Splash answers from Khalid

Nov 13, 2016

In an exclusive hard-hitting interview with the ‘New Sunday Times’, former Selangor Menteri Besar Abdul Khalid Ibrahim shares the dealings made between the state government and Syarikat Pengeluar Air Selangor or Splash, to deprivatise the water concessionaire.

New Straits Times

Former Selangor Menteri Besar Khalid Ibrahim.
Former Selangor Menteri Besar Khalid Ibrahim.

Question: Can you explain the situation with the offer to take over Syarikat Pengeluar Air Sungai Selangor’s (Splash) equities, and how these allegations cropped up?

Answer: The state government during my time, made four offers to four water concessionaires — Splash, Abass (Syarikat Konsortium Abass Sdn Bhd), Puncak Niaga and Syabas. Two were made in 2009, one in 2011 and the final one was made in February 2013. The total offer for the four concessionaires in 2013 was RM9.65 billion.

Splash had rejected the first three before an agreement was reached in February 2013. Yes, an offer of RM2.975 billion was made to Splash, which was issued on June 25, 2009. This was the second offer. But what the people must know is that offer took into account Splash’s equities, liabilities and assets, and not its equities alone.

You must understand that the basis in 2009 is different from the one in 2013. And, at that time, only Splash and Abass agreed to the offers presented to them, while Puncak Niaga and Syabas did not agree to it. The deal could not proceed because Pengurusan Aset Air Bhd (PAAB) had an “all or nothing” principle. So, in the Feb 20, 2013 offer, of the RM9.56 billion, RM1.584 billion was offered to Splash for liabilities and only RM250.6 million was offered for equity takeover, and not RM2.975 billion as (Selangor Menteri Besar) Azmin Ali had claimed.

It is as if he is using the RM2.975 billion figure to justify his RM2.7 billion equity offer. He isn’t supposed to do that, because that would mean that the state government is actually offering Splash a total of RM4.2 billion. He can’t just present a letter showing the figure and say that was an actual offer. Perhaps, this is where some experience in corporate banking and merchandising will help (him). Unfortunately, he didn’t go through that.

Question: But, Azmin is saying he has evidence to prove that you offered RM2.975 billion.

Answer: Yes, he has the offer letter of RM2.975 billion dated June 2009. But that “evidence” doesn’t prove that the amount was only offered for equity. Azmin doesn’t understand the reason behind it. He didn’t read the letters carefully to understand that the structure of the offer made by the Selangor government in 2009 differs from the structure in 2013. He used that figure without explaining what the figure meant. If he had appreciated that structure, then he would know that it would not be the same.

This is not an easy game like selling nasi lemak.

Question: So, where did Azmin go wrong? Are you saying that he didn’t read through the documents?

Answer: He should have read the White Paper detailing the restructuring of the water services industry in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. If he had read it, he would have understood. As an MB, he should’ve also gotten an adviser to deal with a major transaction like this. He did not (read through all documents) and appreciate the differences of the offer.

Question: But shouldn’t he have known this?

Answer: Perhaps (his experience) didn’t teach him a lot in his early working days. Maybe he has only done clerical work, not design, strategy, or anything on financial (matters). This is a very clerical argument.

Question: Why are you speaking up now?

Answer: I’m very concerned. If the state government continues to offer RM2.7 billion to Splash for equity takeover, that amount is over 10 times more than what was offered to the company in 2013. It (the state government) will have to go back to the Dewan Undangan Negeri to say that there is an extra RM2 billion to pay. If the state says it will pay for it, the amount would be taken from the state reserve and you will need to ask the people of Selangor whether it is fair to use it.

On top of that, Azmin is trying to point fingers at me by saying that his offer of RM2.7 billion is lower than what I purportedly made.

Question: With Azmin throwing these allegations at you, do you see anything political behind it?

Answer: Whatever the reason behind him doing this, I don’t mind. As long as the people of Selangor don’t have to pay for it, he can blame politics, (Donald) Trump or whatever. The letter in 2009 and the RM2.9 billion cannot be used because the whole offer was rejected. That’s his mistake. He can’t just simply use a figure.

Question: Would you be willing to meet with Azmin in person to explain?

Answer: No, not personally. But at the state assembly, yes. I don’t see the need to meet him personally. What for? To teach him? I think it’s a bit too late for that. He is the menteri besar, he should have received sound advice.

Question: Have you said anything in the state assembly to counter his allegations, and do you think you will get the chance?

Answer: I wanted to go to the state assembly to explain, but the speaker has been reluctant to give me the floor. And even if I had spoken, the other assemblymen present would only be shouting “Tipu, tipu” (lies, lies). To me, the more they understand what is going on, the more they will be worried about it. So, I’m hoping that I get the chance.

Question: You have sent an open letter to PAS president Abdul Hadi Awang on this, which has since gone public. Why did you send it?

Answer: Because the one who made the statement in the state assembly was a PAS executive councillor — Zaidy Abdul Talib. If PAS did not know what was going on, it would be unfair to PAS, and people by nature trust Pas because of the “amanah” virtue that they hold on to, and that they “takut buat dosa” (are afraid to sin). And with a PAS representative making the statement, I felt a need to clarify through a letter that I sent on Wednesday morning. It went public in the afternoon.

Question: Has there been any response from PAS?

Answer: Yes, a PAS Youth leader from Selangor has responded with a statement, questioning the increase of over RM2.4 billion in the offer to Splash for equity takeover, and hoping that the Selangor government under Azmin’s leadership could resolve the matter without burdening the people.

Question: It has been well over two years since you were publicly pressured to step down as MB, and since then, many things have happened in Selangor. How has life been for you?

Answer: I am very happy. When I was the MB, I took the job with responsibility and took it very seriously that sometimes, my stress levels went through the roof. But now, I don’t have those problems anymore. I still have plenty of other international advisory work. I’m still a member of parliament for Bandar Tun Razak and a Selangor state assemblyman for Port Klang.

Life has been busy because of frequent international travel and also state assembly and Dewan Rakyat sittings. So busy that I have to decline overseas assignments to teach at international universities.

Question: How has your health been, Tan Sri?

Answer: Very good, Alhamdulillah (praise be to God). When I was MB, I was diagnosed with Type 2 diabetes. But now, I don’t even have to take diabetic pills and insulin. It must have been some level of stress I had.

Question: As an independent lawmaker, what can you comment about your former party, PKR, and the Pakatan Harapan pact?

Answer: There is no uniformity in objective and vision. I think, therefore, the chances of getting together as a solid group may not happen. Also, I think with the entry of Parti Pribumi Bersatu Malaysia, it will create more confusion. You must remember that the public, when it comes to making a choice, they will choose a party they understand, not a party that confuses them.

PKR, on the other hand, is trying to kiss the cheeks of everyone, in hopes of unity between opposition pacts. Unfortunately, Pas

In an exclusive hard-hitting interview with the ‘New Sunday Times’, former Selangor menteri besar Tan Sri Abdul Khalid Ibrahim shares the dealings made between the state government and Syarikat Pengeluar Air Selangor or Splash, to deprivatise the water concessionaire.

New Straits Times

Question: Can you explain the situation with the offer to take over Syarikat Pengeluar Air Sungai Selangor’s (Splash) equities, and how these allegations cropped up?

Answer: The state government during my time, made four offers to four water concessionaires — Splash, Abass (Syarikat Konsortium Abass Sdn Bhd), Puncak Niaga and Syabas. Two were made in 2009, one in 2011 and the final one was made in February 2013. The total offer for the four concessionaires in 2013 was RM9.65 billion.

Splash had rejected the first three before an agreement was reached in February 2013. Yes, an offer of RM2.975 billion was made to Splash, which was issued on June 25, 2009. This was the second offer. But what the people must know is that offer took into account Splash’s equities, liabilities and assets, and not its equities alone.

You must understand that the basis in 2009 is different from the one in 2013. And, at that time, only Splash and Abass agreed to the offers presented to them, while Puncak Niaga and Syabas did not agree to it. The deal could not proceed because Pengurusan Aset Air Bhd (PAAB) had an “all or nothing” principle. So, in the Feb 20, 2013 offer, of the RM9.56 billion, RM1.584 billion was offered to Splash for liabilities and only RM250.6 million was offered for equity takeover, and not RM2.975 billion as (Selangor Menteri Besar) Datuk Seri Azmin Ali had claimed.

It is as if he is using the RM2.975 billion figure to justify his RM2.7 billion equity offer. He isn’t supposed to do that, because that would mean that the state government is actually offering Splash a total of RM4.2 billion. He can’t just present a letter showing the figure and say that was an actual offer. Perhaps, this is where some experience in corporate banking and merchandising will help (him). Unfortunately, he didn’t go through that.

Question: But, Azmin is saying he has evidence to prove that you offered RM2.975 billion.

Answer: Yes, he has the offer letter of RM2.975 billion dated June 2009. But that “evidence” doesn’t prove that the amount was only offered for equity. Azmin doesn’t understand the reason behind it. He didn’t read the letters carefully to understand that the structure of the offer made by the Selangor government in 2009 differs from the structure in 2013. He used that figure without explaining what the figure meant. If he had appreciated that structure, then he would know that it would not be the same.

This is not an easy game like selling nasi lemak.

Question: So, where did Azmin go wrong? Are you saying that he didn’t read through the documents?

Answer: He should have read the White Paper detailing the restructuring of the water services industry in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. If he had read it, he would have understood. As an MB, he should’ve also gotten an adviser to deal with a major transaction like this. He did not (read through all documents) and appreciate the differences of the offer.

Question: But shouldn’t he have known this, Tan Sri?

Answer: Perhaps (his experience) didn’t teach him a lot in his early working days. Maybe he has only done clerical work, not design, strategy, or anything on financial (matters). This is a very clerical argument.

Question: Why are you speaking up now?

Answer: I’m very concerned. If the state government continues to offer RM2.7 billion to Splash for equity takeover, that amount is over 10 times more than what was offered to the company in 2013. It (the state government) will have to go back to the Dewan Undangan Negeri to say that there is an extra RM2 billion to pay. If the state says it will pay for it, the amount would be taken from the state reserve and you will need to ask the people of Selangor whether it is fair to use it.

On top of that, Azmin is trying to point fingers at me by saying that his offer of RM2.7 billion is lower than what I purportedly made.

Question: With Azmin throwing these allegations at you, do you see anything political behind it?

Answer: Whatever the reason behind him doing this, I don’t mind. As long as the people of Selangor don’t have to pay for it, he can blame politics, (Donald) Trump or whatever. The letter in 2009 and the RM2.9 billion cannot be used because the whole offer was rejected. That’s his mistake. He can’t just simply use a figure.

Question: Would you be willing to meet with Azmin in person to explain?

Answer: No, not personally. But at the state assembly, yes. I don’t see the need to meet him personally. What for? To teach him? I think it’s a bit too late for that. He is the menteri besar, he should have received sound advice.

Question: Have you said anything in the state assembly to counter his allegations, and do you think you will get the chance?

Answer: I wanted to go to the state assembly to explain, but the speaker has been reluctant to give me the floor. And even if I had spoken, the other assemblymen present would only be shouting “Tipu, tipu” (lies, lies). To me, the more they understand what is going on, the more they will be worried about it. So, I’m hoping that I get the chance.

Question: You have sent an open letter to Pas president Datuk Seri Abdul Hadi Awang on this, which has since gone public. Why did you send it?

Answer: Because the one who made the statement in the state assembly was a Pas executive councillor — Zaidy Abdul Talib. If Pas did not know what was going on, it would be unfair to Pas, and people by nature trust Pas because of the “amanah” virtue that they hold on to, and that they “takut buat dosa” (are afraid to sin). And with a Pas representative making the statement, I felt a need to clarify through a letter that I sent on Wednesday morning. It went public in the afternoon.

Question: Has there been any response from Pas?

Answer: Yes, a Pas Youth leader from Selangor has responded with a statement, questioning the increase of over RM2.4 billion in the offer to Splash for equity takeover, and hoping that the Selangor government under Azmin’s leadership could resolve the matter without burdening the people (SEE BELOW).

Question: It has been well over two years since you were publicly pressured to step down as MB, and since then, many things have happened in Selangor. How has life been for you?

Answer: I am very happy. When I was the MB, I took the job with responsibility and took it very seriously that sometimes, my stress levels went through the roof. But now, I don’t have those problems anymore. I still have plenty of other international advisory work. I’m still a member of parliament for Bandar Tun Razak and a Selangor state assemblyman for Port Klang.

Life has been busy because of frequent international travel and also state assembly and Dewan Rakyat sittings. So busy that I have to decline overseas assignments to teach at international universities.

Question: How has your health been, Tan Sri?

Answer: Very good, Alhamdulillah (praise be to God). When I was MB, I was diagnosed with Type 2 diabetes. But now, I don’t even have to take diabetic pills and insulin. It must have been some level of stress I had.

Question: As an independent lawmaker, what can you comment about your former party, PKR, and the Pakatan Harapan pact?

Answer: There is no uniformity in objective and vision. I think, therefore, the chances of getting together as a solid group may not happen. Also, I think with the entry of Parti Pribumi Bersatu Malaysia, it will create more confusion. You must remember that the public, when it comes to making a choice, they will choose a party they understand, not a party that confuses them.

PKR, on the other hand, is trying to kiss the cheeks of everyone, in hopes of unity between opposition pacts. Unfortunately, PAS has made it clear who they are willing to work with. These opposition parties continue courting each other and, at the same time, blaming each other… and it will continue to be like that.

has made it clear who they are willing to work with. These opposition parties continue courting each other and, at the same time, blaming each other… and it will continue to be like that.

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