SARAWAK Chief Minister TAIB MAHMUD’s RM32 Million Kickbacks through Timber Export Control Dewaniaga Sarawak Headed by Younger Brother Over 7 Years

Japan Times implicate Taib in RM32m timber export kickbacks

Husna Yusop; SUN reporting

PETALING JAYA (April 6, 2007): Sarawak Chief Minister Tan Sri Taib Mahmud has been implicated in a 1.1 billion yen (RM32 million) timber export kickbacks by a Japan Times report last week. Parliamentary Opposition Leader Lim Kit Siang (ABOVE)said this is "the latest instance of more and more adverse international reports about corruption in Malaysia, including the adverse rankings given to the country by the corruption surveys of the Transparency International and the Political and Economic Risks Consultancy (PERC)".

"These warrant urgent action by Prime Minister Datuk Seri Abdullah Ahmad Badawi to salvage his reform agenda and pledge, particularly to make anti-corruption campaign the top priority of his administration," he said in a statement today. Lim has written an urgent letter asking Abdullah to personally reply in Parliament on Monday (April 9) in the winding-up on the Royal Address debates on high-profile corruption allegations under his administration. In the letter, he had drawn the attention of the Prime Minister to the Japan Times report dated March 29, 2007 (see Below)

According to the report, quoting sources, nine Japanese shipping companies which transport lumber from Sarawak have allegedly failed to report some 1.1 billion yen of income in total during a period of up to seven years through last March. It was alleged that the money constituted kickbacks to Sarawak officials via a Hongkong agent which was connected to Taib and his family.

Lim said he had reminded Abdullah of his pledge when he became Prime Minister in 2003 to make anti-corruption his top agenda, his proclamation of "zero tolerance for corruption" and his declaration to "walk the talk" after his first 100 days in service. "Malaysia is today faced with the worst crisis of national integrity in the 40-year history of the Anti-Corruption Agency (ACA) and 50-year history of the nation with a spate of serious corruption allegations reaching the highest levels of government," he added.

The allegations included questions about integrity affecting Abdullah and his family; integrity involving Deputy Prime Minister Datuk Seri Najib Abdul Razak in defense contracts such as those concerning the Sukhoi jets from Russia and submarines from France; and the serious allegations againts former ACA director-general Datuk Seri Zulkipli Mat Noor and Deputy Internal Security Minister Datuk Mohd Johari Baharum. "I urge the Prime Minister to come personally to Parliament on Monday not only to respond to the various allegations but to give satisfactory assurance to the Parliament and the nation that he had not abandoned his anti-corruption pledge and agenda," Lim stressed.

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Thursday, March 29, 2007

Wood carriers allegedly hid 1.1 billion yen income; Kyodo News

Nine Japanese shipping companies that transport lumber from Sarawak, Malaysia, allegedly failed to report some 1.1 billion yen of income in total during a period of up to seven years through last March, sources said Wednesday, alleging the money constituted kickbacks to Sarawak officials via a Hong Kong agent. Such tax irregularities have occurred as the Tokyo Regional Taxation Bureau determined the companies' remuneration payments to Regent Star, a Hong Kong agent, which has a connection with Chief Minister of Sarawak Taib Mahmud (BELOW) and his family, were rebates, not legitimate expenses, the sources said.

Although the Hong Kong agency did very little in the way of substantive work, the shipping companies are believed to have used rebates as a lubricant to facilitate their lumber trade, the sources added. Lumber export is controlled by the Sarawak state government on grounds of forest resources protection. Rejecting the tax authorities' conclusion, the shipping firms claim the transactions with Regent Star have been legitimate and deny wrongdoing.

The companies accused of the alleged tax evasion include Mitsui O.S.K. Kinkai Ltd. and NYK-Hinode Line Ltd. belonging to the Nanyozai Freight Agreement (NFA), a cartel formed in 1962 to avoid excessive competition in import of lumber from Southeast Asia. The 12-member group is exempt from the Antimonopoly Law. The shipping firms will likely be slapped with well over 400 million yen in back taxes along with heavy penalties, the sources added. According to NFA and other sources, the Japanese cartel concluded an agreement in 1981 with Malaysia's Dewaniaga Sarawak regarding lumber transport. Dewaniaga is a state-affiliated concern in charge of lumber export control and is headed by the Sarawak chief minister's younger brother.