Friday, July 07, 2006

NAJIB: “If there is an UNDERESTANDING; I DO NOT KNOW” over Allegation by TAJUDIN RAMLI: Forced to BUY MAS Shares @RM8 by MAHATHIR & DAIM

Yes, we were informed; the cabinet was informed, but whatever he says
if there is
an understanding, I do not know. I cannot comment on that.
That buying
back that was discussed. But the first part, we have
no knowledge of that
.” - The exact words

Deputy Premier Datuk Seri Mohd Najib on Thursday said that he did not know about Tan Sri Tajudin allegation that he was asked to buy MAS shares by Tun Dr Mahathir and Ex-Finance Minsiter Tun Daim Zainuddin in 1994. He said that the cabinet has been informed about the buy back on the MAS shares in the year 2000.

In the Tajudin allegation published in the local media (Sun) Thursday, the corporate figure claimed he was directed to buy the MAS shares to help Bank Negara to recover from foreign exchange losses in 1994. Tan Sri Tajudin Ramli made the allegation in
his RM 13.46 billion countersuit filed last Thursday against the RM589 million suit by Danaharta, over his acquisition of MAS in 1994 and selling them back to the Government for RM 1.8 billion or RM8 a share in the year 2000
According to Danaharta, Tajudin sold the shares at a premium of RM4.32 or 117 per cent over the market price of RM3.68 per share.

Meanwhile, Opposition Leader Lim Kit Siang said Daim had misled the Dewan Rakyat and the country on March 21 2001 when he made several false claims regarding the purchase of the MAS shares by the government.

Daim in reply to questions in the Dewan Rakyat then had said that Tajudin was not given any special consideration when the government bought the shares from Naluri and that the acquisition was in the national interest. Now this is National Service ('Khidmat Negara')
Lim also claimed that Daim had given the impression that Tajudin had acted properly when he wanted to the sell the shares at RM15 each and that foreign investors were interested to buy at that price.

Lim urged the government to set up a royal commission (see also Ailiran's call below) to probe the matter.
UPDATE; July 07 2006
No Royal Commission For Tajudin's Claim On Forced "National Service"
KUALA LUMPUR, July 7 (Bernama) -- A Royal Commission will not be set up to investigate the claim by former Malaysia Airlines (MAS) chairman, Tan Sri Tajudin Ramli, that he was forced to take over the government's stake in MAS, said Deputy Prime Minister Datuk Seri Najib Tun Razak.

"It is a matter of court case. I don't think there is a need to have a Royal Commission," he said.
The Sun newspaper was the only paper on Thursday Jul 05, to break the news with the screaming headlines

Tajudin bombshell – ‘Mahathir and Daim directed me to buy MAS shares.

Read the web edition at

Tajudin alleges secret deal with DrM and Daim

Tajudin, Daim & Dr Mahathir

Here is the AP story,

Ex-tycoon claims Mahathir forced him to buy Malaysia flag carrier to save
central bank

By VIJAY JOSHI Associated Press Writer; Jul 6, 2:54 AM EDT

KUALA LUMPUR, Malaysia (AP) -- In a startling claim likely to shake up Malaysian politics, an ex-tycoon has accused former Prime Minister Mahathir Mohamad of forcing him in 1994 to buy a controlling stake in the state-owned national airline to bail out the government.

Tajudin Ramli filed a court document on June 29 saying his purchase of the 32 percent stake in Malaysian Airline System Bhd. for 1.8 billion ringgit, then worth US$750 million (?586 million), was not a normal commercial deal as it was made out at the time but a forced "national service."

The details of the court document were published Thursday in The Sun newspaper, which described the allegations as a "bombshell."

Tajudin could not be reached for comment, and officials at the law firm representing him refused to speak on the matter.

If true, Tajudin's allegations would point to shady financial practices and lack of transparency in the government in the 1990s, when many private entrepreneurs with close links to top politicians were obliged to carry out business on behalf of the state and received favors.

The mudslinging could also tarnish Mahathir's reputation at a time the ex-prime minister has been severely critical of Prime Minister Abdullah Ahmad Badawi, who succeeded him in October 2003.

Both Abdullah and Mahathir are abroad on vacation and their spokespeople unavailable for comment.

"Tajudin's revelations involve fundamental governance questions and public interest issues which demand immediate and satisfactory response from the present administration," opposition leader Lim Kit Siang told reporters.

The Sun said Tajudin's court document was in support of a lawsuit he filed against the government and other individuals, seeking 13 billion ringgit (US$3.5 billion; RM12.7 billion) in compensation, alleging a conspiracy by the government to take over his companies.

Tajudin claims he was directed by Mahathir and his then-Finance Minister Daim Zainuddin to buy the MAS shares from the airline's main owner, the central bank, for 8 ringgit per share even though its market price was 3.50 ringgit a share.

Tajudin said Mahathir and Daim told him he was buying the shares as a national service to save the central bank, the Bank Negara, which at the time was hit by multibillion ringgit foreign exchange losses.

and here is the AILIRAN story from the executive committee.

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Tajudin's 'Khidmat Negara' and a tale of two Tuns ;Thursday, 06 July 2006

Tan Sri Tajudin Ramli's claim in his court document that he was directed by the two Tuns (former premier Mahathir and his then economic tsar, Daim Zainudin) to buy shares in Malaysia Airlines (MAS) as a form of 'national service' is nothing less than a bombshell.

Tan Sri Tajudin Ramli's claim in his court document that he was directed by the two Tuns (former premier Mahathir and his then economic tsar, Daim Zainudin) to buy shares in Malaysia Airlines (MAS) as a form of 'national service' is nothing less than a bombshell.

According to Tajudin, the transaction was to help Bank Negara recover from foreign exchange losses in 1994. It was however disguised as a commercial deal because the government did not want to undermine investor confidence or create undue public anxiety, he said, adding that he was only a nominee/agent of the government in MAS.

Tajudin alleged that the two Tuns had repeatedly assured him that he would not suffer any losses or be held liable for anything arising from his purchase of MAS shares. This special arrangement was to be a 'secret', he claimed, although the Official Secrets Act was apparently not invoked. But he was spilling the beans now because the government had not honoured the agreement, he said.

If his claim is true, it explains why he bought, through his firm Naluri, a 32 per cent stake in MAS at RM8 per share in 1994, well above the then market price of RM3.50. It was hailed as the biggest ever privatisation exercise at that time.

After the 1998 financial crisis, the government bought back the MAS stake from Naluri at RM8 per share, when the market price was about RM3. The whole expose raises a number of critical questions relating to transparency, accountability and, of course, 'national service' involving
tycoons and cronies.

* First, did Bank Negara really need help to recover from the forex losses ranging from RM10 billion to RM30 billion? How much did it actually lose and who was responsible?

* What was Tan Sri Nor Mohamed Yakcop's precise role in the forex affair? How did he end up as second Finance Minister after the forex affair?

* If Bank Negara was really in such dire straits, why was there a need to keep it secret from the public? Why wasn't its critical financial position reflected in its accounts submitted to Parliament?

* On what basis did the banks approve loans amounting to RM1.8 billion to facilitate Tajudin's purchase of MAS shares when the purchase price was much higher than the market price?

* Who actually approved the buy-back of MAS shares at RM8, well above the market value? Was the Cabinet involved in this decision? Or was it solely the two Tuns?

* Which other tycoons have been roped in for other forms of compulsory - and secret - 'national service'? Is this the original form of 'khidmat negara'?

To get to the bottom of all of this requires nothing less than a royal commission of inquiry headed by a respected judge of impeccable integrity with a broad scope to probe this entire affair. The commission should probe, among other things, how the bank loans were approved and who in the cabinet authorised such transactions.

Since we are into royal commissions, we further propose another body to investigate the corruption allegations against certain judges, which have never been fully probed, as asserted by at least two other former senior judges.

Meanwhile, the two Tuns, who have since apparently fallen out with each other, have a golden opportunity to get together again. After all, they have a lot of explaining to do.

And from Malaysiakini
Tajudin sings, Najib doesn't want to hear it; Beh Lih Yi Jul 6, 06 4:40pm [extract]

Public Accounts Committee (PAC) head Shahrir Samad said Tajudin will have to be compensated if he was doing 'national service' as claimed. But the Johor Baru MP, however, added the matter should be decided by the courts.

"In the first place, I thought it was unreasonable for anybody to borrow so much money to buy over MAS. There was not a necessity for an individual to buy over the national airline," he told reporters when met at the Parliament lobby.

"The amount of borrowing that went into the purchase was staggering because the borrower would have to pay back the loan and the interest required, (it) would require a lot of funds just to service the loan. Anyway, it was a government decision.

"In the end, it didn't seem reasonable why the government should buy back the MAS shares way above the market price. Now it seems to be re-explained by Tajudin. It will be interesting times ahead," said the PAC chief.

Shahrir was the only Umno politician to have publicly questioned the deal in 2001.

and lastly some biting comments from a reader Pak Pandir Baru in Malaysiakini

LETTERS: Tajuddin's turn to squeal; Jul 6, 06 4:28pm

A bombshell has been exposed with the former chief of MAS, Tajuddin Ramli, filing an affidavit in court naming our former premier Dr Mahathir Mohamad and our former finance minister Daim Zainuddin as being the two who ordered him to purchase MAS shares at a big premium from Bank Negara in order to help the latter to mitigate its losses in the forex markets in 1994.

Now the cat is out of the bag and Malaysians are privy to the hanky-panky dealings of our top political masters and their favourite tycoons and how one-sided deals have caused public coffers to be drained. One such misadventure by our central bank resulted in it being burnt big time while playing with the big boys in forex trading business and hedge funds lead by the infamous Goerge Soros.

Previously, when the Malaysian government wanted to corner the they also tin market in the 1980s,lost big time. They never learnt their lessons of not to playing high stakes poker with taxpayers' money more so with foreigners who are well-versed in their wheeling and dealing aimed at causing a big dent in our foreign reserves.

It is now payback time for the former premier as all the sins of the past which he has managed to hide during his 22-year-rule seem to be coming back to haunt him with a vengeance. With all the scandals being highlighted by the press lately, one can see he is a cornered man whose legacy will be tainted with all the abuse of power and corruption during his rule.

His strident attacks against the present regime is just a smokescreen to hide the weaknesses during his rule and the public should not be swayed by his various malicious allegations. He is only interested in saving his skin as well as to prevent his family's fortune from being investigated.

As for Tajuddin Ramli, he seems to be a fall guy for his two political mentors as a gentleman's agreement without a written contract won't hold up in court as it is only hearsay without any documentary proof. It is common knowledge that MAS' present woes started during Tajuddin's term as CEO. He cannot plead ignorance and shouldn't hide between the skirts of his two
mentors to fight the legal suits filed by his creditors.

As for the public at large, we are the ultimate losers when politicians make bad deals. They seem to be immuned from prosecutions and go scot-free for all their crimes against society. Surely it is not too much to ask the government of the day to check on the serious allegations made by Tajuddin against Mahathir and Daim. Or do we need to change the government at the
next polls before the ACA brings the culprits to book?
Read the latest posting (Sun, Jul 09 06)
Dr S Hawking: How can the human race survive the next hundred years? In a world that is in chaos politically, socially & environmentally-Q &A to YAHOO


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