Wednesday, March 18, 2009

Timber - How Do They Cheat?

Sarawak Headhunter will make this as simple as possible so that everyone can understand beyond a doubt how Taib, his family, henchmen and cronies involved in the timber business blatantly cheat (actually steal) and shortchange the state so that they themselves can obtain maximum benefit and profit without having to account for it or pay the royalties and taxes rightfully due to the state and federal governments.

There are a few basic ways to do it, all involving under-declarations or false declarations, with the connivance of the state authorities of course. In Sarawak the state authorities means Taib.

First is to under-declare the volume or tonnage sold/exported. Next is to under-declare the grade and the price combined with false declarations as to the actual species and actual buyers. This involves nothing more than having 2 different sets of shipping documents drawn up and that more or less completes the method of operation of all timber scams perpetrated by them. Very simple and straightforward.

Don't the authorities know about this? Of course they do - they are all involved and everyone gets his cut. How does Sarawak Headhunter know this? Just take a look at the official statistics on the Malaysian Timber Industry Board's (MTIB) website.

More valuable and expensive species are grouped together and supposedly sold as MLH or Mixed Light Hardwood, the cheapest timber, which sold for RM480 per m3 ex-logpond in Malaya in May 2008 compared to Dark Red Meranti at RM860 and Chengal at RM2,290. See the prices here.

But then, you may ask, why am I using Malayan prices?

The reason is very simple. Somehow, Sarawak timber has managed to do the impossible and priced itself even below Malayan MLH. How is this possible, unless they (the Sarawak timber companies) are cheating? In fact they have cheated so much that this is what has actually happened. Don't believe me? Where is the evidence of this? See the MTIB site here (Export of Logs by Sarawak, January-August 2008).

Sarawak exported 2,402,146 m3 of logs during this period with a total FOB value of RM1,080,000,115. No species are stated - are we to assume all are MLH? The average price per m3 is therefore RM450.

First of all, even if we accept that ALL Sarawak log exports are MLH, we would expect the FOB price to be higher than the logpond price because of transport costs.

Secondly, it is unbelievable that Sarawak does not export any higher-priced logs of more valuable species such as meranti. If there are any such higher-priced logs, definitely the average price would be higher than that for MLH.

Even if only 10% of the volume of the logs was priced at an average of RM1,000 per m3, this would bring the average price per m3 up to RM505 and make a difference of RM132 million in revenue. Do you think it is only RM132 million that they have not declared?

To capture the difference, they use a mechanism known as "transfer pricing", where they will invoice a related company (controlled by themselves) the lower price and sum, and this related company, usually residing outside of Malaysia in a friendly lower-tax or even tax-free country, will then invoice the actual buyer the real price and sum.

This is illegal of course and constitutes not only tax evasion but also money laundering. Taib himself is guilty of this plus abuse of power and position for personal gain as well.

You can figure out for yourself the scale of their deception and how much these greedy pigs have stolen out of Sarawak's timber resources over the years, that is on top of whatever else they have stolen from the government coffers through one-sided contracts, over-priced, wasteful and unnecessary projects plus the costs of their mismanagement, misgovernance and maladministration.

As an anonymous timberman says:

"I used to work with one of the 3 largest timber companies in Sarawak from 1996 to 2002.

The timber company, listed on Bursa Malaysia main board, keeps two sets of accounts. One set is for legitimate transactions and another for transactions whereby royalty is not paid.

You may know of a company called Sarawak Transport (not Sarawak Transport Company, the bus service). Sarawak Transport belonged to Cahaya Mata Sarawak. When it was formed, and for many years onwards, it did not own a single land, air or sea transport vehicle.

Instead, for every cubic meter of timber exported from Sarawak, a certain fee is paid to Sarawak Transport by the exporter.

Befriend an accountant in any of the largest timber companies in Sarawak. They can tell you the exact facts and figures.

Timberman"

So what say you MACC, Malaysian Stock Exchange, Police Commercial Crime Department, Inland Revenue Board and Bank Negara Anti-Money Laundering Department? Anybody? No evidence? No crime? Nothing?

18 comments:

tunabdulrazak said...

Does Datuk Sri Tiong, a Bintulu MP know about this? What shall we do Dayaks? Do we still want to be further cheated? BN means cheating.
Vote PR.

patrickayu said...

do you know that to load export logs in sarawak all vessels have to be registered with a company in hong kong and a fee paid to this company. i believe this hong kong company is controlled by the taib machinery.

Mata Kuching said...

Why must the export of logs go through STIDC and/or one of its subsidiaries and Archipelagoes Shipping? The whole procedures and processes are to deceive the Rakyat, Tax Department and Federal Government apart from having the actual tonnage records of exported logs by timber merchants so that these mercahants would be compelled to pay the full and actual commissions to Taib's companies. There shall be no arguments over the actual tonnage exported and commissions must be paid otherwise licences will be withdrawn by Taib himself.

Hardwoood timber, a subsidiary of STIDC will be buying illegally felled logs from our neighbour Kalimantan and all other parties who were caught smuggling timbers into Sarawak from Kalimantan would have their logs consficated and auction to Hardwood Timber at very much below market value to be resold to timber merchants at market value.

Anonymous said...

I used to work with one of the 3 largest timber companies in Sarawak from 1996 to 2002.

The timber company, listed on Bursa Malaysia main board, keeps two sets of accounts. One set is for legitimate transactions and another for transactions whereby royalty is not paid.

You may know of a company called Sarawak Transport (not Sarawak Transport Company, the bus service). Sarawak Transport belonged to Cahaya Mata Sarawak. When it was formed, and for many years onwards, it did not own a single land, air or sea transport vehicle.

Instead, for every cubic meter of timber exported from Sarawak, a certain fee is paid to Sarawak Transport by the exporter.

Befriend an accountant in any of the largest timber companies in Sarawak. They can tell you the exact facts and figures.

Timberman

Anonymous said...

Hi,
Al jazeera open up a can of worm by grilling James Masing last night. See James masing squirming in his seat and say the most stupid things e.g. the swak govt is transparent in awarding contract to CMS an Titanium, there is no cronyism in Sarawak, contracts are award on open tenders and the usual bulls--t. can you get a whole transcript and put it here?

http://www.youtube.com/watch?v=fzm5BwNH8xM

Anonymous said...

This is part 1 of Al Jazeera's washing of Taib's dirty linen in the public.

http://english.aljazeera.net/programmes/101east/2009/03/2009318105348309246.html

Anonymous said...

Fellow Dayaks.... we have to stand for what is right. Right for our future brothers in arms back in the long house. Spread the word that changed has to come and it is inevitable...... To BN goons..... Changed will come whether you like it or not.... JMM udah kena tupik Taib....nak ulih jakok utai bukai... CRONYISM AND NEPOTISM TO THE MAX HERE IN SARAWAK... FOR MORE THAN 30 YEARS...

stingray said...

Hi ahmadneil,
Where have you been for so long!Have seen you comment in MT.Have you been bar.admin must be crazy if they bar you.MT with you is so bored!

To all the sarawakian,
Take back the land that your forefathers ahve given to you.f you keep on voting BN, you will be left landless.The jungles have long gone and now they are selling your land to the foreigners.One day you will be chase out from the land of the hornbills.
Vote PKR to end your sufferings!

NEIL said...

Hi stingray,
Thanks for your concern.Ya,I'm been barred and I have email labisman but they haven't reply me to tell me why I'm been barred.Maybe my comment about that bitch ,Elizabeth Wong ,drew some hate from admin.I hpoe they will let me comment as this are my views.Everyone is entitled to his or her comment but I really don't know why MT is so naive.

Bobby said...

Headhunter,
I even know who's the people helping Taib to do this. I couldn't believe it until I came to Sarawak 2 years back and saw the "Kings" of Sibu, Miri and Kuching.

telur dua said...

A sea change in Sarawak is long overdue. Make that happen in the next State Election.

Don't be a sucker for punishment anymore. The power for change is in your hands.

Anonymous said...

Yes, my friend. It did happened. No doubt about it as I worked in timber company before. You can check with the timber companies in Sarawak and they will say "no comment".

chapchai said...

I am a Sarawakian of Chinese origin, and I deplore the way the Chinese towkays, working hand in glove with white hair, are robbing the Dayaks of their ancestral land. One question to be pursued: Before the dam construction starts, the land has to be cleared which means trees have to be felled. Surely the proceeds from the sale of these trees should go towards a trust foundation for the people being displaced?

Anonymous said...

Ahmadneil, I have always enjoyed your comments till you made the stong negative comments of our golden girl Eli. I strongly disagree with you on this but you are entitled to your views.
I will be pleading with M2day admin to allow you back.

angela ooi

Anonymous said...

Sarawak people are being betrayed by some of their greedy leaders/representatives. It's time to wake up and fight for what is yours!

Sarawak fan.

Anonymous said...

It's already in our life our culture. Everything pek mo have a share. every house, building etc that uses cement he has a share.The chinese always said in hockkien "pek mo ay" belongs to white hair. It's already set in people's mind and it's legal ha ha ha

Anonymous said...

Anyone been to Lundu recently? If you notice that there is one area before Sempadi, the hill top and surrounding is now "bold" to prepare for what I think Palm Tree plantation. Many might not realize that stretch of area is a Reserved Forest area(The sign board is still there). The top is getting richer but the rakyat is getting poorer and even worse, the land that we are standing now, is NOT FREE anymore. Is this what the BN called For the Rakyat? what future our descendants will have?

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