August 11, 2011
MAS-AirAsia Deal: Reprieve for Tajuddin Ramli?
Written by Wong Choon Mei, Malaysia Chronicle
Amid growing concern that Malaysian taxpayers have again been taken for a ride by the UMNO elite, Opposition leader Anwar Ibrahim ticked off Minister in the Prime Minister’s Department Nazri Aziz for allegedly instructing Government-Linked-Companies or GLCs to withdraw lawsuits filed against for MAS chairman Tajuddin Ramli.
Among the affected GLCs are Telekom Malaysia Bhd, Naluri Corporation, Celcom (M) Bhd, Atlan Holdings Bhd, Pengurusan Danaharta Bhd, Malaysia Airlines and Duta Skyline Bhd. These firms had sued Tajuddin for losses suffered by MAS amounting to billions of ringgit, and there is concern that with a stroke of pen, Prime Minister Najib Razak’s administration was bailing out fallen tycoon Tajuddin.
“Such orders should have come from the Minister of Finance and not Nazri as this concerns GLCs. The government said it had a strong case against Tajudin involving billions of ringgit in filing the suit. It is a disturbing,” Anwar, a former Finance minister, told reporters on Thursday.
The UMNO elite
UMNO is the dominant party in the BN coalition, providing all 6 of the country’s prime ministers since 1957. A party of over 3 million members, it operates on a largely feudalistic style with power tightly held in the hands of a few elite families, including Najib’s and former premier Mahathir Mohamad’s.
On the back of this latest escape route for Tajuddin is the secrecy-shrouded MAS-AirAsia deal, wherein national investment firm Khazanah swapped its 20.5 per cent stake in MAS for 10 per cent in AirAsia.
Analysts have been mixed in their responses, with some insisting it benefited AirAsia and some who say it was a bailout for MAS. Whichever it is, the deal lacked transparency and shares in AirAsia plummeted, while MAS stock shot up more than 18 per cent.
Given the huge complexity of the swap, it is not clear yet who really benefited but already many say they smell corruption and improper benefits in the deal praised as a “very good idea” by Mahathir, former Trade minister Rafidah Aziz, and Najib himself. There is speculation that the ‘spoils’ have already been carved out and agreed on by these UMNO bigwigs.
It is also telling that Munir Majid, the former MAS chairman who initiated the suit against Tajuddin, had resigned effective July 31, 2011. He was MAS chief since 2004. Meanwhile, Anwar has appealed to the authorities, including the Securities Commission, to sieve through the transaction to ensure utmost transparency.
“More importantly, the deal raises the question as to what is the fate of the GLC Transformation Programmes that had been launched by the Prime Minister Najib Razak with much fanfare and wastage of millions of the rakyat’s money. And is the government specifically admitting that the so-called successful turnaround of MAS was a mere charade? The Prime Minister must be held accountable for misleading the rakyat on this,” said Anwar in a response to the swap.
“This deal also raises fundamental issues of transparency because of the secrecy in which it was shrouded. In this regard, the Securities Commission must investigate the possibility of irregularities including insider trading of the shares of both entities.”
A news portal had reported earlier on Thursday that Nazri had issued letters to the GLCs, informing them that the Finance Ministry had agreed to settle out-of-court all outstanding civil suits against Tajuddin.
“This is to inform you that the government of Malaysia and the Finance Ministry has agreed to settle all civil claims against Tajuddin Ramli (left) and others to be withdrawn immediately in view of the fact that the government and the Finance Ministry have agreed that the said cases will be settled out of court. For your information the government has given me the mandate to act for the government in this matter,” Malaysian Insider had quoted Nazri as saying.
It is believed that both the BN government and the GLCs will negotiate for a global settlement with all the parties involved in the Tajuddin lawsuits. Some of the matters which had come up before Federal Court judge Md Raus Shariff on Thursday have been deferred to September 29 for case management pending settlement.
Tajuddin is one of the coterie of Malay tycoons given special privileges by Mahathir who said he wanted to create a special speed of Malay entrepreneurs to crimp the Chinese dominance in corporate Malaysia. But soon after it was implemented, the plan succumbed to massive corruption, with many pointing the fingers at Mahathir and his finance minister of that time Daim Zainuddin as benefiting the most from the program.
When asked about the MAS-AirAsia deal, Mahathir not only insisted it was a “very good idea”, but that “AirAsia can learn about the experience of MAS and MAS can learn how to reduce costs as done by AirAsia.”