How Dr M 'castrated' the MCA & spawned BN's corrupt crony business system

REPRINT Chopped down at the height of his power by what many say was a conspiracy by political enemies, former MCA president Tan Koon Swan says he tries to forgive those who jailed him and forced him to live a life in the shadows for 27 years.

But even so, Koon Swan acknowledges those memories are still fresh in his mind and one cannot help but wonder if his reflections these days include the still-powerful Mahathir Mohamad. The former prime minister has been blamed for seizing on Koon Swan's Pan-El crisis and the MCA's misguided foray into a disastrous deposit-taking venture to further his own political ambitions.

"After doing time in Singapore, and upon returning to Malaysia, I was sentenced to another year of imprisonment. Later (I was) declared a bankrupt over debt matters. All these are still fresh in my mind," Sin Chew had reported Koon Swan as saying.

Koon Swan, who was overseas, was responding to the shock revelations that he had been wrongly prosecuted and jailed by the Singapore government as alleged by its former top public prosecutor Glenn Knight. Koon Swan was slapped with 15 charges of fraud, cheating, stock market manipulation and abetting criminal breach of trust when his Singapore-listed flagship Pan El collapsed in 1985. He was sentenced to 18 months jail and fined S$500,000 (RM1.2 million) upon conviction in 1986.

In his just-released book Glenn Knight: The Prosecutor, Glen had said that on discovering his mistake years later, he felt remorse and apologized to Koon Swan. The admission made the top news in Malaysia and sparked a re-think of what had happened during the 1980s when Mahathir, who was then also the Umno president, was challenged by rivals from his own party and had to struggle to stay in power.

Mixed feelings: A black conspiracy to split the Chinese

Despite Koon Swan's quitting as the MCA president and serving out his Singapore sentence, the Malaysian government was not appeased. Koon Swan was jailed again when he returned and made a bankrupt as well.

Now a low-profile businessman, the 72-year-old Koon Swan said he had mixed feelings when Glenn met up and apologized to him two years ago. He kept quiet about the incident but the recent release of Glenn's book has rehashed the entire episode that many observers of Malaysian politics believed was exploited and played up by former premier Mahathir Mohamad to split the Chinese and keep them disunited.

"Which MCA leader will dare to deny that after Koon Swan stepped down, the party never fully recovered. Team A and Team B politics became a permanent fixture in the MCA and this worked to Mahathir's advantage. He wanted to control who would be the MCA president and indirectly call the shots in the party. For example, who would say it isn't true that current president Chua Soi Lek takes his orders from Umno and not from the Chinese community?" PKR vice president Chua Jui Meng told Malaysia Chronicle.

Jui Meng, a former Health minister and MCA vice president, quit the party to join the Opposition in 2010 after failing to convince the MCA top leadership to withdraw from the Umno-led BN coalition if promised reforms were not forthcoming. In the 1980s, he was a staunch supporter of Koon Swan's and part of the latter's inner circle.

Tumultous 80s: Dr M under pressure to strengthen his grip

Indeed, the 1980s were a tumultuous time in Malaysian politics. Mahathir, now 87, took over the premiership from Hussein Onn in 1981. A ruthless leader, Mahathir made no bones about using all ways and means to stamp his mark on Umno and the rest of Malaysia.

MCA, which was then riding high, basking in the inspiring success and rise of many rags-to-riches Chinese tycoons such as Robert Kuok and Lim Goh Tong, was ripe for Mahathir's plucking.

The MCA and Koon Swan became the sacrificial lambs he offered to impress Umno members and to convince them that it was he who deserved Hussein Onn's vote to rule rather than his rivals Tengku Razaleigh and Musa Hitam.

The 1985-86 recession triggered by plunging world oil and palm oil prices was exacerbated by the financial mess of the Pan-El crisis and Koon Swan's jailing. The resulting uncertain economic picture plus a cowed populace allowed Mahathir to carry out his racial supremacy and 'race re-engineering' experiments.

With the help of former Finance minister Daim Zainuddin and a compliant mainstream media, Mahathir 'created' a special breed of Malay entrepreneurs to compete with the Chinese tycoons. At the same time, he also 'elevated' several non-Malay businessmen by giving them opportunities and access to government contracts.

Mahathir's coterie of cronies included Tajudin Ramli, Halim Saad, Rashid Hussain, Vincent Tan and Ananda Krishnan. Since then, all of Mahathir's cronies and Daim's 'boys' have been dogged by scandal and the powerful duo have been accused of using billions of public money to bail them out at the expense of the ordinary and low-income folk.

Reign of terror: A turning point for the Malaysian Chinese

In Singapore, Koon Swan was charged and jailed when Pan El and two other companies went under after undertaking some S$480 million in debt. In Malaysia, Koon Swan was controversially jailed for a year despite having served out his Singapore sentence. He managed to discharge himself as a bankrupt in 1995.

Pan El and Koon Swan have often been cited as examples of why business and politics should not be allowed to go hand in hand. While that might be true, many of his supporters say he should not have been crucified for what was the 'style' of politics in those days.

Over and above all, they insist that it still did not make it right for Mahathir to move in on the MCA and throw Koon Swan to the wolves in order to achieve his own ambitions. They allege it only paved the way for Mahathir to build an even more corrupt corporate Malaysia, with his cronies the 'new Kings' who called the shots.

A born-again Christian who now dabbles in low-key property development projects, Koon Swan and his second wife Penny Chang came under immense public scrutiny during the Pan-El and MCA days.

His supporters did not dare speak up for him due to Mahathir's ham-fisted use of the Internal Security Act and Sedition laws to jail and silence critics. The awful silence and his own guilty plea demoralized the entire Chinese community. Many turned on him and Penny as result.

"Koon Swan's jailing was a turning point. The entire episode made the Chinese bury their heads in the sand. Mahathir's Ops Lalang in 1987 further terrorized the rest of the country into complete obedience to his wishes and politics. No one wanted to go to jail, no one wanted to rock the boat. Guys like Lim Kit Siang, Karpal Singh were appreciated but only secretly and they suffered too," said Jui Meng.

"I am glad society has changed and Malaysians of all races are now more vocal due to the greater awareness spread by the alternative media and the Internet. If Mahathir were to try his old tricks again, I don't think the people will let him jail them anymore. More likely, they will jail him!"

To those who have "rewritten his life story" : Political comeback?

As for Koon Swan, he may have little choice but to be philosophical about those who have "rewritten his life story".

Speculation is also swirling that he may wish to mount a political comeback. While he is likely to demur, given his age, long-time observers of MCA will say that nothing is ever impossible in the fast-shifting world of politics.

There is also hope in many quarters within the party that Koon Swan will offer himself as an alternative to the scandal-tainted Soi Lek, whose standing has been sharply declining amid criticism of hypocritical politics based on mudslinging against the Opposition while closing a blind eye to the Umno-BN's own wrong doing and corruption.

"What he does next is something for Koon Swan to decide for himself and for him to speak about if he wishes to," said Jui Meng.

Ling Liong Sik, who succeeded Koon Swan and has been condemned for selling several of the MCA's core assets including Multi-Purpose Holdings Bhd for some RM500 million when these were allegedly worth many times more, has said a mere "sorry" would not be enough to pay back for Koon Swan's humiliation and suffering.

Sad to say, while Ling hoped that the Singapore government would follow up with some action, including compensating Koon Swan, his family, and even the MCA which suffered as a result of the court decision, not once did he call for similar redress from Malaysia's Umno-BN government.

As for Soi Lek, he has declined to comment, saying he is not familiar with legal issues.

Malaysia Chronicle  (First published on Sept 12, 2012 under The memories are still fresh in my mind, says Koon Swan: BUT I TRY TO FORGIVE )