SPECIAL REPORT ON BENTA WAWASAN SDN BHD - Part 3
MALAYSIA TODAY :
Tan Sri Wong: the prime destructor of Sabah’s tropical rainforests
Tan Sri Datuk Seri Panglima Wong Chik Lim first appeared on the radar screen in 1979 when a company he incorporated on 13 September 1979 became the beneficiary of a monopoly to export logs to Japan.This company, Dewaniaga Sdn Bhd, has a paid up capital of only RM6.00 (six Ringgit) which are equally owned as follows:
Tan Sri Datuk Seri Panglima Wong Chik Lim – 1 share
Wong Pak Hiung – 1 share
Wong Phin Chung – 1 share
Dauk Haji Ampong bin Puyon – 1 share
Mohammad bin Zifli – 1 shareZulkifli
A. Orow – 1 share
The three Wongs are the Directors of the company while Ampong is the Manager with no Board position. The other two ‘Bumiputeras’ do not sit in the Board either. Dewaniaga, therefore, is a 100% Chinese-owned company.
The first and last time Dewaniaga ever filed any accounts was in 1979. Since then, the company has not filed any accounts (due to an exemption it was given) so its profits are very well hidden from public view. This means, not only are its profits hidden, but the 'commissions' or kickbacks it paid to the powers-that-be in Sabah are also under wraps.
How they can get away with this without running foul of the authorities is certainly a mystery, but the following Asian Wall Street Journal report of 14 March 1989 says it all:
Asian Wall Street Journal report
In the timber-rich Malaysian state of Sabah, a 10-year-old log-shipping monopoly is flourishing despite recent changes in state government shipping policies intended to break it up.
Dominated by Japanese shipping cartel and a well-connected Sabah businessman, the monopoly has scuttled an upstart fleet of rival ship-owners for the lucrative business. The state government appears to have embraced the old cartel and the door has again been closed to competition.
The beached would-be competitors are crying foul. They charged that cartel members have been paying hefty commissions to a secretive company in Hong Kong in return for retaining their exclusive rights to the Sabah timber trade.
Politics and business traditionally inter-twine in Sabah, a chunk of Malaysian Borneo with a Wild West reputation. The story of the log-shipping cartel illustrates the extent to which a tiny commercial and political elite controls the resource-rich state of 1.3 million people.It also shows how difficult it is to break up a monopoly that boasts a powerful membership, plenty of cash and political influence. And the saga demonstrates how erstwhile political rivals and their associates frequently end up doing business together, often shielded from public accounting.
The stakes in the timber shipping business are high. Logs are Sabah’s biggest export. During 1979-1988 log exports have averaged about nine million cubic meters a year and brought in more than M$15 billion (US$5.5 billion). About 80% of the state’s log exports go to Japan, with Taiwan and South Korea the next most important destinations.
In 1985, Sabah Chief Minister Joseph Pairin Kitingan won the election, in part on promises to clean up the patronage and cronyism that characterized the nine-year administration of Harris Salleh. It was Datuk Harris who gave his blessings to the cartel and to its Malaysian partner, Sabah timber tycoon Wong Chik Lim. Within weeks of Datuk Pairin’s election, his brother, Jeffrey, the new director of the influential state government-owned Sabah Foundation, declared that the cartel should be broken.
In early 1987, that goal appeared to be in sight. After eight years of monopoly control, competition was returning to the log trade. But today, the rival shipping lines have run aground – despite changes in the state government’s policy that initially appeared to favour them.Datuk Wong and the old cartel again dominate Sabah’s log-shipping business. And the upstart challengers, including several Japanese lines, face big losses and complain that they have been cheated by policy reversals.Critics of Datuk Pairin’s nearly four-year-old administration say that, despite his campaign promises, the log-shipping dispute shows that doing business in Sabah hasn’t changed.
Outside these fees, however, much bigger transactions took place, in the form of commissions. From 1979 to 1985, the commission for logs headed to Japan was US$1.38 a cubic meter. This was raised to US$1.55 a cubic meter in 1985, where it remained at least into 1987.
Based on an annual average of nine million cubic meters of log exports, such commissions could have amounted to as much as US$100 million since the arrangement started. At least some of the commissions were paid into Hong Kong bank accounts held by an entity known as Mawa Shipping Agency Co.Japanese and Sabah-based shipping executives allege that Mawa Shipping is a Dewaniaga Sdn Bhd nominee. They describe the payments as the price of admission to Sabah’s log-shipping business. “If you’re in the trade, you’ve got to do it,” says a Hong Kong-based shipbroker.
Futao Sekine, a Japanese Transport Ministry official, describes the commissions to Mawa Shipping as “legitimate compensation” for lumber transport.
Mr. Sekine says the government doesn’t know how the commission money is used "or to whom it is channelled." He emphasizes that the NFA is "just paying at the request of ‘the other side’." It is complying with a payment request from a company in Hong Kong.” He declines to provide figures for the commissions but says that the commission rates are roughly in line with those provided by Japanese ship-owners.In March 1983, according to documents that are on file with the registrar, Datuk Wong requested that Dewaniaga be exempted from having to submit annual financial reports. An Exemption apparently was granted, and instead of an annual report, the company’s auditors, Kan & Associates, have stated each year that Dewaniaga can meet its liabilities.
Without public financial records, it isn’t possible to determine either the amount of money Dewaniaga received from its shipping business or the ultimate recipients of the money. This has led to widely held suspicions that at least some of the funds may have ended up with Datuk Harris or his Berjaya political party.
Note:Dewaniaga Sdn Bhd is a company jointly established by the Sabah Bumiputera Chamber of Commerce (SBCC) and the Sabah United Chinese Chambers of Commerce (SUCCC) and the President of SBCC then is present Sabah Chief Minister Musa Aman.To be continued.
Part 1: Introduction
Part 2: The total destruction of our forests: genocide of alarming proportions
Tan Sri Wong: the prime destructor of Sabah’s tropical rainforests
Tan Sri Datuk Seri Panglima Wong Chik Lim first appeared on the radar screen in 1979 when a company he incorporated on 13 September 1979 became the beneficiary of a monopoly to export logs to Japan.This company, Dewaniaga Sdn Bhd, has a paid up capital of only RM6.00 (six Ringgit) which are equally owned as follows:
Tan Sri Datuk Seri Panglima Wong Chik Lim – 1 share
Wong Pak Hiung – 1 share
Wong Phin Chung – 1 share
Dauk Haji Ampong bin Puyon – 1 share
Mohammad bin Zifli – 1 shareZulkifli
A. Orow – 1 share
The three Wongs are the Directors of the company while Ampong is the Manager with no Board position. The other two ‘Bumiputeras’ do not sit in the Board either. Dewaniaga, therefore, is a 100% Chinese-owned company.
The first and last time Dewaniaga ever filed any accounts was in 1979. Since then, the company has not filed any accounts (due to an exemption it was given) so its profits are very well hidden from public view. This means, not only are its profits hidden, but the 'commissions' or kickbacks it paid to the powers-that-be in Sabah are also under wraps.
How they can get away with this without running foul of the authorities is certainly a mystery, but the following Asian Wall Street Journal report of 14 March 1989 says it all:
Asian Wall Street Journal report
In the timber-rich Malaysian state of Sabah, a 10-year-old log-shipping monopoly is flourishing despite recent changes in state government shipping policies intended to break it up.
Dominated by Japanese shipping cartel and a well-connected Sabah businessman, the monopoly has scuttled an upstart fleet of rival ship-owners for the lucrative business. The state government appears to have embraced the old cartel and the door has again been closed to competition.
The beached would-be competitors are crying foul. They charged that cartel members have been paying hefty commissions to a secretive company in Hong Kong in return for retaining their exclusive rights to the Sabah timber trade.
Politics and business traditionally inter-twine in Sabah, a chunk of Malaysian Borneo with a Wild West reputation. The story of the log-shipping cartel illustrates the extent to which a tiny commercial and political elite controls the resource-rich state of 1.3 million people.It also shows how difficult it is to break up a monopoly that boasts a powerful membership, plenty of cash and political influence. And the saga demonstrates how erstwhile political rivals and their associates frequently end up doing business together, often shielded from public accounting.
The stakes in the timber shipping business are high. Logs are Sabah’s biggest export. During 1979-1988 log exports have averaged about nine million cubic meters a year and brought in more than M$15 billion (US$5.5 billion). About 80% of the state’s log exports go to Japan, with Taiwan and South Korea the next most important destinations.
In 1985, Sabah Chief Minister Joseph Pairin Kitingan won the election, in part on promises to clean up the patronage and cronyism that characterized the nine-year administration of Harris Salleh. It was Datuk Harris who gave his blessings to the cartel and to its Malaysian partner, Sabah timber tycoon Wong Chik Lim. Within weeks of Datuk Pairin’s election, his brother, Jeffrey, the new director of the influential state government-owned Sabah Foundation, declared that the cartel should be broken.
In early 1987, that goal appeared to be in sight. After eight years of monopoly control, competition was returning to the log trade. But today, the rival shipping lines have run aground – despite changes in the state government’s policy that initially appeared to favour them.Datuk Wong and the old cartel again dominate Sabah’s log-shipping business. And the upstart challengers, including several Japanese lines, face big losses and complain that they have been cheated by policy reversals.Critics of Datuk Pairin’s nearly four-year-old administration say that, despite his campaign promises, the log-shipping dispute shows that doing business in Sabah hasn’t changed.
Outside these fees, however, much bigger transactions took place, in the form of commissions. From 1979 to 1985, the commission for logs headed to Japan was US$1.38 a cubic meter. This was raised to US$1.55 a cubic meter in 1985, where it remained at least into 1987.
Based on an annual average of nine million cubic meters of log exports, such commissions could have amounted to as much as US$100 million since the arrangement started. At least some of the commissions were paid into Hong Kong bank accounts held by an entity known as Mawa Shipping Agency Co.Japanese and Sabah-based shipping executives allege that Mawa Shipping is a Dewaniaga Sdn Bhd nominee. They describe the payments as the price of admission to Sabah’s log-shipping business. “If you’re in the trade, you’ve got to do it,” says a Hong Kong-based shipbroker.
Futao Sekine, a Japanese Transport Ministry official, describes the commissions to Mawa Shipping as “legitimate compensation” for lumber transport.
Mr. Sekine says the government doesn’t know how the commission money is used "or to whom it is channelled." He emphasizes that the NFA is "just paying at the request of ‘the other side’." It is complying with a payment request from a company in Hong Kong.” He declines to provide figures for the commissions but says that the commission rates are roughly in line with those provided by Japanese ship-owners.In March 1983, according to documents that are on file with the registrar, Datuk Wong requested that Dewaniaga be exempted from having to submit annual financial reports. An Exemption apparently was granted, and instead of an annual report, the company’s auditors, Kan & Associates, have stated each year that Dewaniaga can meet its liabilities.
Without public financial records, it isn’t possible to determine either the amount of money Dewaniaga received from its shipping business or the ultimate recipients of the money. This has led to widely held suspicions that at least some of the funds may have ended up with Datuk Harris or his Berjaya political party.
Note:Dewaniaga Sdn Bhd is a company jointly established by the Sabah Bumiputera Chamber of Commerce (SBCC) and the Sabah United Chinese Chambers of Commerce (SUCCC) and the President of SBCC then is present Sabah Chief Minister Musa Aman.To be continued.
Part 1: Introduction
Part 2: The total destruction of our forests: genocide of alarming proportions
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