Petronas is saying its financial statements are available to the public. True, they have the annual reports published on their website. But these provide only brief summary figures e.g. revenue, profit before tax, etc – not detailed breakdowns.
As mentioned earlier, I would like to see the detailed accounts, not summary figures for revenue and profit before tax. I want to see the administrative and operating expenses, the other misc expenses. Let’s have a look at the detailed profit and loss acount.
Published accounts offer only summary figures and are not of much use to anyone wanting to analyse the financial performance of the company in greater depth.
In particular, let’s have figures for how much was spent over the years for the following:
- Development of Putrajaya
- Bailout of banks
- Construction of Petronas Towers
- the Philharmonic Orchestra
- Donations, commissions, management fees, consulting fees etc
- Entertainment expenses
- Formula One racing and related expenses
- Amounts spent on acquiring companies or assets owned by BN-related parties e.g. Petronas’ MISC rescuing Mirzan Mahathir’s loan-saddled shipping and haulage businesses
- Expenses related to Pulau Langkawi activities
Petronas belongs to the Malaysian people. We are entitled to these detailed figures. We should not be treated like corporate shareholders entitled only to the bare minimum information about a company.
Meanwhile, tell us how much Petronas earned for the year ended 31 March 2008. The figures should be available by now.
Dear Peggy
I an fully aware of the role and duties of an auditor vis-a-vis investigative and reporting functions, having been an accountant for 30 years and having worked at a couple of local Plcs myself. Nor have I stated or implied anywhere that auditors should be hauled up for management failures.
However, if you have been following events in USA & UK, you will find that auditors can no longer find refuge in the old mantra of ‘we are a watchdog, not a bloodhound’, in particular where it concerns Plcs and MNC’s where there is internal audit and continuous external audit throughout the year and a much higher standard of auditing and reporting is demanded. The demise of Anderson’s is a case in point.
But, I am amazed that you think that there is nothing to be unearthed from Petronas’ a/cs.
Firstly, you say there is nothing illegal in GH’s $120 million losses. How do you know?
I’m aure thes Plc’s have internal trading limits, not to mention limits imposed by broking firms. I believe these losses resulted from exceeding these pre-approved trading limits by at least 5:1. Furthermore, in the wake of the long delay in making management accountable for these horrendous losses, who is to say that 1 or 2 among them might not have had an inappropriate hand in the scandalous losses? This is why the SC should take GH to task for failing to make a more public disclosure of these losses, instead being smugly contented that it is buries safely in some innoculously worded notes to the accounts! I suspect that the fact that the whole Group was being re-organised as Synergy Drive has something to do with GH’s $120 million losses being downplayed in 2007.
With further regards to disclosures, let’s take the announcement by Proton that gave the public impression that it was back in the black. However, on close scrutiny, you will note that included in the PAT is an unusual amount of $192 million income from a Government Grant. If you discount this from the true Operating Profit, then Proton just about broke even. Now, you cannot say that is not significant, can you? Yes, they played by the rules, but what about substance over form? Isn’t that what the auditors are there for?
In Petronas 1/2 year accounts to 30th September, there is a gap of $60 billion between Total Revenue and PAT. In a full year, this would translate to $ 120 million of direct, selling and admin expenses and other write-offs. Is this insignificant when Petronas has long-term debts of $ 30 billion?
You and I know from our vast experience that all sorts of ‘funny’ items can be slipped into Cost of Sales and Overheads and escape the attention of auditors or where detected explained away in a convenient Letter of Representation from the MD.
My point is, Petronas may be a company incorporated under the Companies Act, but it is 100% owned by us, the People. It is therefore not reasonable that we should, as a bulwark against fraud, misuse of fudns and misrepresentation, have to rely mainly on the words of 1 man and his lieutenants that ‘All is Well’. Especially so in the wake of the massive frauds at Barings (S’pore), Global Crossings, Enron, Bank National Paris etc etc. fom which we know that most serious and mega frauds are committed by management at the highest levels!
The Petronas 2007 full year accounts posted at their website does not contain an Auditors’ Report. By independent audit, I mean one carried out by the Auditor General as is normal for Government and Statutory Bodies, or 1 where 1 of the Big 4 auditors are independently appointed by the Government, the 1 and only Shareholder, and the Auditors report back to the Government.
As it stands, we are still in the dark about the $120 billion of expenses Petronas incurs before PAT. We also know that Petronas subsidises MPO, Prasarna, Petronas Uni, PMB etc tec. More than that, it has gone into the Property Market as a serious player, as well as investing in MISC, Perkapalan, Proton, MAS what have you, some of which may be termd as ‘Govt bail-outs’. I would aver that it is not Petronas raison d’etre to venture into these areas; it is that of the Government’s, which then becomes more transparent and we can, if the performance is not satisfactory, hold them accountable at the ballot box!
As to the question of accountability on what the Govt spends the billions it receives from Petronas, this is what PKR, DAP and many of us have been asking for years withou a satisfactory answer. And we finally showed them on 8th March 2008 that we have the power to make changes at the very highest of levels of Govt.
In short, we must make both Petronas and the Govt more transparent and accountable for our, the People’s, assets, money and legacy! And we must restrict Petronas’ activities to the O & G business so that it is focussed and does not shoot all over the joint!
Complain about this comment
Like or Dislike:
1 
0
Dear Anil
Many of our bloggers (as well as MP’s & Aduns) do not seem to understand that it is not possible to match Govt spending against any specific source of Revenue.
The Govt’s revenue source is derived from Incone and Corporate Tax, Customs & Excise Duties, Petroleum Revenue Tax, Fees& Licences, Road Tax, Dividends from JV’s etc. All Revenues go into a commmon Consolidated Fund from which disbursements are made for Operating and Development Expenditure which are specified in the Govt’s Annual Budget. The gap between Income and Revenue, if any, is bridged by the issue of Bonds or in more extreme cases, Loans from the IMF, World Bank etc.
The Govt’s annual performance against their Budget is then audited by the Auditor General, whose report is reviewed and action taken against wasteful expenditure, fraud etc by the Public Accounts Committee (PAC).
Nevertheless, we can put pressure to come up with a detailed Cash Flow Statement, as is mandatory for all Limited Compabies, to see wher all these funds have disappeared to.
But without going too far, we only have to look at Putrajaya, Cyberjaya, Cinejaya, KL Tower, KLCC, PMB,Prasarna, MAS, KTMB, PKZ, UEM, National Service, Monsoon Cuo,NS Highway, Proton, KLIA, Mirage & Sukhoi Jets, Scorpene Subs, Space Tourist, Crooked Bridge, Bakun, etc to know where some of our billions have gone.
Complain about this comment
Like or Dislike:
0 
0
Thank you Anil for making us aware of this issue.
Complain about this comment
Like or Dislike:
0 
0
We should try to pester Tun M in the Petronas issue too beCAUSE… isn’t he the Petronas “adviser” all along?
Complain about this comment
Like or Dislike:
0 
0
“Since its creation in 1974, Petronas has recorded a profit of RM570 billion of which RM336 billion has been paid to the government, said its CEO in a TV interview.”
This is what I am talking about. How did the government spend the RM336 billion? Obvously, it is pointless to ask Petronas.
Complain about this comment
Like or Dislike:
0 
0
Dear All,
There is a lot of allegation regarding to Petronas when the subsidy is partially removed by the government. I suggest rather than we complain and try to blame others on the current situation, let us think on the contribution that we made to the nation. Petronas made 35% (RM53.2Bill) of Malaysian revenue last year with just 30,000 plus personnel. You can take your calculator and divide the number which is RM1.77Mill per person. I’m not too sure that is enough for one person to contribute. But I’m sure that the person who trow bad comment and allegation to Petronas is contributing more than that.
Complain about this comment
Like or Dislike:
0 
0
donplaypuaks: … i don’t agree that every attempt to sponsor something perceived bourgeoisie is bad for the country or wasteful.
i myself have been to the philharmonic a few times during my student days on a RM10 ticket, which is fairly easy to obtain with a valid students ID. My piano teacher has also organised a trip to the philharmonic on a RM10 ticket.
My school has made field trips to the petronas science centre and I found that I learnt something even during my visits as an adult. Why the cries to dismantle all of it now. Isn’t it commendable effort to bring a bit of magic and culture to the rakyat, at a price which is within reach?
Isn’t it common for every profit generating corporate to try give something back to society, be it in form of charity, or in terms of art, or in terms of beauty?
Isn’t CSR the way forward? And it can come in many creative forms! It is not bread and butter alone that feeds a society and pushes it forward!
back to the more serious bits about financial statements.
substance over form is a very wide statement to dump all responsibilities on the auditors. it is subjective and open to interpretation. being an accountant for 30 years, i hope you are agree that the 1st line of responsibility over a set of financials lies with the directors of the company. If stakeholders cannot take enough interest to ensure trustworthy stewardship of the company, why blame the auditors.
(to be continued, too tired, going to sleep now)
Complain about this comment
Like or Dislike:
0 
0
petronas accounts?
go to CCM. Can print all of the 135 pages of the audited financial statements for the year ended March 2007. better than the one on the petronas website. For March 2008, due to be disclosed within this final week of June.
Complain about this comment
Like or Dislike:
0 
0
Hello Petronzas,
What is the real figure of 5% royalty to sarawak after the 41% oil price hike? And sabah? And oso Trngganu? pls tell us?
Complain about this comment
Like or Dislike:
0 
0
Every one know that Petronas is making astronomical revenue and profit when oil prices hit $140/barrel, much of it go to management perks,board of director fees and BN government coffer, our natural resources generated revenue generally benefited only small percentage of Malaysians and selected few, it is a well known fact indeed.
Complain about this comment
Like or Dislike:
0 
0