KL Tower scandal: Selling a cash cow that generates RM20m for just RM3.8m screams corruption

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If opposition Lim Guan Eng was charged for buying a bungalow at a small discount, this scandal is 16 million times worse.

Muhyiddin Yassin has been extremely silent – even worried – since the first sitting of the 15th Parliament beginning December 19. The former backdoor prime minister obviously has a bigger problem than trying to seize power through yet another political coup. He knew the 10th Prime Minister of Malaysia – Anwar Ibrahim – would win the vote of confidence in the Parliament.

It was Muhyiddin himself who bragged in April 2021 that the Perikatan Nasional backdoor government under his leadership has splashed more than RM600 billion (RM340 billion in economic stimulus packages and RM322.5 billion for the 2021 Budget to fight the Covid-19 pandemic). He thought his decision to declare a State of Emergency means he could plunder public funds without consequences.

Of course, he had never imagined that opposition Pakatan Harapan would return to power after he betrayed the coalition in Feb 2020. Not only Pakatan Harapan leader Anwar easily won his legitimacy in the Parliament via the confidence vote, he did so with two-thirds majority. Essentially, this means all of Mahiaddin’s (Muhyiddin) lies and corruptions would be exposed.

All Anwar needed to do at a media conference on Dec 5 was to announce that the Finance Ministry had informed that there had been several breaches involving the Covid-19 funds. Muhyiddin was like a cat on hot bricks after the prime minister said there were some dubious expenditures involving the RM600 billion. Panicked, Muhyiddin screamed that he did not steal any money.

Suddenly, Muhyiddin admits there was no such thing as RM600 billion, contradicting his previous claims. He said it was only RM530 billion. Even then, the Perikatan Nasional chairman played down the numbers. Spilling the beans, he said his administration had only spent RM83 billion in fiscal injections. This means Muhyiddin’s government did not actually help the people to the tune of RM530 billion as shamelessly trumpeted.

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However, the Malaysian Anti-Corruption Commission (MACC) has confirmed it will now focus its investigation on the RM92.5 billion directly funded by the Muhyiddin regime after it was established that RM437.5 billion was not from the government. The difference between MACC’s RM92.5 billion and Muhyiddin’s RM83 billion means about RM10 billion might have gone “missing”.

Regardless of whether Muhyiddin and his band of crooks had swindled RM10 billion or RM92.5 billion, they would certainly be charged and could join former PM Najib Razak in prison. The burning question is whether MACC Chief Commissioner Azam Baki, who was appointed by Muhyiddin in March 2020, would drag his feet trying to rescue his political master.

But the previous Perikatan Nasional government was so corrupt that even before the MACC could investigate Muhyiddin’s RM530 billion dubious spending, another scandal has erupted. The new scandal involving the suspicious sale of the Kuala Lumpur Tower (KL Tower) concession by Telekom Malaysia Bhd (TM) to a company that is facing bankruptcy screams corruption.

You don’t need a rocket scientist to tell that bribes or kickbacks were involved in the deal. As a start, through TM’s subsidiary Menara KL Sdn Bhd, the concession and management rights of Menara KL brought in a cool RM20.9 million “net profit” in 2019 for Telekom Malaysia. A year earlier (2018), Menara KL, also known as KL Tower, generated a net profit of RM25.6 million.

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Completed on March 1, 1995, the KL Tower is Malaysia and Southeast Asia’s tallest tower. Essentially, the 420.7-meter-tall telecommunication tower, which is also the world’s 7th tallest tower, was a “cash cow” to Telekom Malaysia. The KL Tower is owned by the Malaysian government, while operations and maintenance of the tower were granted to Telekom in 1996.

Crucially, the Kuala Lumpur Tower is a national strategic asset, serving as the broadcasting station for Radio and Television Malaysia (RTM) and FM-radio broadcasting, among others. Strangely, according to TM’s 3Q FY2022 financial announcement, the telecommunication group had on Oct 31 completed the disposal of its 100% interest in Menara Kuala Lumpur for merely RM3.8 million.

Unless the Muhyiddin government or Telekom Malaysia top management had gone mad, it’s hard to believe a cash cow that generates RM20 million yearly was sold at fire-sale of RM3.8 million. The disposal of the entire “10-million shares” at just RM0.38 per share when it was worth at least RM2.00 per share means TM and the government had sold at a massive loss – losing RM1.62 per share.

Worse, the valuable asset was sold to a financially troubled company called Hydroshoppe Sdn Bhd. Incorporated on February 15, 2008, data from the Companies Commission of Malaysia (SSM) shows the company involved in “General Trading” is owned by Abdul Hamid Shaikh Bin Abdul Razak Shaikh and Nazarina Binti Mohamed Nasir, with 500,000 shares each.

Finance Twitter
Finance Twitter

Despite the unfamiliar names, sources have claimed that 42-year-old Nazarina is “girlfriend or mistress” of former Communications and Multimedia Minister Annuar Musa. However, Annuar has denied that he was involved in the transfer of shares from Menara Kuala Lumpur to Hydroshoppe. But it’s hard to believe that he had no idea or was kept in the dark about the transaction.

At EPS (earnings-per-share) of RM2.00, the KL Tower could be easily sold at five times or even 10 times its eps – translating to RM100 million or RM200 million. Selling at just RM3.8 million when it could generate RM20 million annually means an instant net profit of RM16.2 million – every year – for Hydroshoppe. And if the cash cow is resold for five times its eps, that’s an easy RM96.2 million.

Interestingly, the ownership of KL Tower was quietly transferred to Shah Alam-based Hydroshoppe on October 31, 2022, just days after then-PM Ismail Sabri dissolved the Parliament on Oct 10, paving the way for the 15th General Election – suggesting that it was done hastily by powerful minister(s) in anticipation of a loss by Muhyiddin’s fragile Perikatan Nasional coalition.

Even though TM has issued a media statement to explain that it had decided not to renew its concession of KL Tower as part of its plan to refocus its efforts and resources on its core business of telecommunications and technology, it’s equally hard to believe the top management of TM was no longer interested in a profitable business which it has been running since 1996.

At best, some corrupt TM top guns were bribed not to renew its concession, allowing the ownership of KL Tower to be transferred to Hydroshoppe. At worst, Annuar and powerful crooks linked to Muhyiddin had abused their power by forcefully stripping KL Tower from TM and awarding the cash cow to Hydroshoppe, a company involved in cosmetic products instead of property management.

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At the end of the day, the dubious transaction cannot go through without the green light from the government because the KL Tower belongs to the Malaysian government while Telekom Malaysia, despite being a public listed company, is still a GLC (government-linked company). Therefore, Annuar Musa or Muhyiddin or both of them were involved – either directly or indirectly.

Even if the concession had expired and TM was incapable of managing the KL Tower, it’s jaw-dropping that a company which not only has zero experience in property management but was also on the brink of being delisted by Registrar of Companies (ROC) for failing to make declarations and filings on schedule has been awarded the lucrative concession without open tenders.

Through the Ministry of Finance Inc, Telekom Malaysia’s board has a director representing the government. Hence, former finance minister Tengku Zafrul, another political appointee of Muhyiddin, should have knowledge about the hanky-panky deal in KL Tower. Likewise, Khazanah Nasional Berhad (KNB), the sovereign wealth fund of the Government of Malaysia, is the biggest shareholder in TM.

So, why did the Finance Ministry and KNB kept silent and closed both eyes as hidden hands in the previous government bulldozed the KL Tower concession from TM to Hydroshoppe Sdn Bhd? If the MACC refuses to charge anyone, it will be obvious that Chief Commissioner Azam Baki is corrupt and should be replaced. If opposition Lim Guan Eng was charged for buying a bungalow at a small discount, this scandal is 16 million times worse. – Finance Twitter