EPISODE 13: One disaster to cover another disaster (part 1)

In the RM13.46 billion Statement of Claim that former MAS Executive Chairman Tan Sri Tajudin Ramli brought against Danaharta, he declared thatthe then Prime Minister Tun Dr Mahathir Mohamad had instructed him to acquire a 32% stake in MAS to bail out Bank Negara, which had experienced massive losses in foreign exchange.

THE CORRIDORS OF POWER

Raja Petra Kamarudin

Najib must give a frank and honest answer whether the RM589 million out-of-court settlement of Tajudin Ramli’s debts is proof that Malaysians today are  still paying for the RM100 billion Mahathir  financial scandals

Lim Kit Siang (25 February 2012)

Malaysians are entitled to a frank and honest answer from the Prime Minister, Datuk Seri Najib Razak, whether the RM580 million out-of-court settlement of Tajudin Ramli’s debts is proof that Malaysians today are still paying for the RM100 billion financial scandals perpetrated in the 22 years Tun Dr. Mahathir was the Prime Minister. And if so, they want to know of other such instances.

More and more Malaysians are asking this question as there is total lack of transparency, accounting, explanation, or details for the RM580 million out-of-court settlement with government-linked corporations (GLCS), raising the question whether the Barisan Nasional government has achieved another entry in the Guinness Book of Records in being the first government in the world to surrender a court judgment for RM580 million.

One big controversy among Malaysians today is who is to be believed, Mahathir or Tajudin Ramli about the “double bail-out” of MAS.

Tajudin had claimed through his affidavits 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. This has been denied by Mahathir.

Four reasons have been advanced by those who believe that Tajudin’s claims are more credible, viz:

(1) Tajudin would be out of his mind to buy at RM8.00 something trading at RM3.50 then.

(2) Tajudin would do so if he were protected by an overriding agreement as he claimed.

(3) The overriding claim appears credible because the government did subsequently buy back from him at twice market price which the government was not otherwise obliged to do so.

(4) Affidavits are sworn statements to court and false statements constitute perjury, a punishable offence.

As Prime Minister, Najib would know what actually transpired and Malaysians want him to tell the country the truth, whether it is Mahathir or Tajudin who is lying and whether criminal action would be instituted against Tajudin if he had committed perjury in his affidavits.

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That was what Lim Kit Siang said on 25 February 2012.

Two weeks ago, on 13 February 2012, Malaysia Today came out with EPISODE 6: How Malaysia Today ‘lied’ three years ago.

I had anticipated that Lim Kit Siang would jump and go for the jugular. This is because in 1994, almost 18 years ago, Lim Kit Siang was the very person who exposed a massive financial scandal that still holds the Malaysian Book of Records -- or the Guinness Book of Records, as Lim Kit Siang would say.

The financial scandal, which Lim Kit Siang was referring to, happened in 1992 and 1993. And no one except for a handful of those who walked in the corridors of power knew about this well-guarded secret until Lim Kit Sang raised the matter in Parliament. Hence we must revisit this 20-year old scandal because that particular matter is connected to the MAS (Malaysian Airlines) fiasco, which two weeks ago reached an ‘out-of-court settlement’ at a great loss to the Malaysian taxpayers.

Most Malaysians have forgotten the earlier episode of two decades ago -- or somehow do not see the link between that old episode and the current MAS scandal. Some I spoke to were not even aware of this scandal because at that time there was no Internet. Well, allow Malaysia Today to refresh your memory and explain how the issue of February 2012 is linked to the issue of 1992.

Today, we will first talk about the MAS issue.

In the RM13.46 billion Statement of Claim that former MAS Executive Chairman Tan Sri Tajudin Ramli brought against Danaharta, he declared that the then Prime Minister Tun Dr Mahathir Mohamad had instructed him to acquire a 32% stake in MAS to bail out Bank Negara, which had experienced massive losses in foreign exchange.

In other words, Tajudin was just doing ‘national service’ on the instructions of Dr Mahathir. And the whole objective of this exercise, said Tajudin, was to cover Malaysia’s massive forex losses. Hence, you can’t look at this MAS multi-billion disaster in isolation. You need to look at it in the context of the earlier scandal, the forex disaster, which the MAS exercise is supposed to cover.

The Chinese call this digging a hole to get the earth to cover another hole. Only that each new hole you dig gets bigger than the earlier hole you are trying to cover. (Don’t you just love Chinese sayings?)

Nevertheless, the MAS exercise itself was a disaster. Hence, the MAS exercise was not a solution to a problem but a problem as well. So now we had two problems, both running into billions of losses of hard-earned taxpayers’ money.

But that was merely the civil matter, which has now been settled out of court and is money down the drain. There is still the criminal matter, which the powers-that-be has filed under NFA (no further action). It appears like the criminal case too has been ‘settled out of court’.

According to the police investigation, there is certainly something criminal that went on in MAS resulting in, according to the police, a RM8.8 billion liability for the airline company. This means there are TWO losses involved here. First was the loss on the government buy-back of the MAS shares at DOUBLE the market price and second was the operational loss suffered by MAS itself.

Now, what many may not be clear about is that the civil suit was on the shares while the criminal investigation was on the shenanigans in MAS that resulted in the RM8.8 billion fiasco. So they are actually two separate issues but both involving massive losses to the Malaysian government -- meaning, of course, the Malaysian taxpayers.

What is even more interesting and which is the main issue here, the police investigation also revealed that there was collusion between the Police and the Attorney General’s Chambers (AGC) to not prosecute Tajudin and to NFA the case.

Now, this is the Director of the Commercial Crime Investigation Department (CCID) who is alleging that the Police and the AGC are colluding to cover up a crime -- a crime, according to Tajudin in his Affidavit to the court, done on the instructions of Dr Mahathir.

Was this why they had to NFA the criminal case in 2007 and seek an out-of-court settlement on the civil case two weeks ago? Was it to ensure that the real purpose of the MAS exercise would not become public knowledge? Was it so that Malaysians would never find out that the RM8.8 billion MAS hole was to cover an even bigger RM30 billion forex hole that was created back in 1992 and 1993?

And remember one thing: RM30 billion 20 years ago is equivalent to RM100-RM150 billion today.

This was what the Director of the CCID said in his investigation report:

And this was what he said in his letter to the then Prime Minister, Tun Abdullah Ahmad Badawi.