Malaysian Maverick: Mahathir Mohamad in Turbulent Times by Barry Wain (fantasy novels to read .TXT) 📕

to 1991 and from 1998 to 2001, Daim was at other times a government economic adviser. When the Asian financial crisis spread to Malaysia in 1997, Dr. Mahathir brought Daim back to head an emergency task force that undercut Bank Negara and the finance ministry. Daim was made minister with special functions in early 1998, before becoming finance minister for the second time later that year. He was UMNO treasurer throughout this entire period, from 1984 to 2001.

Both from Kedah, Dr. Mahathir and Daim enjoyed a friendship that contributed to the image and tone of the Mahathir administration. By his actions, Daim made it clear he was not going to let conventional notions of conflict of interest interfere with the way he ran his private business empire, the economy, or UMNO's financial affairs. They became deeply entangled. Daim's provocative stance added to the perception that the government was conducting its business first and foremost for the benefit of insiders. Although they remained on talking terms, Dr. Mahathir and Daim fell out politically and parted ways in 2001, with Dr. Mahathir making the extraordinary comment that he was tired of defending Daim against allegations of corruption, "trying to whitewash him, literally".[20] The same accusations had not unduly troubled Dr. Mahathir for the preceding 17 years.

The duo dovetailed in practical ways. With his heart in the business world, Daim was content to try to make Dr. Mahathir's policies work, even after registering his disagreement with some of them.[21] As Dr. Mahathir said of Daim, "he knows the nitty gritty, the way to carry out" a mandate. "For example, if I say privatization, his job is to find the means of privatizing. He showed how it should be done and all that."[22]

Lacking political ambition, Daim was never a threat to Dr. Mahathir, as were Musa Hitam and Tengku Razaleigh Hamzah. Daim declined to seek elected office in UMNO so that he did not have to worry about making friends, or perhaps, face the public and the media to explain his wealth. As he put it, "I was not prepared to be blackmailed with votes."[23] He even resented having to campaign for Dr. Mahathir's faction when UMNO split in 1987, despite Daim's handling of the economy and the party's finances being hot issues. His usual reaction to the severest and most pertinent criticism was to ignore it, regarding it as "a waste of time" to respond. More than anyone else in the administration, Daim had a fairly free hand, because everyone who mattered knew he had Dr. Mahathir's ear and steadfast backing. In return, he was loyal.

Known to his friends as "Muscles", the soft-spoken and diminutive Daim, who usually shunned the press and often conducted business dressed in jeans, a casual batik shirt and sandals without socks, saw no reason to change his ways because he was in the Cabinet. He dismissed concerns about his overlapping public and private interests. An accelerated acquisition spree, in which Daim bought significant stakes in food, property and building-materials companies, culminated in his biggest and potentially most lucrative deal a week before he was named finance minister. He swapped his 51 per cent interest in Malaysian French Bank and RM125 million in cash for a co-dominant, 40.7 per cent stake in the much bigger United Malayan Banking Corporation. The timing was most convenient, as allowing a serving finance minister to assume shared control of the country's third-largest bank would have given the government a political headache.

Although Daim pledged to put his businesses in a blind trust, out of sight two of his family-owned companies did not complete their purchase of the bank stake until five months after he joined the Cabinet. More seriously, the two companies took outright control of the bank the following year in a move that was not publicly disclosed. On top of that, Bank Negara two months later announced sweeping policy changes that may have pre-empted the takeover by the Daim companies. New guidelines, which had been drawn up and awaiting implementation for some time, forbid individuals or family-owned companies from owning more than 10 per cent of the equity of a local bank. Crucially, the guidelines were not made retroactive.[24]

Once they surfaced, the transactions raised legal and ethical issues as well as thorny political problems. Malaysia's Banking Act of 1973 required the approval of the finance minister for any "agreement or arrangement" for the sale or disposal of shares in a Malaysian bank or affecting management and other matters "which will result in a change in the control or management of the bank". The minister's approval was also required for any "reconstruction" of the bank that transferred any part of the bank to another corporation. While Bank Negara said the Cabinet had approved Daim's purchase of the bank shares and he "was never at any stage involved", the explanation left the question of legality unsettled, since the Banking Act made no specific provision for the minister to delegate authority for such approvals. And neither did it provide for the Cabinet to play any role in the approval process.

After Dr. Mahathir announced in 1986 that ministers, deputy ministers and their immediate family would no longer be able to buy shares in companies and would be required to reduce any existing holdings, Daim's planned sale of his controlling interest in United Malayan Banking Corporation proved every bit as contentious as its purchase. He sold out to state-owned Perbadanan Nasional Bhd., the previously co-dominant shareholder that had not subscribed to a preferentially priced rights issue in 1985, which had allowed Daim to take outright control of the bank. A year later, the state enterprise was paying at least RM27 million more for those shares, bankers estimated, though the price was not disclosed.[25]

Announcing his Look East policy in late 1981, Dr. Mahathir sought a paradigm shift in the mentality of Malaysians, especially in the Malay-dominated bureaucracy, which had defied all previous efforts to eliminate the influence of the long-gone British. Declaring that the West was in