2 mega deals, Nazir Razak and the Umno elite's rush to cash out

Nazir Abdul Razak has been a busy man these past few months. The youngest son of the second prime minister, Tun Abdul Razak and the brother of the current Prime Minister Najib Razak, Nazir is the go-to man-of-the-hour when it comes to business deals.

Nazir may now be in the shadow of his famous dad and elder brother, but he is no slouch. No one can say is he a self-made banker as he never had to rise from the ranks, but still, his knowledge of the financial world and his management vision is envied by many top professional bankers in the country and few would begrudge his many titles and awards.

In 2006, Nazir was named one of Asia’s 50 most influential figures of the past decade by FinanceAsia. He was also named "Best Top Executive in Malaysia" by Asiamoney for two consecutive years, in 2009 and 2010. He had joined the corporate advisory unit of the Commerce International Merchant Bankers Berhad in 1999, and is currently the managing director and chief executive of CIMB Group, one of the largest financial services providers in Malaysia.

Nazir’s influence on the Malaysian economic landscape cannot be ignored, whether on its own or in connection to his brother. Upon assuming the premiership, Najib’s first move was to increase the service charge for credit card holders. This prompted many of his critics to accuse him of benefiting his younger brother and other banking fat cats on whom the corruption-tainted PM was seen eager to cozy up to. And it is safe to say that Nazir would surely be one of Najib’s unofficial advisers when it comes to money matters in Malaysia.

MAS-AirAsia

In the past weeks, Umno blogs have been heavy with criticism over the recent share swap between MAS and Air-Asia. But it was truly an Umno family affair, with the disgruntlement only about who got more and who got less out of the deal. Even the person who brokered the swap was 'family' - it was none other than Nazir Razak.

His group acted as adviser to the highly controversial deal a month ago, when Khazanah Holdings Bhd traded of 20.5% of Malaysia Airlines’ shares for 10% of AirAsia and agreed to buy another 10% AirAsia X’s shares for an ‘undetermined price’. Given that AirAsia is hugely in debt while the long-established MAS has many fixed assets, it was seen as an uneven deal and MAS staff are protesting it. However, in the BN-controlled media, the process is smartly described as a ‘collaborative agreement’.

The MAS and AirAsia swap raised eyebrows because it does not make much business sense for a large Government-Linked-Company like MAS to allow smaller AirAsia to take on the lead role and lion’s share of the goodies. In its crudest terms, the share swap between MAS and AirAsia was a company take-over, with AirAsia assuming the commanding voice in what is in principle a national asset.

While AirAsia is also Malaysian and its chief Tony Fernandes well-thought of, such generosity from the federal government or to be precise the Finance ministry, of which Najib is in charge, is certainly questionable. Yet, Najib allowed this to happen, ignoring the fact that taxpayers have pumped in billions upon billions through the years to save the ailing MAS. Not only that, he even commanded all other GLCs to stop legal action against former chairman Tajudin Ramli, who is well-known to be a crony of ex-premier Mahathir Mohamad and former finance minister Daim Zainuddin.

As for Nazir, how much did he gain from brokering this deal? The information is obviously confidential, but it paved the way for the next ‘collaborative agreement’ - Sime Darby acquiring a 30% stake in E&O for RM766 million.

Sime-E&O

The Sime Darby- E&O deal already reeks of impropriety when one considers the fact that E&O chairman, Azizan Abdul Rahman, is the husband of Zarinah Anwar, the head of financial industry regulator Security Commission.

Azizan also has ties to Umno-linked businessman Kalimullah Hassan, who has stakes in ECM Libra. And four months ahead of the Sime-E&O deal, ECM Libra had increased its shares to 5.35% or 41.41 million shares after mopping up an additional 3.4 million shares in May.

This has of course not gone unnoticed by the financial media. Even the Umno factions are baying for blood. Did Azizan tell Kalimullah of the impending move by Sime Darby to buy into E&O? In Umno circles, Kalimullah - the former head of the NST group - is a staunch supporter of former premier Abdullah Badawi and his son-in-law Khairy Jamaluddin.

Yes, Umno politics is complex. It is a huge web of deceit with flitting loyalties and the recent slew of giant deals are seen to be nothing less than the Umno elite and their cronies cashing out. And more are on the way.

As for Nazir Razak, how was he involved and what did he gain from this second deal? It was Umno blogger Big Dog who first revealed that Nazir's CIMB was also the adviser to the Sime-E&O transaction. Big Dog also happens to be among those bloggers believed to be loyal to the Mahathir faction in Umno and his tidbit was seized upon by his colleagues to highlight Nazir's role in the deal.

But frankly, as an investment banker, Nazir may only be doing what he is supposed to - which is to look out for fat-cat deals to broker. It is what he is extremely highly-paid to do by CIMB shareholders. Whether these deals were unprincipled and if CIMB should have advised or turned down such questionable transactions are different issues altogether, although if later proven, then surely they would have to pay the legal price.

Chaos as Umno does a Titanic

The point is, two huge and politically-laced deals were rushed through ahead of a looming 13th general election. This is cause for alarm bells to ring loud and clear. Taxpayers, minority shareholders and the general public must sit up and take notice and demand answers.

The Umno elite who have taken brutal advantage of the power they held through the decades to enrich themselves are cashing out. This is really the Last Grab, so to speak. And it is telling that the factions within Umno are also taking the opportunity to use these deals to take pot-shots at each other.

When the MAS-AirAsia was unveiled, the grousing came mostly from those aligned to the Badawi camp. The Tajudin connection to Daim and Mahathir and the enormous disadvantage to MAS were pointed out. Now in another deal that benefits the Badawi camp allegedly through the Kalimullah connection, bloggers on the other side are busy highlighting the shady aspects of this transaction, all in the name of being "cruel to be kind" and nation before faction!

So, Nazir may be disliked for his curt ways but he is not the real target. For the Sime-E&O, which incidentally also involves tycoons with links to Daim and Mahathir, the targets are Badawi and Najib.

Scandal-tainted Najib is already on his way out, but it does not matter if he is helped along the way with a few more body-blows and it would be perfect if his smart-alec banker brother got slapped as well. Also to ensure that Mahathir's choice gets a free path to the throne, which is the Umno presidency, all efforts must also be made to nip in the bud any pretensions from the Badawi camp to try and revive the sunken fortunes of overambitious son-in-law Khairy Jamaluddin.

In the coming days, revelations of more Najib misdeeds and those of his clan, Badawi's family and even the Mahathir faction which includes Deputy Prime Minister Muhyiddin Yassin will surface. Anwar and Pakatan can take a break now, their political enemies are already on auto-pilot. Like the Titanic, pirate-ship Umno is sinking. The 'warlord-ism' and infighting will get really intense in this last lap.

- Malaysia Chronicle