MAS & AirAsia vs The People of Malaysia

To put things simple enough, RM18 million of MAS’ very important, very hard earned cash was given to another company belonged to one of its directors. Basically, a director of MAS, Tony Fernandes got RM18 million given to his other company – a football team, Queens Park Rangers (QPR).

There is a massive conflict of interest there. Worse, the transaction was transacted like a kneejerk reaction. Like someone had jerk the leash of owners of MAS and bamboozled them into agreeing to give their money to another director.

MAS and AirAsia even said in their statements to Bursa Malaysia ‘that the collaboration agreement would only be committed upon once an anti-trust analysis had been completed and was in compliance with the applicable laws with regards to anti-trust.’

But what happened soon after was anything but being compliant to the anti-trust laws. The routes to KL – Bandung and KL – Sandakan were taken off without so much of a warning; leaving AirAsia as the sole service provider of the routes.

There aren’t any other foreign flights to ply this route for customers to choose from too.

When MAS was still plying this route, the average ticket price of AirAsia ticket to Bandung from Kuala Lumpur was around RM300 to RM400 and could be as high as RM800 if you had bought them a few days before the departure date.

But currently, even at two weeks before the date, AirAsia is selling them at more than RM1,000 each! It was RM800 if you buy slightly earlier than that.

This is in serious breach of anti-competitive laws.

Customers are at the mercy Air Asia.

Do you know that flights to Jakarta via KLM is much more cheaper than AirAsia’s own flights? KLM provides food and in flight entertainment too. With all those incidental fees here and there, Tony Fernandes hoodwinked Malaysians into believing that he provides cheap flights.

Coupled with very lousy service right from the booking department all the way to the quality of its aircraft, AirAsia is a behemoth of which crooks are hiding behind it.

If Azman Mokhtar couldn’t curtail Danny Yusof from agreeing to that RM18 million deal, what makes you think his other investment decisions will be sound?

The deal was mired with blatant conflict of interests which is nakedly open for the public to see and yet the main shareholder of MAS is not doing anything about it. In fact, they are actively supporting this mistake!

The mismanagement and systematic destruction of MAS, the arrogance of the conniving Tony Fernandes, supported by inaction of Khazanah and their investment blunders will certainly not look good on the Prime Minister’s reputation.

But nobody seems to be awake at the moment. Everyone is being bigheaded and high and mighty yet nobody wants to be accountable.

Perhaps, this is time to consider other company to fly with... People should now stand up and say ENOUGH to AirAsia, the financially loss-making company in each year.

MyCC to look into MAS-AirAsia deal

Malaysia Competition Commission (MyCC) will officially look into the deal between Malaysia Airlines (MAS) and AirAsia when the Competition Act comes into effect on January 1 next year.

However, chief executive officer Shila Dorai Raj said neither MAS nor AirAsia had submitted any report to MyCC.

MyCC received several complaints from consumers, especially during its road show in Sabah and Sarawak recently.

"Our priority is the consumers. We will investigate the deal next year onwards. From our initial analysis, we think there could be something," she told reporters.

Yesterday, International Chambers of Commerce (ICC) organised the "ICC Malaysia CEO Business Luncheon Talk on Competition Act 2010: An Insight into What to Expect".

MyCC chairman MyCC chairman Tan Sri Siti Norma Yaakob was present as a guest speaker to give an insight into the Competition Act.

"The Act is important to further boost foreign investment to help spur Malaysia's vision to be a high income economy by year 2020," she said.
Earlier, in an interview with another media, she said the commission will follow the development of MAS-AirAsia deal closely to see if any anti-competitive activities or agreements arise following the alliances between both airlines.

The Competition Act is to prevent business monopolies or cartels. It will apply to all commercial activities undertaken within and outside Malaysia that affect competition in the country.
The Act will provide a regulatory framework including powers to investigate, adjudicate and impose penalties.

The introduction of the Act would create healthy competition, which would in turn stimulate production and innovation thus leading to a wider choice of products with better quality and reasonable prices.

Since its inception in June 2011, MyCC has initiated advocacy programmes to increase awareness of the Act among the stakeholders, especially businessmen.

Business Times 15-Dec-2011

My comment:

I am applauding MyCC to take bold stand over this matter. Because the case is really close to the people and should be resolved as soon as possible. From what is happening right now, after AirAsia's controllers were put into MAS' board of directors (but none from MAS appointed to AirAsia, raise your eyebrows, please!!) many MAS routes are being axed and FireFlyz the only local competition against AirAsia is now being forced to reduce its flying frequency.

By letting AirAsia and MAS swapping shares, we are closing the only competition in the local budget airlines and this is depressing the customer of any other choices. Thus, this is creating a MONOPOLY as AirAsia will be the only budget airline once they successfully close down FireFlyz and they can put any price and any charges they like. What stopping them now when they are the only service provider?

While MAS distributed dividends to Khazanah (which in turn go to rakyat), AirAsia since its first year operating never give out dividend and REPORTING MORE LOSSES THAN PROFITS in almost all of their quarterly financial reports!

Shahirasul

Student Saving Scheme @ Post Office Savings Bank

While studying for research on other topic, I found about POSB which of course sparks my interest to know more about it... So, I compiled relevant information on POSB and I find it to be quite amusing. Shahirasul - 15/12/2011

Post Office Savings Bank

Malays in the early days saved in various ways. Children were taught to keep loose change in a tabung buluh (made from a hollow bamboo trunk, which is equivalent to a "piggy bank" in English culture). Other children might be encouraged to collect new ten-cent stamps and paste them in a special book, in what was known as Student Saving Scheme during the days of the Special Malay Classes in the 1950’s. When the piggy bank was full, or when the SSS book was filled, the children would transfer the money to the Post Office Savings Bank (POSB).

POSB was established under the Savings Bank Ordinance in 1876 and started operation in 1877. The objective was to collect small savings in Singapore and the then Federatated and Unfederated States of Malaya.

Since 1949 savings with the Post Office Savings Bank have grown steadily. In 1949 it had 229,652 depositors with a credit balance of RM47.2 million. At the time of the launching of Bank Simpanan Nasional, Malaysia on 5th December 1974, it had more than 2.5 million depositors. The accumulated assets of the bank were over RM537 million, out of which over RM526 million were in government securities. The amount standing to the credit of depositors was over RM511 million. At the end of 1981, the Bank had more than 4.3 million depositors with accumulated assets of more than RM1.2 billion.

In 1971, POSB was transformed into a statutory corporation, independent of the Post Office. Bank Simpanan Nasional or National Savings Bank is the result of the separation from Singapore.

With the establishment of Bank Simpanan Nasional, a new chapter is opened in the history of public saving institutions in the country. Bank Simpanan Nasional Act, 1974 provides for the transfer of the powers of management from the Postal Services Department to the Board of Directors which will assume functions and undertake responsibilities in accordance with the objectives of the Act.

References:

Act 146 - Bank Simpanan Nasional 1974
http://www.agc.gov.my/Akta/Vol.%203/Act%20146.pdf

Lee Sheng-Yi, The Monetary and Banking Development of Singapore and Malaysia (ISBN 9971-69-146-9) Singapore University Press

Malaysian Legislation - Post Office Savings Bank Act 1948 (Repealed by Act 146)
http://www.commonlii.org/my/legis/consol_act/posba1948rba146337/

The Beginnings of Bank Simpanan Nasional
http://www.mybsn.com.my/ab_our_history.html

Fairness in Islamic Banking?

Can a Moslem who is opposing some and parts of the Islamic Banking/Financing products be branded as apostate?

My argument is that: some of the Islamic Banking products are inherited from conventional banking in term of charges, then changed to some new fancy names. Some of the cost of the products are even higher than that of conventional banking, which claims to be fair and just - but Islamic Banking products are squeezing for bigger and even fatter profits!

What I am saying is that: take for an example, buying and financing a house in Malaysia. Same house if financed through Islamic, will drive the cost higher than that of conventional banking. (Total monthly commitment x 12 x total servicing year). Where is the justice in this?

Same application form format, same rate reference set by Central Bank (name for conventional is Base Lending Rate (BLR) while Islamic took Base Financing Rate (BFR)).

The obedient Moslem who purchased a house, at the end of the loan tenure will have to fork out more than the one who took out conventional loan.

Just a simple thought... But it was once branded as an apostasy for any Muslim for not supporting Islamic product.

But still, I really have big concern about it!

Malaysian Banking Experience

This happened recently. My call went to voice mail that asked me to leave phone number so that they can return as soon as possible BUT was not taken action of. No choices left, I have to consult through email to customer service and engaged a copy to Central Bank. No firm action was made until few days later when the case was escalated by Central Bank officer - making the officers from the bank come down running - emailing and calling me concerning the matter.

My point is, what is happening to the quality service of our banks? Some misled people in their advertisement and some bank just "do what they want":

1. 40% rebate (but VERY small note says, only for 5% of total retail purchase)

2. Free Legal Fees (but again small printed note for loan amounting certain number and limited to few early birds)

3. Monthly charges based on loan balance, but calculated as daily rest, but ignoring 20 days grace period!

4. 20% rebates on interest charged for balance transfer, but upfront charges was made and calculated on whole tenure, not monthly or daily rest.

5. Damage Fee: Early payment/settlement and OVER payment. You make more payment than you should, we will penalize you! Beware.

6. If the customer is late, meaning the bank will charge fees. If the bank is late?

7. Charges for over-the-counter transactions - even when the cash deposit machine is down.

8. Non-negotiable BUSINESS! Bank can charge and even scolded the customer for any mistake, mishap and for certain request. A statement was printed, but from a poorly dot matrix printer which perhaps already printed 1,000,000 papers and the customer has to pay RM6.00 for almost unreadable statement.

9. A service you paid for, if there's any problem shall not be refunded. It is considered sold - a common problem for online prepaid reload.

10. Banking has been simplified and centralised to each HQ. It should speed up business and less time for customer to wait. But some say, we have to wait and can only do that for you TOMORROW.

11. How many banks in Malaysia really concentrate on providing seamless customer experience? While accounts logically can be consolidated and checked under one online login (because they are highly likely to utilising one same server farm, afterall they are one same banking house) BUT bank require customer to visit branch because they CANT provide/allow that. Take for instance, ASB loan statement, hire-purchase and mortgage. Common answer: We only allow saving/current/credit card accounts only.

And Malaysia say, we are going to be customer driven and providing least waiting time and "banking anywhere, anytime"

I hope someone will step up and tell the bank: That is our money and we want value for that!

Bank should disclose charges information and be transparent of why and for what purpose they charge and based on what amount. Some statement only comes with "arrears" and fees asking to be paid - but without full explanation.

Update: Reply from Bank I***m with regards to my case that was escalated by Central Bank officer.

Segala kesulitan amat dikesali dan kami sentiasa berharap tuan akan terus bermuamalah dengan Bank I***m.

Regards,
Shahirasul

Note: This article has been dispatched to Bank Negara Malaysia (Central Bank) on Dec 7, 2011.

Update: 22/12/2011 - Reply from Bank Negara Malaysia.

BNM Telelink bnmtelelink@bnm.gov.my

RE: Malaysian Banking Experience/lwm

Dear Sir,

 

We refer to your email dated 7 December 2011 on the above matter and we apologise for our late reply.

 

We take note and thank you for your feedback. We would like to take this opportunity to inform you that Bank Negara Malaysia (the Bank) is monitoring the banking institutions' practices closely to ensure the financial sector stability and at the same time, to protect the consumers' interest.

 

Please rest assured that we have issued circular and guidelines to the financial institutions to address regulatory concerns for consumer interest and protection. The financial institutions need to be transparent and communicate properly on the options available to to their customers. They are also required in improving information disclosure on products and services offered to the customers.

 

We also wish to inform you that each banking institutions are required to set up Complaints Unit to deal with customers' complaints. If the customers are not satisfied with the banks' products and services, they can address the matter to the Complaints Unit of the bank concerned. Contact details of the Complaints' Unit of the banking institutions can be obtained from the Bank's website at url

http://www.bnm.gov.my/index.php?ch=13&cat=banking

 

Once again, we thank you for the feedback given.

 

 

Enclosed are the tips for consumer on the financial matters for information. 

 

For more information on financial fraud alert, please visit

http://www.bnm.gov.my/index.php?ch=216&pg=701&ac=98  http://www.bnm.gov.my/microsites/fraudalert/index.htm

 

For more information on banking, insurance & takaful, please visit

http://www.bankinginfo.com.my & http://www.insuranceinfo.com.my

N* S* H* J*

BNMTELELINK

Bank Negara Malaysia

No Tel : 1-300-88-5465

No Faks: 03-21741515

Email : bnmtelelink@bnm.gov.my

Introductory Post

Hello,

I have always wanted to share my thought about financial matters that is happening in Malaysia, the Islamic banking, the effect of BLR, the inflation, the move taken by government, the business move taken that affect people at large (and me included).

I have always wish that there's some place that I can voice out my opinion or disgust (or praise for that matter) towards some action taken by the authority, but by no mean to disgrace anyone. I will at my best to stick to proportionality of journalism to discuss from multiple perspectives to that some issues can be taken from an angle of being pro or con at the same time without taking any side - that is being neutral.

Therefore, I hope that visitor on my blog will benefit from the topic I would have written and if there's any discussion to be made, it is very much welcomed but please post it in a manner that will not hurt anyone and the comment will be beneficial to others as well.

Last but not least, I hope the journey will be worthwhile.

Regards,
Shahirasul