Sunday, 09 June 2013 12:19Mahathir's dirty legacy seen in Halim Saad suit - Pakatan Rakyat MPs

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Tycoon Tan Sri Halim Saad’s massive legal suit against the government underlines the widespread corruption that typifies the Mahathir-era where the line between business and politics was blurred to help the ruling Umno amass an empire of wealth, said Pakatan Rakyat (PR) leaders.

Opposition leaders believe the suit, set to be one of the biggest corporate battles in the country, will also test the Najib administration’s seriousness in tackling high-level corruption as they expect the legal battle to expose more gruesome details on Umno’s dirty corporate ties.

“This is yet another legacy of Tun Dr Mahathir (Mohamad),” DAP lawmaker Liew Chin Tong told The Malaysian Insider, referring to the longest-serving former prime minister whose administration had spearheaded a Bumiputra corporate advancement project that helped create a pool of Malay tycoons like Halim.

“When it comes to corruption and cronyism, we know Umno is corrupt and filled with cronies. What we want to know now is, who is getting all that money. That’s what the people want to know,” he added.

Halim has mounted a massive legal challenge against the government to demand full settlement of an over RM2 billion deal that forced him to relinquish his controlling stake in Renong Bhd more than a decade ago.

According to digital business magazine, The Edge Review, Halim, once the sole corporate nominee of the ruling Umno, was offered RM1.3 billion in cash and property as well as control of a private waste management company, roughly valued at RM2 billion, in exchange for his disposal of Renong in the 2001 agreement.

Citing people familiar with Halim’s suit, the magazine reported that the business magnate had since only received RM165 million despite giving up his business empire and is seeking the remainder.

The move comes as a shock since Halim’s tenure in Renong was marred by questionable decisions. It is widely perceived that he had failed to rein in Renong’s growing debts, which allegedly forced the government to take over his stake in the conglomerate through state investment arm, Khazanah Nasional Bhd.

Liew said the Halim saga was among the many failures of Dr Mahathir’s Bumiputra corporate advancement project, citing other controversies like the legal battle between national carrier MAS and its former chief executive officer Tan Sri Tajuddin Ramli and the Forex scandal in 1983.

“Unfortunately, since Mahathir retired, we are still dealing with these issues after 10 years. I feel it is time the suggestion to set up a Royal Commission of Inquiry be executed to investigate all financial legacies related to Mahathir,” he said.

The Edge Review had said that the suit would expose for the first time the “behind-the-scenes dealings in several multibillion dollar transactions and contract awards that shaped corporate Malaysia between the mid-1980s and the early part of this decade”.

It also quoted industry observers as saying that Halim’s suit will provide insights into how Umno created a political moneymaking machine around Renong and its associated concern, United Engineers Malaysia Bhd (UEM).

“It will offer Halim’s account of how he ceased to be a business nominee of Umno and also provide a personal confession of the gruelling years the businessman went through as he battled to keep debt-laden Renong afloat,” the magazine wrote.

PKR’s newly elected Kelana Jaya MP Wong Chen echoed the view and said the suit will help shed light on Umno’s corporate links and how it helped the ruling Malay party amass massive wealth to sustain its dominance.

“This case will expose a system where an Umno sole corporate nominee helped shape and protect the party’s empire.

“Furthermore, it would also highlight the dubious relation between Umno and businesses. What Halim Saad said is true, the nominal system had encouraged the culture of opaqueness in business and politics,” he told The Malaysian Insider.

Wong, who is in charge of opposition party PKR’s investment portfolio, also noted how the case would show if the government of Prime Minister Datuk Seri Najib Razak would act on those involved in the fiasco.

“It will test if they are as transparent and accountable as they say they are”.

The opposition claimed that those behind the costly policy failures of the Mahathir administration have not only escape punishment but are compensated heftily in some cases.

The most notable case is the out-of-court settlement between MAS and Tajuddin, another Bumiputra corporate posterboy of the Mahathir era.

The move has been described as an attempt by the government to cover up details found in Tajudin’s affidavit in support of his counter-claim where the embattled tycoon purportedly revealed much of the inner workings behind the purchase of MAS.

Opposition leaders noted that the same could happen with the Halim suit as the tycoon’s exposes on the Umno-Renong link could force the government to concede and seek a settlement outside of court.

“I hope this case will not imitate the Tajuddin Ramli case where it was settled out of court. Until today, the people are asking what happened and how much of taxpayers’ money was paid to him,” PAS chief economist Dr Dzulkefly Ahmad told The Malaysian Insider.

According to The Edge Review, Halim had tried to pressure the government into paying a full settlement from the Renong deal but in 2010, Dr Mahathir told him the agreement would not be honoured.

Businessmen familiar with the situation say that Dr Mahathir told Halim that he had been informed by (Tan Sri) Nor Mohamed (Yakcop) that the assets taken over by Khazanah belonged to Umno,” it added.

The Edge Review said Halim then met with Nor Mohamed, then a minister in the Prime Minister’s Department in charge of the Economic Planning Unit, who confirmed Dr Mahathir’s words.

According to the magazine and StarBiz, Nor Mohamed, the Malaysian government and state-owned strategic investment fund Khazanah Nasional Bhd have been named as defendants in the multibillion-ringgit suit that was filed in April this year.

In the statement of claim sighted by StarBiz, Halim is alleging that the parties had signed the 2001 and/or another 2003 agreement with him with “an intent to deceive him or induce him to enter into both agreements”.

Dzulkefly said the only way to unravel the fiasco was to conduct a forensic audit on the suit. I think what the people want to see is if their money is not freely gambled,” he said.

The former Kuala Selangor lawmaker also called on Putrajaya to expose all corporate transaction data involved in the Renong deal.

“Is the money belonging to the government-linked company Umno’s money? And not the people’s?” He said.

Halim, who was in 1984 taken by former Finance Minister Tun Daim Zainuddin under his wing to become Umno’s sole corporate nominee, had built Renong and UEM into Malaysia’s largest conglomerate, with ventures in the banking, construction, telecommunications, real-estate development and tolled-roads industries.

The Asian financial crisis of 1997 led to the fall in Renong’s share prices and according to The Edge Review, exposed the conglomerate’s poor cash flow and large debt burdens.

- The Malaysian Insider