Thesun 2009-03-03 Page01 Showdown In Perak

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No. 4708 PP 2644/12/2009 (023092)

Tuesday March 3, 2009

TELLING IT AS IT IS

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Riding the storm N

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Sports

pg27

US govt throws AIG RM111bil lifeline

EW YORK: The US government threw a new US$30 billion (RM111bil) lifeline to American International Group Inc on Monday as the embattled insurer reported the biggest quarterly loss in US corporate history at US$61.7 billion (RM228.29 billion). AIG’s board approved a new rescue package that also includes more lenient terms on a government investment in its preferred shares and a lower interest rate on a government credit line, two sources familiar with the matter said. This would be the third time the government has had to step in to save AIG, once the biggest insurer by

market value whose global reach may have made it too big to fail. Without government intervention, AIG’s losses would prompt credit ratings downgrades, triggering even more debilitating losses for the insurer and its trading partners. A source familiar with the matter said that US authorities felt it was cheaper to put more taxpayer money into AIG than to take the risk of letting it fail. Allowing the collapse of AIG, which has struggled to sell assets, would have far-reaching consequences for the global financial system as it guarantees about US$300 billion

(RM1.1 trillion) of asset-backed securities and other debt, analysts said. The source said that a failure of AIG would be both a systemic risk for the US economy and would send shockwaves through the retail insurance industry, adding that as long as it remains a systemic risk, more government help may be needed. The government has been blamed by many for exacerbating the financial crisis by allowing Lehman Brothers to fail. “The government really does not have the option of letting AIG totally blow up,” said Robert Haines, senior insurance analyst at CreditSights. “The counterparties on most of the book

are (European) banks that would be hammered if the US walked away. Hopefully, the third bailout will be the charm.” The rejigged bailout, which changes the terms of an earlier US$150 billion (RM558bil) rescue, is the latest example of how federal authorities are having to revamp aid for top financial institutions as the global financial crisis deepens. Last week, the government agreed to boost its equity stake in Citigroup Inc to as much as 36% in a bid to bolster the bank, already the recipient of billions of dollars in taxpayer funds. The dollar rose against most other

currencies in Asia as news of the deal emerged (see page 14). AIG, which had 74 million customers at end-2007, has said it has been losing business and finding it harder to win new clients since it was first rescued in September after bad mortgage bets left it on the verge of collapse. The government stepped in at the time with an US$85 billion (RM314bil) bailout, and subsequently offered additional financing, bringing the support up to about US$123 billion (RM455bil). In November, the government had to revise its bailout package, raising its total aid to about US$150 billion (RM555bil). – Reuters

Showdown in Perak STATE ASSEMBLY AND HIGH COURT ARE BATTLEGROUNDS TODAY IN ONGOING POLITICAL WAR TO CONTROL STATE

BERNAMAPIC

POH: The stage is set for a showdown today between two political groups, each claiming to be the rightful Perak government. A defiant State Legislative Assembly Speaker V. Sivakumar is determined to go ahead with an emergency sitting of the assembly this morning to vote on two motions, aimed at killing the Barisan Nasional administration of Datuk Dr Zambry Abdul Kadir who was appointed by the Sultan of Perak as mentri besar. But the obstacles are already up. Yesterday evening, police erected roadblocks along the main road leading to the Perak Darul Ridzuan building which houses the mentri besar’s office, the State Secretariat and the Legislative Assembly. An unsigned notice put up at the complex advised employees at the building in Jalan Panglima Bukit Gantang Wahab to cancel all appointments today at the premises. In reaction, senior exco member under the Pakatan Rakyat government Datuk Ngeh Koo Ham said its elected representatives will attend the sitting. He pointed out that the assembly is separate from the state secretariat. Ngeh was with reporters waiting at the High Court yesterday afternoon, on talk that BN lawyers would apply for an injunction to stop the special sitting. Perak police chief Datuk Zulkefli Abdullah warned of action against any gathering at the Perak Darul Ridzuan complex, saying such a gathering would be illegal. He said they were informed by the building administration that the state assembly would not sit today and added that only employees and people with special approval would

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Security tightened ...

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rmed policemen checking vehicles headed to Parliament House yesterday as security is tightened following the intrusion last Thursday by a group of Umno Youth members who accosted Bukit Gelugor MP Karpal Singh. The road leading to the Parliament House gate was divided into two lanes – for MPs and visitors. Reports on PAGE 2

be allowed in. “According to a statement from the secretary of the assembly received today (Monday), the emergency sitting of the assembly called

for tomorrow (Tuesday) is not valid because it does not have the consent of the Sultan of Perak,” he said when contacted by Bernama. Yesterday afternoon, Zam-

bry told a press conference that an originating summons had been filed in the High Court, seeking a declaration that Sivakumar’s decision to suspend him and his exco was

unconstitutional, unlawful and ultra vires the constitution. The case will be heard at 9am today. He said another suit was also filed, by the three BN-

friendly Independents on the status of their unsigned resignation letters which Sivakumar had used to declare their seats vacant. This will be heard on Thursday. In another development, BN-appointed state executive councillor Mohd Zahir Abdul Khalid served notice to refer Sivakumar to the Rights and Privileges Committee for alleged misconduct. The notice, to which was attached a report on the speaker’s alleged misconduct, was served on Sivakumar’s political secretary A. Basu at the speaker’s office at Bangunan Perak Darul Ridzuan at 11am. Mohd Zahir said the notice was also related to several actions of the speaker, including his decision to suspend Zambry and the six state executive councillors from the legislative assembly recently. “We regard this as contrary to the Perak Constitution and in violation and contempt of the order of the Sultan of Perak. We, as the state assemblymen including the speaker, must state our undivided loyalty to the Sultan of Perak,” he said after serving the notice. He said according to Article 47 of the Perak Constitution, all assemblymen had sworn to, among other things, uphold, safeguard and defend the Perak Constitution as well remain loyal to the Sultan of Perak. Deputy Prime Minister Datuk Seri Najib Abdul Razak had on Saturday said that Sivakumar could not call the emergency sitting as the court had yet to decide on the status of the state government. However, Sivakumar’s lawyers had argued that the assembly was adjourned sine die last November and as such, the speaker had the power to convene a new sitting.

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