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

sued George Tan for failing to repay seven loans for which he stood as guarantor. The banking industry interpreted the move as a shallow and belated effort by Bank Bumiputra to show it was serious about recovering its loans and to dispel rumours of a separate recovery effort.[49]

The three-man committee of inquiry announced by Dr. Mahathir in early 1984 was headed by Malaysia's Auditor General, Ahmad Noordin Zakaria, a veteran civil servant known for his thorough and often critical audits of state agencies. He was joined by a lawyer and an accountant. Dr. Mahathir said they would have a broad mandate to probe all aspects of BMF's lending, including any possible wrongdoing, and the findings would be presented to Malaysia's Parliament. But his decision to have the committee operate within the framework of Bank Bumiputra gave the impression that it was more in-house inquiry than independent investigation. It lacked the legal powers of a royal commission to secure evidence, call witnesses and cite for contempt those who did not appear. Dr. Mahathir saw no difficulties in getting former bank executives and others to cooperate. "The government is interested in getting to the bottom of this," he said.[50]

As the committee embarked on a two-year paper chase to reconstruct tangled records, however, the government continued to give the impression it was still reluctant to see the sordid details exposed. Noordin, the chairman, complained that he and his colleagues received better cooperation from Hong Kong authorities than they got at home in Malaysia.[51] After the committee delivered a series of interim reports detailing irregularities by BMF's former senior executives, Bank Bumiputra filed complaints with the Malaysian police and initiated legal action against some of the ex-staff. By now, most of the suspect bankers were living abroad. Malaysia's attorney general said his decision on whether to prosecute the case would not depend on the committee's findings, indicating the police criminal investigation was starting from scratch and would ignore the voluminous evidence already gathered by the committee.[52]

In a characteristic move, Dr. Mahathir discovered enemies abroad plotting to take advantage of the situation to blacken Malaysia's name, a familiar ploy to gather public support and deflect attention from domestic difficulties. He said Hong Kong police improperly passed BMF documents, obtained during the Jalil murder inquiry, to the colony's securities commission, and he refused to discount suggestions that Hong Kong or British officials might have manipulated the investigations to embarrass Malaysia.[53] But former premier Hussein Onn, for one, was not impressed. He joined some other members of UMNO, the Malaysian press, opposition parliamentarians, intellectuals, labour unions and consumer groups clamouring for the truth, many persuaded that responsibility reached deep into the political establishment.

The committee's final report, which consisted of two volumes and totalled 1,075 pages, was eventually published in early 1986, but not before a rancorous exchange between the committee and the government. Committee members applied maximum political pressure by addressing a press conference and calling on the Mahathir administration to keep its promise to make the findings public. While they declined to discuss their conclusions, they tantalized the public with the statement that the Malaysian authorities could have saved at least US$150 million if they had taken resolute action when Carrian declared its liquidity crisis in October 1982.[54] Dr. Mahathir accused the committee of acting "beyond its authority" in seeking publication of the report. Citing legal concerns, he told Noordin that "you don't care what happens to others so long as you satisfy your righteousness".[55] There was little doubt how taxpayers felt. The extensively documented allegations made the three committee members instant folk heroes. After praise for them poured in from readers, the Star, an English-language daily owned by the Malaysian Chinese Association, a senior partner in the National Front government, named them Men of the Year in 1984.[56]

Nobody connected with BMF was brought to trial in Malaysia, contributing to the belief among many Malaysians that the politics of the story remained untold. It was left to the Hong Kong government to extradite Rais from France, and Lorrain and Hashim from Britain, and to prosecute them successfully. They were all jailed for short periods, along with George Tan and several others.

Bank Bumiputra's 1983 results, announced in 1984 later than usual while the government arranged the bank's resuscitation, set records for all the wrong reasons. The loss of RM973.6 million for the year was the biggest in the history of the Malaysian banking system. It was Bank Bumiputra's first loss since opening its doors 19 years earlier. A RM1 billion write-off on the Hong Kong loans exceeded by far the total of all after-tax profits ever earned by the bank.[57] A decision to transfer almost all BMF's Hong Kong loan portfolio to Bank Bumiputra on the last day of 1983 proved controversial, since it masked the subsidiary's 1983 lending to Carrian, and enabled the bank to stretch out the write-offs so it was harder to link them with Hong Kong. Just the same, the absorption of the heap of bad debt was devastating, wiping out Bank Bumiputra's paid-up capital almost twice over.[58]

To avoid a financially difficult and politically embarrassing direct bailout, the government chose to use Petronas, the only state-owned institution that packed enough financial punch to do it. Under the complex RM2.49 billion arrangement, Petronas bought the bank from its major shareholder, National Equity Corporation, injected fresh capital, and acquired RM1.26 billion of problem Hong Kong loans from the bank. Petronas ended up with about 90 per cent of the equity, with the balance in the hands of the Minister of Finance Inc. Analysts calculated that Malaysia eventually would lose a total of about RM2.26 billion in bad loans, plus millions of dollars on forgone earnings on government funds diverted to the rescue.[59] Rather than impose an onerous financial burden on the treasury, the Malaysian government, in effect, decided to pay for the losses with accumulated and future earnings from the oil and gas industry.

Petronas's acquisition of Bank Bumiputra was almost certainly illegal. The Petroleum Development