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Motorola sinks £55m into Malaysia

In exchange for £150m contract

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Ougoing Malaysian chief minister Tan Sri Dr Koh Tsu Koon asked that a £150m contract for upgraded police radios be awarded to Motorola in a confidential letter to the country's Prime Minister Datuk Seri Abdullah Ahmad Badawi.

Motorola had apparently threatened to abandon the country, causing 10,000 job losses immediately before an election.

The letter, which was obtained by the Malaysiakin website and dated 3 December 2007, suggests that in exchange for the contract Motorola would agree to invest £55m in the country, an investment which was announced on Tuesday though no details of a government contract have yet emerged.

Dr Koh has defended the letter, claiming that losing Motorola would have led to the immediate loss of 4,000 jobs, and another 6,000 redundancies amongst companies supplying Motorola in the country.

But the fracas has provided ammunition to the opposition who have been basing their attacks on the incumbent administration's failure to reinvigorate the economy.

Awarding huge contracts to get companies to base themselves in your country is slightly more underhand than just handing them money, and it makes it harder to ask for it back too, but Dr Koh says he was simply acting out of commercial necessity: "I believe I did the right thing to protect the interest of the people of Penang," he said in a statement.

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