Forward    Feedback    


Cabinet next week must set up Royal Commission of Inquiry into RM1.8 billion  Tajuddin-MAS bailout, RM30 billion Bank Negara forex losses and other mega financial scandals in the past two decades to establish transparency, accountability, integrity and good governance of Abdullah premiership


Media Statement
by Lim Kit Siang  

, Thursday) The Cabinet next week must set up a Royal Commission of Inquiry to conduct public investigations into the  RM1.8 billion  Tajuddin-MAS bailout, RM30 billion Bank Negara forex losses and other mega financial scandals in the past two decades to establish the  transparency, accountability, integrity and good governance of Abdullah premiership.


The RM13.46 billion counter-suit by one-time corporate high-flyer Tan Sri Tajudin Ramli filed on June 29  in response to the RM589 million Danaharta suit has opened a “can of worms” when it dropped a “bombshell” with shocking revelations surrounding the Tajudin’s acquisition of 32% stake in MAS in 1994 and the RM1.8 billion sell-back of the MAS shares to the government  in 2000 at RM8 per share when the market price was only RM3.68 or a premium of RM4.32 or 117 per cent.

The Sun scored a  scoop today with its report, “Tajudin bombshell – ‘Mahathir and Daim directed me to buy MAS shares’”, which  answered many questions which had been asked in and out of Parliament for the past decade about the Tajudin MAS buy-out and sell-back – without getting any light.

As the Sun reported on its front page, the “bombshell” dropped by Tajudin Ramli’s  RM13.46 billion counter-suit came from his various claims, viz:

·        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 to appease the investment community and the public.

·        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.

·        He was asked to keep this special arrangement a secret. He is telling all now because the government did not honour the agreement.

Regardless of the outcome of the litigation between Tajudin and Danaharta and the government,  Tajudin’s revelations involve fundamental governance questions and  public interest issues which demand immediate and satisfactory response from the present administration, as it will directly reflect on its commitments on accountability, transparency, integrity and good governance.

The Tajudin litigation has raised afresh many good governance and public interest  questions which cannot continue to be avoided if the Abdullah premiership is not to be tarred with the brush of colluding and conniving in their cover-up.

The first question is whether Parliament and nation had been taken for a ride for a decade by the former Prime Minister, Tun Dr. Mahathir Mohamad and former Finance Minister, Tun Daim Zainuddin on the billion-ringgit Tajudin MAS buy-out and sell-back scandals?

In retrospect, Daim had committed parliamentary contempt when he deliberately deceived Parliament and the nation when he answered a question on the RM1.8 billion Tajudin-MAS sell-back scandal in Parliament on March 21, 2001, where he made the following false claims:

  • that no special considerations were given to Tajudin in the buying of MAS shares from Naluri.

  • the suggestion that the RM8 per share for Tajudin’s MAS stake was the best price possible in the national interest, when he said that if the people and MPs “are not happy with this purchase decision, the Government can sell the shares back to Naluri”. 

  • that Tajudin was a “reluctant seller” at RM8 per share when the market price was RM4.32.

  • giving  the impression that Tajudin was quite reasonable in wanting to release his MAS stake to the government at not less than RM15 and that there was foreign investor interest in MAS at this price - which was most  outrageous as  Tajudin had told a foreign news agency  when the deal was concluded that he was lucky in getting a  good price of RM8 a share  to  enable him to settle Naluri’s entire debt of RM927.4 million,  while the balance of RM864.5 million would  be for new business ventures but would  in the meantime be  placed  in banks to  earn RM24.2 million a year.  

Study is being  made as to whether the present Parliamentary Privileges Committee has jurisdiction to deal with gross breach of parliamentary privileges committed in the  previous Parliament, as Daim was clearly guilty of in making patently false statements intended to deceive Parliament and the nation.

In retrospect, it is now clear why Daim had given such an unsatisfactory reply in Parliament on the Tajudin-MAS sell-back scandal, in particular:

  • Why no independent professional valuation was ever done when the government agreed to  pay Tajudin’s Naluri Bhd for the MAS stake at RM8  per share representing  a premium of  RM4.32 or 117 per cent over the closing market price at RM3.68 per share when the deal  was signed on 20th December 2000; and 

  • Why rules for the bail-out of companies established by the National Economic Action Council  in the “National Economic Recovery Plan” was violated and  Tajudin was not only spared from having to “take his appropriate hair-cuts” but was given a bonanza at taxpayers’ expense to reward for his mismanagement of MAS by  being given  117% premium for the  MAS shares over the  market price, transforming it into a personal rescue for Tajudin instead of a public rescue for MAS.


Apart from the Tajudin-MAS buy-out and sell-back scandals, the time has also come to “exorcise the ghost” of the RM30 billion Bank Negara foreign exchange (forex) losses more than  a decade ago, especially as the person who played  such a pivotal role in the Bank Negara forex scandal is none other than Tan Sri Nor Mohamed Yakcop, the second Finance Minister.


Up to now, the government has failed to “come clean” on the colossal  Bank Negara forex losses  as a result of speculation in the international currency markets from 1992-1994, with the losses  cited as ranging from RM10 billion to RM30 billion. 


In Parliament in 1994, I had given reasons as to why the Bank Negara’s forex losses as a result of its forex speculation operations could have amounted to as high as RM30 billion, which had not been seriously rebutted by any top government leader or Bank Negara official. 


One question which I raised in Parliament on May 3, 1994 in my speech on the 1993 and 1994 Supplementary Estimates had remained unanswered in the past decade and continues to haunt the corridors of power  – whether Bank Negara’s maximum exposure at the height of its forward foreign exchange speculation was in the region of RM270 billion, which was three times the country’s GDP and more than five times the country’s foreign reserves at the time! 


But it is not just the RM1.8 billion  Tajuddin-MAS bailout and  RM30 billion Bank Negara forex losses where there must be proper accounting and discovery, the same applies to the  other mega financial scandals in the past two decades as well.



*  Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman

Your e-mail:

Your name: 

Your friend's e-mail: 

Your friend's name: