JPY30 bil yen (RM860.9 mil) this year, a 50% increase from 2023. Seven out of eight major Japanese credit card companies reported growing losses, with six contemplating or already implementing higher fees for foreign cards.

3. IN MALAYSIA 🇲🇾

Tip of the GISB iceberg
A religious teacher will be facing hefty punishment for caning and kneeing the chest of 3 boys from 2 schools linked to GISB. Yes, there is news about GISB every day. A video of a boy crying out in pain after having his chest and neck kneed by the suspect went viral, leading the police to open up an investigation on September 16, 2024. The religious teacher - Muhammad Barur Rahim was unrepresented during litigation and stated that he was still single and had to support both his parents. Using parents' sentiments is a classic move. However, Judge Noridah Adam did not buy into it and proceeded to hand down a sentence of 10 years in prison after Barur Rahim pleaded guilty to all four charges. Apparently, this ruthless man was a warden at the school and was the caretaker of these boys. The victims are said to be heavily traumatised by this incident and are unable to continue their studies at any schools.

The Companies Commission of Malaysia (SSM) found that 12 companies related to GISB failed to submit their annual and financial statements. This investigation led to the Ministry of Domestic Trade and Cost of Living having to issue a total fine of RM4.4 mil against the involved companies. Its minister also added the existence of 17 other companies using GISB’s name in their SSM registration and as many as 201 businesses are to be connected with GISB.

Najib Razak: USD70 mil received in bank account for CSR use only
Former PM Najib Razak stated that his AmBank account which received USD70 mil was for corporate social responsibilities (CSR) use only and not his personal account during his defence in the SRC International Sdn Bhd’s civil action case. Although the account was under his name, he denied making any personal banking and affairs with it. To add to that, the account was alleged to have received funds embezzled from SRC and 1MDB. A total of RM4 bil loan from KWAP was given to SRC in two tranches but the company claims that USD120 mil had somehow ended up in Najib’s bank accounts only 4 months after SRC received its first tranche of KWAP loan.

However, when SRC’s counsel asked Najib to prove the USD70 mil was not from SRC or KWAP, he said he had not requested the evidence because he doesn’t manage his accounts. It was also established that Nik Faisal, former CEO of SRC was managing Najib’s accounts but then Nik is also currently on the run. The company is looking for compensation of USD120 mil from Najib and USD2 mil from Nik. One would have thought they were reading the white-collar criminal version of Pinnochio.

Heads up construction companies - new requirement is on the way
MACC's chief commissioner Azam Baki has shared the new requirement for construction companies nationwide. Companies will need to apply for an anti-corruption ISO certificate which must be presented when they tender for government projects worth RM100 mil and above. However, in a meeting with the Special Cabinet Committee on National Governance, the government decided to give a two-year grace period before the requirement becomes mandatory, making companies obtain ISO 37001 certification. MACC welcomes participation for now but once the grace period is over, companies without the certification will not be entertained during tenders. This obligation is a result of the input given by global researchers who commented on the construction sector as having a significant leakage issue. Issues like bribery to administrators, increasing cost of projects and many other flaws have been identified.

Shorts

1. 16 retail chains with almost 8,000 outlets nationwide will no longer provide single-use plastic bags from October 1, 2024, which will reduce the use of plastic bags by 200 mil annually. In the “Say No to Single-Use Plastics” campaign launched by the Ministry of Housing and Local Government. Fun fact: More than RM 2 bil is spent annually to manage waste disposal sites. Malaysians are encouraged to bring their grocery bags and help Malaysia achieve its vision of eliminating single-use plastics by 2030. Time to say bye-bye to the collection of plastic bags our moms saved. 

2. The Ministry of Tourism, Arts and Culture is keeping an eye on the hotel check-in issue. Some hotel management have decided to set the check-in time at 4 pm and check-out by 11 am enraging customers.  While the ministry is asking industry contributors to explain, it also advises the public to go through the T&C set by hotels before making reservations. However, the ministry also welcomes additional information from the public regarding this issue and you can drop yours at [email protected]. 

4. AROUND THE WORLD 🌎

Israel says no to Lebanon ceasefire
A US-backed proposal for a ceasefire was rejected by Israel, in an act that defies calls from its allies for a halt in the fighting. The US, France, and several other allies had called for an immediate 21-day ceasefire along the border in a bid to prevent a regionalisation of the conflict, with hopes of also seeing a ceasefire in Gaza, a hope that was echoed by Gazans. Israeli Prime Minister Benjamin Netanyahu says he has yet to respond to the proposal but has instructed Israeli forces to continue fighting, with Israel’s foreign minister announcing that “there will be no ceasefire in the north” along the Lebanon-Israel border. 

In fact, Israeli went the opposite of ceasefire and intensified airstrikes on Lebanon, with Israel’s military chief telling troops that the airstrikes are “preparing the ground” for the troops to “enter enemy territory”, the clearest indication from a senior official that a ground invasion of Lebanon is happening soon.

Still, the Pentagon has confirmed that the US is not supporting Israel’s operations in Lebanon, not even with intelligence support, with a spokesperson stating that the US military “has no involvement in Israel’s operations” in Lebanon. However, the US also provided a USD8.7 bil aid package to Israel to “support its ongoing military efforts”, with most of it designated for air defence systems.

As an aside, Russian President Vladimir Putin has lowered the threshold for the use of nuclear weapons. Analysts suggest the move is meant to threaten the US and its allies, as Ukraine has been pressuring NATO members to allow it to use the long-range missiles it received from NATO against targets deep in Russian territory. The important line here is that an attack that poses a “critical threat” to Russia, even if performed by a non-nuclear power with the “participation and support of a nuclear power”, would be considered a “joint attack”.

China continues stimulus spree

• For the banks: For the banking industry, the amount of cash that banks must hold in reserve – the reserve requirement ratios – will be lowered by 50 basis points, freeing up USD142 bil for new lending. Beyond that, sources have also indicated that the government could inject another USD142 bil into the six biggest state banks to increase their capacity to support the economy. The injection will mainly come from the issuance of new special sovereign bonds, though details have yet to be finalised.

• For the extreme poor: The authorities also announced direct aid in the form of cash handouts to the extremely poor, with living subsidies issued to disadvantaged groups including the very poor and orphans, with local authorities charged with getting the funds to their target recipients by Oct 1. The amount of the one-time handouts remains unknown. The country has 4.74 mil people living in extreme poverty as of June.

OpenAI goes for profit, Sam Altman could get USD10 bil richer
ChatGPT parent OpenAI is discussing converting to a for-profit business, with one of the topics of discussion being whether or not to award CEO Sam Altman a 7% equity stake in the AI firm. Sources indicated there was no firm timeline for the swap to a public benefit corporation, though the changes also come at a time when a slew of high-level people are leaving OpenAI. Among the latest to leave is CTO Mira Murati, a surprise move that left many in the company shocked. Murati is “stepping away to create the time and space to do my own exploration”, though there is no firm exit date, according to sources.

Also leaving, according to a company note posted by Altman, is the firm’s chief research officer, Bob McGrew, and the vice president of research, Barret Zoph. There was an understanding that all three reached their decision to leave independently, with Zoph and McGrew leaving at the same time to facilitate a smooth handover. 

Coming back to Altman, should he receive the 7% equity stake, he could very well become USD10.5 bil richer, considering OpenAI’s latest valuation places the firm at USD150 bil. Not only that, but a conversion to a public benefit corporation could also pave the way to an IPO, further increasing the value of Altman’s 7% stake.

In response to the happenings at OpenAI, Tesla CEO Elon Musk likened Altman to “Game of Thrones” character Petyr “Little Finger” Baelish, an antagonist known to be ruthless and manipulative. Musk also referenced previous social media posts where Altman said he “doesn’t need more money”, saying Altman was looking for money in “snakey ways”.

Shorts:

1. World's longest-serving death row inmate acquitted

   Former professional boxer Iwao Hakamada, 88, spent 46 years on death row before being acquitted recently, where it was found that the evidence that led to his conviction for killing his boss, his boss’ wife, and their two teens was fabricated. This marks an end to one of Japan’s longest legal sagas. Unfortunately, Hakamada was not able to attend the hearing for his acquittal, due to how much of a toll the years spent on death row have taken on his mental health.

2. Thailand's king to endorse same-sex marriage law

   King Maha Vajiralongkorn signed the landmark marriage equality bill into law, marking Thailand as the first Southeast Asian nation to recognise same-sex marriages. The legislation will take effect in January 2025, with activists hailing the “monumental step”, considering Thailand is now the third place in Asia where same-sex couples can legally wed, after Taiwan and Nepal.

3. Swiss authorities to investigate suicide pod death

   Several people have been taken into custody and now face criminal charges following the authorities learning about the use of a Sarco suicide capsule. The detainees are suspected of “inducement and aiding and abetting suicide”, with authorities securing the capsule and taking the body of the deceased for an autopsy. Switzerland recognises assisted dying, but marks active euthanasia as illegal, with the Sarco pod noted as not complying with Swiss law. View the pod here.
   Read: Assisted dying around the world: where and when it is allowed

5. FOR YOUR EYES 📺

1. What’s behind Uniqlo’s AIR-ism tech?

2. Gotong-royong level 99 - a group of residents at Program Perumahan Rakyat (PPR) flat in PJ came together to upgrade their lobby a 5-star hotel lobby.

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