Open Letters To Najib’s Fellow-Travellers Abroad…


Sarawak Report

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Over the past year and more Sarawak Report has notified a number of lofty organisations and individuals, who have been happy to bask in handouts, donations and business opportunities from Najib and Jho Low, over the grave concerns relating to 1MDB and other kleptocratic activities.

Generally, we have received what is known in local lingo as the ‘bum’s rush’ by these superior persons, who have either ignored us or sent us pompous and dismissive replies.  In the light of the DOJ’s confirmation of all our concerns at last, we are writing them open letters again.

1) To the Headmaster and Board of Governors of Malvern College:

Dear Anthony Clark and Lord MacLaurin,
We wrote to your college last year to ask who had donated the substantial sum to your school for the New ‘Razak’ Science Centre (featured above), recently opened in honour of Malaysia’s Prime Minister, who was present.

We expressed our concern that the payment might well have come from Malaysia’s stolen public money, in the light of the growing 1MDB scandal and Razak’s lack of any legitimate personal fortune – and that it was likely to have been funnelled through off-shore companies by an individual such as Jho Low.

In reply you assured us that your donor was not Jho Low, but that they were to remain anonymous:

“I can confirm that no donation was received from Najib Razak or Taek Jho Low.
Our new Science Centre was enabled through the support of 40 plus College benefactors including four who expressed a wish to remain anonymous.  Central to this was a gift from a donor, made in honour of Najib Razak, Prime Minister of Malaysia.  The Prime Minister and his brother Johari, both Old Malvernians visited the College earlier this year to attend the opening of our new facilities.”(response from Malvern College official)

Given last week’s shocking indictment by the US Department of Justice’s Kleptocracy Asset Recovery Initiative against 1MDB and by implication its boss, who was described as ‘Malaysian Official 1′ (Najib Razak), we ask if the Governors now might care to reconsider their secretive approach to such a very substantial donation?

We ourselves will, of course, be notifying Britain’s National Crime Agency and the DOJ about what we fear was very possibly a gift from misappropriated public funds from Malaysia. It is unfortunate that you were not able to clear up the matter by being more transparent about large donations made to the school and hope that your due diligence was sufficiently thorough to prevent any major embarrassment ensuing.

2) Vice-Chancellor Nottingham University:

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Najib Razak

Dear David Greenaway,
Last year several Malaysian students at your university (which also has a campus in KL) raised a petition against the over 6 foot high portrait of your former student Najib Razak, which hangs prominently on the Kings Meadow Campus.  The petition was rejected.

We would like to ask who paid for the painting and whether you still consider the man now held responsible for the world’s greatest recorded act of kleptocracy to be one of the University’s distinguished alumni to be honoured in such a fashion?

3) President & CEO UN Foundation:

Dear Kathy Calvin,
We have emailed the UN Foundation on a number of occasions over the past several months and written articles (copied to you) expressing our concern at the willingness of the Foundation to accept large sums of money from the ‘billionaire’ Jho Low.

Despite our concerns and the copious evidence we provided from our investigations that he was a fraud and a front for a massive act of kleptocracy against the Malaysian people, you rejected our concerns and as late as last year the UN Foundation was participating in a joint fund-raiser hosted by Jho Low on ‘his’ yacht, moored off Busan.

Funded by Jho Low's Jynwell Foundation - Global Daily - the UN Foundation's news outlet

We ask who paid for UN Foundation personnel to attend that fundraiser and indeed whether the UN Foundation will now publish exactly how much it has received in cash and expenses through Jho Low?  We hope you will assure us soonest that all this money will be returned via the DOJ to the Malaysian people.

You furthermore told us that the money you took from Jho Low would be to help train journalists and bring news via your Global Daily!

The recently announced partnership with the Jynwel Foundation will help the UN Foundation contribute to what has been called “the biggest communications challenge and opportunity of our generation” .. With the support of the Jynwel Foundation and other partners, the UN Foundation will be able to encourage a global discussion around the goals through increased level of media reporting, capacity building and training for journalists, media organizations, and spokespeople

Sarawak Report says that so far there is no evidence that the Global Daily are equipped to teach other journalists their jobs. While we were correctly exposing Jho Low for corruption, Global Daily was running puff pieces about his “philanthropy”.

4) The Chairman of MasterCard Global

Dear Rick Haythornethwaite,
You were ever so pompous and dismissive, referring to Sarawak Report’s “questionable activities” when we wrote to express our concerns about the PetroSaudi group, where you hold posts as Chief Operating Officer and President.

“even if I were to be in possession of information relevant to your query, I would be unwilling to assist you in your questionable activities” [Looks like Haythornthwaite knew more than he was telling!]

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Rick Haythornethwaite

You were concerned that we got your title a bit wrong, but not apparently that billions may have been misappropriated using PetroSaudi. You accused us of being “activists”, which is not a crime like money-laundering is.

Perhaps, now that your company has been named and well and truly shamed by the the US Department of Justice, you might like to do as we suggested and investigate what on earth has been going on and where the money for your handsome remunerations may have originated?

We hope you hang on to that MasterCard job and indeed the Chairmanship post at Centrica Gas.

5) British Malaysian Chamber of Commerce:

Dear Lord Marland,
We wrote earlier this year deploring your sneaky welcome to Najib Razak in London, whilst the Cameron Government was pretending to steer clear.  Your comment to questioning journalists, who by then were all hot on the case of 1MDB, was that one should never judge a chap until ‘proven guilty’ (in Najib’s case that would have to be by his own appointed judges in his no longer independent courts).

Do you want to tell the same to US Attorney General Loretta Lynch, now that she has pointed out in stunning detail exactly why Malaysian Official 1 is guilty of enormous kleptocracy?

6) CitiBank’s Head of Commodities:

Dear Ed Morse,

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Edward Morse – Big laugh

Your ‘expert valuation’ of the company PetroSaudi cost a hundred thousand dollars, straight into your account, but wasn’t worth the paper it was written on.

Not bad for less than a day’s work: a quick re-jig of material that the company itself had sent you in order to provide the exact valuation that they had told you by email they needed for their fraudulent purposes (after all Director Patrick Mahony was an old pal, no reason for him to be misleading).

Great how you can use an impressive CV to coin in easy money.  But, in future that CV may provide less of a glorious track record perhaps?

7) Management and Board of ANZ Bank

Dear Graham Hodges,
In the light of the information which we now have from the US Attorney General about the origin of around a billion dollars that were transferred from 1MDB into your top account at KL’s AmBank, belonging to the Prime Minister, do you still stand by your remarks below on behalf of the bank to the Australian Senate earlier this year?

“Under questioning by senators, Mr Hodges described as “simplistic” allegations that ANZ had governance questions to answer over the 1MDB scandal.

“Clearly the directors on that board are not at liberty to talk about what goes on … we do not control that bank. We are directors on that bank, it is a separately listed public company,” Mr Hodges told the committee.

“As an ANZ executive and one which is a shareholder in that are we happy with that? Certainly not. But that’s different to implying that the culture or the integrity of one of the people who sat on the board is less than it should be because they’ve sat on the board.”

The fact of the matter is that ANZ personnel dominated the top executive positions at AmBank and dominate the Board. This was supposed to be the badge of credibility behind the bank.  We suggest that you as Deputy Chief Executive and your management approach the Board and reconsider your positions on this matter, before someone does it for you.

8) Hollywood’s Glitteratti:

Dear Leo, Alicia and all the Fun Party Team,
We have been warning you for months and months that your favourite party host, charity auction donator, gambling chip provider, Vegas bubbly buyer, yacht and jet supplier was a fake.

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Will you give 1MDB’s money back Leo?

You definitely weren’t interested in listening or maybe the party music was just too loud?

 

Audiences will be fascinated to see Leo acting as the great founder of the American nation, George Washington in Red Granite’s up-coming block-buster. And they will be wondering where the money came from?

Meanwhile, will Leo be returning his fee for Wolf of Wall Street, which we and many others had warned was paid from stolen money from Malaysia’s development fund?

We will continue our letter-writting at less busy time.

Yours sincerly

Sarawak Report

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Wake Up Malaysians! – Comment


Sarawak Report

Wake Up Malaysians! - Comment

Ready to riot for Najib

Ready to riot for Najib

Najib has not hesitated to get his paid-up bullies in Red Shirts onto the streets to threaten ordinary folk, following the DOJ’s devastating details over his thefts from 1MDB.

 

But it’s next week that he plans to really take charge.

On 1st August his shocking National Security Act comes into force, designed to hand him dictatorial powers wherever he likes, against whom he likes for any six months at a time. Then he can renew those powers.

The bill was introduced without warning late on the final day of the Parliamentary session at the end of last year. Surprised MPs were given no time to scrutinise it, let alone put forward amendments and the debate was cursory as it was rushed through its stages in an effective pre-planned coup by the Prime Minister against his Parliament and the democratic rights of his own people.

Even the Sultans and the Agong have been shocked into a rare refusal to sign it unamended – but rather than accept their counsel on a matter of core national security he has brushed their concerns aside and forced it into law unchanged or re-considered.

That Najib’s excuse was the need to combat ISIS is no surprise.  Yet the terms of this Act would lead anyone to conclude that Malaysia has experienced worse threats than Europe, Indonesia and the US put together, which of course is not true.

None of those countries have attempted to create such sweeping powers to combat terrorists – the reason being that this law has nothing to do with fighting criminals… and everything to do with protecting the one who is presently in charge.

Is Najib Razak a safe pair of hands for such powers?

Is Najib Razak a safe pair of hands for such powers?

To give just a single example of the evil intent of this National Security Act, consider the clause that cancels the formal inquest into the death of anyone killed by army or police in any crackdown under its provisions.

Someone must have thought closely to insert such a sinister detail in advance.  That someone must have decided that they are tired of being inconvenienced by all the paraphernalia of the law when it comes to murder cases. That person wants to be freed from questioning and investigation, when someone who gets in his way is ordered dead.

Does Malaysia want to place such a dangerous law in the hands of a desperate thief and liar like Najib, who is furthermore himself personally associated with a string of murky, half-solved murders?

And yet, the mainstream press in Malaysia has been almost as silent on this deadly law, as over the shocking revelations by America’s Department of Justice about their Prime Minister’s thefts from 1MDB.  The story which has been headlines for the past two days in every other country in the world has remained virtually unreported where it is most relevant – Malaysia.

Core messages the Malaysian media are avoiding!

Core messages the Malaysian media are avoiding!

What press coverage there has been has even attempted to pretend that the description of Najib as ‘Malaysian Official 1′ means that he has somehow not been identified in the US indictment.  Do they think Malaysian’s are laughably stupid?

For the avoidance of doubt the PM is plainly and clearly identified in the United States Department of Justice indictment as the corrupt official who received $681 million in his private bank account direct from 1MDB (no Saudi Royals in sight).

The rest of the world media has had zero problem in making the connection, as evinced by the headline at the top of this article.  It is merely that legal documents only cite by name those who are directly moved against in that indictment – since Najib placed the US-based loot in the name of his step-son Riza and Jho Low (both now hiding in Malaysia and Taiwan) he was not directly relevant to that indictment.

However, his proven duplicity and shocking level of corruption is supremely relevant to people in Malaysia.

Malaysian media have tried to pretend otherwise

Malaysian media have tried to pretend otherwise

Frogs?

There is an over-used analogy, which explains a dangerous torpor, which could finally lose Malaysians their last vestiges of freedom, promising poverty and misery for their country.

A frog will jump out if you put it into hot water, but if you start from cold and heat it up, it stays and cooks.

After years of incremental abuses and ever-worsening corrupted practice, it seems Malaysians no longer understand a tipping-point or see the moment to act.

Revelations that mobilised Icelanders and even people in Brazil to successfully voice their outrage and to pressure the departure of discredited leaders, seem in danger of falling on deaf ears amongst self-defeatist Malaysians, who have perhaps bubbled in the pot too long?

It seems too many prefer to explain why ‘nothing can be done’, rather than take a risk and do it. This paralysis is worst amongst those with the most responsibility to take action now – those around Najib. Their failure to do the necessary is forcing others – ordinary people – to have to do their job of replacing a leader who has lost the plot.

Here we have one of the remaining countries in the world where sodomy remains a crime and was even used to place a popular opposition leader in jail on cooked-up charges. Yet, the population is being asked to nonetheless bend over and be thus abused.

How will once proud Malaysians be able to look other nations in the face if they let it happen and surrender up their freedoms to a thief, who has been exposed and discredited the world over for buying power with money stolen from the poor?

 

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…of #1MDB, Najib, DOJ and the Lying Malaysian Cabinet


Malaysiakini

Prove your worth by staying united as thinking Malaysians

 

This too late self-admission by Deputy Prime Minister Ahmad Zahid Hamidi of his sighting of the transfer documents and his meeting with the representative of PM Najib Abdul Razak’s ‘donor’, as his interpretation of solid evidences of Najib’s innocence, speaks volume of an allegedly untrustworthy and incapable Umno leader, wishing to dutifully show loyalty to Najib and good leadership to Malaysians.


Zahid: I met with RM2.6b donor’s representatives

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http://www.themalaymailonline.com/malaysia/article/zahid-i-met-with-rm2.6b-donors-representatives


For his role, like all the other cabinet ministers, they deserve the maximum disrespect and exoneration of Malaysians, and if, they still pride themselves being honourable to their oath of office, they must with due respect, as Malaysians are deeming it necessary and overdue, immediately resign en bloc, providing the only compelling lead for Najib to likewise do so.

That would at least be the greatest services Zahid and the rest would have done for the nation.

It’s impossible like to hope for such a smooth transition, since their survival are at stake, but forgiving and thinking Malaysians have no alternative but to burden themselves much more, to forgive and forget these glaring allegedly treacherous acts of national and possibly worldwide contagious and catastrophic impacts, which our current governing system is suspected of trying to cushion, avert, resolve and eradicate.

Loyal and passionate Malaysians must avoid all untoward provocations and subversions which may arise from unrepentant, innocent and paid supporters and rise relentlessly to resolving this political impasse with wisdom and respect for truth and justice, which must be upheld, utmost and always, at all costs, for any hope of returning our beloved country, Malaysia, to its path of glory.

Repent, rethink, refresh and reform we must commit ourselves too, as our sure hope for our desired and lasting destiny.

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The Lament of Ex-Malaysian MSM Editor


Malaysia-Chronicle

‘IT’S ALL OVER BOYS’: WRITE YOUR RESIGNATION LETTERS, SALVAGE YOUR INTEGRITY- EX-NST EDITOR MUSTAPHA TELLS PRO-NAJIB MEDIA

by Mustapha Kamil

79ff3baf1e17f0a9b17b27f08b1b6aad_STo all mainstream media editors, especially those who for the past couple of years have unashamedly called their international counterparts ‘liars’, you guys have missed a very very big story yesterday.

Your international counterparts have ‘scooped’ you right under your noses. How are you to face, first your reporters, your advertisers and ultimately the public? Who is lying now?

The way I look at it, the mainstream media institution has been destroyed.


Local papers ‘ignore’ DoJ action against 1MDB-linked assets


Its all over boys. This is a good time to compose your resignation letters.

“The Malaysian people were defrauded in an enourmous scale (in) a scheme which tentacles reached around the world,” – Deputy Director, Federal Bureau of Investigations.

“Rakyat Malaysia telah ditipu dengan skala yang amat besar didalam suatu perancangan yang merangkumi seluruh dunia” – Timbalan Pengarah, Biro Siasatan Persekutuan (FBI).

I would like to ask my former colleagues in the mainstream media this one question:-

Where are we to hide our shamed souls now?

I say ‘we’ because I feel ashamed of myself too as for a long 28 years, like you, I failed to play my role as the public’s watchdog.

That was why I left.

I take no pride in leaving the profession but I wasn’t strong enough to go against the tide.

What has been laid bare by the US Justice Department for the world to see should not have been allowed to happen to this great nation.

We journalists in the mainstream media knew this all along.

We spoke about it in the newsroom corridors, during our coffee and smoking breaks.

But whenever our paychecks arrived, we enjoyed our perks but forgot that we owed the public nothing less than the truth.

My time is over my friends.

Don’t for one minute think that am standing proud now for having left.

Quite frankly, I have nothing much to show.

Journalism is not about rubbing shoulders with the powerful, being driven around by a driver and with a few honorific titles to show.

It is about how we help society master their world by helping them make the best decisions on matters that affects their lives.

Lying and the suppression of the truth is not journalism.

For you who are still in the profession, there is still time to turn back and put journalism in order.

You owe that to the society you serve.

f2f20-mus1

Mustapha Kamil

Former Group Editor of NST

https://www.facebook.com/mustapha.kamil.5?fref=nf&pnref=story

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Call for Malaysia PM to step down over #1MDB scandal


Former prime minister Dr Mahathir Mohamad has suggested that a tribunal of independent judges, including foreign judges, be set up to hear the case involving the troubled state fund 1MDB.

“The attorney-general may defend the government or the officers, but he should not be the judge. Let the tribunal do the judgment,” he said in a blog post today. – Malaysiakini

AlJazeera

US officials allege $1bn siphoned from Malaysia state fund and used as “personal bank account” to buy luxury assets.

1MDB_doj

A Malaysian opposition party leader has called on Prime Minister Najib Razak to step down following the lawsuit filed by the US Justice Department to seize $1bn in assets linked to the country’s scandal-plagued 1MDB state investment fund.

The Justice Department said on Wednesday that the assets were “associated with an international conspiracy to launder funds misappropriated” from 1MDB, and included lavish real estate in Beverly Hills and New York, artwork by Monet and Van Gogh, and a business jet.

“I believe the Malaysian people want Dato’ Sri Najib to go on leave as prime minister so as not to create the perception of abuse of power or process to halt or hinder a full and transparent investigation on this very serious issue,” Wan Azizah Wan Ismail, president of the People’s Justice Party (PKR), said in a statement on Thursday.

Malaysia’s government should allow an independent commission investigate corruption claims outlined by the Justice Department, said Wan Azizah, who is the wife of jailed Malaysian opposition leader Anwar Ibrahim.

The lawsuit alleges a complex money laundering scheme that the Justice Department said was intended to enrich top-level officials of 1MDB.

In a press conference in Washington, DC, on Wednesday, US Attorney General Loretta Lynch said the 1MDB funds were used as a “personal bank account”.

Swiss say $4bn may be missing from Malaysia state fund

The fund is owned by the Malaysian government, but none of the lawsuits named Prime Minister Najib Razak, who has consistently denied any wrongdoing.

However, the case named Riza Aziz, the prime minister’s step-son, as a “relevant individual” in the case.

The lawsuits also named Najib’s friend, Malaysian financier Low Taek Jho, or Jho Low, and Abu Dhabi government officials Khadem al-Qubaisi and Mohamed Ahmed Badawy Al-Husseiny.

Al Jazeera’s correspondent Sohail Rahman, speaking from Kuala Lumpur, said the prime minister’s office issued a statement overnight in response to the allegations.

As the prime minister holds the financial portfolio under which 1MDB operates, and many of his critics say he should have known what was going on “and many actually accuse him of being involved in this whole scenario,” Rahman said.

Ordinary Malaysians will likely be shocked by this US investigation, as the Malaysian government’s own probe of 1MDB has already ended, he said.

“The case in theory has been closed since October when the attorney general here in Malaysia said that there was no wrongdoing, and ordered the Malaysian anti-corruption commission to close the case.”

“However, this re-opens it from, certainly, across the Pacific, where the US now will go forward to try and investigate how these assets were bought,” Rahman said.

In the statement, the prime minister’s office said it would “fully cooperate with any lawful investigation of Malaysian companies or citizens, in accordance with international protocols, as the prime minister has always maintained, if any wrongdoing is proven, the law will be enforced without exception,” he added.

‘Money-laundering scheme’

The 1MDB fund was created in 2009 by the Malaysian government with the goal of promoting economic development projects in the Asian nation.

Instead, officials at the fund diverted more than $3.5bn over the next four years through a web of shell companies and bank accounts in Singapore, Switzerland, Luxembourg and the US, according to the justice department complaint.

Federal officials said more than $1bn was laundered into the US for the personal benefit of 1MDB officials and their associates.

The funds were used to pay for luxury real estate in the US and Europe; gambling expenses in Las Vegas casinos; a London interior designer; more than $200m artwork by artists, including Van Gogh and Monet; and for the production of films, including the 2013 Oscar-nominated movie “The Wolf of Wall Street”.

The complaint said that among those who profited from the scheme was the prime minister’s step-son Aziz, who co-founded Red Granite Pictures, a movie production studio whose films include “The Wolf of Wall Street”.

According to the complaint, 11 wire transfers totaling $64m were used to fund the studio’s operations, including the production of the movie starring Leonardo DiCaprio.

Leslie Caldwell, US assistant attorney general, said at the news conference on Wednesday that neither 1MDB nor the Malaysia people saw “a penny of profit from that film,” or the other assets that were purchased with fund siphoned from 1MDB.

Red Granite said on Wednesday that none of the funding it received four years ago was illegitimate and nothing the company or Riza did was wrong.

Authorities in neighbouring Singapore also announced on Thursday that they seized assets worth $240m in their own investigation of 1MDB-related fund for possible money laundering.

The Monetary Authority of Singapore, as well as the city state’s Attorney-General’s Chambers and the Commercial Affairs Department said their investigation of the funds found “deficiencies” at several major banks, including “undue delay in detecting and reporting suspicious transactions.”

Al Jazeera’s correspondent in Washington DC Kimberly Halkett said the investigation is likely to strain US relations with Malaysia, which President Obama had personally tried to cultivate, having played a round of golf with Najib during a visit to the country in 2014.

Source: Al Jazeera and agencies

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No, We Are Not Mere Pawns


FEE

by T.K. Coleman

A person who values looking smart rather than being curious and humble will never fully realize their potential.


pawn

This → “We are powerless little pawns, helplessly manipulated and moved about by the hands of politicians,” is the kind of self-negating, liberty-hating nonsense I will never believe!

If you want to distance yourself from “the gullible ones,” use the above italicized statement as a mantra. It’s an easy way to sound smart, in-the-know, and well-informed about politics and conspiracies without having to feel the pressure of doing the hard work required to make the world a freer place.

The cynics and pessimists pride themselves in such a belief. They believe that by holding to such a defeatist and hopeless proposition they can somehow avoid the embarrassment of placing faith in false hope. More than the desire to be free, they desire to never be on the wrong side of “I told you so.”

So rather than fight for their possibilities, they choose to argue for their limitations. They respond to every proposed solution and any possible strategy as if it’s delusional fancy. Tell them not to lose heart and they’ll respond by citing a dozen examples of some politician who lies, cheats, and steals. Although they are fully aware of the fact that they can never be free simply by sitting around and griping about political corruption, they lack the courage, imagination, and creativity necessary to take the kinds of risk that make it possible to turn things around.

A person who values looking smart more than being open, curious, and humble will never realize the fullness of their potential. Interesting and liberating discoveries require a willingness to look foolish in relation to generally accepted sentiments. Fewer things are more antithetical to this willingness than an attitude which ignores the unfamiliar and uncertain in exchange for the right to say “well, they didn’t fool me.”

Fighting for freedom is noble, but for many it’s not worth the risk of putting their ego on the line. Many people can live with being unhappy and unfree, but they can’t live with the burden of being the person who tried something daring, failed at it, and was forced to admit miscalculation or misjudgement.

This is the world we live in, but, as in all worlds, creativity can and will thrive in spite of those who choose to hide behind the safety of being a naysayer.

Things don’t get accomplished because of the face-saving negative talk of people who do nothing more than make much ado about what can’t be done. Things get accomplished because of those who hope against hope, those who see failure as nothing more than an invitation to try something new.

Don’t waste your time around people who have nothing to offer to a conversation other than arguments about what’s impossible. Spend time around people who have a stake in the game, people who are willing to put their motor where their mouth is by getting up, going out, and getting things done, whether it’s easy or not.

The future will neither belong to those who coerce, nor to those who merely criticize. The future will belong to those who create, to those who sow the seeds of productivity, positivity, and possibility, in season and out of season.

This is why I will never believe that we are powerless pawns. I have too much respect for myself, for you, for critical thinking, for freedom, and for reality itself.

This first appeared at the author’s website.

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Memories of a Reserve Currency Collapse


Penang Monthly

By N. Balakrishnan

If the history of global capitalism is anything to go by, massive social unrest can be only one financial event away.

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Mobs attempting to overturn a bus.

As the ringgit tests multi-year lows and I hear people talk about the coming collapse of the US dollar as the world’s reserve currency, I look back to my time in Penang in 1967 when I witnessed first hand the severe social consequences that a sudden collapse in a reserve currency can bring.

Malaysia in November 1967 was just about four years old – though it had existed as independent “Malaya” since 1957. The country had a currency board system with the Malaysian dollar backed by the British pound sterling which then was in widespread use in former British colonies.

The Malaysian government was in the process of issuing its own currency backed by its own Central Bank to replace the currency issued by the Board of Commissioners of Currency of Malaya and North Borneo set up in 1938 and backed by the sterling. This Currency Board system had been able to provide a level of monetary stability and prosperity to Malaysia, Singapore and Brunei which other Asian countries – including giants such as China and India – could not even dream of.

In June 1967 the Malaysian dollar, issued by the new central bank, Bank Negara Malaysia, replaced the Malaya and British Borneo dollar at par and both currencies were allowed to circulate, with the Board’s currency backed exclusively by sterling and the Malaysian dollar by the Malaysian Central Bank. The plan was to withdraw the Board’s currency eventually, but no one was in a hurry to do that, what more with a currency note backed by the mighty sterling of a former colonial power.

But then came November 1967. Five months after the introduction of the Malaysian dollar, the pound was suddenly devalued by 14.3%. The new currency issued by Malaysia was not affected but the Malayan and British Borneo dollar were still pegged at 8.57 dollars per pound, and these reduced in value overnight by 15%. Since the devaluation of the sterling was unexpected and even the Malaysian government was not told about it by the UK, Malaysia found itself in a strange situation with two currency notes in circulation as legal tender – and one worth 15% less than the other! Malaysia’s then-Finance Minister was the capable Tun Tan Siew Sin, who definitely could not be blamed for not anticipating this turn of events.

The irony was that many Malaysians, conditioned to think of Britain as a strong power and to be sceptical of the financial abilities of fledgling states like their own, had been storing up on the “old British” notes. Malaysia at that time was underbanked, and most people, especially the poorer ones, literally kept their savings in large denomination notes under their mattresses.

Their savings suddenly lost value and, naturally, they were deeply angered.

Malaysia in those days had legitimate socialist parties such as the Socialist Front, which had deep support from smaller businessmen and workers. Huge demonstrations were organised asking for the government to offer compensation to holders of the old notes. The demonstrators had a point, since the government had told the public not to rush to the banks to convert to new notes and that both currencies were backed by the government equally. No one was in the mood to listen to the arcane explanations of the government about how the notes were actually backed differently.

The Socialist Front was particularly strong in George Town at that time, and had elected Members of Parliament and a good political infrastructure.

Unsurprisingly in a nascent post-colonial nation with large ethnic ghettoes, the anti-government demonstrations soon took on a racial dimension. Dozens of people were killed and a curfew was imposed for several days.

Though Indian, my family lived on Lebuh Cina, which was populated mostly by the Chinese. It was not far from where many inter-ethnic clashes took place between marauding youths from all ethnic groups. In my mind, I can today still sense the acrid smell of tear gas coming from canisters that the passing police vans threw – to our eyes, rather randomly and callously – along the streets.

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The use of tear gas to disperse the mobs.

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The deserted streets of the once-holiday island of Penang.

It was also the first time and fortunately only time I saw men being knifed and blood running in the streets. The victims were unlucky, being of the wrong ethnic group in the wrong place at the wrong time. Eventually the situation returned to normal but two years later in May 1969, more interethnic clashes broke out, this time largely in KL following a bad showing by the ruling Alliance coalition.

But it was the 1967 riots and killings in Penang that left a deep impression. I was too young to understand the economic and monetary dimensions of it. Those revelations came to me later, in 1980 when I was working as a rookie reporter for a news agency based at the World Trade Center in New York. Cigar-chomping Paul Volcker was in charge of the Federal Reserve then. The prime interest rates were in the high teens, and the gold price was rising rapidly. In fact, the Aden Sisters, based in Costa Rica, were predicting that the gold price would reach US$5,000 an ounce.

The markets and the market gurus of that time were fixated on the narrow money supply – “M-1B” – and were watching it diligently. If it went up, then the high interest rates were there to stay, and if it went down then there was hope for lower rates. Despite some economic training from a very good American college, it was a shock for me to see billions changing hands on the basis of this one number!

Those were pre-Internet days and I was the youngest of half a dozen reporters invited to the briefing every Friday afternoon at in the New York Federal Reserve on Liberty Street. The numbers were released to us at 4pm but we were only allowed to use the fixed line phone to call our offices at 4.10pm. So for a precious ten minutes, I was in possession of a number that could have made a lot of money for anyone who knew them in advance!

The Federal Reserve briefings went on for about 30 minutes, detailing “wire problems” and various problems afflicting the US banking system. Any faith I had that bankers and banks knew what they were doing with all that money evaporated then. I also have fond memories of the fluffy folded hand towels that adorned the men’s room at the New York Fed. I doubt whether there were women’s rooms then, and if there were, whether they had fluffy towels in them.

But the expected Weimar Republic of America scenario never happened, and the conservatives in America triumphed in convincing the populace to swallow immediate sharp pain for the long-term good. Today, the Liberty Street crowd seems instead to want the Federal Reserve to not only increase the money supply but print more and more money to make the markets go up. Some are even proposing negative interest rates!

Is this a new era where lax money does not matter anymore, or is it just the calm before the storm? Will what happened in Penang in 1967 happen on a global scale soon, with the masses taking to the streets when they finally realise that the “currency” in their pockets is not worth what they were told? Having seen how sudden changes can come about in 1967 Penang and 2008 New York, I am no longer reassured by “expert” assurances that things are all right on the monetary front.


N. Balakrishnan is an entrepreneur with diverse interests who has been based in Hong Kong for more than 20 years. He grew up in Penang and attended Penang Free School. More information about him can be found at http://www.coolinvestor.biz

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