According to very reliable sources, on 21-11-2011 Tan Sri Azman Mokhtar told the Public Account Committee (PAC) the followings:
There were 50 verbal and written questions raised by 36 MPs regarding the secret MAS – AirAsia share swap and his brain child, the Collaborative Framework;
“MAS IS NOT BEING SOLD OUT: the MAS Board composition remains balanced in line with SHAREHOLDINGS;
Share swap resulted in Khazanah selling 685, 142, 000 MAS share (20.5%) to Tune Air in exchange for 277, 650,600 AirAsia shares (10% of AirAsia)”.
“EXTREMELY CHALLENGING AVIATION INDUSTRY REQUIRES RADICAL CHANGES TO BUSINESS MODEL OF MAS: therefore, collaboration and market segmentation by carries is the norm in aviation today, MAS losses exacerbating conditions for a refocus of segment / product”;
“FAIR SWAP VALUATION, AN ARM’S LENGTH TRANSACTIONS: Share swap ratio between MAS & AirAsia based 5-8-2011 market of both airlines; key valuation matrices supported the relatives swap ratio, as at share swap DATE, 15 of 22 analysts had buys calls on AirAsia while 10 of 15 had sell calls on MAS, all regulatory requirement strictly adhered to, overseen by the Boards of Khazanah and MAS”;
(NOTES: Before the share swap was announced on 9-8-2011, the previous MAS Board didn’t know anything about the negotiations of the secret share swap resulting in YM Tengku Azmil and a few others Board members resigned in “protest” prior to or on the day of the said secret share swap announcement on 9-8-2011. Leaving behind Tan Sri Md Nor Md Yusof (ex-MD of MAS of WAU fame that he was responsible for appointing BinaFikir Sdn Bhd as MAS consultant, disposing 70% of MAS Catering Sdn Bhd to Gubahan Saujana Sdn Bhd [a company related to Datuk Ibrahim bin Hj Ahmad Badawi [the brother of Tun Abdullah Ahmad Badawi], Ex-Chairman of Security Commission) and Datuk Azman Yahya (also the key man in SCOMI) as Board members before the new appointment on 9-8-2011. Presumably, Tan Sri Azman Mokhtar meant that these were the two directors that were overseeing the regulatory requirement of the said share swap. It is hoped that the Security Commission and the Bursa KL will take note of the glaring facts revealed by Tan Sri Azman Mokhtar and that no DISCLOSURE by MAS Board of the possible MAS – AirAsia share swap and the movement of share prices of MAS and AirAsia Bhd during the material time i.e. end of June to 5-8-2011. Arm’s length transactions involving the said share swap: The said share swap was shrouded in secrecy. It must be noted that Tan Sri Azman Mokhtar, En Mohammed Rashdan, Tan Sri Tony Fernandes are known good friends. Perhaps Tan Sri Azman Mokthar should tell us what he meant by “arm length’s transaction”? As far as yours truly is concerned it was just another beautiful big word like CCF fitting for the understanding of those with the background of consultant. When question was put: why the share swap was based on market cap of 5-8-2011 and not net tangible asset (NTA)? The reply was: JUDGMENT CALL! What a brilliant reply.)
“COMPREHENSIVE COLLABORATIVE FRAMEWORK (CCF) IS REQUIRED FOR MAS & THE AVIATION SECTOR: Focused collaboration supports KLIA as a hub into other airports in Malaysia; CCF provides legal framework whereby only actions that benefits both parties will be executed; oversight via strong governance structure; MAS needs to refocus on its products segment, increase yield and productivity for its long term survival, regardless of CCF, some operational improvements have already occurred”;
(Notes: Full details were not furnished to PAC with regards to the execution of the so-called legal framework to ensure all actions benefited both parties! Was the sponsorship of RM18 million for QPR home jersey by MAS, when MAS was bleeding, on 16-8-2011 [7 days of the inking of the said secret share swap was of benefit to MAS or Tan Sri Tony Fernandes, who is the co-owner of QPR?)
PAC has also been told that “Both major shareholders believe that all airlines (MAS & AirAsia) will benefit greatly from the collaboration which will ultimately see greater and improved returns to all shareholders”.
Instead of joining the OneWorld with a membership of 12 other international IATA airlines, Tan Sri Azman Mokhtar came up with such “great” idea where MAS and AirAsia X Sdn Bhd will be competing with Thai and SIA together with the other 22 international IATA airlines under the Star Alliance. Was it an afterthought? By the way, Tan Sri Azman had declared to the bloggers on 16-8-2011 that “AirAsia X Sdn Bhd is a DODGY DEAL!’ Tan Sri Azman: Have you forgotten about this famous declaration of yours?)
“PUBLIC INTEREST CONSIDERATIONS HAVE APPROPRIATE SAFEGUARDS: Subject to anti-competition scrutiny in Malaysia and other countries, low cost carrier model requires low prices to attract increased volumes, consumers choice for full service and low cost offerings will be maintained and collaboration advisory panel is in place”,
(NOTES: To cater for consumers choice? With En Mohammed Rashdan Yusof (Rashdan) cancellations of many Firefly full load flights during the recent Raya season causing great inconveniences and heartache to about 7,000 “balik kampung” rakyat, termination of Firefly profitable routes from JB to Kuching and KK from 25-8-2011, termination of MAS profitable route to Bandung from 3-10-2011 and stopping the Firefly expansion plans under YM Tengku Azmil and Datuk Eddy Leong. Who are on the Collaboration Advisory Panel? Only God knows. Based of the current trend of the decisions in MAS, the members of this panel must be Rashdan, the ex-business partner of Tan Sri Azman Mokthar in BinaFikir Sdn Bhd, Tan Sri Md Nor Md Yusof and Tan Sri Tony Fernandes. It is hoped that yours truly guess is wrong”.
Tan Sri Azman Mokhtar also told PAC: “The Collaboration Agreement does not give rise to any commitment to collaborate until anti-trust analysis has been completed. Should the parties identify any area in which they can collaborate, they will make the necessary anti-trust assessment and seek approvals prior to implementation.” Sounded very consultant liked.
If the said statements are anything to go by, all the said decisions of cancellation of Firefly and MAS routes, and the shelving of Firefly expansion plans have been done without approvals from the Malaysian Anti-Trust Commission, which will only come into effect on 1-1-2012. Then the said decisions should be rescinded forthwith. Don’t tell yours truly that all the said decisions have already been vetted by Dr Wafi, the world renowned authority on monopoly law. By the way, Dr Wafi, you must have also vetted the Alwafeer Air lease agreements before execution by MAS that have cost MAS more than RM150 million losses! Another leakage in MAS.
The PAC hearing on 21-11-2011 was just a preliminary briefing without much questioning. Reliable sources said that several more long hearings will be fixed where Tan Sri Azman Mokhtar, En Ahmad Jauhari and others will be called for interrogation. Hopefully the directors of the previous MAS Board especially ex-MD, YM Tengku Azmil and the CEO of Firefly, Datuk Eddy Leong, should also be called to enlighten the PAC and the nation of the true episode of this secret share swap.
By the way, the full details of the proceedings will be published and tabled in Parliament in due course. Your truly will alert all the readers when it was tabled so that you can read in full via the official website of Parliament.
Next Change / Akan Datang!!! The AJ’s briefing to PAC which will be just as interesting and informative as Tan Sri Azman Mokhtar!