PERWAJA Terengganu Sdn Bhd, the government-owned steel manufacturer, is insolvent. It is unable to pay some of its creditors and is seeking a moratorium on payment of interest and principal on some of its borrowings. It is facing a serious financial crisis which may require a further injection by the government of large sums of public funds.
The Perwaja crisis is the talk of the town. In boardrooms, coffee shops and even private homes, people are talking about Perwaja's problems and their implication on the Malaysian economy. Yet, no report or analysis of this important issue has appeared in the local mainstream media which devotes so much time and space to reports on drug and sex scandals and singing the praises of their political masters.
In the Sixth Plan period, the country also saw the biggest corporate financial scandal in history, the second Perwaja financial crisis, and Parliament is still waiting for the publication of the management and financial investigations into Perwaja as promised by the Deputy Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim, last month.
It is most regrettable that Anwar had failed to make public the reports on the second Perwaja financial crisis in time for the Parliamentary debate on the Seventh Malaysia Plan.
The Government is taking too long to give a full and proper accounting on the second Perwaja financial scandal, considering that the former Perwaja managing director, Tan Sri Eric Chia was asked to step down from his position eight months ago.
Since Eric Chia was appointed to "rescue" Perwaja in 1988, the country had been told that Perwaja had undergone a "miraculous turnaround", that Perwaja Steel had started making profits from the year ending March 1990, which would be maintained all the years through to 1994, to the extent that Eric Chia was talking about publicly listing of Perwaja.
During Eria Chias tenure, the Prime Minister, who declared he was personally supervising Perwaja and was getting a monthly report from its management, visited Perwaja several times.
The Prime Minister repeatedly expressed his satisfaction with Perwajas turnaround, publicly praised Perwaja for setting a world feat in loading its steel mill in Telok Kalong, Kemaman, with 13,000 tonnes of scrap metal in 24 hours and even said in February 1991: : "I have felt disappointments and frustrations in the Government, but I feel only relief when I visit Perwaja". He also said: "Perwaja staff had proved that we can achieve anything if we work hard, day or night".
The Prime Minister said the people brought in by the Government would not stay in Perwaja forever and would leave once they had passed on their management expertise to others and jokingly told Eric Chia in public: "This is why you have to work yourself out of this job."
Eric Chia has now worked himself out of the job, but not by making a success of Perwaja but by creating an even bigger financial disaster.