In a recent statement, tycoon Halim Saad placed the blame for the 1997 Asian Financial Crisis and the subsequent collapse of the stock market squarely on former Prime Minister Mahathir Mohamad. Halim emphasized that Mahathir's monetary policies during his tenure had a detrimental effect on Malaysia, particularly in terms of isolating the country from foreign investors.
Halim's statement comes in response to a lawsuit he filed against Mahathir and two others in July, relating to the government takeover of his holdings in the Renong-UEM group in 2001. He also named Nor Mohamed Yakcop and the federal government as defendants.
The defendants had previously contended that the takeover was a result of the weak performance of Renong and UEM shares during the 1997 crisis, which had a cascading effect on the stock market due to the group's significant market holdings.
Halim vehemently denied these allegations and asserted that his management of Renong had been sound. Under his leadership, he argued, Renong was one of the most successful Bumiputera-owned groups before the government takeover.
He refuted claims that his management led to a decline in Renong's market capitalization from 1997 to 2000, insisting that this decline was in line with the broader stock market downturn brought about by the 1997 crisis.
Instead, Halim pointed to the policies implemented by the Mahathir administration during the crisis, such as the pegging of the ringgit and restrictions on dividends, as exacerbating the adverse impact. He also mentioned political instability resulting from the arrest and prosecution of then Deputy Prime Minister Anwar Ibrahim.
Regarding Renong's substantial debt during the peak of the crisis, Halim argued that it was manageable despite its size. He cited the Corporate Debt Restructuring Committee's (CDRC) assurance that debt restructuring could be carried out without government financial support.
Furthermore, the CDRC expressed confidence in extracting significant value from Renong's asset portfolio over the following years. The proposed scheme ultimately resolved Renong's debt through the issuance of RM8.4 billion bonds by PLUS in September 1999, receiving a favorable A3 rating from RAM Ratings.
These factors, according to Halim, indicate that PLUS was not in financial distress. The CDRC's approach demonstrated that with prudent management, even significant debt levels could be navigated successfully.
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