Putrajaya has directed all government-linked companies, including Malaysia Airlines and the national debt restructuring company Danaharta, to cease all civil suits against Tan Sri Tajuddin Ramli, the former chairman of the national carrier and protege of Tun Daim Zainuddin.
In a letter sent this month to the GLCs and Danaharta by Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz, the GLCs and Danaharta were informed that the Finance Ministry had agreed to settle all outstanding civil suits against Tajuddin, a poster boy of Tun Dr Mahathir Mohamad’s plan to groom Bumiputera entrepreneurs.
“This is to inform you that the government of Malaysia and the Finance Ministry has agreed to settle all civil claims against Tan Sri Dato Tajuddin Ramli and others to be withdrawn immediately in view of the fact that the government and the Finance Ministry have agreed that the said cases will be settled out of court.
“For your information the government has given me the mandate to act for the government in this matter,” Nazri said in the letter sighted.
At least one government agency is expected to withdraw its claims against Tajudin in court today.
Nazri’s letter also directs the lawyers acting for the GLCs and Danaharta to hand over their cases to the firm of Hasfarizam Wan and Aisha Mubarak, a known Umno lawyer.
But the minister made no mention of the terms of settlement with Tajuddin.
Tajuddin was a protege of Daim, the close friend of Dr Mahathir and ex-finance minister who was the architect of the now discredited policy of nurturing a class of Malay corporate captains on government largesse.
Individuals such as Tajuddin, Tan Sri Halim Saad and others flew high in the 1990s but their true mettle was tested during the Asian financial crisis. Nearly all of them fared poorly.
The Najib government’s move to settle all outstanding claims against Tajuddin appears to be an atempt to wipe the slate clean in a financial saga that goes back decades to the height of Dr Mahathir’s administration.
First police report in 2002
MAS had first lodged a police report against Tajuddin in 2002 for allegedly causing the flag carrier to suffer losses in excess of RM8 billion. Tajuddin was the executive chairman of the airline from 1994 to 2001.
According to a report to the Malaysian Anti-Corruption Commission (MACC), a major contributor to the record losses under Tajuddin was the relocation of MAS’s cargo operation in Amsterdam and Frankfurt to a single hub in Hahn, Germany, where the airline was forced to enter into a disadvantageous aircraft lease contract with a company, which was later linked to Tajuddin’s family.
The new cargo hub operation had caused MAS to suffer losses of between RM10 million and RM16 million a month before the project was terminated after the government regained control of MAS in 2001.
The termination resulted in a RM300 million arbitration claim against MAS by the company.
MAS has had a turbulent past decade after the government bought back the airline from the former corporate high-flyer at RM8 per share or about double the market price at the time.
The airline was at the time saddled with a debt reported to be RM9.5 billion.
It then had its books cleaned up in 2002 under the wide asset unbundling (WAU) exercise that was engineered by the BinaFikir consultancy, then led by Tan Sri Azman Mokhtar.
In 2009, Danaharta and two of its subsidiaries won a RM589.143 million suit against Tajuddin. The case arose after the tycoon executed a facility agreement on July 13, 1994 to borrow RM1.792 billion from a group of syndicated lenders to finance the purchase by him of a 32 per cent stake in MAS.
However, from 1994 to 1998, he failed to service the original loan, causing it to become a non-performing loan (NPL).
In 1998, Danaharta acquired the NPL from the lenders but Tajuddin also failed to settle his debts to Danaharta until it was in default of RM1.41 billion as at Oct 8, 2001.
As part of a settlement agreement, Tajuddin was to pay RM942 million in four instalments over three years and that he was permitted to redeem his charged shares at a minimum price per share.
Tajuddin, however, defaulted in the payment of the quarterly interest payable under the settlement agreement and on April 27, 2002, the plaintiffs terminated the settlement agreement and demanded RM1.61 billion from him.
On April 29, 2002, Danaharta, together with its subsidiaries Danaharta Urus Sdn Bhd and Danaharta Managers Sdn Bhd, sold part of the charged shares consisting entirely of Technology Resources Industries (TRI) shares at RM2.75 per share, resulting in total proceeds of RM717.39 million.
As at December 31, 2005, the amount outstanding was RM589.14 million and on May 11, 2006, Danaharta and the subsidiaries commenced action to recover the money.
Tajuddin alleged, in his affidavit, that he was directed by Dr Mahathir and Daim in 1994 to buy a controlling stake in Malaysia Airlines to bail out the government.
Forced “national service”
Tajuddin claimed that his purchase was a forced “national service”, disguised as an arm’s length commercial deal, because the government wanted to appease the investment community and the public.
Dr Mahathir denied in his autobiography published this March that he and Daim had forced Tajuddin to bail out MAS in 1994 for RM1.8 billion.
Instead, Tajuddin was “elated over his purchase” of the national carrier, the former prime minister said in the book titled “A Doctor in the House: The Memoirs of Tun Dr Mahathir Mohamad”.
“Recently Tajuddin accused me and Tun Daim of forcing him to buy shares and a controlling interest in MAS. I have checked newspaper reports of the time. Far from feeling coerced, it is obvious that Tajuddin was elated over his purchase.
“He wanted to swap his Malaysian Helicopter shares (a company with two aircraft) for MAS shares (a company with well over 60 aircraft). The government rejected his plan and asked that he pay in cash instead, which forced him to borrow RM1.8 billion.
“He was therefore not coerced by the government to buy the shares, but was forced by his own modest collateral to borrow heavily,” Dr Mahathir wrote.
Tajuddin had claimed that Dr Mahathir and Daim had forced him to buy a 32 per cent stake in MAS from Bank Negara at RM8 per share instead of the market price of RM3.50 to bail out the central bank which was hit by multi-billion ringgit foreign exchange losses.
Tajuddin had said that he did not want to buy the MAS stake as he was worried about financial losses but agreed to do it because it was a directive and also because the government had assured him that he would be protected from financial losses and liabilities.
“I do remember wondering how Tajuddin would be able to buy the airline and when I asked Tun Daim, he explained that Tajuddin’s telecommunications company Celcom (Malaysia) Berhad was doing well,” Dr Mahathir wrote.
- Malaysian Insider
No comments:
Post a Comment