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Sanctimonious shenanigans - Soros money in Labuan
 Channels for hot money Malaysiakini’s independence is, according to this logic, compromised because its funding is linked to Soros. The source was the Far Eastern Economic Review which has since clarified the facts to show that the connection is at best tenuous. If we stick to the same source, we will find that the Review of Oct 19, 2000 carries a story titled ‘Dodge City’. It reveals how our offshore financial centre, Labuan has been a tax haven for such big names as the American insurance giant AIG, Bell Canada and (surprise, surprise) … George Soros! “They and other companies have invested billions of US dollars in (South) Korea and walked away with billions in profits. And thanks to special rules, Labuan has helped both foreign and Korean companies avoid hundreds of millions of US dollars in taxes. That’s an amount that could cover about 10 percent of Korea’s projected budget deficit this year,” said the article. The tax dodging works like this. Malaysia has a tax treaty with South Korea which means Malaysian companies pay little tax in South Korea and vice versa. Foreign investors pay a hefty tax on dividend income as well as capital-gains tax. Thus, if a company is registered in Labuan, there are no Malaysian taxes to pay either. Apart from enabling companies to avoid taxes, offshore centres like Labuan serve to mask the origin and nature of foreign investment: Jenny Kimmis, a policy adviser at Oxfam, the British-based charity that has studied the issue of tax havens and poverty, is quoted in the article as saying: “Another factor is financial stability. The lack of transparency in these offshore centres does encourage financial actors who are looking for a level of secrecy to make speculative investments. Read: hot money.” Worldwide, the International Monetary Fund estimates that as much as US$1.7 trillion of investments is channeled through offshore centres like Labuan each year. In late 1997, South Korea learnt what it’s like to get burnt by hot money. The Malaysian pot calling Soros black Such shenanigans by the big multinational companies and currency speculators like Soros have been going on for some time at great cost to the South Korean economy and the Mahathir administration, that great advocate of ‘East Asian Economic Cooperation’, has been an accessory to the tax dodging and hot money by these multinational ‘morons’. The other curious fact is the way in which the Mahathir administration tries to present a virginal facade in relation to currency speculation when those with a longer memory will remember how the Malaysian central bank lost more than RM10 billion of taxpayers’ money through currency speculation in the early 1990s. It’s no good trying to be sanctimonious about currency speculators such as Soros only after losing out to him at the same game. The fact is the Mahathir administration has condoned and participated in such financial shenanigans using Malaysian taxpayers’ money for years! Nor has the Malaysian government said no to Soros’ direct investments worth billions in Labuan. So why the shenanigans about malaysiakini’s funding sources now? The important question is: Has malaysiakini compromised its independence through its funding? One would think that the best judge, as with all media, is the reader. Barisan Nasional should be reminded yet again not to cheat at this democratic chess game! Dr KUA KIA SOONG, a former member of Parliament, is a director of human rights group Suaram.    Download Mobilekini to get the full story on your phone.
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