Bank Negara was technically bankrupt. To conceal this fact, the government had to embark upon ‘creative accounting’ to generate ‘paper profits’. And the ‘sale’ of MAS to Tajudin was one of many such exercises. Now, of course, we know that it was actually a bogus sale meant to show a huge ‘profit’ to cover Bank Negara’s FOREX losses and conceal the fact that the central bank was technically bankrupt.
This was what Datuk A. Chandrakumanan, PAR Malaysia President, said on 12th June 2015:
Tun Mahathir casually replied that it does not make sense for him to write about the national airline’s dealings as he was never the chairman of MAS. On the surface, what Tun replied to Zaid (Ibrahim) makes sense. However, such thoughts evaporate into thin air when you actually refer to the affidavits filed in Court by one Tajudin Ramli. The case eventually was settled out of court in 2011.
Before the “out-of-court” settlement for the Malaysian Government to write-off Tajudin’s RM580 million judgement debt, Tajudin had claimed in affidavits in court that former premier Mahathir had made him buy MAS in 1994 to help bail out Bank Negara after the central bank suffered massive foreign exchange losses due partly to speculation in foreign exchange markets as a “national service” with an “Overriding Agreement” to indemnify him against any losses suffered.
Although this has been denied by Mahathir, an answer which is relevant and pertinent to the million dollar question as to who must bear responsibility not only for some RM10 billion MAS losses.
It has to be mentioned here that the a loss of 1.8 billion was suffered directly due to the strange and rather suspicious move from the government to buy back Tajudin’s 29.09 per cent stake in MAS at RM8 per share representing a premium of RM4.32 or 117 per cent over the market price at RM3.68 per share when the deal was signed on the 20th December 2000.
You can read more about this matter in the two news items below (Govt yet to apply to strike out Tajudin’s RM13.46b suit and MAS settles suits against Tajudin Ramli). Further to that you can read The Sun Daily’s special report of 6th July 2006, Tajudin alleges secret deal with DrM and Daim(READ HERE).
Mahathir and Daim fabricated the sale of MAS to Tajudin to generate a ‘paper profit’ to offset the losses Bank Negara made
Basically, what all these reports say is that the government suffered an estimated RM10 billion loss by ‘selling’ MAS to Tajudin Ramli and then ‘buying it back’. And the reason for this fake sale is to make a ‘paper profit’ to cover the huge RM30 billion (or US$10 billion) loss that Bank Negara suffered.
Bank Negara was technically bankrupt but the government could not reveal this. So they did ‘creative accounting’ to show that the disaster was not as huge as what people are saying and that it was actually a ‘small paper loss’. In short, the government robbed Peter to pay Paul, or dug a hole to cover another hole, leaving an even bigger hole behind.
The Sun Daily’s special report of 6th July 2006, Tajudin alleges secret deal with DrM and Daim, which Mahathir and Daim have never denied, goes on to say:
Tan Sri Tajudin Ramli has counter-sued for RM13.46 billion and also drops the following bombshell in court documents:
* He was directed by former prime minister Tun Dr Mahathir Mohamad and former finance minister Tun Daim Zainuddin to buy shares in MAS to help Bank Negara recover from foreign exchange losses in 1994,
* The transaction was a national service but was disguised as an arm’s length commercial deal because the government wanted it that way,
* He was at all times only a nominee/agent of the government in MAS,
* He was assured repeatedly by Mahathir and Daim that he would not suffer any losses or be held liable for anything arising from his purchase of the MAS shares.
Kit Siang is no longer concerned about the RM100 billion that Mahathir cost the country like he used to
Even Lim Kit Siang suspects that the RM10 billion MAS disaster is to cover up much larger disasters amounting of RM100 billion in his blog posting titled “Is RM589 million out-of-court settlement of Tajudin Ramli’s debts proof Malaysians today are still paying for RM100 billion Mahathir financial scandals?” (READ HERE)
In that posting Kit Siang said: Malaysians are entitled to a frank and honest answer from the Prime Minister, Datuk Seri Najib Razak, whether the RM580 million out-of-court settlement of Tajudin Ramli’s debts is proof that Malaysians today are still paying for the RM100 billion financial scandals perpetrated in the 22 years Tun Dr. Mahathir was the Prime Minister. And if so, they want to know of other such instances.
Tajudin had claimed through his affidavits that former premier Mahathir had made him buy MAS to help bail out Bank Negara after the central bank suffered massive foreign exchange losses due partly to speculation in foreign currency markets as a “national service” with an “Overriding Agreement” to indemnify him against any losses suffered.
So there you are. Kit Siang has spoken and Malaysians believe that Kit Siang always tells the truth and never lies. And Kit Siang said Mahathir cost the country RM100 billion and that he is still costing the country losses until today. And Kit Siang said the MAS disaster was to cover up another bigger disaster, the bankruptcy of Bank Negara. And would Kit Siang lie?
Govt yet to apply to strike out Tajudin’s RM13.46b suit
(The Sun Daily, 27 Nov 2006): The government has yet to file its application to strike out a counter-claim for RM13.46 billion by tycoon Tan Sri Tajudin Ramli against Danaharta, the government and several companies and individuals.
At a High Court hearing here today, senior registrar Muzlina Mohamad Jamil set Jan 31 and Feb 13 for the cases to be mentioned again.
Out of the 24 defendants named in Tajudin’s suit, 19 have filed their applications to strike out the counter-claim by Tajudin, and Muzlina allowed them time to submit their affidavits.
She set Jan 31 to hear the eighth and ninth defendants, and the rest were set for hearing on Feb 13.
Tomorrow, Muzlina will hear another four of the defendants in their application to strike out the counter-claim.
The counter suit was filed by Tajudin following a RM589 million suit filed by Danaharta against the one-time corporate high-flyer.
The suit revolved around transactions related to shares of Malaysia Airlines Bhd (MAS), Celcom (M) Bhd and Naluri Bhd, all companies that Tajudin had controlled at one time.
In court documents filed by his lawyers, Lim Kian Leong & Co, on June 29, Tajudin made some startling revelations about the circumstances leading to his RM1.8 billion acquisition of a 32% stake in MAS in 1994.
Among Tajudin’s allegations in the counter-claim were that:
Former prime minister Tun Dr Mahathir Mohamad and former finance minister Tun Daim Zainuddin directed him to buy shares in MAS to help Bank Negara recover from foreign exchange losses in 1994;
Mahathir and Daim had repeatedly assured him he would not suffer any losses or be held liable for anything arising from his purchase of MAS shares;
The transaction was a national service but was disguised as an arm’s length commercial deal because the government wanted it that way; and
Tajudin was at all times only a nominee/agent of the government in MAS.
MAS settles suits against Tajudin Ramli
(The Malaysian Insider, 23 Jun 2012) – Malaysia Airlines (MAS) has settled out of court its three lawsuits against ex-chairman Tan Sri Tajudin Ramli, a move the national carrier described as “considerably viable”.
The Malaysian Insider understands that the High Court has allowed both MAS and Tajudin (picture) to withdraw their suits and counterclaim respectively.
The matter was settled in chambers earlier today in the presence of Justice Rosilah Yop.
“He (Tajudin) has agreed to surrender valuable land in Langkawi where the Four Seasons Hotel stands,” a court source told The Malaysian Insider on condition of anonymity.
Another source close to MAS disclosed that the national carrier considers the settlement as a viable move which will allow it to “move on and to provide closure to a very longstanding matter.”
It is also understood that an official announcement will be made to Bursa Malaysia later today.
MAS was represented by lawyers from the firm of Lee Hishammuddin Allen & Gledhill, while the firm of Lim Kian Leong & Co represented Tajudin.
Tajudin, who was executive chairman of the airline from 1994 to 2001, had applied to cancel MAS’s suit over allegations he abused his position and concealed his interests in business decisions made during his watch.
Putrajaya also sought to strike out Tajudin’s counterclaim, in which he alleges the government and MAS defamed him with the civil suit for abuse of power while heading the flag carrier.
MAS had accused Tajudin of unconscionable conduct by using his influence to continue the VIP chartering service with the purchase of a Boeing 737 business jet for US$31 million (RM93.5 million) in 1997, despite MAS suffering losses.
The airline also claimed that Tajudin had dishonestly concealed his interests in Cendanasari Insurance Brokers Sdn Bhd, in matters involving a parcel of land in Langkawi and a luxury yacht, Colombo Star.
The Kedah-born businessman had in turn claimed that the suit contains bare allegations with no basis and that MAS had acted with malice and in bad faith in taking legal action against him to embarrass and tarnish his reputation.
Earlier this year, Tajudin settled out of court his debt owed to Pengurusan Danaharta Bhd (Danaharta) and several other government-linked companies (GLCs) for an undisclosed sum of money.
This was despite a High Court decision in December 2009 ordering the ex-MAS chief to pay the state asset management manager RM589.14 million plus two per cent interest per year, backdated to January 1, 2006.
Tajudin has been entangled in a complicated series of expensive suits, countersuits and appeals with various parties arising from his failure to service a billion ringgit loan he took to purchase a major stake in MAS in 1994.
He has claimed that his purchase was forced “national service”, disguised as an arm’s length commercial deal, because the government wanted to appease the investment community and the public.
Former Prime Minister Tun Dr Mahathir Mohamad, however, denied in his autobiography published in March last year that he and former Finance Minister Tun Daim Zainuddin had forced Tajudin to bail out MAS in 1994 for RM1.8 billion.
Last August, Putrajaya intervened and commenced action to put an end to the controversial legal battle by ordering all suits against Tajudin to be dropped.
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.
According to media reports, Tajudin had also claimed of an over-riding agreement protecting him from liabilities.
The 65-year-old was a poster boy of Daim’s now-discredited policy of nurturing a class of Malay corporate captains on government largesse during the Mahathir administration.
WRITER: RAJA PETRA KAMARUDDIN