Malaysia Weekly Highlights

KHIR TOYO SENTENCED TO A YEAR'S JAIL

The sentence has been delivered. Former Selangor Menteri Besar Dr Mohamad Khir Toyo was sentenced to a 12 months' jail for abusing his power while in office to purchase two plots of land ad a bungalow in 2007. Federal Court Judge Tan Sri Zulkefli Ahmad Makinudin who delivered the verdict, also upheld the decision of the lower court to forfeit the properties. 

Khir Toyo sentenced to a year's jail

A five-member panel led by Chief Justice Zulkefli Ahmad Makinuddin made the ruling together with Justices Jeffrey Tan Kok Wha, Datuk Ramly Ali, Tan Sri Hasan Lah and Tan Sri Ahmad Maarop.

The court has also rejected his mitigation to offer free dental services to the poor for three days weekly between one and two years as part of community service in default of jail, as it would not be appropriate. Khir Toyo began his jail term in Kajang Prison on September 29.

Zeti: Malaysia bond market will not collapse

ZETI: MALAYSIA BOND MARKET WILL NOT COLLAPSE

The country's bond market will not crash even if foreign investors, who collectively hold 45% of government debt paper, decide to make an exit, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said. The justification made was that even if the redemption of government bonds by foreign investors were made, it would not impact the foreign reserves because domestic institutional investors like the Employee Provident Fund (EPF), Permodalan Nasional Bhd and Lembaga Tabung Haji could step in to purchase these bonds.

ZETI: No interest rate hike pressure

Bank Negara Malaysia governor, Tan Sri Zeti Akhtar Aziz reiterated last Wednesday that there was no need to peg the ringgit to the US dollar despite its continued downward trend. She said, "If you peg the currency, something else will adjust, either prices or demand conditions, and those might have greater costs on our economy." She said at this point in time, the central bank was not looking at other capital-control measures. 

SHELL MALAYSIA TO CUT 1,300 UPSTREAM JOBS

Shell Malaysia to cut 1,300 upstream jobs

Shell Malaysia has joined the list of oil companies that resort to job cuts for survival amid the current low crude price environment. SHELL MALAYSIA is cutting 1,300 jobs from its upstream division – 20% of its 6,500-strong workforce and the jobs will go over the next two years. Shell Malaysia chairman Iain Lo said, "Shell Malaysia is preparing itself to be more competitive in a low oil price environment. Continuing business as usual is not sustainable. We are taking difficult, but necessary action. We have a strategy going forward." He also added, "We remain aligned strategically with the group and we are confident that we will be able to deliver competitive returns for our shareholders, thus earning the mandate to compete for our future in Malaysia.” The news comes two months after its Netherlands-based parent Royal Dutch Shell plc announced plans to slash 6,500 jobs this year and cut capital investment by 20% compared with 2014.

MBSB AND BANK MUAMALAT MERGER TALKS START

Malaysia Building Society Bhd (MSBS) said last Thursday that it would commenced merger talks with Bank Muamalat Malaysia Bhd's shareholders - Khazanah Nasional Bhd and DRB-Hicom Bhd. It said Bank Negara Malaysia had no objections in principle to their talks but requires that negotiations be completed within three months. 

MEDIA PRIMA BUYS TWO RADIO STATIONS

Media Prima Bhd agreed to buy Copyright Laureate Sdn Bhd, which currently operates two radio stations, Ultra FM and Fi Mai FM, for RM20 million. Its subsidiary, Synchrosound Studio Sdn Bhd, entered into an agreement with the vendors, Mohamad Fazhly Johari, Hamyzar Toha and Lau Chuan Chiat. Media Prima already operates three radio stations, Hot.fm, Fly.fm and One.fm.

1MDB GETS EXTENSION TO SUBMIT AUDITED ACCOUNTS

The Companies Commission of Malaysia has granted 1Malaysia Development Bhd (1MDB) a six-month extension to file its financials. 

The delay was caused by key documents in its financial accounted being seized by police and an investigative special task force in raids in July. 1MDB's two subsidiaries, Edra Global Energy Bhd and 1MDB Real Estate Sdn Bhd are seeking extension of up to a month to file their respective audited accounts.

NAJIB TOLD US INVESTORS: IGNORE "NOISE" ON 1MDB, GOVERNMENT TO STAY

IGNORE "NOISE" ON 1MDB

On the sidelines of the United Nations general debate, Datuk Seri Najib Tun Razak had breakfast meeting on Wednesday with several American fund managers, urging them to ignore the “noise” back home in Malaysia related to 1Malaysia Development Bhd (1MDB) but look instead at the "real" fundamentals of a resilient economy despite the current economic volatility. 

He later sat through a lunch with US business leaders, highlighting Malaysia’s positive competitive index as affirmed by leading ratings agencies such as Moody’s, Standard & Poor’s and Fitch as well as Bloomberg declaring Malaysia as the world’s fifth most promising emerging market.

"The government is here to stay," the prime minister said.

"I am not in a hurry to go back home for fear of losing my job or something like that," he said, adding that the government would serve its five-year mandate before the next election.

“On 1MDB, Najib said the company was expected to announce "in the coming days" a further reduction of its total debt by about RM16 billion.

The prime minister said that he had given his undertaking that the government would need six months until the end of the year to reduce the debt and turn around the company.

"Bank Negara has come up to say there is no systemic risk related to 1MDB. We have more assets than liabilities," he said.

On the proposed sale of Edra Global Enegry Bhd, Najib said there were already attractive offers for the power generation arm of 1MDB.

"So I am quite confident by the end of the year, we will be able to show that 1MDB is basically a corporation that is able to go through the process of rationalisation with a massive reduction in debts," he said.

He explained that the business model of 1MDB is based on the concept of "fast IPO" and not using a lot of government funds. He said currently the indicators were good for the Malaysian economy but “the noise level may not be all that positive about Malaysia."