SKS is small operation controlled by Syed Mokhtar al Bukhary, one of Malaysia's wealthiest industrialists with a Forbes Magazine estimated net worth of $2 billion. Much of Syed Mokhtar's personal wealth has been acquired in dealings with the GOM and GOM-linked corporations. He controls Malaysia Mining Corporation, DRB Hicom, Malakoff, and Gas Malaysia among other significant Malaysian operations.
C O N F I D E N T I A L SECTION 01 OF 03 KUALA LUMPUR 000059
SIPDIS
STATE FOR EEB/ESC THAMMANG
STATE FOR EEB/TFS CBACKEMEYER
STATE FOR NEA/IR RWADHWANI
E.O. 12958: DECL: 01/26/2020
TAGS: ECON, EFIN, ENIV, ENRG, EPET, ETTC, IR, KNNP, MY
SUBJECT: MALAYSIA: SKS VENTURES EXPLAINS ITS IRAN INVESTMENTS
REF: A. 09 STATE 121808
B. KUALA LUMPUR 0037
Classified By: Econ Counselor Matt Matthews for reasons 1.4 (b) and (d)
1. (C) Summary: SKS Ventures (SKS) CEO Abang Iskandar Muas (Iskandar) met with Econoff January 19 to discuss SKS plans to develop the Golshan and Ferdowsi gas fields (G&F) in Iran.
Iskandar said that the GOM had initially negotiated the deal with the GOI and handed the project to SKS just prior to signing. Iskandar told us that development of the G&F fields is going slowly because sanctions impeded National Iranian Oil Company (NIOC) ability to perform basic due diligence functions. He also stated that NIOC has been extremely difficult to work with and that the initial buyback service contract signed in Dec. 2007 is the only commercial agreement between SKS and NIOC.
SKS’s only investment over the past two years since the announcement was limited to staff time from their 15 employees and air tickets for meetings with a total value under $1 million, according to Iskandar. He was pessimistic on prospects for the deal and said that SKS is considering pulling out altogether.
However, he emphasized SKS would need GOM approval prior to exiting the transaction because Malaysian Trade Ministry and Foreign Ministry officials had encouraged SKS to enter into the deal in the first place and had reconfirmed GOM support for trade cooperation with Iran at a recent meeting.
Iskandar also denied reports of SKS participation with NIOC in a refinery projects in Syria and Indonesia and downplayed its deal with NIOC which is under review in Malaysia. End Summary.
2. (C) Comment: SKS is small operation controlled by Syed Mokhtar al Bukhary, one of Malaysia's wealthiest industrialists with a Forbes Magazine estimated net worth of $2 billion. Much of Syed Mokhtar's personal wealth has been acquired in dealings with the GOM and GOM-linked corporations. He controls Malaysia Mining Corporation, DRB Hicom, Malakoff, and Gas Malaysia among other significant Malaysian operations.
Post believes Iskandar is a credible interlocutor that provided an important window on the GOM's role in the deal and SKS current thinking on the transaction. Iskandar seemed genuinely frustrated that the G&F deal turned out to be an empty business proposition due to NIOC incompetence and Iran sanctions. Other oil and gas industry contacts have confirmed the small size and scope of the SKS operation. End Comment.
SKS Ventures
3. (C) Econoff met January 19 with SKS Ventures (SKS) CEO Abang Iskandar Muas (Iskandar) to discuss the SKS intentions to develop the Golshan and Ferdowsi gas fields (G&F) in Iran and implications under the Iran Sanctions Act (ISA).
Iskandar mentioned early in our conversation that Ministry of International Trade and Industry (MITI) Senior Director Wong had called him January 15 informing him that the embassy had been trying to contact him and he needed to meet with us. Econoff delivered ref A points and offered additional background on our information request.
According to Iskandar, SKS has 15 full time employees and works on projects outside of Malaysia for Syed Mokhtar. Iskandar is an experienced O&G industry professional, having worked for Shell Oil USA (based in Houston) for fifteen years in Sarawak, Saudi Arabia (where he was VP for Finance and Human Resources), and Kuala Lumpur prior to assuming his current position with SKS two and one half years ago.
Iskandar fondly reminisced of his frequent travel to the U.S. for business and family vacations prior to assuming his position at SKS.
Golshan and Ferdowsi: G2G Agreement
4. (C) Iskandar said the G&F deal grew out of government-to-government negotiations between Malaysia and Iran during 2007. The GOM brought SKS to the table late in the negotiations, according to Iskandar, finalizing a buyback service contract between SKS and National Iranian Oil Company (NIOC) in December 2007.
He added that SKS entered into the agreement based on the GOM’s policy of expanding trade cooperation with Iran and the belief that the business climate for oil and gas (O&G) in Iran was improving during 2005-6.
Iskandar said that the initial business strategy was for SKS to plan the project, NIOC to perform physical due diligence (appraisals, seismic analysis, feasibility studies, etc.), and, once the project was ready to start, sell controlling interest, at a profit, to an international oil company that could bring resources to develop the fields.
Iskandar commented, "We have no wells, no drilling rigs, no facilities, no experts, and no technology" to implement a project the size of G&F. His explanation as to why the Iranians would enter in to a transaction the size of G&F with such a small entity was, "in order to be friendly to the government (of Malaysia)."
NIOC Difficulties
5. (C) Working with NIOC, according to Iskandar had been "extremely difficult." He added, "we should have taken a lesson from Petronas" claiming that Petronas will not deal with NIOC any longer because NIOC still owed a substantial amount of money to Petronas from its buyback service contract for South Pars Phases 2 and 3.
Iskandar said that NIOC has made no progress on its due diligence obligations at G&F due to international contractors refusing to work in Iran because of sanctions. He complained that SKS and NIOC also have not reached any commercial agreements on the project in the last two years.
Iskandar stated, "We have no idea how we would be paid. NIOC has not agreed to LNG and we have no interest in selling gas domestically. Iran uses most of their gas to inject into their oil fields to get more oil or to produce heavily subsidized electricity."
He listed numerous other problems plaguing the project related to Iran sanctions such as the inability to import LNG technology or hire expat expertise, a low likelihood that Iranian LNG could be consistently sold on the open market, and NIOC's lack of access to financing.
SKS Ready to Walk Away
6. (C) Iskandar described the SKS agreement with NIOC on G&F as "barely hanging on" and that SKS is currently deciding whether to stay in or pull out, and added, "The decision will come sooner rather than later." He viewed the buyback service contract as having "no commercial value" at this time.
He noted though that Syed Mokhtar's close connections to the Malaysian government mean SKS will not move on a G&F decision without policy direction from the GOM. "We do not want to be on the wrong side of the government and we have not heard from PM Najib", according to Iskandar. However, he added that SKS has "no money in the ground" in Iran, because the firm did not pay an initial "signing bonus" as the buyback service contract did not carry any vested rights to the gas.
He also stated that SKS management is aware of the change in the international political environment with regard to Iran and is "not entrenched," implying SKS would quickly drop the transaction if permitted by the GOM.
Another View of the MITI Meeting
7. (C) Iskandar offered a different account of the recent meeting between MITI and Ministry of Foreign Affairs (MFA) officials and officers from the three Malaysian companies listed in ref A. Iskandar said that after the companies answered MITI queries on their Iran investments, the companies, especially Petronas, pushed back at MITI and MFA asking "What is the government's stance on trade cooperation with Iran?" and "Should we adjust our investment strategies?"
MITI responded that the GOM still supports trade cooperation with Iran, according to Iskandar. (Comment: The MFA account of the meeting (ref B) was similar to Iskandar's but omitted the companies' questions and MITI's response. End Comment.)
Other Announcements Inaccurate
8. (C) Toward the close of the meeting, Iskandar addressed recent Iranian and Malaysian press announcements of SKS participation in other transactions with NIOC. He stated that the GOM asked SKS to commission a feasibility study on a project with NIOC. It involved a refinery project in Kedah with a pipeline across the Malaysian Peninsula to Terengganu.
Iskandar commented that the pipeline is economically unwarranted and an Iranian partner likely makes the refinery unfeasible. He added that recent announcements of SKS participation in a refinery project in Syria with Iranian and Venezuelan partners and SKS participation in an Indonesian refinery project with Pertamina and NIOC are blatantly false.
He said that the first SKS had heard of either project was in press reports. He explained that SKS never issued denials of participation in the deals in order to avoid embarrassment in case the government was involved.
KEITH
Showing posts with label wikileaks. Show all posts
Showing posts with label wikileaks. Show all posts
Wednesday, June 15, 2011
Wednesday, May 18, 2011
Wikileaks: Najib and the Altantuya murder
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| Altantuya |
The diplomats, like much of the public, also speculated that the trial was being deliberately delayed and feared what one cable calls "prosecutorial misconduct" that was being politically manipulated. The embassy officials based their concerns on sources within the prosecution, government and the political opposition.
The cables also draw attention to an intriguing allegation that then Prime Minister Abdullah Ahmad Badawi may have attempted to use the proceedings to implicate Najib, a claim that was quickly hushed up in the Malaysian press.
Altantuya was murdered in October 2006 by two of Najib's bodyguards, chief inspector Azilah Hadri, 30 and corporal Sirul Azhar Umar, 35, who stood trial and were pronounced guilty in April 2009.
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| Abdul Razak Baginda |
The murder has been tied closely to the US$1 billion acquisition of French submarines by the Malaysian Defence Ministry, which Najib headed during the acquisitions. Altantuya reportedly acted as a translator on the transaction, which netted Razak Baginda's company a 114 million euros (RM534.8 million) "commission" on the purchase.
Reportedly she had been offered US$500,000 for her part in translating. After she was jilted, she vainly demanded payment. A letter she had written was made public after her death saying she regretted attempting to "blackmail" Razak Baginda.
French lawyers are investigating whether some of the 114 million euros was kicked back to French or Malaysian politicians. Despite the scandal, the US government has not publicly backed away from Najib.
In April 2010, Najib visited the White House and was praised by President Barack Obama for the Parliament's passage of an act allowing Malaysian authorities to take action against individuals and entities engaged in proliferation of weapons of mass destruction.
The cables are replete with accounts of a long series of meetings with opposition leader Anwar Ibrahim, who repeatedly told the Americans that Najib was connected to corrupt practices in the acquisition of the submarines as well as the purchase of Sukhoi Su-MCM-30 Flanker fighter jets from Russia. Anwar also called attention to Najib's connection to the Altantuya case.
Prosecution ineptitude by design?
A Jan 24, 2007 cable, marked 'secret', wrote that "Perceived irregularities on the part of prosecutors and the court, and the alleged destruction of some evidence, suggested to many that the case was subject to strong political pressure intended to protect Najib."
Clark called the trial a "a prosecutorial embarrassment from its inception, leading many to speculate that the ineptitude was by design. On the eve of the trial, attorney-general Abdul Gani Patail dropped his lead prosecutors and replaced them with less experienced attorneys.
Similarly, a lead counsel for one of the defendants abruptly resigned before the trial 'because of (political) attempts to interfere with a defence he had proposed, in particular to protect an unnamed third party.'"
The protracted nature of the case, Clark continued, led "at least one regional newspaper to speculate that 'the case is being deliberately delayed to drive it from public view'. Malaysia's daily newspapers rarely mention the case's latest developments, and it is unprecedented in Malaysian judicial history that a murder trial could drag on for seven months and still not give the defence an opportunity to present its case.
"Such an environment has led many to conclude that the case was too politically sensitive to yield a verdict before the anticipated general elections."
A January 2007 cable called attention to Razak Baginda's affidavit confirming that he sought the help of Musa Safri, later identified by reporters as Najib's aide-de-camp, in ridding him of the jilted woman, and in other cables pointed out that Musa had never been called for questioning.
In another cable, dated May 16, 2007, Wan Ahmad Farid Wan Salleh, a deputy home minister in former prime minister Ahmad Abdullah Badawi's cabinet told US Embassy officials that he was "certain that government prosecutors would limit their trial activities to the murder itself and the three defendants; prosecutors would not follow up on allegations of related corruption or other suspects."
In a Jan 27, 2007 cable, marked 'Secret', embassy officials wrote that "In December we heard from one of (Anwar's) lawyers that Razak Baginda's wife was in contact with Anwar and Wan Azizah, suggesting one possible source for Anwar's information."
Razak Baginda's wife, during one of his first appearances in court, screamed that her husband "doesn't want to be prime minister." That was taken by observers as a reference to the fact that Najib reportedly had been having an affair with Altantuya, but passed her on to Razak Baginda because it would be unseemly to have a mistress when he succeeded Abdullah as premier. Najib has offered to swear on the Quran that he had never met the woman.
However, in July 2008, P Balasubramaniam, a former police officer and private detective who had been hired by Razak Baginda to protect him from Altantuya, filed a sworn statement saying he had been told by the accused man that Najib not only knew the murdered woman but had an affair with her and introduced her to him.
In a telephone interview on May 9, Anwar, however, told Asia Sentinel that Razak Baginda's wife was not the source of his knowledge of Najib's connection and that instead he had been told of the connection by Setev Shaariibuu, Altantuya's father, who said he had wished to present evidence of Najib's involvement, but was not allowed to do so. Multiple attempts to contact Setev by Asia Sentinel have been unsuccessful.
Almost immediately after he made the statement, Balasubramaniam was picked up and driven to a police station, where he was forced to withdraw the statement and write a new one saying Razak Baginda had told him nothing of the sort. Balasubramaniam fled Malaysia for India.
He later said Najib's brother, Nizam, and wife, Rosmah Mansor, had met with him and that he was offered RM5 million to forget his statement connecting Najib to Altantuya.
Balasubramaniam displayed a flock of checks drawn on the account of an associate of Najib's wife. The former private detective has made a series of statements from outside the country about Najib's involvement.
'You can die, Pak Lah'
"In the latest turn of the ongoing Altantuya murder trial, accused political insider Abdul Razak Baginda, who has remained calm and composed through most of the proceedings, unleashed an emotional tirade shortly after the Feb 20 noon recess on the trial's 90th day," Clark wrote.
"Referring to the prime minister by his nick-name 'Pak Lah', Razak reportedly exclaimed: 'You can die, Pak Lah! (in Malaysian - Matilah kau, Pak Lah!) I'm innocent!' according to unpublished journalist accounts.
Last day of Abdullah Ahmad Badawi. Najib Abdul Razak takes over as prime minister in Putrajaya"Local newspapers and the government news service Bernama reported the fact of the outburst, but did not print Razak's statements. The short-lived exception was the English language newspaper The Sun, which included the quotations from Razak in its early morning Feb 21 edition.
"Sources at newspaper confirmed to us in confidence that the Ministry of Internal Security compelled The Sun to withdraw and recall thousands of copies of their first run paper in which the original quote was included. Prime Minister Abdullah serves concurrently as Minister of Internal Security."
During the trial, Clark wrote, Razak Baginda, "appeared uneasy throughout the morning session of court on Feb 20. Razak's father, Abdullah Malim Baginda, had whispered something to him shortly before the trial had begun for the morning and apparently upset the accused.
Razak had remained quiet throughout the morning hearings, but just after the noon recess was called and as he was leaving the courtroom he kicked and banged the door and yelled, 'You can die, Pak Lah! Die, Pak Lah! I am innocent. I am innocent.' He was later seen crying before his lawyer while his mother attempted to comfort him.
"Speculation is rife in Malaysia's online community concerning what it was that set off Razak Baginda outburst, including conspiracy theories alleging the Prime Minister's Office had urged Razak to implicate Deputy Prime Minister Najib Abdul Razak ... in return for sparing Razak a guilty verdict and its mandatory death sentence," officials wrote.
The cable goes on to write, "Regardless, the Internal Security Ministry would want to limit any possibly inflammatory reference to the prime minister at the trial, and particularly at this juncture due to the proximity of Malaysia's general election to be held on March 8. Any connection between the prime minister and the murder trial would be scandalous.
"The GOM (government of Malaysia) reportedly has worked hard to 'drive (the case) from public view' ... and is not about to allow the case to influence the coming elections."
- Asia Sentinel
Sunday, April 17, 2011
Wikileak: Malaysian press lied about F5 engines, govt official tells US
US embassy finds it hard to believe Malaysian govt
Malaysian official: Mindef ‘elusive’ about scandal
RMAF failed three times to tell US officials
Though engines were stolen in 2008, US told only in January 2010
Attorney-General defensive about Iran as destination, press drops references to Iran or Middle East
F5E Tiger II fighter jet in service in Iran, which has difficulty obtaining spares because of a UN arms embargo
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The Malaysian press published a lot of disinformation and wrong information about the theft of two US-made fighter jet engines in December 2009, a Malaysian foreign ministry official told the US embassy in Kuala Lumpur, according to US diplomatic cables published by WikiLeaks.
The embassy also told the State Department that the embassy found it hard to believe the Malaysian government’s explanations on the scandal. “We share some of the incredulity expressed in the blogosphere about the government’s case and explanation of who was behind the engine thefts,” the cable said.
RMAF patch Government officials provided the embassy with little information about the case, and the embassy had to obtain most of its information from the media. The embassy noted that “a chorus of commentary in online media has expressed incredulity at the government’s position that the thefts were carried out solely by two relatively low-level individuals and that higher-ups in the military and elsewhere were not involved”.
It said the Malaysian foreign service officer had said the Malaysian defence ministry was being “elusive” in its handling of the case, and the US embassy noted that the foreign office was keeping at arm’s length from the scandal.
The cable, dated Jan 10 last year, was written by the political counsellor, Brian McFeeters, and signed by the ambassador James Keith. (Embassy cables routinely go out in the name of the ambassador.)
It named the Malaysian official as Mohamad Radzi Jamaluddin, the principal assistant secretary (Americas Division) at Wisma Putra, the foreign office.
Radzi suggested that the press had falsely reported that the Malaysian government had asked the US for assistance on the scandal: this was because any such request would have gone through the foreign office. McFeeters also noted that he had no record of any such request from Malaysia.
The cable was published at WikiLeaks last week, one of three cables on the F5 jet engine theft scandal. The J85-21 engines, made by General Electric, were for the Northrop F-5E light fighter jets dating from the 1970s and still in service then with the Royal Malaysian Air Force.
“Subsequent reports indicated that, in fact, two engines had been stolen and sold to an international company in South America. The story has been front-page news in Malaysia’s government-influenced press and uncensored blogosphere since then,” the cable said.
It noted that the embassy had queried Malaysian officials about the current location of the engines. “They either do not know the location or have been instructed to withhold information while a police investigation continues,” it said. “The Malaysians “also have not provided adequate explanation as to why, after two years, this incident has just now become public.”
The cable also noted that the Middle East, and specifically Iran, had been stated by police in early press reports as the possible destination. Some independent online news portals claimed that the engines ended up in Iran. At a press conference, the Attorney General reportedly became defensive when asked about the Iran connection, and all references placing the engines in the Middle East or Iran have since been removed from the state-run media.”
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