daim

WHO IS THE REAL DAIM?

Books have been written about Tun Daim Zainuddin, but not many people know who the real Daim is. He is famous for being taciturn. Everyone knows that Daim is the silent type; so silent, in fact, that the victims of his scheming and conniving have fallen like ten pins without ever knowing what hit them. He has, on the quiet, made a career of shooting poison darts, laying booby traps, and knifing friend or foe in the back. His hand is never seen, but his mark is everywhere. Truth to tell, he has been at the root of many national crises, but his name has never been smudged, thanks to the wealth he wields and his bond of friendship with Dr Mahathir.

Most members of Umno’s new generation are aware that Daim is an acquisitive millionaire and a macho man with a taste for young women, but they concede him these weaknesses because they see in him a clean and competent Economic Adviser to the Government. But the generation of Harun Idris, Musa Hitam and Manan Othman, to name just a few of the old hands – they are the ones to ask in order to discover who the real Daim is. It was Datuk Harun who plucked Daim from depths of failure in the salt business. Daim'’ wife Mahani and Harun'’ wife Salmah were good friends and influential pair in the early 1970s. It was wife power that moved Harun to give Daim 160 acres of prime Kampung Pandan land. And thus Syarikat Maluri was born.

There is no use of speculating over how much Daim paid Harun. After all, the two were fast friends. For the gory details, just ask Low Kiok Bow or Thamby Chik. They can relate how Daim cheated a land broker and greased Selangor state executive councilor and Mahathir brother-in-law Ahmad Razali for that piece of land. Of course, Daim still had to pay for the land. In those days, it wasn’t easy to borrow from bank. Hence, he was forced to corrupt Bank Bumiputra. Lorrain Osman and Rais Saniman know how much he spent. Manan Othman can no doubt confirm the figure; he was so close to Daim that they used to share a girlfriend, with Manan often borrowing the bedroom at Daim’s office in Taman Maluri. Daim, thus, has distinguished himself as the first Malay entrepreneur to give bribes.

Daim’s elevation as Senator and subsequently, minister of Finance, was part of Mahathir’s strategic plan. Mahathir’s choice should surprise no one, after all the two were intimate friends from the same kampung in Seberang Perak, Alor Setar. Upon becoming Prime Minister on 16th July 1981, the first thing on Mahathir’s mind was how to sideline his archenemy, Tengku Razaleigh Hamzah. Daim told everyone he had no interest in politics, but all the while he was confident of getting the Finance Minister’s job after a stint with the Senate. A few months after joining Senate, Daim became the third most important man in the Federal Cabinet, after the Prime Minister and his deputy.

Musa Hitam, the Deputy Prime Minister, was at first oblivious of the closet ties between Mahathir and Daim. Innocently, he expressed to Mahathir his disquiet over Daim’s kneeling and dealing, particularly his award of projects and contracts to his own associates and cronies. It must have baffled Musa when his complaints fell on deaf ears. Although he was Deputy Prime Minister, he had no say when it came to economic matters, particularly privatization and the assignment (to supporters) of economic projects. How disappointed Musa must have been to find that Daim couldn’t care less about his effort to help his supporters secure some projects or contracts. Daim succeeded in making millionaires of such cronies of Wan Azmi, Halim Saad, Tajuddin Ramli, Shamsuddin Hassan, Razali Rahman, and Tan Sri Basir, but Musa in the end was cast off as a poor ex-DPM. Musa once complained to Mahathir that Daim has stolen a number of his supporters’ project proposals, but again Mahathir ignored him. These were the first cracks in the eventual breakup of the Mahathir-Musa partnership. As the interest of Daim, Mahathir and Razaleigh bloated, Musa got squeezed out.

Many Umno members assume that Razaleigh is Musa’s number one enemy. In fact, the blame for the 1986 split in Umno must fall on Daim. It was he who drove Musa to the edge until he had no choice but resign. Again, Daim’s man-of-few-words demeanours worked to his advantage. Few knew of his behind-the-scenes role in that Umno rupture, and not many more know it today. One really shouldn’t wonder why Musa called a truce with Razaleigh and the two decided to collaborate in the 1987 fight, the one that eventually caused Umno to be outlawed. At that time, Daim was almost invincible, what with support coming from such strongmen as Sanusi Joned and Anwar Ibrahim. The comradeship of the three was rock solid and the Musa-Razaleigh camp could do nothing except to make a joke of it by giving them the nickname AIDS.

To enable the formation of the new Umno, Daim and Mahathir had first to get rid of the Lord President, Tun Salleh Abas, Daim was the chief plotter in sacking of the wise, pious and respected Tun Salleh, and his replacement with Tun Hammed, a playboy and chronic gambler, but Mahathir’s and Daim’s schoolmate. The appointment of Hammed triggered the collapse off the integrity and the independence of judiciary.

As Finance Minister, Daim persuaded Mahathir to give the Economic Planing Unit and Treasury full power in implementing the privatization policy. Thence, it was no longer necessary to call for tenders for government projects. Instead, the projects were offered directly to favoured companies. And so began the era of wealth accumulation by Daim and his cohorts. The United Engineering Company, bought for RM2, changed into multi million ringgit corporation. As Finance Minister, Daim practically ordered banks to lend to companies that he himself owned. And no Daim crony ever complained of difficulty in securing bank credit. Indeed, bankers lived in fear of Daim. Having appointed Wan Azmi and Basir to head Malayan Banking and Bank Bumiputra, he could give any project to any of his cronies because funding was not an issue.

As if those physical projects were not enough, Daim also took every opportunity to rake in wealth from the share market as well. Every time the Treasury approved a company for listing on the stock exchange, Daim cronies received their lion shares. That was how stocks in Southern Bank, Resort World, Sports Toto, Berjaya, Tanjung and scores of other blue chip firms landed with Daim and Company. Once, when share values were rocketing, Daim boasted among friends that his visible wealth alone totaled RM65 billion. To shut the mouth of Barisan Nasional leaders, Daim gave massive projects to Samy Vellu and Ling Liong Sik so that their children could be......

Why did he quit?

Daim managed to fool Umno members into believing that Mahathir would not let him go although he had asked to be relieved of his Cabinet post on a number of occasions. With Musa and Razaleigh out of picture, Daim could grab as much wealth as he wanted without even Mahathir stopping him. Besides, he was Umno’s treasurer and he could make it look as if the companies he controlled were those in which the party had a stake.

Daim’s avarice damaged not only his own images as finance minister, but also Mahathir’s and Malaysia’s reputation with the international community. It is said that he used to demand exorbitant fees for himself in negotiating contracts involving foreign suppliers. The chairman of Japan’s two biggest banks – the bank of Tokyo and Sanwa Bank – once complained to Mahathir that his Finance Minister demanded commissions that were too high when negotiating yen loans. Margaret Thatcher, too, has complained about Daim’s role as a commissioned agent. He had – or still has – accounts in Zurich, London, Hong Kong, Tokyo, Singapore, Caymen Island, Channel Island and Virgin Island. Indeed, instead of keeping his billions in Malaysia, he has stashed them overseas. With his immense wealth and far-reaching influence, Daim eventually became a burden that Mahathir could no longer bear. In every deal he made, there was something in it for himself. It was not beneath him even to conspire with Lee Kuan Yew to snatch KTM land, Tanjung Pagar, in Singapore. The Malaysian Cabinet had no knowledge of this. But this issue of Malaysia being cheated by Lee Kuan Yew and Daim is far from over.

Mahathir eventually realised that he had to end Daim’s lordship over the Finance Ministry. And so he told him to quit. Mahathir worried that if Daim continued as Finance Minister, complaints would come not only from Vincent Tan, Ananda Krishnan, Arumugam and other members of the Malaysian business elite, but also from foreign leaders. Signs of a Daim-related scandal were ominous and it could break anytime in Japan or Britain, therefore, Daim had to go.

Daim’s resignation was planned such that it would not appear as if he had been sacked. Indeed, it does not make any sense why a powerful Finance Minister, rich and in control of so many public companies, would suddenly quit simply because he had lost interest in the job. The truth is that he was ordered to resign. Observers will recall that Mahathir’s first comment on the so-called reaction was: "He has asked several times for permission to resign, and I’ve finally allowed it. I hope Daim won’t leave the country after resigning." The statement was pregnant with meaning. Mahathir knew Daim was sulking. So did Anwar and Sanusi. Mahathir retained Daim as Umno Treasurer for a good reason; he wanted to ensure the safety of Umno money, a lot of which was under Daim’s control.

But Daim, who holds so many of Mahathir’s secrets, is truly a sly one. After resigning he ran off to live in his San Francisco residence. He told the Malaysian public he wanted to study at Harvard, but in fact he wanted to leave Malaysia. Mahathir, who was familiar with Daim’s trades, pleaded with him to come back, saying he needed him to advise on economic matters. Daim returned and announced that Mahathir had named him Economic Adviser to the Government. Rafidah asked Mahathir to confirm this, but all she got was a silence. Daim was never formally appointed as Economic Adviser, a post which Tun Raja Mohar once held. The appointment is the prerogative of the Public Service Department. Daim gave himself the job. To keep Daim happy, Mahathir allowed him to open an office at the Economic Planning Unit, and this strengthened the public perception that he was still in control as far as economic affairs were concerned.

When he was told to resign as Finance Minister, Daim asked Mahathir to appoint Anwar Ibrahim to the job. Obviously, he thought this would help to ensure that his skeletons would remain closeted. He warned Mahathir of the peril that Rafidah would be to both of them; the secrets they shared would be uncovered. Daim also persuaded Mahathir to appoint Mustapha Mohammad as Anwar’s deputy because these two could be depended on to fill up the holes he had left gaping. Anwar is nobody’s fool, but he sacrificed his idealism to protect his towkay.

As far as we know, no Finance Minister in this world has retired a billionaire, except Daim. In the book Daim yang Diam: Sebuah Biographi (Daim the silent: A Biography), Daim explains his retirement: "I’m happy in retirement. It was too heavy a responsibility. In truth, I love the business world. Business is in my blood. I love to make money. I know how to do it. I can do it just by sitting in this chair. On a lucky day, I can make millions."

Friend of Soros

According to an internal bank analysis, corroborated by the corporate community, and a hint from Daim crony Amin Shah, Daim’s wealth, in ringgit and foreign currencies kept overseas, currently amounts to RM20 billion. With so much money at his disposal, Daim can manipulate the Kuala Lumpur Stock Exchange. He showed his hand in 1991, just to prove how much influence he wielded. After selling off his stocks, he made a statement to the effect that the market would crash. And crash it did. As we can recall, even Mahathir couldn’t help but make a wry remark when Daim boasted that he invested in KLSE only for pocket money. But to his good friend, Daim said he could turn in profit on RM90 million a day when the market was up. When the market was plummeted in October 1991, Daim bought back his share on the cheap. When the market turned bullish again 1995 and 1996, Daim made billions of ringgit. This, then, is what the work of an economic adviser amounts to.

So, it turns out that Soros isn’t the only big time market manipulator and currency dealer. Daim met Soros twice in London when ringgit was being hotly traded. Anyway, when the ringgit fell below RM4 to the US Dollar. Mahathir asked Daim for help and, according to a source in Singapore, he lost RM1 billion trying to prop up the Malaysian currency. To lose that much in currency trading, imagine how much money he had at his disposal.

The falls in currency and share values put Mahathir in a feverish panic. He knew his policies and his own belligerent attitude were partly to blame. Seeing Mahathir in such a frenzied state, Daim recommended that he declare a state of emergency to enable him to restore the economy and, at the same time, bury the corpses that were beginning to stink. We hail the Chief Secretary to the Government and the Solicitor-General for opposing the move. If Daim’s plan had been followed the Malaysian economy would be utterly ruined. Having failed to declare an emergency, Mahathir set up the national Economic Action Council, headed by Daim, with the Economic Planning Unit as its Secretariat. The original plan was to give the NEAC complete autonomy, but the Cabinet ministers opposed to this for fear that they would lose any vestige of power they had left. Eventually, the council become merely an advisory body, with the Cabinet having final say on its recommendations.

The establishment of the council was to wedge between Anwar and Daim. Thus, two old friends who had together stood behind Mahathir against Musa were now turned against each other. All the council’s recommendations were rejected by the Cabinet and Bank Negara. Daim openly assailed bank Negara for dismissing his proposals, such as those relating to interest rates and credit control. We salute the bank Negara Governor for maintaining a prudent monetary policy in the face of Daim’s bullying and insults. Unlike Daim and his cohorts, Bank Negara’s officials are not self-serving. Daim’s appointment to NEAC was a major national mistake.

Going by press reports of its deliberations so far, the NEAC’s sole preoccupation is with saving mega corporations from bankruptcy. No doubt, these are Daim-related companies. Daim has yet to show any concern over the rise in the price of chilies, or the leaps in fish prices or how the price of rice has boiled over. Neither has he talked about small businesses in their death throes. Class F contractors going bankrupt or kampung-road projects being abandoned. In his dictionary, there are no entries for the small man’s worries, nothing about low-cost houses, water cuts, or study funds for the children of poor Malays. In fact, it contains only billion-size figures. While the Malaysian economy is close to ruin, Daim remains a billionaire, living a life of glamour, jetsetting with his new wife Naimah and the attractive Josephine, an Indian lass who helps him run one of his firms, the International Malaysian Bank.

We have merely given a sketch of who the real Daim is. A thorough account will soon be available in book form. We recommended the book to Umno members, especially those with big ambitions, because they will learn from its fantastic-but-true tales of economic and political intrigues. We denounce the likes of Vincent Tan and Ting Phek Khiing for land-grabbing, but perhaps we should ask the Mentri Besar of Johore and the Mentri Besar of Kedah how much land Daim has taken. Ask Sanusi how much Daim paid to the Kedah government for 12,000 acres in Sungai Petani and how much profit he made from them. For 12,000 acres, Osman Arof had to be sacrificed. The true story of the Daim-Sanusi conspiracy in Kedah will be exposed in the book.

Umno is at a crossroads and has to decide wisely where is it going. One road leads to glory, where stability and democratic practice will abide. The other leads to division, autocracy and, ultimately, utters destruction. The call for REFORM, which used to be made only whispers at small, secretive gatherings, is becoming louder. Umno members, showing that they can no longer contain their restiveness and frustration, have begun to openly debate the need for change, even at party conventions. Can there be a clearer indication that they have reached their tether’s end, that they can no longer stomach the leadership’s undemocratic attitude and the prevalence – whether in the party or the government – of favouritism, cronyism, nepotism, graft and other misdeeds? Malay nationalism is dead and materialism and egoism are running amok.

Friday March 23

Daim waffling, answers baffling
CHIAROSCURO
MGG Pillai

1:42pm, Fri: Few dare to flutter at the Kuala Lumpur Stock Exchange, where sentiment is masked by high volume in the last few minutes of trading for the day. There, three shares are controlled by the government - Telekom, Tenaga, Malayan Banking - and represent about 35 percent of the weightage of the KL Composite Index.

It is enough to move the index, but not enough to reverse the decline. Investors cannot see why they should enter the market to be ‘burnt’. Bears batter bulls to dominate, helped by official ill-thought-out schemes to rescue and nurture bankrupt cronies of the establishment so brazen that revulsion results when it is announced.

This is so serious that the finance minister, Daim Zainuddin, answers questions in Parliament over two days to justify the unjustifiable. He had treated MPs with contempt, ignoring their questions or refusing to explain his actions. He cannot now. Barisan Nasional MPs now demand answers.

Which is why Daim answers parliamentary questions himself, and the newspapers publish his full reply. However, he does not convince; he waffles, is defensive, nor does he explain. The danger is that since follow-up questions are tightly controlled at question time, he will be ignored by his own side. That can only add to his, and the government's, discomfiture.

Golden share

At the centre of the current storm is the bailout of a Daim protege, Tajuddin Ramli, whose 29.03 percent stake in MAS the government bought at about twice the market price at an indefensible RM8 a share.

Daim does not explain why it had to pay nearly RM2 billion when it could have bought the stake on the open market for half this, or why it needed to buy it at all when its ‘golden share’ gives it a controlling stake in how MAS is run. That he did after the Sultan of Brunei's stake in MAS was acquired at RM4 is viewed with distaste in the sultanate.

What frightens is that this is bought at a time when the country does not have the funds to rescue failed companies, nor to fund the hundreds of billions of ringgit worth of projects announced. Malaysia’s foreign reserves have fallen sharply. Add to that the tens of billions of foreign exchange loans Malaysian businessmen borrowed in foreign currency that they cannot now repay.

The one source of seemingly never-ending funds, the state-owned oil company Petronas, is so overloaded with dud companies and such projects as the development of Putrajaya and compromised by selling its petroleum production forward to Taiwan two years ago. Since then the oil prices have risen, but Petronas cannot benefit from that though Taiwan does. If we are not careful, Petronas can go the way of Pertamina.

Daim's explanation in Parliament that Tajuddin Ramli's stake was bought to protect Malaysia's interest has been greeted with disbelieve and shocked yawns. What is unmentioned, not in Parliament anyway, is that almost every major company and businessman bailed out, such as Time dotCom, are apparently linked to Daim himself.

Malaysians and investors, local and overseas, therefore view the bailouts as involving almost wholly companies linked to Daim. It does not matter if it is or not, but market perception gives ultimate control of such companies as Renong, UEM, Plus and every major privatisation to him.

A widely held view in the marketplace is that this shifting of assets, to not put a fine point to it, reflect an unmentionable pattern, with the ultimate owners cashing in. Otherwise, why is Petronas considered a potential buyer now of MAS - which, to be fair, Petronas wants nothing to do with, at least not now? It explains, if that is the correct word, why the government bought a chunk of MAS shares from a crony rather than in the open market.

Special treatment

When inefficient, debt-stricken, bankrupt, privatised companies are bailed out, a rule of thumb would return them to the management that brought them to their knees in the first place after the debts and losses are hived off. When the stock market is buoyant, no one cares if velvet purses can be knitted from sows' ears. It does not make it right, but when every one makes money, no one cares if short cuts are taken unfairly. Now with suspicions and losses staring one in the face, every one does.

When the government is in limbo, as now, unable to govern because it is disbelieved, the people increasingly angry at this deliberate campaign against those the government does not like, such attempts at bailing out cronies would be challenged.

The Time dotCom share issue was seen, in the market, as an attempt to cash in on investor gullibility. It would no doubt have been oversubscribed if the underlying basis of it was not as questionable and challenged. It bombed. Daim said the government pension fund, as a sub-underwriter, ended up owning a chunk, while the main underwriters did not, is mischievous. And with good reason.

The government had deliberately evaded explaining its actions to Parliament. So, when Daim decided to ‘come clean’ about the bailouts and why it bought MAS shares at RM8 a share, other considerations clearly forced him to. He is, without doubt, the most powerful man in Umno and the government. He is always treated with kid gloves, and has control of economic policy and finance by virtue of the two portfolios he holds - finance and minister without portfolio in the Prime Minister's Department.

Daim would now have to be more forthcoming in the sessions of Parliament, and explain his actions. His party realises that if he does not, Umno itself could be buffeted in the political gale storms that may break out. Unless more convincing explanations emerge about the bailouts, in Parliament and elsewhere, Daim, and the government with him, is in for a rocky ride.