Harapkan pagar, pagar makan padi

In An open letter to Mahathir Mohamad (see MM Online), Johari Abdul Ghani, who is Malaysia's Finance Minister II and also a Fellow of the Chartered Association of Certified Accountants, wrote among many issues about the Forex Loss of RM31.5 Billion under the PM-ship of Mahathir, the following (selected extracts):

2. It is very important for the public at large to understand the difference between speculative foreign exchange activities and orderly management of foreign exchange market.

The speculative foreign exchange activity, to put it in simpler words,is a kind of “gambling” activity with the hope of quick returns.

[...]

6. Because of the scale of these foreign exchange speculative activities losses, the Government was forced to transfer its sharesin Telekom and Tenaga Nasional Berhad to BNM at the nominal value of RM1 per share and these shares were immediately revalued by BNM at RM22.10 per share and RM19.30 per share for Telekom and TNB respectively.

In addition, BNM had to dispose off its Malaysia Airlines shares to a third party at the price of RM8 per share and MISC shares at RM10 per share to Kumpulan Wang Pencen in order to realise the gain.

If these speculative foreign exchange losses were not real, the Government would not have taken these drastic actions in order to cover the BNM losses at that material time.

The above transactions were humongous losses to the Malaysian public, because when one talks about 'government shares' and 'BNM's shares', those shares actually belong to us, the general Malaysian public.

And the losses were as a result of ... gambling ... with public money-assets.

Now, Johari Abdul Ghani is Malaysia's Finance Minister II and of course would/could be accused of political bias against Mahathir.

But the scandal regarding Makuwasa would not be, because Mahathir himself admitted it. A week ago I penned Stricken by plagues of Egypt? in which I said:

... let us talk about (1) the Maminco-Makuwasa scandal.

But why was that Maminco scheme called Maminco-Makusawa intead? What was the Makuwasa part of it.

Let us hear from WTF, which states:

Malaysia used to be the world’s leading tin producer accounting for 31% of the world’s output. It was a major contributor to the country’s economy providing employment for more than 40,000 people.

In 1985 the world tin market crashed with the price plunging by 50%. Many tin mines in Malaysia had to close as it was no longer economical to operate the tin mines.

One of the factors that contributed to the collapse of the tin market is the ill-fated attempt by the Malaysian government to corner the tin market and to prop up the tin price.

In this crooked scheme, a RM2 company Maminco Sdn. Bhd. was set up and was used to secretly buy tin future contracts and physical tin in order to push up prices on the London Metal Exchange.

To finance its covert activities, Maminco obtained financing from Bank Bumiputra – naturally. At one point, this RM2 company was borrowing astronomical amounts from the bank – as much as RM1.5 billion.

It's those unfair plagues sent against me 

With that introduction let's leap to the Makuwasa scandal.

Undertaking this Maminco scheme is already bad enough. But instead of admitting their mistake, Mahathir and his merry bandcooked up another scheme to hide the losses incurred by Mamincofrom the Malaysian public. Another RM2 company called Makuwasa was set up.

Continuing - The idea was new shares reserved for bumiputras allocated to EPF were diverted to Makuwasa at par value! 

Can you believe this? These cheaply acquired shares could then be sold for a profit at market price! Instant profits made by Makuwasa can then be used to cover the Maminco’s losses. 

Effectively, Makuwasa is used to raid the savings of Malaysians to help pay for Maminco’s losses!

In 1986 Mahathir publicly admitted that Makuwasa was created to recoup the government’s losses from the Maminco debacle and to repay its loans to Bank Bumiputra.

Memang harapkan pagar, pagar makan padi. The Malays in general were tyhe BIG losers, having a big chunk of their assets (shares reserved for them) pilfered or stolen to cover up someone's speculation (gambling) mistake.

Which do you think had been the worse, the theft in the Makuwasa scandal or the selling off (transactions) of public-owned shares (Telekom, Tenaga Nasional Berhad, MAS shares) held in trust by the government and BNM?