Mahathir ticking of Petronas - may have backfired on himself

Kit Siang demands Petronas opens its books
By Shannon Teoh

PETALING JAYA, July 4 — Lim Kit Siang urged the Barisan Nasional (BN) government today to open its books on Petronas and give a full accounting of how payments from the national oil company had been spent since its inception.

While the veteran DAP man backed Tun Dr Mahathir Mohamad today in questioning how the government spent RM253.6 billion in payment from Petronas, he said the public were also entitled to know how the former PM’s administration had utilised the RM169 billion it received from Petronas.

“Mahathir is right. Malaysians have a right to know how the RM253.6 billion paid by Petronas to the federal treasury in the past six years had been spent.

“But Malaysians have a right to go one step further, to demand how half-a-trillion ringgit contributed by Petronas to the government in the past 33 years – RM4.2 billion under Tun Hussein Onn, RM168.8 billion under Tun Mahathir and RM253.6 billion under Tun Abdullah Badawi – has been spent and to demand a full accounting,” the DAP parliamentary leader said today.

Dr Mahathir, a trenchant critic of his successor Abdullah, wrote in his blog yesterday that “it would be interesting to know what the RM253.6 billion was spent on” since he left office in 2003.

Some of the former PM’s backers have pointed out that there is no physical evidence of just what Tun Abdullah’s government spent Petronas money on, while Dr Mahathir could point to major infrastructure projects from the Kuala Lumpur International Airport (KLIA) to Putrajaya.

But Lim, in calling a for a public inquiry and full accounting of the RM427 billion contributed by Petronas since its inception, responded today that the Petronas adviser’s point that “prudence was the last consideration in the expenditure of the RM253.6 billion Petronas petro-ringgit” should also be levelled at the influential statesman.

“Mahathir had set many bad precedents of abuse and misuse of the Petronas ringgit in his 22 years as prime minister,” Lim said in a press statement today.

The Ipoh Timur MP said that “Mahathir had not bat an eyelid” to misuse funds from Petronas, set up in 1976 as the national oil company, to “bail out dubious projects”.

“The most infamous being the RM2 billion bailout of his son Mirzan Mahathir’s shipping concern Konsortium Perkapalan Bhd (KPB) in 1998 when KPB was floundering in billion-ringgit debts with its share price falling to RM3.78 by February 1998, a fraction of its pre-financial crisis level of over RM17,” the DAP stalwart said.

He claimed that there were other occasions under Dr Mahathir when “Petronas was used as a national piggy bank” such as the RM2.5 billion and RM1 billion bail-outs of Bank Bumiputra in 1986 and 1989, aiding MAS and Proton in their financial struggles as well as to fund mega-projects such as the Petronas Twin Towers and the shifting of the federal administration to Putrajaya

Lim also demanded a full accounting of the RM15.2 billion royalty owed to the Terengganu government from 2000 to 2009, which he claims were “hijacked by the federal government when the Terengganu state government fell to PAS.”

The doubts over government management of Petronas funds come after the nation’s only Fortune 500 company announced on June 25 that it had paid RM30 billion in dividends to the federal government for the financial year ended March 31, 2009.

A special dividend of RM6 billion was declared last year and this amount is exactly the increase against the previous financial year’s dividends. This is despite a 14 per cent decline in net profit to RM52.5 billion due to lower crude oil prices and higher operating costs.

Apart from the dividends, Petronas also paid RM29.4 billion taxes, RM6.2 billion royalties and RM2.2 billion export duties for the last financial year, totalling RM67.8 billion to the federal government against RM56.8 billion in the previous year.

But the government has in the past stated that money from Petronas goes into the treasury’s consolidated fund and cannot be linked directly to any particular expenditure. There is mounting concern over the management of Petronas as it contributes to 45% of the country’s economy.