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

declared financial difficulties. The idea was to prop up Carrian and at the same time get back some of the money it owed BMF.

The elaborate transaction to acquire several parcels of Carrian property in California and Florida was disguised as a loan by Bank Bumiputra to a third party. It began with the bank extending an US$85 million loan to a newly established Liberian company created by the bank. Called Marmel Inc., the Liberian company in turn loaned the money to a Channel Islands-based company called Trans Pacific Trust. From there, the funds were loaned yet again to another Liberian-incorporated outfit called Darton Ltd. Darton and Dragon Base Company in Hong Kong used the US$85 million to purchase the U.S. assets. Darton appeared to belong to Yap Lim Sen, the purported third-party buyer, who had his own property development company in Malaysia. But Darton was ultimately owned and controlled by the bank, and Yap was Nawawi's friend and agreed to hold the U.S. assets as a "national service".[34]

In 1986, a committee of inquiry appointed by the Malaysian government concluded that Bank Bumiputra's convoluted exercise was "clumsy, unprofessional, unethical and amounted to a fraud" on Carrian's shareholders and other creditors. The panel recommended that evidence and documents related to the property acquisition be turned over to the Malaysian police for further investigation. But no legal action was ever taken in Malaysia against those involved in the arrangement.[35]

In 1991, a minority shareholder in the defunct Carrian group, Bahamas-based Capri Trading Corporation, filed a lawsuit in the United States claiming it was denied a fair share of the proceeds from the sale of the property.[36] The suit alleged that Bank Bumiputra and its senior officers at the time acted "in concert and in conspiracy...to fraudulently conceal the looting" of the property from Carrian's minority shareholders and creditors. It claimed they engaged "in a pattern of racketeering" by paying less than one-third of the property's market value, depriving minority shareholders of adequate compensation and "significantly diminishing" the value of Capri's stake in Carrian.[37] After several hearings extending over 14 months, a U.S. Federal Court judge dismissed the suit on a technicality, that Hong Kong would be the most appropriate venue for such a case.[38]

News of the suit being filed in California, first reported in early 1992 by Bernama, Malaysia's national news agency, buffeted stock markets in Malaysia and Singapore. They were unsettled by the prospect, however remote, that Bank Bumiputra might have to cough up the U5$3 billion being sought in damages.[39] The government immediately imposed a domestic news blackout on the story. Bernama was ordered to delete the report from its electronic news system and editors of the country's newspapers were told not to publish it.[40] Although the suit essentially repeated allegations made by the committee of inquiry five years earlier, it was an unacceptable reminder of Malay outrage and Mahathir administration culpability.

The practical flaw in Nawawi's 1982 secret rescue plan, in which Dr. Mahathir invested so much hope, was that it left in place the executives at BMF who were responsible for its predicament. Directors Lorrain Esme Osman and Mohamed Hashim Shamsudin in Kuala Lumpur, and General Manager Ibrahim Jaafar in Hong Kong were, at the very least, guilty of reckless lending that almost defied belief. As it turned out, press investigations showing that two of them had improper dealings with borrowers were not only accurate but merely the tip of the iceberg. Nawawi had taken the precaution of setting up a special supervisory committee to monitor BMF's lending in Hong Kong when he took over Bank Bumiputra in 1982. But Lorrain, Hashim, Ibrahim, and an alternate director of BMF, Rais Saniman, effortlessly circumvented the committee and continued lending to George Tan and Carrian. To avoid detection on one occasion, they arranged for China-owned Bank of Communications (Nominee) Company Ltd. to make a US$40 million loan on BMF's behalf.[41]

All the double dealing, back-room scheming and obfuscation began to fall apart days after Dr. Mahathir's press comments, when a BMF executive, Jalil Ibrahim, was murdered in Hong Kong.[42] Bank Bumiputra's head office had secretly dispatched Jalil, an internal auditor, specifically to inspect BMF's books covertly while occupying the post of assistant general manager.[43] Lured to Hong Kong's five-star Regent Hotel,[44] he was later found strangled in a remote banana grove in the New Territories. Mak Foon Than, 32, a little-known Malaysian businessman, was soon arrested, convicted and jailed for his murder. At the trial, the prosecution linked the crime to an attempt to bail out Carrian.[45]

With Hong Kong homicide detectives joining investigations by the police fraud squad, the securities commission and the anti-corruption agency, events moved swiftly. Police raided Carrian's offices on suspicion that someone was siphoning off assets from the group. Carrian and George Tan companies were found to owe BMF much more than either side had disclosed, effectively sinking a ten-month effort to rescue the conglomerate.[46] Tan and his principal assistant were arrested and charged with making false and misleading statements in their roles as company directors.

It was a different Dr. Mahathir who faced the press again three months later, in October 1983. Now he called BMF's lending "a heinous crime" and "a betrayal of trust". He identified five men responsible for the fiasco, said they had accepted consultancy fees from BMF that were "morally wrong" but not illegal, and indicated the four still in their jobs would be asked to leave.[47] But he made no mention of the reported financial transactions between some BMF executives and their Hong Kong customers, which had been reported in the press. Lorrain, Hashim and Rais duly quit their posts at both BMF and Bank Bumiputra. Ibrahim followed. The surprise was not that they were forced out, but that they had been retained so long as part of Bank Bumiputra's strategy of using the people responsible for the bad loans to try and salvage the debts.[48]

As the government tried to parry increasingly strident calls for a full account of what happened in Hong Kong, BMF