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

with Daim's family companies, or with his responsibilities as head of Peremba, and they were in his favoured property development.[42]

From 1982 to 1984, Daim's obligations were split three ways. He was building his own conglomerate at a rate that would make him the richest Malay in the country. As chairman of Peremba, he was serving the government while also acting as an unofficial adviser to Prime Minister Mahathir. And as chairman of the Fleet group, he was UMNO's trustee. "I am a man who can do many things at the same time," Daim once said. "I can put every one of them in separate compartments."[43] But in an academic study of Daim's "triple capacity", Terence Gomez concluded that Daim did precisely the opposite: He "apparently had no qualms about mixing his personal business interests with those of the companies entrusted to him".[44]

Interlocking directorships indicated that Daim had a few common nominees, who were assigned by him to manage the companies under his control. Mohamed Desa Pachi and Abdullah Mohamed Yusof, the most prominent, were appointed by Daim as directors of Fleet Holdings and Fleet Group. Desa was also a director of Fleet Group's main publicly listed companies and most of Fleet Group's other private limited subsidiaries. He was also a director of Peremba, and sat on the board of two of Daim's family companies, apart from being a director of publicly listed companies in which Daim had a significant stake. He was a director of several major government-owned companies as well. Abdullah, a lawyer, was also a director of Peremba, and a director of some of Fleet's listed and private companies. Younger associates, Daim's boys, also served as nominees: Halim Saad, Mohamed Razali Abdul Rahman, Wan Azmi Wan Hamzah and Tajudin Ramli.[45]

Daim stoutly defended his business methods:

If I think the government can make money with me, why not? I mean, there's transparency, particularly as these are listed companies in which I was involved, or where Peremba was involved. Where some group want to sell, and Peremba doesn't want to buy, since I have the details of the company and I think it is a good investment for my family, why not? If everybody is going to make money, why not? So I see no reason why it is a conflict, so long as everybody declares their interest.[46]

One of the government's first privatizations, the granting of a licence in 1983 for TV3, showed Daim's juggling act. The licence was given to Fleet Group, which took 40 per cent of the equity, while 10 per cent went to two of Daim's companies and 10 per cent to the holding company of the Malaysian Indian Congress, a partner in the ruling coalition. Another example was the use of a Daim-owned company, Daza Sdn. Bhd., to purchase the outstanding, Singapore-owned 20 per cent of New Straits Times Press for Fleet, with the negotiations, including bank loan commitments, conducted by the general manager of Peremba.[47] In another case, Fleet-invested Faber Merlin, in which Daim had a major equity stake, bought subdivided land from his main publicly listed company, while he was in control of both companies. Only a month earlier, Fleet had been allocated all the special bumiputra convertible unsecured loan stock in Faber Merlin by the government. Later, Fleet acquired Daim's stake in Faber Merlin.[48]

Daim mired himself deeper in controversy when he became finance minister in 1984 and accelerated Dr. Mahathir's privatization programme. Although he quit Peremba and pledged to put his businesses in a blind trust, "Daim brought to government a view that no longer saw the spheres of government, party or private interests as distinct entities", wrote Peter Searle, an academic specialist in Malaysian business. "For Daim national, political and private interests might be pursued simultaneously or in tandem...".[49] Daim himself described the situation as "commonness" rather than a "conflict" of interests.[50]

As the economy slumped in the mid-1980s, property prices sagged, leaving Fleet with a large quantity of overvalued real estate and shares that had lost a significant percentage of their market value. Fleet Group, which recorded a RM27.3 million profit in 1984, plunged into the red, losing RM20.3 million in 1985.[51] The company's financial statement for the year ended 31 August revealed a "shocking state of affairs".[52] The auditors qualified the accounts on the grounds that the ability of the company and the group to continue operating depended on the success of various steps taken by the directors. The balance sheet indicated that current liabilities exceeded current assets by about RM222.3 million. A significant portion of the company's investments — in listed and unlisted subsidiaries, amounting to RM178.4 million — had been pledged to financial institutions to secure bank facilities for Fleet Holdings. The company also owed Fleet Holdings about RM235.6 million. And Fleet Holdings itself had incurred losses, though as an exempt private company it did not report the details.[53]

By 1987, Fleet's debt had grown — or diminished, if one accepted Daim's figure of RM500 million debt in 1982 — to RM343.5 million.[54] To stay afloat, Fleet Group was forced to sell some of its best assets to New Straits Times Press, in which Fleet was the major shareholder. In other words, the most profitable arm of Fleet Group was used to purchase its holding company's major subsidiaries.[55]

UMNO was also seriously over-extended on another front. In 1981, the party had gone ahead with the construction of its 42-storey headquarters, together with a convention and exhibition facility, at a cost of more than RM300 million. It was built on a 3.6 hectare site on which Tengku Razaleigh once had an option, which he had been persuaded to relinquish to UMNO at cost.[56] Originally, UMNO planned to finance the Putra World Trade Centre, as it was called, with a RM200 million bank loan secured against the land. According to projections presented to UMNO's Supreme Council, which cleared the investment, cash flow from office and hall rentals would pay off the debt within 17 years.[57] But after drawing down the first portion