By G. Sharmila
YTL Corporation Bhd group managing director Francis Yeoh has become embroiled in a crony controversy as he has denied a report in the Malay Mail Online that Malaysia is suffering from crony capitalism.
Francis Yeoh
Also, he has come under attack from Umno mouthpiece Utusan Malaysia which launched a blistering campaign against him in the newspaper and said he should admit that he has got lucrative government contracts.
In a statement to the media yesterday, Yeoh said: ““I want to make it very clear that this Malay Mail’s title ‘Crony Capitalism in Malaysia has to go, son of YTL founder says’ has completely misrepresented what I said.
“It automatically presupposes that ‘crony capitalism’ is how things are done in Malaysia. This is far from the truth! In fact, I said I wanted to correct this misperception that has hovered around and used by various political factions for 20 years.”
The Malay Mail Online article Yeoh was referring to had quoted him saying that Malaysia has to free itself from the constraints of “crony capitalism” and stop racial and religious rhetoric in order to compete on the global stage. The article was published following a talk Yeoh gave during the Global Malaysia Series forum on Tuesday.
The Malay Mail Online had also quoted Yeoh saying that 85% of YTL’s businesses are in Britain, Singapore and Australia because these countries do not tolerate corruption, practice meritocracy and stand for the rule of law.
“For example in Singapore, we own a third of Singapore’s electricity, there is no subsidy of any kind, there is no cronyism of any type.
“The good thing about these three territories, I don’t have to kowtow to the prime minister before I do deal(s), I don’t have to see them even; even after I’ve won the deal.
“I turn west because of this transparent, coherent regulatory framework,” he was quoted as saying by the article. (Read the full article here).
An article published in The Malaysian Reserve yesterday also quoted Yeoh saying that the country has to be free from “crony capitalism”. According to the article, Yeoh said that one of the reasons that YTL Group has more than 85% of its businesses outside of Malaysia and in countries such as Britain, Singapore and Australia is they “do not tolerate corruption and are practising meritocracy”. Yeoh was quoted saying that he does not need to know the leaders of these countries to make deals.
Meanwhile, Umno-owned Utusan Malaysia ran a front-page story on Yeoh today, lambasting him for his purported remarks during the forum.
Tenaga Nasional Bhd workers union president Mohd Roszeli Majid and Malay businessmen were quoted by the newspaper warning Yeoh not to boast that he was a self-made man.
Umno supreme council member Mohd Puad Zarkashi warned Yeoh not to “talk big”, saying that there were big companies who were now “thorns in the flesh” of the government’s attempt to uphold integrity and transparency in business.
“These companies are building an empire within a ministry and has created an internal mafia. Therefore, YTL does not need to talk so big,” he was quoted saying by Utusan. (Read the full story here).
Referring to the Malay Mail article, Yeoh said: “The title of this article is inaccurate and it does not reflect the content of what I actually said at the forum sponsored by Pemandu.”
“I accepted the invitation to chat at this forum by Pemandu. In the first place, I understood the purpose was to be as candid and transparent to a cynical audience and if the opportunity arises, to clear some misperceptions of how business is actually conducted in Malaysia and globally. I have always been enamoured of the Economic Transformation Programme led by our present Prime Minister, Datuk Seri Najib Razak, and transparently articulated through Mampu.”
On the purported ‘crony capitalism’ remarks, he said: “I made it very clear that the achievements made were not a consequence of crony capitalism. I also wanted to dispel the audience’s misperception that successful businesses in Malaysia are a result of crony capitalism.”
“Throughout this interaction, I have actually defended the present Government’s concerted efforts to introduce more open competition and encourage greater transparency in business. This is very apparent in the efforts by Pemandu”, he added.
“When asked if I was a ‘crony’ of Tun Dr Mahathir who purportedly awarded us a lucrative independent power plant (IPP) concession, I categorically stated that I was not a crony of Tun Dr Mahathir. In everything we did, we introduced innovative ideas to succeed — from unprecedented ringgit financing for infrastructure projects in developing countries to creating the first 15-year bond market and pioneering the IPC listing category in Bursa Malaysia,” Yeoh said in the media statement.
Mahathir Mohamad
Yeoh’s links to former prime minister Mahathir Mohamad date back to the early nineties, when YTL was awarded a lucrative IPP contract by the government via direct negotiations as part of the government’s effort to deregulate the industry. The award of contracts to IPPs such as YTL was heavily criticised at the time because it ultimately resulted in consumers having to pay higher electricity prices.
More recently, a consortium involving YTL Power International, SIPP Energy Sdn Bhd and Tenaga Nasional Bhd (TNB) was conditionally awarded the development of Project 4A, a combined cycle power plant in Johor, also via direct negotiations. Analysts have been critical of the deal, labelling it a step backwards for the industry.
“Although TNB has been a beneficiary in the award of Project 4A, the process of direct negotiation is another step backwards in the EC’s commitment to reforming the power industry with an emphasis on transparency and meritocracy,” PublicInvest Research said in a recent report.
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