Wednesday, September 2, 2009

Pfizer whistleblower's ordeal reaps big rewards

NEW YORK (Reuters) - Taking on corporate giants can feel like tilting at windmills, but John Kopchinski's six-year legal battle against Pfizer Inc just made him a rich man.

The Gulf War veteran and former Pfizer sales representative will earn more than $51.5 million as a result of his whistleblower lawsuit against the world's biggest drugmaker and the record penalty the company must pay the U.S. government for its massive marketing transgressions.

The unassuming Texas resident celebrated his windfall by having a family portrait photograph taken Wednesday morning.

"We're going to be staying right here in San Antonio in the same house, and my wife tells me when we go to the movies we're still getting one tub of popcorn -- the large tub," Kopchinski said in a telephone interview.

Kopchinski, appalled by Pfizer's tactics in selling the pain drug Bextra, filed a "qui tam" lawsuit in 2003, sparking federal and state probes that led to Wednesday's agreement by the company to pay $2.3 billion in civil and criminal penalties and plead guilty to a felony charge for promoting Bextra and 12 other drugs for unapproved uses and doses.

"In the Army I was expected to protect people at all costs," Kopchinski said in a statement. "At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives.

"I couldn't do that," added Kopchinski, 45, who was fired by Pfizer in March of 2003, two years before the company pulled Bextra from the market over concerns it raised the risk of heart attacks and strokes.

At the time of his dismissal after raising his concerns with the company, Kopchinski had a baby son and his wife was pregnant with twins. He went from earning about $125,000 a year to living off his retirement fund before landing a job with an insurance company for $40,000 a year.

"It was a lot of stress on the family. I pretty much depleted my entire 401(k)," he said.

"The last six years have been pretty hard, so going forward it's going to be pretty much easier," said Kopchinski, noting that college for his young children "is taken care of."

Erika Kelton, Kopchinski's lead attorney from the firm of Phillips & Cohen LLP, said large rewards are justified because of what whistleblowers must endure, often for many years, after complaints within the company go unheeded.

"Particularly in pharma, it's no secret that it's an industry that can blackball former employees," Kelton said, "so the reward is important both to encourage people to step forward and to recognize that their contributions are huge."

Kopchinski and five other whistleblowers will earn more than $102 million in payments from the U.S. government under the False Claims Act through which individuals can reap rewards for exposing corporate wrongdoing.

"The use of whistleblowers has really opened up the keys to the kingdom in terms of what's going on in these companies," said Dean Zerbe, senior counsel for the National Whistleblower Center and a partner at the law firm of Zerbe, Fingeret, Frank and Jadav in Washington.

"You'd never find out what's happening without this kind of reward structure," Zerbe said.

Allow financial institutions to fail, says British economist

KUALA LUMPUR, Sept 2– Financial institutions should be allowed to fail without causing damage to other financial institutions, said British economist Tim Harford.

“ In this crisis, we have propped up banks and insurance companies with failed strategies, because we couldn’t let them collapse. We must figure out a better bankruptcy regime to allow such banks to fail in future,” he said in an e-mail reply to Bernama.

The economist, an author of two economic books and a member of the Financial Times editorial board, said the market has always been a success because bad ideas failed and good ones spread and succeeded.

In a Financial Times article published in April, Harford said banks cannot raise new money and lend it to people as their assets become worthless and weighs down on existing promises to repay depositors and other creditors.

“ They cannot raise fresh money because nobody wants to lend money to a near-bankrupt bank. “ So far, governments have been trying to raise, or at least, stabilise the value of bank assets, but an alternative is to reduce the burden of their liabilities,” he was quoted as saying.

On stimulus packages introduced by governments all over the world, Harford said it was probably the right move but would only help a little in cushioning the impact of a deepening recession.

Saying that there were no easy solutions, he added, “We made big mistakes in bank regulations and the banks made big strategic mistakes. There is no painless solution.”

Harford reiterated that he was not in favour of stimulus packages for an ordinary recession as the timing of such a move must be right.

“By the time the government really starts spending the money, the recession will already be over,” he said.

Harford said even John Maynard Keynes, a renowed economist often associated with stimulus packages, had the same concern.

“ In this case the recession is so deep and dangerous that government stimulus is probably the right thing to do,” he said. – Bernama

Difference rule for different people

SEPT 2 — The main take-away from Friday’s cow head protest in Shah Alam is this: that the authorities apply one set of standards for Umno politicians and another for the rest of the country.

Just look at the lame response of the police to the action of the 50 men who marched in protest against the building of a Hindu temple and then compounded matters further with incendiary language.

Six days later and no one has been charged with sedition or any other offence for that matter. Sure, there has been stock answers of the “leave no stone unturned variety’’ and “take a serious view’’ but precious little action has been taken against individuals who promised to shed blood if the Selangor state government went ahead and built a place of worship for Hindus in a predominantly Malay area.

Just listen to Home Minister Datuk Seri Hishammuddin Hussein’s courtship of the residents in Section 23, some of whom were participants in the illegal march. He is meeting the residents today because “we want to be fair to everyone and give them a chance to defend themselves.’’ How magnanimous?

Would he be equally charitable the next time Malaysians are arrested for demonstrating against the Internal Security Act? Would he sit down and have coffee with Malaysians accused of other crimes to give them a chance to defend themselves?

The right forum for the instigators and participants of the cow head’s march to defend themselves is in court, not the minister’s conference room. But he is caught in a bind as are other Umno leaders who have been slow to condemn the actions of the protestors.

Tan Sri Muhyiddin Yassin has been silent. Datuk Shafie Apdal has been silent. Datuk Ahmad Zahid Hamidi has been silent. Datuk Khaled Nordin has been silent. Datuk Ali Rustam has been silent. Could it be that they agree with the actions of the protestors or they see a strategic opportunity to drive a wedge between the Malay electorate in Selangor and the Pakatan Rakyat government?

Or does it come down to this single fact: they can’t bring themselves to dress down their party men who inspired Friday’s march?

The brother of the Shah Alam Umno division chief was one of the chief actors in the parade last Friday. He was ably assisted by several Umno Youth officials who are not residents of Section 23.

In all likelihood, the party leadership will give these instigators a gentle rap on the wrist and move on. By doing so, they will send an unmistakable message to their party men that insulting the religion of other Malaysians is only a minor infraction.

Tuesday, September 1, 2009

Understanding Rights Issues

Cash-strapped companies can turn to rights issues to raise money when they really need it. In these rights offerings, companies grant shareholders a chance to buy new shares at a discount to the current trading price. Let's look at how rights issue work, and what they mean for all shareholders.

Defining a Rights Issue and Why It's Used
A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. More specifically, this type of issue gives existing shareholders securities called "rights", which, well, give the shareholders the right to purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price.

But until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way they would trade ordinary shares. The rights issued to a shareholder have a value, thus compensating current shareholders for the future dilution of their existing shares' value.

Troubled companies typically use rights issues to pay down debt, especially when they are unable to borrow more money. But not all companies that pursue rights offerings are shaky. Some with clean balance sheets use them to fund acquisitions and growth strategies. For reassurance that it will raise the finances, a company will usually, but not always, have its rights issue underwritten by an investment bank.

How Rights Issues Work
So, how do rights issues work? The best way to explain is through an example.

Let's say you own 1,000 shares in Wobble Telecom, each of which is worth $5.50. The company is in a bit of financial trouble and sorely needs to raise cash to cover its debt obligations. Wobble therefore announces a rights offering, in which it plans to raise $30 million by issuing 10 million shares to existing investors at a price of $3 each. But this issue is a three-for-10 rights issue. In other words, for every 10 shares you hold, Wobble is offering you another three at a deeply discounted price of $3. This price is 45% less than the $5.50 price at which Wobble stock trades. (For further reading, see Understanding Stock Splits.)

As a shareholder, you essentially have three options when considering what to do in response to the rights issue. You can (1) subscribe to the rights issue in full, (2) ignore your rights or (3) sell the rights to someone else. Here we look how to pursue each option, and the possible outcomes.

1. Take up the rights to purchase in full
To take advantage of the rights issue in full, you would need to spend $3 for every Wobble share that you are entitled to under the issue. As you hold 1,000 shares, you can buy up to 300 new shares (three shares for every 10 you already own) at this discounted price of $3, giving a total price of $900.

However, while the discount on the newly issued shares is 45%, it will not stay there. The market price of Wobble shares will not be able to stay at $5.50 after the rights issue is complete. The value of each share will be diluted as a result of the increased number of shares issued. To see if the rights issue does in fact give a material discount, you need to estimate how much Wobble's share price will be diluted.

In estimating this dilution, remember that you can never know for certain the future value of your expanded holding of the shares, since it can be affected by any number of business and market factors. But the theoretical share price that will result after the rights issue is complete - which is the ex-rights share price - is possible to calculate. This price is found by dividing the total price you will have paid for all your Wobble shares by the total number of shares you will own. This is calculated as follows:

1,000 existing shares at $5.50 $5,500
300 news shares for cash at $3 $900
Value of 1,300 shares $6,400
Ex-rights value per share $4.92 ($6,400.00/1,300 shares)

So, in theory, as a result of the introduction of new shares at the deeply discounted price, the value of each of your existing shares will decline from $5.50 to $4.92. But remember, the loss on your existing shareholding is offset exactly by the gain in share value on the new rights: the new shares cost you $3, but they have a market value of $4.92. These new shares are taxed in the same year as you purchased the original shares, and carried forward to count as investment income, but there is no interest or other tax penalties charged on this carried-forward, taxable investment income.

2. Ignore the rights issue
You may not have the $900 to purchase the additional 300 shares at $3 each, so you can always let your rights expire. But this is not normally recommended. If you choose to do nothing, your shareholding will be diluted thanks to the extra shares issued.

3 Sell your rights to other investors
In some cases, rights are not transferable. These are known as "non-renounceable rights". But in most cases, your rights allow you to decide whether you want to take up the option to buy the shares or sell your rights to other investors or to the underwriter. Rights that can be traded are called "renounceable rights", and after they have been traded, the rights are known as "nil-paid rights".

To determine how much you may gain by selling the rights, you need to estimate a value on the nil-paid rights ahead of time. Again, a precise number is difficult, but you can get a rough value by taking the value of ex-rights price and subtracting the rights issue price. So, at the adjusted ex-rights price of $4.92 less $3, your nil-paid rights are worth $1.92 per share. Selling these rights will create a capital gain for you.

Be Warned
It is awfully easy for investors to get tempted by the prospect of buying discounted shares with a rights issue. But it is not always a certainty that you are getting a bargain. But besides knowing the ex-rights share price, you need to know the purpose of the additional funding before accepting or rejecting a rights issue. Be sure to look for a compelling explanation of why the rights issue and share dilution are needed as part of the recovery plan. Sure, a rights issue can offer a quick fix for a troubled balance sheet, but that doesn't necessarily mean management will address the underlying problems that weakened the balance sheet in the first place. Shareholders should be cautious.

Demokrasi Yang Tidak Bebas Di Malaysia

SEPT 1 – Selepas pilihanraya 8 Mac 2008 yang menyaksikan pakatan pembangkang menafikan majoriti 2/3 Barisan Nasional (BN) di parlimen dan beberapa buah negeri seperti Selangor, Perak, Kedah dan Pulau Pinang terlepas dari cengkaman parti pemerintah sementara negeri Kelantan berjaya dipertahankan oleh PAS, suhu politik negara tidak pernah reda.

Bagi pencinta demokrasi, ini adalah satu perkembangan yang baik. Ini adalah kerana selama ini, Malaysia hanya diperintah dengan oleh BN (dahulu dikenali sebagai Perikatan) dengan majoriti 2/3 di parlimen. Oleh kerana itu, banyak keputusan yang membabitkan kepentingan negara contohnya seperti dasar PPSMI dibuat tanpa ada perdebatan dan perbincangan yang serius di parlimen sebelum dilaksanakan. Setelah lebih lima tahun dilaksanakan, kerajaan terpaksa memansuhkan dasar PPSMI setelah ditekan kuat oleh Gerakan Mansuhkan PPSMI (GMP).

Selepas PRU 12 yang lalu, BN mempunyai pesaing yang kuat yaitu Pakatan Rakyat (ditubuhkan oleh PAS, BN dan DAP selepas Tsunami politik 8 Mac). Perkembangan ini telah memberikan keutungan kepada rakyat oleh kerana kedua-dua BN dan Pakatan terpaksa membuat dasar-dasar yang popular dikalangan rakyat untuk memenangi hati mereka. Ini dapat dilihat apabila harga bahan bakar pernah diturunkan lebih dua tiga kali dalam sebulan oleh kerajaan BN apabila ditekan oleh Pakatan.

Ini adalah diantara keuntungan yang diperolehi oleh rakyat apabila parlimen tidak dikuasai secara mutlak oleh sesuatu parti politik. Jika dikurangkan lagi majoriti parti yang memerintah, sudah pasti lebih banyak imbuhan yang diperolehi oleh rakyat pada masa akan datang.

Kini pemerintah telah mula sedar, tanpa rakyat siapalah mereka. Ini dapat disaksikan bagaimana PM Najib yang kini sedang hangat mencanangkan slogan 1Malaysia, berusaha keras untuk memenangi kembali sokongan rakyat yang telah dirasakan semakin tidak memihak kepada BN.

Tambahan lagi dikala senario politik negara telah banyak berubah. Jika dahulu, pilihanraya kecil (PRK) tidak kira dikawasan mana sekalipun, pasti akan memihak kepada BN. Selepas 8 Mac, BN kalah PRK secara berturut-turut di Permatang Pauh, Kuala Terengganu, Bukit Gantang, Bukit Selambau, Manek Urai dan terbaru di Permatang Pasir.

BN hanya menang di Batang Ai dan tidak meletakkan calon (pertama kali dalam sejarah) di Penanti.

Kerajaan Pakatan yang baru menguasai negeri-negeri seperti Selangor, Pulau Pinang dan Kedah jika terus menerus dibuai mimpi tidak mustahil akan menerima hukuman dalam PRU akan datang. Ketika itu barulah mereka tahu bahawa rakyat tidak mengundi membuta-tuli. Rakyat mengundi untuk perubahan dasar-dasar yang lapuk dan bukannya setia kepada sesuatu parti atau individu secara membuta tuli.

Demokrasi Malaysia yang semakin rancak dan subur kini telah dicemari oleh politik perkauman yang cuba dihidupkan semula oleh kumpulan-kumpulan tertentu bagi memastikan formula pecah dan perintah yang diilhamkan oleh penjajah British dapat terus dihidupkan.

Bagi kelompok ini, jika Malaysia bebas dari politik perkauman, ini adalah satu perkembangan yang merbahaya kerana ianya akan turut melenyapkan peluang-peluang ekonomi yang selaama ini dinikmati mereka. Oleh kerana itu, sesuatu perlu dilakukan bagi memastikan ideologi “politik perkauman” terus hidup dan ini akan memanjangkan usia “politik” kelompok-kelompok tertentu.

Media arus perdana seperti Utusan Malaysia dan TV3, secara konsisten terus-menerus membakar sentimen orang-orang Melayu bahawa mereka sudah kehilangan kuasa. Walaupun apa yang dilakukan oleh Utusan Malaysia dan TV3 ini bercanggah dengan dasar 1Malaysia yang dibawa oleh PM Najib, tidak pula kita dengar Utusan Malaysia dan TV3 diberi amaran oleh PM agar perkara-perkara yang mengapi-apikan sentimen perkauman haruslah dihentikan secara serta-merta.

Ini telah menyebabkan ramai pihak percaya bahawa percubaan untuk menghidupkan kembali api perkauman ini adalah satu gerakan yang terancang. Terbaru, pada 28 Ogos 2009, kira-kira 50 orang yang mendakwa mereka penduduk Seksyen 23 Shah Alam, berkumpul di Masjid Negeri selepas solat Jumaat sebelum berarak ke bangunan SUK Selangor dengan membawa kepala lembu sebagai bantahan terhadap cadangan untuk memindahkan kuil ke kawasan mereka.

Insiden “kurang ajar” ini telah memranjatkan pelbagai pihak oleh kerana perbuatan berarak membawa kepala lembu dan memijak-mijak kepala lembu tersebut adalah satu tindakan yang menghina agama Hindu oleh kerana bagi agama Hindu, lembu adalah binatang yang suci dan dianggap sebagai tuhan.

Lebih memeranjatkan lagi apabila Polis Di Raja Malaysia (PDRM), tidak melakukan apa-apa dan hanya membiarkan sahaja kumpulan terbabit melaksanakan sesuatu aktiviti untuk menghina agama orang lain secara terbuka.

Tindakan polis ini telah menambahkan lagi ketidakpercayaan rakyat terhadap badan tersebut dan tuduhan-tuduhan bahawa PDRM berat sebelah kepada parti politik tertentu semakin dilihat benar.

Permohonan maaf yang dilakukan oleh Ketua Polis Daerah (KPD) Shah Alam, Noor Azam Jamaluddin sehari selepas kejadian tersebut tidak mencukupi tanpa tindakan yang agressif dari PDRM untuk membawa pelaku-pelaku perkara terkutuk tersebut kemuka pengadilan.

Mengapa jika demonstrasi dianjurkan oleh Pakatan atau NGO (badan bukan kerajaan) yang pro demokrasi seringkali berhadapan dengan tindakan daripada PDRM? Dalam beberapa kejadian, PDRM telah menangkap pemimpin-pemimpin Pakatan atau NGO sebelum bermulanya demonstrasi bagi mengagalkannya.

Mengapa dalam kes “perarakan kepala lembu” polis tidak bertindak agressif dan efisyen? Alasan pegawai junior ditempat kejadian sebagai sebab untuk PDRM tidak bertindak pantas adalah alasan yang tidak boleh diterima.

Apakah kerajaan dan PDRM mahu melihat pergaduhan agama di Malaysia berlaku seperti diantara penduduk Hindu dan Muslim di India? Atau seperti apa yang pernah berlaku diantara penduduk Islam dan Kristian di Ambon, Indonesia?

Mempertahankan kekuasaan politik tidak seharusnya dijadikan alasan untuk memusnahkan asas-asas kenegaraan Malaysia seperti hormat menghormati diantara rakyat yang berlainan bangsa dan agama. Apabila bertanding dalam pilihanraya yang perjalanannya bebas dan adil, kita harus menerima hakikat bahawa akan ada pihak yang menang dan kalah.

Kekalahan janganlah dijadikan sebab untuk terus-menerus mengapi-apikan sentimen perkauman sekaligus memporak-perandakan keharmonian diantara rakyat. Jika kerajaan PM Najib serius dengan gagasan 1Malaysia, pelaku-pelaku biadap pada 28 Ogos lalu harus diseret kemuka pengadilan. Tidak perlu gunakan ISA. Gunakan undang-undang yang sedia ada seperti Akta Hasutan untuk memberikan pengajaran kepada mereka.

Jika tidak, benarlah kata ramai pihak bahawa slogan 1Malaysia yang dibawa oleh PM Najib tidak ada bezanya dengan Islam Hadhari yang satu ketika dahulu dibawa oleh Tun Abdullah Badawi.

Apakah nasib Umno sama dengan LDP?

KUALA LUMOUR, Sep 1 — Akhirnya setelah memerintah Jepun selama 54 tahun, Parti Liberal Demokratik (LDP) tumbang pada tangan Parti Demokratik Jepun (DPJ). Di Malaysia Umno yang memimpin Perikatan dan Barisan Nasional telah memerintah selama 52 tahun, sama usia negara mencapai kemerdekaan, adakah ia mampu mengatasi keupayaan LDP?

Dua tahun lagi ialah 2011, begitu hampir dengan pilihan raya ke-13, suatu yang kritikal bagi Malaysia, adakah negara ini kekal memilih Barisan Nasional atau beralih ke Pakatan Rakyat. Jika diukur dengan LDP, maka masanya sampai bagi Malaysia memilih Pakatan Rakyat. Tetapi tidaklah semudah itu, tentunya Jepun adalah berbeza. Ketahanan Barisan nasional adalah lebih ampuh daripada Jepun.

Ini kerana amalan politik Jepun dan Malaysia jauh berbeza. Walaupun LDP memerintah 54 tahun, ia adalah sebuah parti liberal dan demokratik dalam negara yang juga liberal dan demokratik. Jepun dari satu segi telah dipaksa oleh Amerika Syarikat yang menakluk negara itu selepas Perang Dunia Kedua untuk menjadikannya liberal dan demokratik.

Dalam perlembagaan baru yang digubal atas penyeliaan Amerika, Jepun menjadi liberal dan demokratik di mana semua parti politik dibenarkan ditubuhkan kecuali parti berbentuk fasis dan ultra-nasionalis. Maka dalam keadaan ini, parti-parti kiri termasuk Parti Komunis Jepun (JCP) turut dibenarkan ditubuhkan.

Tentulah keadaanya berbeza daripada Malaysia. Negara ini tidak boleh dikatakan liberal dan demokratik dalam erti kata seperti di Jepun dan negara-negara maju yang lain. Memang benar dalam Rukun Negara disebut bahawa matlamat Malaysia antara lain adalah untuk mewujudkan masyarakat liberal dan demokratik, tetapi hakikatnya tidak begitu.

Amalan liberal dan demokratik di Malaysia mempunyai makna tersendiri yang tentu di Barat, termasuk Jepun tidak menganggapnya sebagai demokratik dan liberal. Keadaan ini berlaku walaupun Jepun adalah sebuah negara Asia yang masyarakatnya tidaklah boleh dianggap begitu liberal dan demokratik berbanding dengan negara-negara Barat.

Maka LDP perlu diakui sebagai parti yang berjaya membawa Jepun ke arah demokrasi setelah pemerintahan fasis semasa dan sebelum Perang Dunia Kedua. Selain itu, LDP telah berjaya membawa kemakmuran ekonomi di Jepun setara dengan negara-negara maju lain. Tetapi lebih penting lagi, ia berupaya mengekalkan kuasanya selepas 54 tahun tanpa menekan pesaing-pesaing politiknya dengan pelbagai akta yang tidak bersifat liberal atau demokratik.

Berbeza dengan Malaysia. Negara ini lahir selepas dijajah oleh fasis Jepun. Kalau Amerika yang menawan Jepun selepas kejatuhan fasis memperkenalkan perlembagaan aman dan demokratik, perkara yang sama tidak berlaku di Tanah Melayu, Sarawak dan Borneo Utara. Ketiga-tiga wilayah ini hendak dikekalkan sebagai tanah jajahan Britain apabila mereka memperkenalkan Malayan Union dan Sarawak serta Borneo Utara dijadikan tanah jajahan mahkota menggantikannya daripada menjadi tanah syarikat Inggeris.

Sikap Britain dan penjajah Barat di Asia Tenggara seperti Perancis dan Belanda mendorong pihak komunis antarabangsa di Moscow menjadikan isu penjajahan sebagai laungan perjuangannya bagi menentang sistem kapitalisme dan imperialisme pimpinan Amerika. Maka parti-parti komunis diarahkan bangkit dan memperjuangkan kemerdekaan.

Ia berlaku di Vietnam, Hindia Timur Belanda dan juga Tanah Melayu apabila Parti Komunis Malaya (PKM) bangkit menentang Britain dengan menggunakan senjata di bawah laungan perjuangan kemerdekaan. Atas desakan ini, Britain dan penjajah lain menimbangkan bahawa adalah lebih baik diwujudkan negara-negara merdeka yang menjadi sekutu mereka daripada wilayah-wilayah ini tumbang menjadi komunis.

Maka perang menentang komunis dilakukan di Tanah Melayu dengan nama darurat. Sokongan juga diberikan pejuang-pejuang kemerdekaan yang bukan komunis. Malah sistem politik tradisi yang telah dimansuhkan melalui Malayan Union dipulihkan dan diperbaiki melalui pengenalan Persekutuan Tanah Melayu.

Walaupun asas kepada Perlembagaan Persekutuan Tanah Melayu adalah liberalisme dan demokratik tetapi ia diketatkan dengan kerangka tradisional kerajaan-kerajaan negeri Melayu serta peruntukan-peruntukan yang membolehkan adanya undang-undang yang jauh daripada apa yang disifatkan sebagai liberalisme dan demokratik.

Akta seperti Akta Keselamatan dalam negeri (ISA) dan Akta Mesin cetak digubal daripada suasana menentang komunisme. Maka tidak hairanlah kongkongan adalah kuat terhadap kepelbagaian politik di mana parti-parti kiri, bukan saja PKM diharamkan atau pemimpin-pemimpinnya ditangkap hingga parti lain tidak dapat beroperasi.

Maka vakum politik inilah diisi dengan mudah oleh Umno. Pada awalnya iaitu tahun 1955, pihak penjajah juga tidak tahu sama ada rakyat, iaitu kebanyakannya orang Melayu akan menyokong Umno atau Parti Kemerdekaan Malaya (IMP) pimpinan Datuk Onn. Kedua-duanya tidak banyak berbeza. Perikatan Umno-MCA-MIC adalah tidak banyak berbeza dengan IMP.

Maka apabila Umno menang, parti ini terus memegang kuasa. Walaupun kemudian negara mencapai kemerdekaan, undang-undang, dan lebih penting lagi amalan serta sikap politik yang bersifat mengongkong. Justeru walaupun Tanah Melayu mencapai kemerdekaan pada 31 Ogos 1957, amalan mengongkong ini masih berterusan. Ia diteruskan antara lain kerana masih berlaku darurat. Dalam erti kata bahawa kemerdekaan sebagai kebebasan, hari itu tidak memberi makna besar.

Akhirnya Darurat berakhir pada tahun 1960, iaitu dua tahun selepas kemerdekaan. Terdapatlah tambahan kebebasan. Tetapi peraturan dan banyak undang-undang darurat masih dikekalkan kerana saki-baki komunis masih ada. Yang pasti parti komunis walaupun dalam bentuk damai tidak diizinkan. Ini berbeza daripada Jepun dan India di mana parti-parti komunis mereka bebas. Rundingan Baling yang merupakan kunci kepada kemerdekaan Tanah Melayu menafikan komunis daripada hak menubuhkan parti politik.

Namun begitu, Umno sebagai kerajaan telah menggunakan ISA yang bagi aktivis pembangkang sebagai menekan mereka. Pemimpin-pemimpin PAS, Parti Rakyat dan Parti Buruh telah ditahan di bawah ISA. Politik tekanan ini membuatkan Umno berada dalam kedudukan kuat.

Justeru hari ini walaupun Umno ditekan dengan kebangkitan pembangkang tetapi banyak undang-undang warisan Darurat masih ada. Justeru, Umno tidak akan jatuh secepat LDP. Ini kerana selama ini ia memerintah dengan menolak nilai liberalisme dan demokratik, tidak seperti LDP. Maka pada tahun-tahun mendatang, keadaan lebih kritikal dan peralihan antara sistem satu parti kepada sistem dua parti adalah lebih memeritkan berbanding dengan Jepun.