Who will trade with M'sia: Global probe on Taib a checkmate for Umno-BN?

Back in June, the Malaysian Anti-Corruption Commisson released a statement that Taib Mahmud, the Chief Minister of Sarawak, was under investigation and that it was gathering information on him. This came hot on the heels of the actions by the Swiss Anti-Corruption Agency, which froze Taib’s assets in Switzerland. That was three months ago, and apparently, the sum total of all that the Malaysian authority has done so far.

Since then, the MACC - supposedly modeled after Hong Kong's ICAC - has remained silent on its progress into the investigation launched into the 74-year old Taib, who has been dogged by allegations of enormous corruption against the people of his state throughout his 30-year-odd tenure.

Prime Minister Najib Razak too appears to have forgotten his vow to the Sarawak people made during April state election to persuade Taib to resign his long-standing position as chief minister. The MACC comes directly under his jurisdiction and if the MACC is silent on Taib, Malaysians and the world can guess that the PM is not keen to rock the boat for the Sarawak leader.

With his immense wealth, Taib has often been accused of buying his way into keeping a stranglehold on Sarawak, a state which is crucial to Najib and his Umno-party's ambition to retain their grip on the federal government . As long as Taib stays loyal to the ruling Umno-led BN coalition, only the naive would think that Najib or Umno would stand on moral high ground and demand a full probe into him.

Illicit wealth so huge no public relations can hide

But the Federal Republic of Germany has no such qualms. It has become the latest country, after Switzerland, to announce that it is mounting corruption and money laundering investigations into Taib Mahmud. More countries are predicted to join the list as more governments start their own investigations into money laundering and even the use of international media to hide the obvious truth from an international audience.

It is worth noting the size of Taib's fabled wealth. To be able to draw the attention of so many First World governments is a testament to the brave NGOs, such as the Bruno Manser Fund and Sarawak Report, which have fought tirelessly to tell the world how this Malaysian leader sanctioned by the Umno federal government could allegedly get away with so much illicit wealth at the expense of his people. In fact, so much so that it could be tracked in the global money-laundering trade, which must surely see trillions pass through in daily traffic.

The BBC has already launched an investigation into the media relations company FBC Media that was allegedly paid by Najib and Taib to provide biased programming for consumption by global news audiences. Taib is alleged to have paid in the region of USD5 million to secure favorable programs about himself, broadcast during the period leading to and during the Sarawak state election.

His critics had churned so much negative reports about him, some of his minders feared there could be repercussion as far as his overseas investments were concerned. Not so much as to get Sarawak voters to change their minds about him. For that he had a different solution, which his critics said was the mass vote buying that helped him secure his PBB party's 35 state seats.

Deutsche rocked by implications

The German government latest move would further expose Taib and his empire of businesses that stretch across the globe. These latest investigations include the huge investments into the banking operations of K & N Kenanga Holdings Bhd, where Deutsche Asia Bank and Cahya Mata Sarawak (CMS), which is Taib’s family company, are among the biggest shareholders.

A merger in 2001 between K & N Kenanga, then 30% owned by Deutsche Asia Bank and the controversial finance subsidiary of CMS, Sarawak Securities Sdn Bhd, gained the merged firm the status of Universal Broker from the Securities Commission, allowing it to trade equity, bonds and venture into investment banking.

Separate questions have also been raised over an unusual bond issue brokered in 2005 by Deutsche Bank AG in Labuan on behalf of the State of Sarawak. The deal raised US$800 million through a private company, SGOS Capital Holdings Sdn Bhd, described as 100% owned by the State Secretary of Sarawak. The 10-year bond is backed by the State of Sarawak.

In an email to the Bruno Manser Fund, the Germany’s Finance Ministry has confirmed that it has authorised the German Federal Financial Supervisory Authority,BaFin, to launch a full enquiry into the connections between Deutseche, the country’s leading financial institution, and the Taib family. The email’s explanation of BaFin’s role leaves no doubt that the enquiry will include money laundering:

“The German Federal Financial Supervisory Authority (BaFin), which comes under the Federal Ministry of Finance, is not only responsible for bank supervision but also for the supervision of financial institutions in respect of money laundering legislation”. [Finance Ministry email to BMF last week]

MACC limps behind despite home ground advantage

With the new investigation already underway by the German government and also the one already launched by the Swiss Authorities, it is a surprise that the MACC is still stuck at the ‘gathering information’ stage since June 2011. Especially considering that it has home ground advantage. More than the voices of Malaysians, of which Najib, Taib and Umno are now openly contemptuous enough of to ignore, is the quiet but impactful ntoice taken by the world financial community. This will confirm the shenanigans of the Umno-led government and deal a fatal blow to foreign investor confidence in Malaysia.

Is the MACC stalling for time? And in doing so, is it giving Taib and his advisers more time to think of a way out for himself? Will we now see a move by the federal government to demand a graceful exit by Taib as he promised during the Sarawak state elections? Given that Najib and Umno need Taib more than he needs them, these scenarios are unlikely to materialise.

So, what will happen is a slow death for Malaysia through a quicker path towards bankruptcy as confidence in the country's administration grinds to a halt. lt is a given and to Malaysia's deep shame that both the Umno-led federal administration and the Taib state government will ignore the actions of these foreign financial authorities and continue their 'blind, deaf and dumb' modes.

But for how long can it last. If found guilty, not just Taib but Malaysia will be put on the global blacklist of nations that actively indulge in money laundering. Who will trade with Malaysia then? Checkmate for the Umno-BN!

- Malaysia Chronicle