Thursday, July 15, 2010
Glory boys run roughshod over government companies?
Dr. Mahathir Mohamad
on July 13, 2010 5:17 PM
UPDATE Thursday July 15, 2010 ** It has been brought to my attention by Khazanah Nasional Managing Director Tan Sri Azman Mokhtar that Khazanah Nasional does not own any shares in Sime Darby Berhad and that reports of its intention to buy into Aman Resorts remains speculative **
1. Fresh from losing three billion ringgit via its majority owned firm Sime Darby, I hear that Khazanah is buying or going to buy "Aman Resorts".
2. These are six star resorts in Bali, Phuket and other exotic places. I don't know how profitable they are but I do know that hotels and resorts are not easy to manage, even less easy to make profits. It is the management companies which make the profits because profitable or not they get their cut of the takings.
3. I am sure Khazanah is well aware of this. Perhaps it is also aware that its investments in fishing had failed. The boats, the nets and other fishing paraphernalia are now dumped in the Langkawi Boustead boatyard. I am told they are for sale.
4. It was a great fishing venture. Special nets were supposed to be used to catch young tuna fish in the Indian Ocean. The fish would not be landed but would instead be dragged while still in the net to Langkawi. There they would be fed and grown until big enough to harvest.
5. It was as innovative a way to catch fish as any and a multimillion Ringgit industry was forecast. I don't know how much Khazanah invested in this failed venture.
6. Well, as I said, the whole investment had ended with the hardware and boats dumped in Langkawi. It did not involve billions, but it must involve maybe a hundred million plus. It is peanuts by comparison to the kind of money handled by Khazanah. We should regard it as a failed experiment. Research cost money. There is no guarantee of results. But it would be interesting to know how Khazanah came upon this idea, what were the fees, who bought the boats and fishing tackle and at what price.
7. Experience is a good teacher. Has this experience taught anyone anything.