Scandal of SALCO – How Taib Plans To Make Billions From Bakun.
Exclusive!
16 Feb 2012
Displaced families, who have received so little compensation from Bakun, may
be interested to learn how Taib and his own family are planning to make billions
for themselves out of the hydro-electric dam, based on an investment of just
RM2.00!
We can reveal that SALCO (Sarawak Aluminium Company Sdn Bhd), the company
that has been handed a licence to build a vast smelter in Simalaju, powered by
cheap electricity from the dam, is secretively entirely owned by the Taib family
company, CMS.
So far, they have only issued two shares for the company, worth a mere one
ringgit each!
Scandalous SALCO scam!
Controlling interest - SALCO is run out of the Taib
building, Wisma Mahmud
Our revelation sheds light on a classic money-making scam, that is still in
its early stages for the Chief Minister, but where the planned outcome is plain
to see.
It depends on a blatant willingness by Taib to abuse his political influence,
in order to divert public money into his own pocket and on the apparent
willingness of the multi-national company Rio Tinto Alcan to invest in a
corrupted project.
At the centre of the ploy, is the
company
Sarawak Aluminium Company Sdn
Bhd, which has always been officially presented as a ‘Joint Venture’
between the giant multinational, Rio Tinto Alcan and CMS, after the two
companies signed a so-called Heads of Agreement in 2007 to explore the
possibility of investing in the smelter project.
Government support - invaluable for a company with just
RM2.00 investment!
In 2008 this supposed joint venture
received a manufacturing licence from the Malaysian Federal Government’s
Industrial Development Authority and it also established a
Memorandum
of Understanding to open negotiations with Sarawak’s energy authority, SEB,
over access to the electricity.
Ever since, the planned SALCO aluminium smelter has been placed at the top of
Taib’s proclaimed SCORE agenda for developing the potential of the Bakun
Dam.
SALCO - is this really who we are?
And, whenever the project is referred to, whether in press releases,
statements by ministers, interviews by CMS executives or, indeed, on SALCO’s own
website (above) it has always been clearly suggested that the company is 60%
owned by Rio Tinto and 40% owned by CMS.
Likewise, the licences and agreements granted by government agencies have
further implied that SALCO represents a serious joint financial investment
backed by the multi-national.
Heads of agreement between Rio Tinto and CMS's Richard
Curtis - with Chief Minister (and Chief Shareholder) Taib Mahmud centre stage in
a deal designed to net him a fortune!
However, our company research reveals that in fact SALCO consists of just two
shares, issued for a mere one ringgit each, both owned by a company called
Samalaju Aluminium Industries Sdn Bhd.
Just two shares at one ringgit each
We can further demonstrate that this Samalaju Aluminium Industries Sdn Bhd is
in turn entirely owned by another company named Samalaju Industries Sdn Bhd.
Samalaju Aluminium Industries Sdn Bhd is owned by
Samalaju Industries Sdn Bhd
… and this Samalaju Industries Sdn Bhd is 100% owned by CMS!
One ringgit per share
Earlier this week a spokesman for Rio Tinto Alcan in the company’s Montreal
headquarters conceded to Sarawak Report that as yet the multi-national has no
direct investment in Sarawak:
“There is not much news to report in terms of the Joint Venture”, he said and
he stressed that the aluminium manufacturing giant would not buy into the SALCO
project “unless the price is right” for the electricity:
“We are actively participating in the negotiations for the power purchase
agreement for the feasibility studies to commence”[RTA
spokesman]
Since the Taib family company CMS has itself no credentials as an aluminium
manufacturer it seems extraordinary that the State of Sarawak and Federal
authorities have nevertheless given its 100% subsidiary SALCO the licence and go
ahead to start manufacturing!
For Taib and his family side-kick Robert Geneid this
'important meeting' had a personal significance. If they can flog 60% of SALCO
to RTS they should make billions of ringgit.
However, for CMS there is all to play for. The RTA spokesman confirmed to
Sarawak Report that the multi-national is indeed interested in the proposed 60%
stake in SALCO, as long as it can negotiate the large amounts of cheap
electricity it wants.
Given that, as predicted, the Bakun Dam has created a glut of electricity in
the state, even with just two of its eight turbines in action, and given there
are few other customers in sight, it is likely to succeed.
This means that the stage is now set for Rio Tinto Alcan to buy over a 60%
stake in SALCO! Its the deal that Taib and his latest top family side-kick
Robert Geneid have been frantically trying to pull together, holding ‘important
meetings’ (Borneo Post) with Rio Tinto in Kuching just last month.
Who wins?
Promoting SALCO - so much political support!
Think of the potential profit for the main shareholders of CMS, if Rio Tinto
Alcan moves in to take a 60% stake of this giant aluminium smelter project!
These shareholders, of course, are firstly Taib’s own long dead wife Laila,
followed by his four children.
In total, as has been detailed many times on this site, the Taib family own
at least half the company and all the top management positions – so plenty of
bonus opportunities there as well!
Remember, Taib has so far invested
just RM2.00. Yet this factory is expected to absorb an enormous RM7billion in
construction costs and it is then expected to produce at least 550,000 tons of
aluminium a year, worth an annual RM2.4billion to Malaysian GDP. This could be
extended to a full capacity of 1.5 million tons!
Getting in there - Australia has been happy to promote
Rio Tinto's bid to work with Taib in Sarawak
So, why would CMS, with such a project under its control, hand over 60% of it
to Rio Tinto Alcan for less than a commensurate price?
In fact, once a nice cheap electricity deal has been cut with SEB (run by
Taib’s cousin and proxy Hamed Sepawi), CMS will be in a position to make a fat
multi-billion ringgit profit out of their tiny two ringgit investment in
SALCO!
And, further down the line, consider what a 40% stake in such a venture would
be worth should Taib and his family eventually decide to sell it off! They
could even decide to cash in early and sell off their holding for a few billion
up front – after all they only invested RM2.00!
Indeed, such RM2.00 companies have been the method by which corrupt
politicians in Malaysia have exploited their positions for years, passing huge
contracts and concessions into these empty shells, so that they can then be sold
or the work sub-contracted to a real working concern.
But, this project is on a scale of its own! The question is, why does Rio
Tinto Alcan, a supposedly respectable multi-national, think it is appropriate to
become involved?
Off repeated lie - "we are a joint venture between RTA
and CMS"!
The losers
The losers are just as easy to identify. To start with, Taib failed to
tender the project, so the State of Sarawak stands to get no realistic premium
from the licence. Likewise, with the rock bottom price for the hydro
electricity, SEB is likely to make very little with which to improve its
services and infrastructure.
As usual, other construction companies have found themselves squeezed out of
the opportunity, but will probably end up sub-contracting for CMS.
Then consider the Civil Service pension funds, which were forced by ministers
to invest billions in the Bakun Dam project to keep it afloat, because private
investors were too wary. The promise of rock bottom prices for the resulting
hydro-power does not provide much prospect of any reasonable return on that
investment, which means civil service pensioners will lose out!
Noxious - the Pressmetal plant in Mukah has provided no
jobs for the locals, but it has taken their land and poisoned their fields and
their health
And what of the local people in the
area? They are already living in terror of the arrival of the plant, because of
the worrying levels of pollution already being experienced by the people of
Mukah, who are affected by the
existing Pressmetal aluminium
plant.
Aluminium manufacturing can be a highly toxic process, unless carefully
managed, and the people of Mukah, who have of course lost much of their NCR land
to the plant that now looms over them, are suffering health problems and their
plants are dying.
And what about the possibility of jobs for such people? Well, unfortunately,
it appears they are not suitable. Rio Tinto Alcan has announced a projected
4,700 jobs on the plant, however none of the local people have managed to find
employment at Pressmetal.
Instead, Taib has already made clear in his announcements that he plans to
import tens of thousands of foreigners from places like India to work in his
SCORE projects. Doubtless these immigrants will be given houses, identity cards
and voting rights, all of which so many local people find hard to obtain.
Just days ago the Australian High Commissioner was over
in Kuching promoting Rio Tinto Alcan's involvement in SCORE. He is supporting
Australian big businesses venture with the Taib family, but what will it mean
for jobs back in Tasmania's aluminium plant which Rio Tinto is planning to
shut?
Doubtless, they will be expected to vote BN in return!
Finally, what about the workers in existing Rio Tinto Alcan plants in places
like Tasmania?
Rio Tinto Alcan have in fact just signalled that they are interested in
selling off their Tasmania plant, presumably because they have a cheaper option
elsewhere!
Rio Tinto Alcan and its Corporate Social Responsibility
RTA spokesmen have made plain that they have yet to move to the stage of
feasibility studies and environmental and social impact assessments for this
Simalaju smelter project.
However, they can be under no illusion that in conducting prospective
business with CMS they are proposing to enter into a joint venture partnership
with one of the world’s most notoriously corrupted and politically exposed
companies.
Taib stands to make billions (as usual), but what is in
this project for local people?
Taib Mahmud himself is being formally investigated by his own federal
government’s anti-corruption commission (MACC). And countries all over the
globe have confirmed that they are looking into the assets of Taib and his
family, with respect to money laundering!
So, what on earth do Rio Tinto Alcan think they are doing even considering
entering into such a deal with a company that is blatantly owned by Taib?
Of course, they stand to make a fortune for their shareholders if they are
able to swing a ludicrously cheap deal for their electricity and to set up in a
country like Sarawak, which has no carbon taxes and low standards of supervision
on matters like the environment and labour matters.
But these days shareholders also expect certain basic ethical standards. Do
they include doing business with corrupt companies personally owned by Chief
Minister of the state in which they are investing?
Is this what Rio Tinto Alcan mean by the statement:
“We respect the laws and customs of our host countries and communities. We
work with them to ensure benefits and opportunities are
shared”?
To the contrary, the Bakun Dam and the whole planned string of future dams
and SCORE related projects that are now being rolled out in Sarawak, represent
nothing less than a human and environmental disaster in one of the world’s last
remaining great tropical rainforests.
What's in store? A Rio Tinto Alcan factory in
Canada
The driving motivation behind this project is the desire by Taib Mahmud and
relatives like his brother in law Robert Geneid (who now features as a key
negotiator in the SALCO ‘joint venture’ project) to become personally even
richer.
So, is it right for companies like Rio Tinto Alcan to threaten to pull out of
established locations like Tasmania in order to get involved with a man like
Taib in a place like Sarawak?
http://www.sarawakreport.org/2012/02/scandal-of-salco-how-taib-plans-to-make-billions-from-bakun/