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YTL paid 1 million pounds sterling to Wessex Water Chairman

What is now beyond doubt is that the YTL Group in Malaysia, through Tan Sri Francis Yeoh, paid the Wessex Water plc chairman, Mr Colin Skellet, one million pounds sterling. What is in doubt is why. Scotland Yard believes it a bribe, as it picked Mr Skellet last week for questioning, to ensure Wessex Water went to the YTL Group through a British subsidiary. Mr Skellet insists it is for consultancy services for five years paid up front. He says he paid Malaysian income tax on it. The YTL Group knows of, and approved, it.

Typical of Malaysian companies, when something like this happens, their normally loquacious chairmen are suddenly struck dumb. Tan Sri Francis Yeoh referred reporters to its website. If the money was paid, and everything above board, why did he not come clean and say what it was? Wessex Water plc, in its statement, said Mr Skellet had said "no payment, nor promise of payment, was made to him during the negotiations over the sale" but curiously did not mention the five-year consultancy which Mr Skellet says there is. Mr Skellet says this would be reported as required by the law. And it is not one million sterling but 920,000 sterling, and, poor fellow, he has pay British income tax on top of that. His defence here is similar to Ras Adiba's over the money they received. (Could they and Tan Sri Francis Yeoh have the same spin doctor?)

There is more to it than is revealed. The YTL Group and Tan Sri Francis Yeoh must clear the air. Mr Skellet, in one interview, said Tan Sri Francis initiated this consultancy agreement. Since the funds came from Malaysia, Bank Negara Malaysia and other regulatory authorities would know of it. So, why did not the YTL Group reveal this consultancy agreement when it was signed in July? When someone comes out of the blue to snatch Wessex Water from under the noses of the preferred suitors, one must assume skullduggery at work. Especially when Mr Skellet was hostile to the YTL Power International's takeover.

Tan Sri Francis, in announcing the YTL Group's successful bid for Wessex Water in March, said it is 'blessed with such a quality asset' and "I thank God for this wonderful asset, which we won against Goliath (sic) competition." Mr Skellet, he said, realized the YTL Group had Wessex Water's long-term interests at heart. Yet newspaper reports at the time said Mr Skellet had threatened to leave if the YTL bid was successful. Questions arise about it that no doubt would eventually be in the Scotland Yard report of its investigations. Also arrested with Mr Skellet was another YTL consultant, Mr Martin Bushnell. Both are now on police bail as investigations continue. The latter, it appears, was not aware of this payment, so London reports say.

Malaysians newspapers and radio ignored the growing scandal which was widely reported in British newspapers and the Washington Post. In Malayais, it was hidden in the inside pages, in the belief that they have not deliberately misled the public by not reporting it. Then on Friday, 23 August 2002, the New Straits Times headlined on its front page YTL Power International Bhd's statement to the KLSE denying it paid a bribe to acquire Wessex Water. "YTL Power has no knowledge of any illegal payment and has offered the (London) police co-operation in relation to the investigation." This was an excellent opportunity to come clean with the consultancy agreement. It did not. It would not.

Listed companies reveal the bare minimum the law requires, stonewalling queries from all and sundry. Read any chairman's statement to shareholders in the annual report: it follows a formula which tells you what the law requires, nothing more nothing less. If YTL Power International had mentioned that the money was, instead, a consultancy agreement, in its statement to the KLSE, it could have assuaged doubts that now arise. If Tan Sri Francis, instead of deflecting questions, read a prepared statement on what the money was all about, and be open about it, he could have been let off the hook.

He is not. His, and YTL Power International's role, in it is suspect. When Malaysian business men venture overseas, their reputations fall. The only businesses they venture into with alacrity is gambling. It is only a naive Malaysian who believes that business men in Malaysia are free of corruption. Corruption is the oil that greases business. When the Wessex Water scandal hit the streets, I asked a dozen people I selected at random -- from MPs to compancy executives, journalists to school teachers -- and none thought YTL Power International is not guilty. Malaysian business men venture overseas as a loss-making proposation for which they would be local compensation from which they could more than offset their losses.

Sometimes they believe in their own hype. Not realising, as the Berjaya Group chairman, Tan Sri Vincent Tan would tell you of his gambling venture in Chinese, the killing of the magnitude Genting Berhad makes in its casinos in the Genting Highlands is a pipe dream; he must wish he did not venture into China. In all else, whether it is the Lion Group's venture into housing in China or Renong Berhad's venture into steel making in the Philippines, or the Berjaya Group's venture into timber in South America, or indeed, the YTL Group's ventures in Africa, they fail.

Malaysian ventures overseas is these days a byproduct of Prime Ministerial visits overseas, done to please the Great Man than a deliberate move to expand the businesses. Tan Sri Francis Yeoh wanted to show Dato' Seri Mahathir Mohamed he is better crony than any he had. There is this constant need to excel so more licences and businesses would come their way by courtesy of the Prime Minister. It is this need to continue to be the apple in his eye that Tan Sri Vincent Tan, for instance, sued me for libel, had his lawyers write the High Court judgement that gave him RM2 million in libel damages.

But it is of use only if it succeeds. The mistake they make is to assume that who they target accept their omnipotence in the Prime Minister's shadow, and are shocked beyond belief when they do not. We not ever know the full story of YTL's "quality asset". I trust Tan Sri Francis Yeoh is thankful, even amidst his trouble, for "this wonderful asset, which we got from Goliath (sic) competition". Meanwhile, it would be politic for Tan Sri Francis to stay clear of Britain while this mess is unravelled.

M.G.G. Pillai
pillai@mgg.pc.my