PAC asks Putrajaya to reveal Tajudin-Danaharta settlement

By Shannon Teoh

March 06, 2012

KUALA LUMPUR, March 6 — The Public Accounts Committee (PAC) has demanded Putrajaya reveal details of the out-of-court settlement reached between one-time national asset management firm Pengurusan Danaharta Bhd (Danaharta) and tycoonTan Sri Tajudin Ramli.

The Malaysian Insider has learnt that the 13-man panel made a “nearly unanimous” decision to ask the Finance Ministry and Prokhas, its unit which manages Danaharta’s residual assets, to explain the confidential settlement that was reached on February 14.

“We want to give them a chance to explain as this involves RM589 million of our money,” a PAC member told The Malaysian Insider, referring to the outstanding debt owed by Tajudin(picture), who at one time controlled public-listed flag carrier Malaysia Airlines (MAS) and mobile operator Celcom Bhd.

Danaharta and Tajudin ended their drawn-out legal battle when they settled out of court last month after Putrajaya had directed in August all GLCs to drop civil suits against the former protégé of Tun Daim Zainuddin.

But the terms of the settlement remain confidential between the two parties despite a High Court decision in December 2009 for Tajudin to pay Danaharta RM589.14 million with two per cent interest per annum backdated to January 1, 2006.

Politicians from across the divide immediately demanded details of the “out-of-court settlement” between the former MAS chairman and Danaharta, which was set up to take over bad debts during the 1997 Asian financial crisis, made public.

The source also said that “no one disagreed to this demand” and a meeting will be arranged so Finance Ministry officials can explain the move.

Tajudin was a poster boy of Tun Dr Mahathir Mohamad’s now discredited policy of nurturing a class of Malay corporate captains on government largesse. He flew high in the 1990s but fared poorly during the Asian financial crisis.

The former prime minister’s policies have been the subject of scrutiny in recent weeks after the Najib administration decided to settle out of court the outstanding RM589 million debt owed by Tajudin from the loan he took to buy MAS in 1994.

The case between Danaharta and the tycoon arose after he executed a facility agreement on July 13, 1994 to borrow RM1.79 billion from a group of syndicated lenders to finance the purchase by him of a 32 per cent stake in MAS.

However, from 1994 to 1998 he failed to service the original loan, causing it to become a non-performing loan (NPL).

In 1998, Danaharta acquired the NPL from the lenders but Tajuddin also failed to settle his debts to Danaharta until it was in default of RM1.41 billion as at October 8, 2001.

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.

Tajudin alleged in his affidavit that he was directed by Dr Mahathir and Daim in 1994 to buy a controlling stake in MAS to bail out the government.

The businessman claimed that his purchase was a forced “national service”, disguised as an arm’s length commercial deal, because the government wanted to appease the investment community and the public.

Dr Mahathir however denied in his autobiography published last March that he and Daim had forced Tajudin to bail out MAS in 1994 for RM1.8 billion, claiming instead that the tycoon was “elated” over his purchase.