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

Tuesday
March 3, 2009
TELLING IT AS IT IS www.sun2surf.com

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Riding pg27
the storm
N EW YORK: The US government
threw a new US$30 billion
(RM111bil) lifeline to American Inter-
national 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
US govt throws AIG RM111bil lifeline
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 securi-
ties 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 bil-
lion (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 custom-
ers 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 govern-
ment had to revise its bailout package,
raising its total aid to about US$150
billion (RM555bil). – Reuters

I
Showdown in Perak
POH: The stage is set for a
showdown today between
two political groups, each
claiming to be the rightful
Perak government.
STATE ASSEMBLY AND HIGH COURT ARE BATTLEGROUNDS
TODAY IN ONGOING POLITICAL WAR TO CONTROL STATE
friendly Independents on
the status of their unsigned
resignation letters which
Sivakumar had used to declare
their seats vacant. This will be
A defiant State Legislative heard on Thursday.

Assembly Speaker V. Sivaku-
mar 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 appoint-
ments 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 com-
plex, 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
Security tightened ...
A 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.
be allowed in.
“According to a state-
ment 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 con-
tacted 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
BERNAMAPIC
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 speak-
er’s alleged misconduct, was
served on Sivakumar’s po-
litical 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, includ-
ing 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
Reports on PAGE 2 had yet to decide on the status
of the state government. How-
ever, Sivakumar’s lawyers
had argued that the assembly
unconstitutional, unlawful and was adjourned sine die last
ultra vires the constitution. November and as such, the
The case will be heard at speaker had the power to
9am today. convene a new sitting.
He said another suit was
also filed, by the three BN- » More reports Page 2