Semesta admits giving out hefty bonuses

By Patrick Lee - Free Malaysia Today,

SHAH ALAM: The public inquiry into allegations of graft in Selangor's sand-mining industry opened today with a shocking revelation: Kumpulan Semesta Sdn Bhd (KSSB) had paid itself an all-round 3.49-month average bonus between September 2008 and June 2009.
Abdul Shukor Nahor, non-executive chairman of KSSB, the state-owned company in charge of sand-mining operations in Selangor, revealed this when the Selangor government's Select Committee on Competency, Accountability and Transparency (Selcat) got the inquiry started on the first day.
“In June, the profit was around RM7 million, and the royalty paid (to the state) was RM2 million. The board of directors felt that it was right to reward the staff,” said Shukor.
He added that in the fourth quarter of 2008, KSSB employees had received a two-month's interim bonus.
Selcat chairman Teng Chang Khim, however, was not impressed by Shukor's statement. “Is it right for a company that has only been running for three to four months to be giving out an interim bonus of two months?” he asked.
“If you get a two-month bonus within four months of work and if you multiply by three, you would get a six-month bonus in a single year. Not even big companies such as Telekom, MAS, Maxis and all the others pay themselves bonuses like that,” said Teng.
Shukor defended Semesta's decision, saying the sand-mining industry was a difficult one and that the bonuses were a way of encouraging the employees who had “worked very hard”.
He said that KSSB's employees had lodged up to 40 police reports in the past 18 months based on a series of threats made against them ever since the sand-mining issue was played up in the media.
Market share
Shukor also said that KSSB's market share -- at 17% -- was not very large, a claim quickly shot down as unimportant by Teng.
Teng said that market share was a separate issue, and as KSSB was Selangor's only sand-mining operator, it amounted to a monopoly.
According to Shukor, KSSB made a profit of RM1.12 million in its first three months of operation (September to December 2008). He said the following year, the company raised its profit to RM5.7 million.
Earlier, Selangor state executive councillor Yaakob Sapari, who was the first witness summoned by Selcat, said that KSSB did not have the right to apprehend illegal sand-miners.
He said that the company's role was to facilitate mining operations, adding that it was up to the Land Office to take action against illegal contractors.
The hearing also took an interesting turn when Teng asked Yaakob how the name Semesta was chosen.
Yaakob said that prior to Semesta's formation, its board of directors intended calling it “Khazanah Negeri Selangor”.
Teng chided Yaakob about the name, saying that it gave the public the impression that the government was contracting sand-mining operations to a private company.
The inquiry continues tomorrow.
Earlier a group of people gathered outside the state secretariat to show their support for Kapar MP S Manikavasagam for highlighting the sand-mining scandal in the state. (photos above)

Manikavasagam also appeared before inquiry today to hand over some documents and was instead to be present tomorrow.