Ad agency says was asked for bribes to win tourism contract

By Clara Chooi

March 17, 2011

Malaysian Insider

KUALA LUMPUR, March 17 — The advertising agency behind the award-winning “Malaysia, Truly Asia” tourism campaign charged today that it withdrew a bid to renew its contract with the Tourism Ministry after being asked for bribes in exchange for the deal.

Integrated Strategic Communications’ (ISC) complaints against the ministry are already being probed by the Malaysian Anti-Corruption Commission (MACC).

The agency said in a press statement today that it was rebutting Tourism Minister Datuk Seri Dr Ng Yen Yen’s denial of “ambiguity” in the tender process for the advertising and promotions contract, worth a total of RM381 million.

ISC founder and chief executive officer Austen Zecha (picture) alleged that both he and his deputy were jointly approached on January 19 to “offer the client” (the ministry) a 50 per cent “rebate” or an annual share of the firm’s income from the account.

In exchange, he said, ISC would then “re-win” another three-year Tourism Malaysia contract for the Europe, North America and Oceania tender.
“This essentially led ISC to decide to withdraw its tender on Wednesday, January 26,” Zecha said.

He added that ISC’s founders, shareholders, directors and management had unanimously agreed that the incident was a “grave insult” and that it added further suspicion to the ambiguity of the tender process on a whole.

He pointed out that ISC had an “impeccable” record in its work for the “Malaysia, Truly Asia” campaign, which it has handled since 1999 through the terms of four successive tourism ministers — Datuk Leo Michael Toyad, Datuk Seri Tengku Adnan Tengku Mansor, Datuk Seri Azalina Othman and now Datuk Seri Ng Yen Yen.

Zecha also repeated ISC’s earlier allegation that it had been told by the ministry that it could only bill Tourism Malaysia RM3 million both in 2009 and 2010 for its previous three-year contract for Europe, which was actually worth RM18 million annually.

“It is only under this minister’s administration — never ever before, even prior to ISC’s past four contractual three years of service or its two predecessor agencies’ previous three contractual years of service covering the 1970s, 1980s and 1990s — did Tourism Malaysia allow ISC and its two predecessor agencies to bill it only one-sixth of any year’s stipulated contract’s worth, or only about 17 per cent.

“So what happened to the other 83 per cent of each contract year’s worth of the RM18 million in 2009 and 2010, and who authorised and benefited from the standard commissions of the other RM30 million of invoices over the past two years?” he asked.

“And does the government, especially the Treasury, allow for such hidden euphemistically-called ‘Direct Bookings’ to deprive bona fide and Treasury-registered companies to be basically ‘short-changed’ on contracts’ worth, and for which ISC duly paid Treasury the normal stamp duties based on its stipulated contracts’ worth?” said Zecha.

He also called into question Ng’s involvement in the issue, pointing out that the latter’s remarks in Parliament on Tuesday had contradicted her earlier statement that she was unaware of the five companies that were each awarded three-year contracts, totalling RM381 million or RM127 million per year.

“Previously, the minister was quoted in the media as saying she did not even know any of Tourism Malaysia’s five tenders were awarded to any of her ‘friends’ but now she seems to acknowledge knowing at least two of them,” he said.

Ng had been forced to explain the situation to Parliament when she was questioned by the DAP’s Jelutong MP Jeff Ooi if the five contracts had been awarded to crony companies through the use of political connections.

One of the tender winners was Impact Creations Sdn Bhd, which is said to have been selected because Juni Ewe, the managing director of Impact Challenger Sdn Bhd, allegedly related to the first company, is a friend of Ng’s.

Ng denied that the two companies were related.

Ooi had also asked if the award to Naga DDB Sdn Bhd was through a political channel as its founder and executive chairman is Datuk Vincent Lee Fook Long, who is also the executive deputy chairman of the MCA-owned Star Publications (Malaysia) Bhd.

Ng is a vice-president of the MCA, the second largest component party in the ruling Barisan Nasional.
The five recipients of the tenders were Naga DDB for the Asean market with a contract value of RM25 million a year, SMASCOM & Designs Sdn Bhd for East and North Asia (RM25 million), Sen Media Sdn Bhd for South Asia, West Asia and Africa (RM26 million), M&C Saatchi Sdn Bhd for Europe, America, Oceania (RM21 million) and Impact Creations for domestic and events (RM30 million).

Ng was also urged to clarify her denial that her ministry was now under MACC investigation and had its offices raided last Friday.

She explained that she was the one who invited the MACC in order to clear the ministry’s image following ISC’s “lies”.

“We cannot say that just because a company has failed to secure a tender, after getting it for 12 years at a value of more than RM160 million, and now it has raised all kinds of things.

“As a minister, it is my responsibility to ensure that the truth is told, not only the lies,” she was quoted as saying in theSun daily.

But Zecha argued that ISC had not “failed” to secure the tender but had withdrawn itself from the bid on January 26, long before Tourism Malaysia decided on and announced the winners on February 7.

He asked if Ng’s statement meant that the latter had already known even before ISC withdrew its bid who would win the tender.

“Is that why only this time there were no actual agencies’ presentations called for, which, as she has said publicly too, was what Treasury told her ministry to do? This should now receive the MACC’s fullest attention, indeed, because something here does not jive,” said Zecha.

The MACC raided the offices of Impact Creations and the Tourism Ministry last Friday following ISC’s complaints on the tender process.

Zecha also denied a statement by former Culture, Arts and Tourism Minister Tan Sri Abdul Kadir Sheikh Fadzir that the “Malaysia, Truly Asia” slogan was created by him, insisting that the award-winning campaign was its own initiative.

“Indeed, as we had already stated earlier this week, if it had been then-Tourism Minister Datuk Seri Kadir’s idea, why did he have to call us in when in May 1999 ISC was not yet a member of Tourism Malaysia’s panel of agencies?

“If it had been his idea, why not just give the concept or strategy to one of his existing panel of agencies’ members then?” he asked.

Zecha said that to put the matter on record, ISC will be engaging with legal parties, both local and abroad, as well as all participants in its 1999 pitch to Tourism Malaysia, to bear testimony and witness to the fact that the campaign had been its own initiative.

“They will help bear witness to the fact that ISC — led by our then-chairman, co-founder and investor Datuk Mukhriz Mahathir and yours truly — presented our conceived and subsequently developed ‘Malaysia: Truly Asia’ international re-branding for Tourism Malaysia as an unsolicited and requested by and accepted on-the-spot by then-Tourism Minister Datuk Seri Kadir,” he said.

Zecha also urged the MACC to investigate why Abdul Kadir’s statement had only been reported in the MCA-owned The Star newspaper.

“Bizarre or coincidence or collusion, that hopefully is also for the MACC to determine,” he said.