The book chronicling the life and politics of Dr Mahathir Mohamad has made a startling allegation that the Umno headquarters – Putra World Trade Centre – was financed, in part, by taxpayers.
In the Malaysian Maverick: Mahathir Mohamad in Turbulent Times, author Barry Wain writes that the government “persuaded” state-owned banks to forgive a large chunk of the loans to finance the project.
The author, who referenced this information to a 2007 interview with former Finance Minister Daim Zainuddin, said the banks had written off at least RM140 million in accumulated interest.
According to a confidential accountants’ report commissioned by Umno in 1985, which Wain had obtained, the PWTC’s eventual price tag was at RM360 million.
The report said the sum was financed by loans of RM199.5 million from state-owned Bank Bumiputera Malaysia Berhad and RM64.9 million from Malayan Banking Bhd, as they were then known.
Additionally, the accountants’ report states that as of March 1986, the Umno appointed company to construct the building, Khidmat Bersatu Sdn Bhd, had only paid RM51,570 in interest.
Umno’s free flowing cash cow
“And the report… made it clear the company would pay no more,” wrote Wain, in the fifth chapter of his book, titled A Volatile Mix of Business and Politics.
“Malaysian taxpayers had subsidised the construction of Umno’s landmark headquarters, which became a cash cow for the party,” he concluded.
Wain’s allegations adds to the string of controversies over how Umno’s financed the iconic 42-story office building, which is still serves as one of the country’s most important convention centres.
The book details, what is already public knowledge, of how the Federal Government threw a debt-ridden Umno a lifeline in 1986, by awarding the party-owned United Engineers (Malaysia) Bhd a RM3.42 billion contract for the North-South Highway, better known by its Malay acronym of PLUS.
“In the case of the PLUS project, it is a means of Umno solving its problems by repaying loans taken for the new Umno headquarters building,” Najib Abdul Razak, then culture, youth and sports minister, was quoted in the book as saying.
‘As long as Umno is in government…’
But as the party went into turmoil in 1988 – which saw the party being de-registered and being reorganised into a new party – its assets were caught in tangle of complications.
After years of failing to service the loan, Bank Bumiputra obtained a court approval to auction off PWTC, which was stalled by Umno which tried to renegotiate a refinancing plan.
“It was a magnanimous gesture, considering that Umno had failed to make any payments for years, though not surprising, since Umno effectively controlled Bank Bumiputra,” wrote Wain.
Referring to the author’s 2007 interview with Daim, the latter was quoted saying, “As long as Umno is the government, the bank will not disturb you”.
PWTC was conceptualised during the 1975 Umno general assembly while construction proper began in November 1982.
Wain’s book is currently under scrutiny by the Home Ministry which have withheld sale of the book. The book is enjoying brisk sales in neighbouring Singapore.
The author was the former editor of the Asian Wall Street Journal and is currently attached to the Institute of Southeast Asian Studies, Singapore. Mkini
MK
16/01/2010
In the Malaysian Maverick: Mahathir Mohamad in Turbulent Times, author Barry Wain writes that the government “persuaded” state-owned banks to forgive a large chunk of the loans to finance the project.
The author, who referenced this information to a 2007 interview with former Finance Minister Daim Zainuddin, said the banks had written off at least RM140 million in accumulated interest.
According to a confidential accountants’ report commissioned by Umno in 1985, which Wain had obtained, the PWTC’s eventual price tag was at RM360 million.
The report said the sum was financed by loans of RM199.5 million from state-owned Bank Bumiputera Malaysia Berhad and RM64.9 million from Malayan Banking Bhd, as they were then known.
Additionally, the accountants’ report states that as of March 1986, the Umno appointed company to construct the building, Khidmat Bersatu Sdn Bhd, had only paid RM51,570 in interest.
Umno’s free flowing cash cow
“And the report… made it clear the company would pay no more,” wrote Wain, in the fifth chapter of his book, titled A Volatile Mix of Business and Politics.
“Malaysian taxpayers had subsidised the construction of Umno’s landmark headquarters, which became a cash cow for the party,” he concluded.
Wain’s allegations adds to the string of controversies over how Umno’s financed the iconic 42-story office building, which is still serves as one of the country’s most important convention centres.
The book details, what is already public knowledge, of how the Federal Government threw a debt-ridden Umno a lifeline in 1986, by awarding the party-owned United Engineers (Malaysia) Bhd a RM3.42 billion contract for the North-South Highway, better known by its Malay acronym of PLUS.
“In the case of the PLUS project, it is a means of Umno solving its problems by repaying loans taken for the new Umno headquarters building,” Najib Abdul Razak, then culture, youth and sports minister, was quoted in the book as saying.
‘As long as Umno is in government…’
But as the party went into turmoil in 1988 – which saw the party being de-registered and being reorganised into a new party – its assets were caught in tangle of complications.
After years of failing to service the loan, Bank Bumiputra obtained a court approval to auction off PWTC, which was stalled by Umno which tried to renegotiate a refinancing plan.
“It was a magnanimous gesture, considering that Umno had failed to make any payments for years, though not surprising, since Umno effectively controlled Bank Bumiputra,” wrote Wain.
Referring to the author’s 2007 interview with Daim, the latter was quoted saying, “As long as Umno is the government, the bank will not disturb you”.
PWTC was conceptualised during the 1975 Umno general assembly while construction proper began in November 1982.
Wain’s book is currently under scrutiny by the Home Ministry which have withheld sale of the book. The book is enjoying brisk sales in neighbouring Singapore.
The author was the former editor of the Asian Wall Street Journal and is currently attached to the Institute of Southeast Asian Studies, Singapore. Mkini
MK
16/01/2010
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