Explain Tajudin Ramli link to MAS privatisation, Zaid tells Dr M

By Debra Chong

February 23, 2012

KUALA LUMPUR, Feb 23 — Tun Dr Mahathir Mohamad owes the nation an explanation for pushing Malaysia Airlines System (MAS) to be privatised and Tan Sri Tajudin Ramli’s role in it, Datuk Zaid Ibrahim said today.

Tajuddin, a former MAS chief, was also a poster boy of former Finance Minister Tun Daim Zainuddin’s now discredited policy of nurturing a class of Malay corporate captains on government largesse during the Mahathir administration.

“What everyone wants to know is why MAS was privatised in the first place, and why to Tajudin?” Zaid (picture), a former Umno minister, said in his blog today.

“Here I think Dr Mahathir has to explain what really happened. He has written a lot of books but none that we can believe in. Perhaps he should start writing one that is believable, that at least reflects the true situation surrounding the MAS saga that has still not been resolved until today,” he added.

Dr Mahathir was the country’s longest-serving prime minister, from July 1981 to October 2003.

Zaid, who was the ruling Barisan Nasional’s (BN) de facto law minister, resigned in September 2008 to join PKR, which he left after accusing the opposition party of election fraud in its 2010 party elections, and founded another party, Parti Kesejahteraan Tanah Air (Kita), in December that same year.

Although estranged from Pakatan Rakyat, he has backed its criticism of a recent out-of-court settlement between Tajudin and Pengurusan Danaharta Bhd (Danaharta) and several other government-linked companies (GLCs) for an undisclosed agreement.

Tajudin’s settlement with Danaharta on February 14 came after a lengthy legal dispute following a High Court decision in December 2009 ordering the ex-MAS chief to pay the state asset management manager RM589.14 million plus two per cent interest per year, backdated to January 1, 2006.

“Since the settlement was conducted in secret, allow me to guess the terms of the deal: Tajudin was not required to pay a single sen to Danaharta or any of the GLCs; instead, the government will pay Tajudin RM6.5 billion (or half of what he had claimed),” Zaid said.

“Tajudin will then be generous in his contributions to the party coffers for the upcoming general election,” he added.

Zaid said his claim was mere conjecture “but what else can a citizen do when the government hides its fraudulent conduct from the people?”

“At the same time, it’s also possible that my guess is spot on. With this desperate government, everything is possible,” he said.

The case between Danaharta and Tajudin arose after he executed a facility agreement on July 13, 1994 to borrow RM1.79 billion from a group of syndicated lenders to finance his purchase 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 debt to Danaharta until it was in default of RM1.41 billion as at October 8, 2001.

As part of a settlement agreement, Tajudin 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.

Tajudin, 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 units 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.

Tajudin had alleged in his affidavit that it was Dr Mahathir and Daim who directed him in 1994 to buy a controlling stake in MAS to bail out the government.

Tajudin 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, however, denied in his autobiography published last March that he and Daim had forced Tajudin to bail out MAS in 1994 for RM1.8 billion, claiming instead that Tajudin was “elated” over his purchase.