Khamis, 30 April 2015

Is Edra Energy’s IPO the best way forward for 1MDB?




Is Edra Energy’s IPO the best way forward for 1MDB?

by 
Wan Ahmad Fayhsal


Previously the writer has argued that the criticality of saving the strategic assets of 1MDB – land and power plants – is akin to saving some of the companies that were hugely impacted by the 1997 Asian financial crisis. Although the actors are different, the systemic risk posed by 1MDB’s debt is not much different the one confronted by Malaysian government under, then (Tun) Dr. Mahathir’s leadership.

How exactly the government especially Ministry of Finance (MOFC) could save 1MDB’s assets?

Earlier MOF appointed CIMB Group Holdings Bhd as an advisor to sell power assets of Edra Energy Bhd, a subsidiary of 1MDB Group but in an official press statement released by MOF on 1st April, the appointment was terminated.

Rumors on the involvement of MOF’s in-house restructuring outfit Prokhas Sdn Bhd to help restructure 1MDB debt was denied by MOF.

At present as per stated in the earlier press release, the only way forward for 1MDB to manage its debt is by listing (IPO) Edra Energy in Bursa. 

But IPO issuance is normally done by company that possess great potentials, and strong balance sheet that could provide assurance to potential subscribers for a stable return; not company that is weak and laggard with unserviceable debt.

No doubt once the debt can be managed properly, 1MDB has great potentials to excel as a strategic development company but at present that seems to be very bleak.

Risky IPO

If the IPO is meant to generate extra cash to service the debt, as pointed by many critiques, still it would not able solve all of the problem. It could only act as a stop-gap measure as the real valuation of Edra Energy is still vague to many.

Furthermore who are the potential subscribers?

Normally there are three types of subscribers:

First group: public fund institutions like Tabung Haji, EPF, KWAP, LTAT and sovereign wealth fund like Khazanah. All of them are rich in cash.

Second group: international fund institutions like Temasek of Singapore, employees provident fund from UK, the US, hedge funds and gigantic insurance companies. They too are rich in cash.

Third group: the retail investors and “men in the streets” (MITS) who will only able to subscribe very limited amount of shares.

1MDB’s IPO will be facing hurdles from rulings set by Securities Commission (SC) as well as stipulated guidelines set by investment panels of the public fund institutions. The investment decision is guided by:


(1) Sectoral Limit

Each of the public fund institutions normally has a vast range and spread of investment portfolios from different sectors. This is a normal practice as part of managing investment risk exposure or in the English adage: ‘don’t put all your eggs in one basket’. This is to avoid systemic risk that could wipe out the overall investment if few invested sectors experienced losses.

For example: if KWAP already have an investment or shares in energy sector (which they currently have – in Malakoff Corporation Berhad) and the investment already reached the stipulated ceiling, then KWAP could no longer invest or subscribe to any IPOs that are issued by other energy companies.

(2) Single investee limit.

Local public fund institutions also are being ‘capped’ by government – for governance purposes – for not to invest beyond the stipulated limit.

For example: Let’s say EPF has an investment in our national oil and gas company PETRONAS which is capped to the amount of RM200 million, therefore EPF can no longer invest beyond that amount. Reason being government placed such restriction is to allow a fair competition for all existing public fund institutions to invest in such blue-chip companies that could provide reliable returns. By doing so not only EPF, but Tabung Haji, LTAT, and KWAP could also have a slice of the cake.

This is where the regulators like Ministry of Finance, SC and Bank Negara must make thorough due diligence with proper strategies (including exit strategy) clearly laid out before deciding to take Edra Energy public.

Edra as low-hanging fruit

The hard fact is that the IPO is already well-known by the public to be a ‘unique’ one. The real intent of going for IPO is to help 1MDB generate more cash in order to service the large debt that was incurred earlier in both of its principals and interests. This is very important for 1MDB in order to avoid foreclosure, not really about the prospect of future growth that is normally and clearly visible in ordinary prospectus.

The rate that 1MDB incurs its debt must not exceed the rate of its revenue generation in order to maintain a well-balanced debt management. The question is can this IPO for Edra Energy able to generate returns in short span of time as well as able to ensure its business operation i.e. concession period runs long enough. We have to keep in mind that the Tun Razak Exchange (TRX) realty is a long-gestation development. It means 1MDB as a group could only depend on Edra as its immediate savior.

Judging from market sentiment, going for IPO seems an insurmountable task and will not be that impactful in resolving 1MDB’s cash flow. People already speculated the writing on the wall for the proposed IPO. Prospective investors are afraid that the IPO will end up like Felda Global Venture’s (FGV) IPO which received an euphoric response during the listing but now its shares are languishing in value. The horizon is indeed bleak for 1MDB.

The author is a fellow at Putra Business School. The article first appeared in The Malaysian Reserve, 30th April 2015.

 


Rabu, 29 April 2015

Geopolitical Risk of 1MDB could be a reality





THE GEOPOLITICAL RISK OF 1MDB
What will happen if we do not solve 1MDB?

by 

Wan Ahmad Fayhsal

If we were a policeman on duty and suddenly on that day encountered a person who was badly hurt in the aftermath of car accident. What would our first course of action be? Would it be appropriate for us to figure out the damaged car, taking pictures of the accident scene or rush to help the injured person?



Definitely we need to assist the victim and figure out the other details of the scene later especially in identifying the cause of accident. 

This analogy has always being used by former Malaysian premier, Tun Dr Mahathir in a time of dire strait where decisive action must be made in saving critical institutions and assets, as he had demonstrated in 1997 economic crisis.

Government institutions and corporations that faced utmost difficulties which could trigger a systemic risk to the country’s economy as a whole must be saved first and prioritized above the blame game.

The problems besetting 1MDB  – Malaysia’s strategic development company – is almost similar to the risks exposure of 1997 financial crisis. In 1997, the crisis involved many companies but now it confined to a single company that holds massive debt.

Much has been written about 1MDB especially with regard to politically charged expositions championed by opposition parties in Malaysia. But none thus far have touched on the geopolitical risk that 1MDB might bring if it is going to enter into an event of default and worse, foreclosure.

The greatest threat at hand is the loss of national strategic assets which currently within the fold of 1MDB: the tract of lands for Tun Razak Exchange (TRX) in Sungai Besi and number of power plants recently acquired by its subsidiary Edra Energy.

Contagion

In what way 1MDB debt could be exposed to such problem? One of them is through systemic risk of servicing debt with debt.

1MDB external debt exposure would pose a systemic risk to national economy. 1MDB has hired investment bank Goldman Sachs, dubbed by many as “the bank that rules the word” as its book runner. Goldman Sachs has histories of mismanagement and unethical practices when it comes to managing debt.

The current economic mess in Greece can be traced to role of Goldman in 2002. As an aspiring member of the newly established Eurozone, Greece like any other European Union (EU) members, was required to conform to Maastricht Treaty where its debt management must not exceed 60% of its GDP.

To manage this expectation, the Greece government then sought help from Goldman for a loan swap deal in order to mask the Greece’s sovereign debt with a fictitious exchange rate that would help the debt amount appeared to be smaller than it should.  The swap deal circumvented weaknesses that existed in Eurostat’s reporting rules that do not comprehensively keep tab on transactions involved with financial derivatives. 

The impact is huge to Greece economy as we can see today. On top of the national deficits, Greece currently is in the brink of economic collapse due to extreme austerity measures that are being imposed over by powerful EU debt commission: European Commission (EC), European Central Bank (ECB) and IMF. Dubbed as ‘the troika’, they have subverted Greece political sovereignty under the suzerainty of the international bankers.

Threat of Vulture Funds

Second geopolitical threat is in the form of vulture fund. It is a type of fund institution that buy over the debts at a discounted price in the view to gain profit through interest charges by helping the indebted party – either country, company or individual – in settling the debt within the grace period.

Not of all them are sincere to help. There are sinister vulture funds that really preyed onto the debtor’s agony with a view to tie them into a financial serfdom.

Case in point is Argentina where it is currently being hunted by the vulture funds that have acquired some portions of their national debt. Failing to resolve the debt internally, Argentina had to resort to foreign assistances. In that chaotic period of recession, the government then did not expect some of their debts were already bought over by group of fund institutions that were known for their efforts in rescuing distressed entities – including the vulture funds.

In 2012, the renowned vulture fund manager, Paul Singer through his NML Capital (subsidiary of Singer’s hedge fund Elliott Capital) filed a court injunction which was granted by Ghanian superior court to detain the Argentina’s naval vessel ARA Libertad in the Ghana’s port city of Tema.

As reported by The Financial Times, Elliot Capital had been tracking the vessel and was bidding for the right moment in enforcing the legal judgments at the port that falls under the jurisdiction that previously awarded by US and UK courts. Not limited to that, creditors have been targeting planes belonging to Argentina’s national airlines Aerolineas Argentinas’ as well as Argentina's central bank money deposited in the U.S. and Europe.

Argentina is also fighting a ruling made by New York district judge Thomas Griesa to block all interest payments to the restructured bondholders unless the payment being made to the vulture funds led by Paul Singer’s NML Capital. This has caused the country to default last summer for failing to service their debt on time.

Although we cannot make direct comparison between 1MDB and to a country that held massive national debt like Argentina, the sensitivity and risk exposures on the debt that beleaguers them has almost similar impacts.

1MDB must be resolved

From the situational assessment above, the risk of 1MDB to fail cannot be taken lightly. It must be viewed from a larger picture of geopolitics. Though most of the critics especially coming from Malaysian opposition parties are warranted, the manner they handle the crisis at hand as well as the solutions proposed are counterintuitive to the risks discussed. 



Bailout is a consequence of decision that we must make in order to save 1MDB from encountering another event of default. It’s not only due to the sheer amount of debt that 1MDB currently owns but also the strategic assets of land and power plants that must not fall into the wrong hands especially to the external creditors which care not on the sovereignty of our nation.

The writer is a Fellow at Putra Business School. The article first appeared in The Malaysian Reserve, 28th April 2015.



Isnin, 27 April 2015

Ḥuqūq al-ʿIbād vs. Insan Promethean: Satu tanggapan awal terhadap landasan berfikir "Sisters In Islam" dan golongan yang seumpama dengannya





Oleh Wan Fayhsal 

Saya masih memikirkan banyak perkara – khusus yang tersirat, berhubung muʿāmalah (engagement) saya dengan kumpulan Sisters In Islam pada 25hb Apil 2015, dalam forum  “Kebangkitan Islamisme dan Demokrasi” yang mereka anjur bertempat di Hotel Concorde, Jalan Sultan Ismail, KL.

Seperti biasa dicelah-celah perbahasan panjang lebar berkenaan Islamisme (atau political Islam, harakah Islamiyah) antara persoalan yang sering dibangkitkan ialah mengenai kewajipan berhijab untuk wanita.

Saya cuba letakkan diri saya dalam situasi mereka. Mengapa mereka membantah, membentak dan seperti “rebellious” terhadap tuntutan ini?

Secara zahir mereka berhujah bahawa hijab itu tiada dalil dalam Qurʾān berkenaannya (samalah juga dengan sejumlah masalah yang lain seperti kewajipan menegakkan kerajaan dan pemerintahan Islam) tapi mereka masih belum faham (mungkin) perintah dan istilah “menutup aurat” seperti dalam ayat 31 dalam surah al-Nūr. Kita juga maklum pelbagai lagi hadīth aḥkām (legal rulings) berhubung aurat yang mungkin mereka tidak fahami lagi.

Bila saya renung, saya teringat saya juga ada kisah peribadi tentang menutup aurat.

Sebagai pemain ragbi sewaktu di universiti (ni sebelum masuk Jemaah Islam Kampus), saya selalu pakai “short rugby” yang sangat pendek – atas lutut dan ketat. Itu memang sifat “short rugby” sebab ianya “contact sport” maka kena “fit to the thigh”.

Jadi saya selalulah berulang pergi dan balik dari padang ke hostel dengan seluar pendek yang ketat. Bila saya pergi ke café, saya selau nampak poster kempen tutup aurat yang Rakan Masjid UTP tampal di merata tempat.

Entahlah lama-lama bila hati saya tertarik ke masjid sebab suka dengar ceramah Ustaz Rahmat Abu Seman yang merupakan Imam II Masjid al-Nūr UTP yang bagi saya lain daripada yang selalu saya dengar tentang Islām (ada banyak asbab lain macam mana hidayah sampai kepada saya).

Lebih kurang setahun kemudian saya dengan rela hati memakai “thigh lycra” dan “knee guard” dengan “short rugby” untuk memenuhi kegiatan dan hobi sukan saya mewakili UTP dalam sukan ragbi. Kesedaran saya untuk menutup aurat bukan selepas masuk Jemaah Islam Kampus tetapi sebelum itu (kalau tak, takkan mereka bawa saya ke tamrin perkaderan bukan?).

Apa sebenarnya yang mencetuskan kesedaran dan mendorong saya dengan rela hati untuk menutup aurat?

Bila saya muhasabah balik kini dengan sedikit ilmu dan kefahaman Islām yang lebih mantap daripada sebelumnya, saya sedar pilihan saya itu bukan kerana saya takut dan rasa dipaksa dengan hukum Fiqh, tapi ada sesuatu yang lebih besar daripada itu…

Sebenarnya saya baru sedar bila saya muhasabah bahawa sebelum saya menutup aurat, saya sebenarnya telah menutup MARUAH dulu atau dalam kata asal Arabnya:  MURŪʾAH.

Apakah itu “murūʾah”?  Dari segi bahasa ianya daripada kata akar “marʾun” (person).

Dari segi istilah, Imām al-Mawārdī dalam karyanya yang masyhur – Adāb al-Dunyā wa’l-Dīn (Adab of Living and Religion) mentaʿrifkannya sebagai:


“Menjaga hal keadaan (murāʿat al-aḥwāl) atau akhlak yang paling utama sehingga tidak kelihatan pada diri seseorang sesuatu yang buruk atau hina dan tidak mengikuti sesuatu yang dipandang jelek akan sifat yang selayaknya untuk insan (lā yatawjjahu ilayha dhammun bi-istiḥqāq)”

Ringkasnya dalam bahasa Melayu “keperibudian” atau “keperibadian” atau bahasa Inggeris-nya “(hu)manhood” [marah pula feminis kalau tak leta “hu-], “gallantry” dan “sense of honour”.

Imām al-Mawārdī juga menjelaskan murūʾah sebagai perhiasan (ornament) kepada insan.

Ianya juga berkait rapat dengan soal ḥayāʾ (malu) yang kita semua tahu daripada ḥadīth Nabī (saw) sebahagian daripada iman.

Inilah pada hemat saya maqṣad (tujuan) sebenar arahan daripada Allah SWT dan Rasul-Nya dalam memerintah kita untuk menutup aurat. Yang mana hijab, jilbab untuk wanita itu merupakan satu kemestian yang perlu dipenuhi untuk menyempurnakan tuntutan tersebut.

Kalau begitu, maka kita kena tahu bagaimana sebenarnya kita dapat memberi kefahaman yang betul dalam menjemput mereka (bukan ‘pontificate’) untuk menutup dan menyempurnakan murūʾah terlebih dahulu sebelum mengajak untuk menutup aurat melalui berjilbab dan berhijab.

Hanya dengan cara ini kita dapat elak fenomena nifāq sharʿī seperti sesetengah wanita di Iran yang memakai “chador” tetapi bila jejak pada bumi asing terus tanggalkan.

Makanya sebarang kritikan berhubung hukum-hakam ke atas golongan Muslim yang berfikiran liberal adalah tidak mujarab dan “make sense” kepada pemikiran beragama (religious logic) mereka.

Kita tahu usaha untuk menerangkan hal ini tidak mudah. Ada halangan-halangan berbentuk epistemik malah juga ontologik yang telah menyelaputi (scaffolded) pemikiran atau lebih tepat pandangan alam kumpulan seperti Sisters in Islam dan yang sepesen dengannya.

HAMBA

Kami di CASIS di ajar oleh Prof. SM Naquib Al-Attas dan para anak muridnya untuk sentiasa merungkai keteraturan tersirat (implicate order) juga menggali keluar berhala-berhala konsep (excavating conceptual idols) yang tertanam dalam pemikiran mereka yang ganjil (shādh) dalam menanggapi dan mengamali Islām khusus Sharīʿah.

Kemahiran ini digarap oleh guru kami Prof. Wan Mohd Nor Wan Daud dalam mata kuliah yang beliau ajar iatu “Worldview and Epistemic Framework.”

Saya cuba amati secara mendalam setiap persoalan dan pertanyaan yang dibangkitkan ahli Sisters In Islam dan para penyokong mereka dan saya sedar bahawa pandangan alam Islam mereka itu berdiri atas asas yang berbeda dengan pandangan alam Islam sejati ahl al-Sunnah dalam bab ontologik – iaitu tempat, kedudukan dan hubungan antara diri mereka sebagai insan dengan Tuhan.

Pendek kata asas dan logik beragama mereka didasari dan dibingkai kepada faham “human rights” yang bersifat Promethean.

Human rights” kita tahu tapi apa itu Promethean?

Promethean adalah sifat yang diambil sempena mitos Yunani yang masyhur berhubung insan separa tuhan (demigod) bernama Prometheus yang telah mencuri api yang disembunyikan Zeus (tuhan terhebat Yunani kuno).

Setelah ditangkap beliau dihukum dengan diikat pada batu dan limpanya dipatuk oleh Helang Kaukasia kemudian pada sebelah malanya ianya tumbuh semula, kemudian dipatuk lagi pada sebelah pagi sehinggalah satu hari Hercules selamatkannya.

Sarjana dan pemikir Islam seperti Seyyed Hosein Nasr dan Al-Attas merujuk istilah “Promethean Man” (insan Promethean) sebagai manusia yang mencabar keteraturan dan autoriti Tuhan. Manusia yang memberontak ke atas segala ketetapan dan hak yang telah termaktub ke atas setiap insan dari Nabi Adam sampai kiamat. Dan cara-gaya dan kefahaman ini amat menular di kalangan orang Barat.

Persoalannya di sini apakah hak itu yang tidak difahami oleh orang Barat yang sekular dan Muslim yang berfikrah liberal dan moderat?

Jawapannya ialah, “Hak Sebagai Hamba-Nya” atau dalam istilah Arab-Islaminya: Ḥuqūq al-ʿIbād.

Perasan tak ada semacam satu tanāquḍ (percanggahan) dan oxymoron dalam faham dan konsep “Hak Sebagai Hamba-Nya”?

Sejak bila seorang hamba itu memiliki HAK?! Bukankah seorang hamba itu tidak memiliki apa-apa dalam jalan perhambaan (serfdom)?

Ya, ada hak untuk seorang hamba Allah: hak dan tanggungjawab untuk membayar hutang dengan menyerahkan diri sepenuhnya kepada Allah SWT ke atas segala ketetapan yang Allah SWT telah berikan kepada setiap hamba-Nya: yang baik dan buruk (khayrun wa sharrun), yang manis dan yang pahit (ḥulwun wa murrun)

Harus diingat, istilah hak dalam Islām tidak sekadar “rights” tapi juga berserta tanggungjawab (responsibilities) – sesuatu yang tidak wujud dalam wacana “rights” di Barat kerana sifat individualisme yang amat tebal sudah menenggelamkan perihal “duties” yang hanya wujud dalam perhubungan antara dua atau lebih pihak.

Ada sarjana yang guna istilah “karāmah al-insāniyah” (human dignity) tapi ini tidak menggambarkan status ontologik yang paling asas dalam Islām berhubung insan vis-à-vis Tuhan yang lebih tepat dalam konsep “haq al-ʿabd” (rights and duties of bondsmen).

Maka fahamilah kita bahawa Sisters In Islam dan yang sepesen dengannya itu berdiri atas wacana Human Rights yang sempit lagi Promethean, yang lahir daripada rahim sekularisasi pengalaman beragama Barat yang menatijahkan faham positivisme, individualisme dan kebebasan yang tidak berpandukan wahyu.

PENTINGNYA AL-ATTAS

Padanlah saya faham golongan Sisters In Islam ini tidak mampu menerima teguran dan nasihat daripada golongan yang dilihat mereka sebagai authoritarian, bengis dan “holier than thou” yang mereka anggap wujud dalam semua insan yang bergelar ulama’.

Sebab so-called ʿUlama’ ini sering “pontificate” iaitu memaksa-maksa (imposing) sesuatu hukum tanpa mendidik – ya’ni dengan menunjukkan di mana silapnya asas berfikir dan kerangka epistemik golongan ini sebelum membalas dengan segala jenis dalil dan hukum sharaʿ.

Alhamdulillah saya boleh faham mengapa ramai kaum Muslimin di zaman moden ini terperangkap tanpa sedar dan sedar ke dalam ranah ini kerana itu adalah semangat zaman ini (zeitgeist) atau apa yang Al-Attas jelaskan sebagai “sekularisasi sebagai satu rencana falsafah”.

Dan ubat untuk penyakit ini tiada lain ialah pendidikan atau lebih tepat dalam istilah Al-Attas: taʿdīb, iaitu:

“satu gerak usaha untuk menanamkan dalam diri insan akan kemampuan untuk pengenal pastian (recognition) dan pengiktirafan (acknowledgement) “kedudukan setiap sesuatu” dalam aturan mawjud (creation) yang akan menatijahkan pengenal pastian dan pengiktirafan akan kedudukan Tuhan dalam kedudukan, darajat, dan keteraturan bagi setiap yang mawjud dan wujud (in the order of creation and existence).”

Dan ubat untuk Sisters In Islam dan kita semua selaku insan yang senantiasa lupa akan hakikat perhambaan kita ialah dengan memahami sampai lumat risalah Al-Attas bertajuk “Islām: Faham Agama dan Asas Akhlaq” (atau dalam B Inggeris – Islām: The Concept of Religion and the Foundation of Ethics and Morality).

Dalam risalah ini huraian yang amat-amat dahsyat lagi bermakna berhubung makna “Agama” (al-Dīn) yang Al-Attas telah sharahkan dan bina satu sistem berfikir yang amat ampuh yang mana ditekankan oleh Al-Attas asas agama kita sebagai seorang Muslim ialah “KEBERHUTANGAN” (yang diambil daripada makna al-Dayn berkongsi akar dengan al-Dīn) kepada Pencipta kita.

Bila kita faham mengapa Islām itu agama yang berdiri atas faham “keberhutangan” maka menjadi seorang Muslim itu – seperti ulas Al-Attas, adalah satu penyerahan (aslama – yang terbitkan kata pelakunya iaitu istilah “Muslim”) dan bagi mereka yang mampu menyerahkan dengan penuh ikhlas dan redha mencapai tahap “Muʿmin” yang merupakan kata pelaku kepada akar kata āmana yakni membawa maksud “mencapai keamanan dan selamat” (peace and safety).

Sepanjang saya baca, dan kaji sekian banyak kitab dan buku yang menerangkan berkenaan Islam, tiada pernah saya jumpa satu huraian yang mendalam, yang sistematik dan yang amat menusuk aqal seperti mana Al-Attas telah jelaskan dalam risalahnya yang mahsyur itu yang juga dijadikan bab penting dalam karya agung beliau yang awal iaitu “Islām and Secularism” (1978).


Kalaulah golongan Muslim modenis dan liberal faham asas aqidah dan pandangan alam ini – yakni makna al-Dīn, Islām, Muslim, Muʾmin dan banyak lagi kata kunci yang menayangkan peri makna Pandangan Alam Islām yang tulen tanpa diselaputi faham sekularisme –  maka nescaya kita dapat betulkan kekeliruan dan kesalah fahaman yang mereka telah berpaut pada dahan rapuh Promethean Man yang menjadi asas kepada faham Human Rights yang membentuk wacana mereka.