Did Loke Just Land Farhash In Some Difficulty?

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Loke: Awarding of HeiTech Padu’s contract not linked to Farhash Wafa’s involvement in company

Transport Minister Anthony Loke clarified that the RM190 million contract awarded to HeiTech Padu Bhd for servicing and maintenance of the Road Transport Department’s (RTD) MySikap and mainframe systems, is unrelated to the involvement of Prime Minister Datuk Seri Anwar Ibrahim’s ex-political secretary, in the company…

In a press conference today, Loke explained that the contract was awarded to HeiTech Padu in February before Datuk Farhash Wafa Salvador purchased 15.09 per cent of shares in the company in March.“The approval was given on February 2, 2024. However, as usual, the offer letter will only be issued after several internal processes. However, a decision from the Ministry of Finance (MoF) was made on February 2 and Farhash only bought 15.09 per cent shares in HeiTech Padu on March 16, 2024.

“Meaning the decision on the tender was made even before Farhash bought shares in HeiTech Padu. It has nothing to do with his involvement with this company. The decision was made in early February. So, he bought those shares in March, that is individual rights to buy the shares. But what the prime minister wants to stress is that after Farhash became a shareholder in HeiTech Padu, to date, there are no government contracts that were offered to HeiTech Padu,” Loke said.

He stated that Anwar and the Cabinet view the “taunts” towards the government on this issue seriously.

If any party is not satisfied with this explanation, the prime minister welcomes them to lodge a report with the Malaysian Anti-Corruption Commission (MACC) so that an in-depth investigation can be done,” Loke added.

One gets the impression that Mr Loke made his intervention today trying to be helpful.

That his intention was to assure that nobody has done wrong in this matter, where an extremely close (if now informal) advisor to the Minister of Finance suddenly bought a huge chunk of shares in a company that was subsequently awarded a lucrative government contract.

According to Loke’s statement it can be clearly proven that there is no question of the government having somehow skewed its tendering process to favour a company in which Mr Farhash had just made a huge investment. The dates simply don’t fit that theory.

However, in staving off one accusation the minister has unfortunately potentially raised another rather more serious suggestion …  and then invited anyone troubled by the facts to call up the MACC.

The reason being that the awarding of the contract to Heitech was announced to the wider world of investors just two days ago:
– “In an announcement on Bursa Malaysia today, HeiTech Padu said it signed the letter of award from JPJ on April 15, with the three-year contract commencing on May 1.” [FMT 15/4/24].

That was when shares might have been expected to jump in Hitech Padu. However, those shares had already jumped in value one month back after the news came out about Farhash’s recent purchase of 16 million shares – making him a tidy paper profit.

Unfortunately, this was clearly owing to the fact his purchase had caused many to uncharitably speculate that this was a sign that Heitech Padu was likely to be the company that would win or had won the tender, given he is a known insider around the corridors of decision making power.

Those speculators had clearly calculated, rightly or wrongly, that someone needed to have been persuaded by some very good reason to lend Farhash the large sum of money required to make his sudden major purchase of shares.

Alternatively, he would have had to have good reason to dip into resources few were aware he had to make a very big personal gamble, for example on that bumper contract being awarded to this particular company.

Now it is confirmed that Farhash was right to make his punt and that those who speculated were also right, although their line of reasoning may have been unfair to Mr Farhash (insider trading, after all, is … not allowed).

Yet, by his remarks Loke has now stoked those unfortunate speculations by confirming some very pertinent facts and  an unhelpful sequence of events. Namely that, although it had yet to be made public for another two and a half months, the Ministry of Finance had officially made its decision to award the RM190 million contract to this particular company on February 2nd.

Loke went on to further state that Farhash then made his very prescient purchase on March 16th.

This does very little to make the argument against those who had come to the conclusion (and indeed were prepared to bet money on it) that Mr Farhash was acting on privileged information.

So, while Mr Loke may have scotched any rumour that Mr Farhash bought the shares then made sure the tendering process was cooked to suit his purposes – a very cumbersome way to game the system – he has given credibility to the far simpler possibility that he acted on inside knowledge.

It therefore seems likely someone might well take up that offer to call the MACC, if only to dispense of such unlovely speculations given they have been stoked by the businessman’s own political defenders in such a manner.

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