Wednesday, 18 June 2008

Making Profit From Cash Rebates

A lot of people welcomed the fuel rebate of RM625 for cars below 2000cc and RM150 for motorcycles.

In fact, there were monstrous lines formed in a painstaking wait to collect the money from the nearest post office.

I did wonder, why withdraw the fuel subsidy and instead give out cash rebates to vehicle owners, some of whom may not even be using their cars and motorcycles?

Now I have my answer.

ECM Libra Financial Group Berhad has a stake in Pos Malaysia Berhad (PMB) through it's acquisition of Avenue Capital Resources in 2006 through some very dodgy bit of insider trading.

If the name ECM Libra rings a bell, you will be right to remember Kera Jantan, more commonly known as the Prime Minister's son-in-law. KJ was a Director of Investment in ECM Libra in 2004 before making a disappearing act when sh!t hit the fan.

But all is not ended. Kalimullah Hasan, of plagiarism and sue-you-for-speaking-the-truth fame, is now the Chairman and CEO of ECM Libra.

Same guy who spins faithfully for Pak Lah on the mainstream media, namely New Straits Times. The money trail isn't going too far off now, is it?

But back to the issue at hand, so why was PMB was given the job of giving out the cash rebates to replace of fuel subsidy? Some say it was out of convenience, as post offices are easily available and accessible.

Pak Lah and KJ would have you think so.

It is quite odd on why JPJ was not given this role but instead it was given to a postal service company. Heck, the JPJ is where I go to renew my road tax, not the post office.

Instead of the more efficient and more relevant job function of the JPJ, these cash handouts responsibility were thrusted into the already mountainous variety of services PMB had to handle.

But now, let's see how Pak Lah and his cronies get extra money out of this purportedly 'for the rakyat' act of selflessness.

For every transaction, PMB will get 10 sen commission on every RM10 of that RM625 and RM150 (for cars and motorcycles respectively). That means, for every transaction, PMB will get RM6.25 for cars and RM1.50 for motorcycles in the form of transaction fees.

From what I know, there are approximately 11 million cars and 8 million motorcycles in this country at the moment. Let's do the math:

RM6.25 x 11 millions = RM68.8 million (for cars)

RM1.50 x 8 millions = RM12 million (for motorcycles)

A cool total of RM81 million for the entire exercise per year.

With RM117 million already paid out during the first day, I wonder how much PMB will collect by March 2009. This role was given to PMB and not JPJ because PMB is a public listed company (read: profit oriented) while JPJ is a government-owned entity (read : no cost to public).

This nefariously cunning way of trying to 'help' the poor while at the same time enriching oneself is very much prevalent in Pak Lah's administration.

What's worse, they are emptying the nation's coffers (from the Treasury) in the form of cash rebates and transfer a significant percentage of it into their own pockets (through fees paid into PMB and ultimately into ECM's bank accounts).

Such selfless generosity is unprecedented.

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