Tajudin-Danaharta settlement to cover up for Dr M and Daim, warns Anwar

Opposition Leader Anwar Ibrahim warned of a possible cover-up after Prime Minister Najib Razak's government agreed to an out-of-court settlement with fallen tycoon Tajudin Ramli, a protege of former finance minister Daim Zainuddin and who also has links to former premiers Mahathir Mohamad and Abdullah Badawi.

“My concern is that they are afraid that with Tajudin proceeding with the case, he will expose corruption. The deals which may involve the prime minister and finance minister at the time,” Anwar told reporters on Thursday.

The Najib administration's decision to settle out of court comes after a lengthy legal dispute following a High Court decision in December 2009 ordering Tajudin to pay Danaharta RM589.14 million plus two per cent interest per annum, backdated to January 1, 2006.

Indeed, Anwar's statement seems credible given that in August 2011, the Najib administration had suddenly instructed all the government agencies including national asset manager Danaharta to freeze their legal suits against Tajudin.

In his affidavit, Tajudin also alleged that it was Mahathir and Daim, who directed him in 1994 to buy a controlling stake in MAS for RM1.8 billion to bail out the government. Tajudin also claimed that the purchase was “national service”, but Mahathir has denied it.

Daim's Boys

Tajuddin was the chairman of Malaysian Airline System or MAS from 1994 to 2001. He was one of a coterie of Malay tycoons given special privileges by Daim and Mahathir, who supposedly wanted to create a special speed of Malay entrepreneurs to crimp Chinese dominance in corporate Malaysia.

But soon after the plan was implemented, it succumbed to massive corruption, with critics pointing the finger at Mahathir and Daim as benefiting the most from the alleged "Umno money-making schemes". Another of the 'Daim's Boys' to have suffered losses, requiring massive bailouts was Halim Saad, who built the North-South Expressway.

Apart from Danaharta, other affected parties that have been forced to given up legal action against Tajudin include 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.

“This is to inform you that the government of Malaysia and the Finance Ministry has agreed to settle all civil claims against  Tajuddin Ramli 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,” Nazri Aziz, minister in the PM's office had announced.

AirAsia-MAS swap

Nazri's shock statement to suspend litigation against Tajudin came on the back of a secrecy-shrouded MAS-AirAsia deal, wherein national investment firm Khazanah agreed to swap a 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.

The share swap was announced after Munir Majid resigned from MAS on July 31, 2011. The outspoken Munir had been the MAS chief since 2004, and had initiated a legal suit against Tajuddin. MAS also lodged a 7-page complaint to the Malaysian Anti Corruption Commission. In the report, the airline alleged that Tajudin was responsible for racking up as much of RM8 billion in losses due mainly to several chunky deals that favored his family and proxies. It also alleged that one of Badawi's brothers had improperly benefited from striking a deal with the MAS catering arm.

Malaysia Chronicle