Mahathir past cascading into the Najib present – powerful reasons for full accounting for the RM100 billion “black hole” caused by Mahathir’s financial scandals

Recently, the past has fast cascaded into the present – or to be more specific, the Mahathir past cascading into the Najib present.

Today the High Court in Kuala Lumpur fixed March 5 to decide whether to end the multi-billion ringgit legal battle between Malaysian Airlines (MAS) and Tan Sri Tajudin Ramli, by striking out MAS’ mega claims against Tajudin as well as his RM500 million counter-claim against the government and the national carrier.

Tajudin has been entangled in a complicated series of expensive suits, countersuits and appeals with various parties arising from his failure to service a billion ringgit loan he took to purchase a major stake in MAS in 1994.

Tajudin was the executive chairman of the airline from 1994 to 2001.

In 2002, MAS lodged its first police report against Tajuddin, accusing him of allegedly causing the flag carrier to suffer losses in excess of RM8 billion.

According to a report to the Anti-Corruption Agency, a major contributor to the record losses under Tajudin was the relocation of MAS’s cargo operation in Amsterdam and Frankfurt to a single hub in Hahn, Germany, where the airline was forced to enter into a disadvantageous aircraft lease contract with a company, which was later linked to Tajudin’s family.

The new cargo hub operation had caused MAS to suffer losses of between RM10 million and RM16 million a month before the project was terminated after the government regained control of MAS in 2001.

The termination resulted in a RM300 million arbitration claim against MAS by the company.

MAS has had a turbulent past decade after the government bought back the airline from the former corporate high-flyer at RM8 per share or about double the market price at the time. The airline was at the time saddled with a debt reported to be RM9.5 billion.

In 2009, Danaharta and two of its subsidiaries won a RM589.143 million suit against Tajudin. The case arose after the tycoon borrowed RM1.792 billion from a group of syndicated lenders in1994 to purchase a 32 per cent stake in MAS.

However, from 1994 to 1998 he failed to service the original loan, causing it to become a non-performing loan (NPL).

In 1998, Danaharta acquired the NPL from the lenders but Tajudin also failed to settle his debts to Danaharta until it was in default of RM1.41 billion as at October 8, 2001.

As part of a settlement agreement, Tajudin was to pay RM942 million in four instalments over three years and that he was permitted to redeem his charged shares at a minimum price per share.

Tajudin, however, defaulted in the payment of the quarterly interest payable under the settlement agreement and on April 27, 2002, the plaintiffs terminated the settlement agreement and demanded RM1.61 billion from him.

On April 29, 2002, Danaharta, together with its subsidiaries Danaharta Urus Sdn Bhd and Danaharta Managers Sdn Bhd, sold part of the charged shares consisting entirely of Technology Resources Industries (TRI) shares at RM2.75 per share, resulting in total proceeds of RM717.39 million.

As at December 31, 2005, the amount outstanding was RM589.14 million and on May 11, 2006, Danaharta and the subsidiaries commenced action to recover the money. The national asset management company won its case against Tajudin in 2009.

But the ex-MAS chief filed a counter suit claiming RM13.46 billion from some 22 parties and individuals.

Tajudin alleged, in his affidavit, that he was directed by former Prime Minister Dr Mahathir Mohamad and former Finance Minister Tun Daim Zainudin in 1994 to buy a controlling stake in MAS to bail out the government.

Tajudin had claimed that former premier Mahathir had made him buy MAS to help bail out Bank Negara after the central bank suffered massive foreign exchange losses due partly to speculation in foreign currency markets as a “national service” with an “Overriding Agreement” to indemnify him against any losses suffered.

Although Tajudin’s claim has been denied by Mahathir, the former Prime Minister’s rebuttal has little credibility.

Last August, Putrajaya intervened and commenced action to put an end to the controversial legal battle by ordering all suits against Tajudin to be dropped.

On February 14, Danaharta and Tajudin reached “out-of-court settlement”, the terms of which remain confidential between the two parties, where all suits pertaining to the RM589.14 million that Tajudin was ordered to pay to the firm in 2009, would be dropped and Tajudin agreed to withdraw a total of 27 appeals, 11 against Danaharta.

The question, whether the RM580 million out-of-court “renunciation” of Tajudin’s debts is proof that Malaysians today are still paying for the RM100 billion financial scandals perpetrated in the 22 years of Mahathir premiership, has been asked but not answered.

There is now the seccond question – whether a settlement of the multi-billion ringgit litigation between MAS and Tajudin, with the striking out of their mutual claims against each other, would also be in consequence of the same factors and forces resulting in the government “surrender” of the RM580 million court judgment against Tajudin?

It is indeed time to revisit the RM100 billion “black hole” created by Mahathir’s financial scandals in his 22 years of premiership, especially if the present generation of Malaysians are to pay for the sins of Mahathir’s past premiership.

There can be no better start to revisit Mahathir’s financial scandals in his 22 year as Prime Minister than to refer to Chapter 6 “Scandal, What Scandal?” of Barry Wain’s “Malaysian Maverick – Mahathir Mohamad in Turbulent Times”, which started with the following two paragraphs:

“Dr. Mahathir’s administration took office in 1981 with the slogan bersih, cekap amanah – clean, efficient, trustworthy. Almost immediately, however, it became embroiled in financial scandals that exploded with startling regularity, some of them truly spectacular. A few were of an order of magnitude that could have bankrupted most developing countries. But tropical Malaysia was generously endowed with natural resources, notably offshore hydrocarbon deposits, and commanded by a leader committed to rapid development. The expanding economy absorbed the shock of much of the dissipated wealth, and where necessary, the gaps left by the missing billions were plugged with the proceeds of oil and gas exports.

“Almost all the scandals involved the government directly, or senior officials and businessmen closely connected to UMNO. In some cases, impropriety – whether illegal or merely ill-advised – was officially authorized or condoned for an allegedly higher purpose. Public funds were stolen in various ways, or simply poured into a big black hole in the name of ventures that bordered on the reckless, improbable or criminal. The extent of the losses – and in some cases the way the money disappeared – was never fully documented. Dr. Mahathir’s administration generally did not hold Malaysians accountable for the financial disasters, and often laid the blame on others. By the early 1990s cynics remarked that it had been a good decade for bad behavior, or a bad decade for good behavior.”

In this chapter, Barry Wain estimated that Mahathir’s financial scandals would have created ”a big black hole” of RM100 billion.

With the Mahathir past fast cascading into the Najib present whether because of the MAS “double bail-outs” triggered by the 1992/3 RM30 billion Bank Negara forex scandal, they are all powerful reasons demanding full accounting for the RM100 billion “black hole” caused by Mahathir’s financial scandals of 22 years.

  1. #1 by Godfather on Monday, 27 February 2012 - 4:52 pm

    Dream on, Kit…..the powers to be have decided that there will be no further legal action. Both parties will scrap their legal suits against each other. And little piggy squeals all the way to the bank.

  2. #2 by monsterball on Monday, 27 February 2012 - 5:22 pm

    So many multi billions scandals.
    Charge one…all have to be charged.
    It has to be settled….as planned.

  3. #3 by monsterball on Monday, 27 February 2012 - 5:28 pm

    If Malaysians want all truths..nothing but the truths…change of government is the only way…to reveal all.
    So many solid evidences in so many ripped off by the hundreds of millions…each case..and yet not one Minister like Rafidah….Thamy Chick..Najib…Mahathir…been charged on corruptions at all.
    The only time one powerful man charged for corruptions and went to jail was the late Harun Idris.

  4. #4 by Jeffrey on Monday, 27 February 2012 - 5:31 pm

    One have ask the basic question: what is Danaharta for? Promulgated under Danaharta Act by Mahathir’s admin in 1988 it was a response to 1997 attack on our currency that caused corporate distress & collateral values to slump. Large companies & banks (bumi controlled) would fail or be taken over by foreigners if no institution such as Danaharta took over the bad loans/assets to free these companies’ and banks’ balance sheets so that they could go on road to recovery. For that Danaharta has vast powers. It could override the contractual arrangement between borrowers and banks; suspend borrowers’ right to action etc It is justified by the importance of Danaharta’s national mission aimed at public interest- to take over distressed assets, nurse them back to financial health or otherwise to maximise maximise recovery values of collateral/assets vested in Danaharta.

  5. #5 by Jeffrey on Monday, 27 February 2012 - 5:35 pm

    Though the Govt is shareholder of Danaharta, the question is : can the govt stop Danaharta from taking or enforcing legal recourse, for which in some cases it has obtained legal judgment against a borrower like Tajuddin? To do so, would not the govt be considered acting contrary to the Danaharta Act and its legislative intent??? If it wants to load/burden public coffers with this hole from Tajuddin’s debt then it shouldn’t have Danaharta take over his debt from the banks in the first place, come what may. Let the banks take the loss: why were they earning Tajuddin’s interest for, without the downside? Now if you ask Danaharta to take over these debts from the bank then you shouldn’t stop Danaharta from recovering the values from the assets vested/acquired by it by powers under Danaharta Act. To do so violates the whole purpose of that Act: there’s nothing in Danaharta Act that say expressly govt/minister can stop Danaharta from pursuing recourse; there’s nothing in Danaharta’s M&A to say that the govt as shareholder can direct it to act or desist from acting in manner contrary to Danaharta Act.

  6. #6 by yhsiew on Monday, 27 February 2012 - 5:43 pm

    Pakatan, if voted into power, must not forget to conduct RCIs to recoup all the wealth plundered by these culprits.

  7. #7 by sheriff singh on Monday, 27 February 2012 - 5:46 pm

    First item on the agenda when PR comes to power: RCI, RCI, RCI, and get to the bottom of all these losses.

    Find out who benefited, who got the RM 100 BILLION.

  8. #8 by cseng on Monday, 27 February 2012 - 6:05 pm

    Monsterball, my though exactly. If MACC is not sleeping on their job, they must be part of the plot. Najib today say: “only if BN get 2/3, more bites for MACC”, what is this? Has Jib Go forgot BN is the gov of the day, or is Umno’s habit to hold voters for ransom.

    All the while we expect BN to convince voters they have given MACC more bites and deserve the votes. So, it is other way round, we have to give votes first, then only, you will give MACC more bites. This is kick-back mentality, corrupt mentality, we just can not agree with this.

  9. #9 by undertaker888 on Monday, 27 February 2012 - 6:08 pm

    O mamak, mamak the evil
    He was entrusted to do good but he chose against the people’s will
    O mamak you have single-handedly brought us ill
    Now the rakyat are paying still

    O mamak you unrepentant bull
    You took us for a long ride and made us your stool
    We the rakyat are no longer a fool
    The hour is up O mamak for you to be totally screwed.

  10. #10 by Bigjoe on Monday, 27 February 2012 - 6:09 pm

    Ask Najib to investigate Mahathir? Now when he has completely lost his freaking mind by asking voters to give him 2/3 so that he can give MACC more power?. Finally Mahathir’s perversion has finally mess up his head so bad, he completely lost it.

    Since when have the opposition ever stood in the way of more power and accountability of MACC? He can do it tmrw if he want to with the opposition help..

    Najib is inadvertantly reveal he so desperate for help within his party, he has completely lost it by asking help from the voters against his own party..

  11. #11 by cseng on Monday, 27 February 2012 - 6:14 pm

    Is it true, people like Tajudin, Sharizat’s husband can not be charged, because they will throw ‘shit’ to the fan and many behind them get a slide of it…. that is very dirty and stinky…

  12. #12 by Godfather on Monday, 27 February 2012 - 7:57 pm

    Najib is woefully lost. He’s so paranoid about losing, and he tries to be everything to all men. He won’t take a position. He supports everybody – from liberals to conservatives, from extreme left to extreme right. This country is in serious trouble.

  13. #13 by Godfather on Monday, 27 February 2012 - 8:13 pm

    He’s so scared of upsetting Mamakthir, Daim, Shahrizat, even Tajuddin..he supports Perkasa, Perkida, he supports the Church, the Hindu temples, the Chinese schools, the Malay schools…truly a man for all, except that he is driving the country over the cliff.

    We live in dangerous times. Najib in fact has developed the bo-hood syndrome, worse than the original bo-hood guy from Penang.

  14. #14 by Godfather on Monday, 27 February 2012 - 8:34 pm

    You want RCI on Sabah ? You want declassification of correspondence between Mamakthir and Ehud Barak ? No problem. You want more scholarships ? You want meritocracy ? No problem. You want competitive tenders ? You want transparent evaluation ? No problem.

    Except that they will never happen….

  15. #15 by jus legitimum on Monday, 27 February 2012 - 11:01 pm

    Malaysia so well endowed with natural resources , a favourable climate all year round,free from calamities like earthquakes,it should have become a high income state joining the ranks of the four Asian Tigers a long time ago.Corruption,mismanagement,abuse of power,cronyism,nepotism,extravagance and wastage committed by crooks vested with powers have turned this country into one where half of the country’s population have to apply for the 500 ringgit special aid.

  16. #16 by Jeffrey on Monday, 27 February 2012 - 11:08 pm

    Its strange that Ah Jib Gor’s pledge to expand MACC’s powers to appoint officers is conditional upon BN winning parliamentary 2/3 in next GE. Giving powers to MACC is to enable it to more effectively curb corruption: what has that got to do with BN getting 2/3 or not? How does one construe the intent behind such a proposal? Is it to give the signal to rakyat that if BN wins but with a simple majority -without rakyat’s support sufficient to procure 2/3 majority- there’s no need for BN to expand MACC’s powers to fight corruption? Or is it an indirect incentive to MACC to be more assiduous in going all out for PR’s assemblymen’s infractions in the hope that sufficient of such assemblymen will be bogged down with investigations thus sapping their energy to contest or campaign the coming the GE, which will assist BN in getting that 2/3? It is hard to divine the intent behind such a proposal. I would have thought that it should be the other way around- that the govt gives MACC the requisite powers now to showcase its political will to fight graft so as to improve BN’s image and chances of procuring 2/3 parliamentary majority, instead of subjecting the empowerment of MACC to such a condition!

  17. #17 by boh-liao on Tuesday, 28 February 2012 - 12:21 am

    Wouaaa wouaaa wu wu wouaaaaaaaaaa!! Rakyat CRYING loud!
    RM100 billion divided among each rakyat would b a lot of $$$ 4 each rakyat, all lost bcos of MMK, dat blardi useless crook, liar

  18. #18 by boh-liao on Tuesday, 28 February 2012 - 2:56 am

    We must C H A N G E d gomen 4 a better future, ABU
    Please watch n ask rakyat 2 watch

  19. #19 by dagen wanna "ABU" on Tuesday, 28 February 2012 - 8:46 am

    100billion lost to or due to dr mamak. Another 1,000billion lost due to illegal transfer of money out of the country by umno ppl. And not to mention all the other losses due to umno’s corruption, excesses, abuses or incompetency like leaky roofs, collapsed bridge, pkfz (even this I suspect umno is behind that mca facade) and many many more. The grand total of umno’s cock-ups could well be (wot? my guess) 2000billion!!?? 2trillion.

    Yes ppl, it is massive. Astronomical. Then again umnoputra is the supreme race of the universe. And so for them nothing less than astronomical will do.

    Jib Jib Boleh!

  20. #20 by sotong on Tuesday, 28 February 2012 - 9:57 am

    These people are in the business using public fund and taxpayers’ money for opportunity to make a lot of money.

    In position of trust, power and influence…..they don’t care!

  21. #21 by Bunch of Suckers on Tuesday, 28 February 2012 - 10:51 am

    Suckers always suck! They suck here and there in Bolehland politics! When these suckers will go away?

  22. #22 by monsterball on Tuesday, 28 February 2012 - 11:11 am

    Has the sign of delaying 13th GE reach new levels?….getting closer and closer towards a plan by Najib…not to have it at all.

  23. #23 by monsterball on Tuesday, 28 February 2012 - 11:22 am

    The whole country is fed up with corruption…stealing country’s wealth by the billions each years….and those vampires must suck every sen they can get from working folks too.
    Diverting attentions is the cunning art they keep applying. Religion is tested with most stupid reasons.
    NOW….PR leaders are the main targets.
    What are all these messages mean?
    It’s telling Malaysians vote for UMNO b and Najib…or else there will be trouble.
    It’s provocations in another level.
    All past provocations trying to make Malaysians angry.. failed.
    Now is focusing on PR leaders.

  24. #24 by jus legitimum on Tuesday, 28 February 2012 - 4:04 pm

    In today’s Sin Chew,it was reported that Singapore’s percapita income is about US 60000 a year or US5000 a month and it is the 3rd highest in the world after Qatar and Luxemberg.What is ours? In 1965,we were on par with each other.Now the ringgit has shrunk to 2.5 to 1 sing dollar.Malu,malu,malu,betul,betulbetul.

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