Tajuddin settlement proof political patronage alive and well, says Pakatan

By Shannon Teoh

August 11, 2011

Rafizi said Tajuddin could save more with the deal. — File pic

KUALA LUMPUR, Aug 11 —Pakatan Rakyat (PR) has flayed Putrajaya’s decision to drop all claims against Tan Sri Tajuddin Ramli, calling it proof that Barisan Nasional (BN) is resorting to political patronage to fund its war chest ahead of the next general election.

Opposition lawmakers said the out-of-court settlement was a “scratch-your-back, you-scratch-mine” deal that would allow the former chairman of Malaysia Airlines (MAS) to further reduce an initial RM1.8 billion owed to state-owned debt restructuring firm Danaharta.

“Now instead of the already discounted RM942 million owed to taxpayers, Tajuddin can save even more in exchange for up to hundreds of millions deposited in Umno’s war chest,” said PKR strategy chief Rafizi Ramli.

He told The Malaysian Insider that “Danaharta’s case is watertight so I cannot think of a good reason for the government to settle except to say, you scratch my back, I scratch yours.”

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.

DAP publicity chief Tony Pua also said that “this shows that political patronage is alive and well in the country.”

“This sounds the death knell of Datuk Seri Najib Razak’s New Economic Model and Economic Transformation Programme when the prime minister can allow cronies to get away at the expense of public interest,” the Petaling Jaya Utara MP said.

Pua said cronies were getting away at the expense of public interest.

He added that as 37 other parties were told to drop suits against Tajuddin, a poster boy of the Mahathir-era policy to raise Malay corporate captains on government largesse, total funds including interest lost to the public could be in the tens of billions.

The Malaysian Insider reported today that Putrajaya has directed all government-linked companies, including MAS and Danaharta, to cease all civil suits against Tajuddin.

Documents obtained showed that the Finance Ministry has agreed to settle all outstanding civil suits against the protege of Tun Daim Zainuddin. Tajuddin’s failure to keep MAS in the black led to the wide asset unbundling exercise (WAU) and two business transformation programmes (BTP) in the past decade but the flag carrier remains a loss-making concern.

The Najib administration’s move to settle all outstanding claims against Tajuddin appears to be an attempt to wipe the slate clean in a financial saga that goes back decades to the height of Dr Mahathir’s administration.

Tajuddin had then been a high flyer in the 1990s along with individuals such as Tan Sri Halim Saad but the 1997 Asian financial crisis saw most of them crashing to the ground.

Although PM Najib is expected to call a general election within the year, it has been reported that BN is short of funds to fight polls nationally, after committing its machinery to retain its two-thirds majority in the April 16 Sarawak state election.

The ruling coalition was said to have spent over RM500 million in the closer-than-expected race after party intelligence said that victory was only assured in 25 of the 71 state seats.