On 19 May 2023, the media, both mainstream and news blogs, went to town with the report that a former senior minister and a prominent businessman, who is also a Tan Sri, are under investigation for the alleged misappropriation of over RM2.3 billion of national funds in the wake of the revelation of confidential documents through the Pandora Papers previously.
MACC should continue beyond those named in the Pandora Papers and investigate the claims by Tan Sri Tajudin Ramli, set out in a 7-minute video accessible on YouTube channel, that he was forced to buy Malaysian Airline System Bhd (MAS) shares at higher than market value by PM4 and a former Senior Minister, reportedly told him that he was not allowed to say "no" to the prime Minister with regards with the purchase of the shares.
If Tajudin himself can reveal this openly, it shows that there were some suspicious elements involved in the deal.
Tajuddin claimed he was instructed to buy MAS at RM8 per share when the share price of MAS was trading at approximately RM3 in 1994.
In 2000, the government bought back MAS shares at RM8 a claim, a reported 117 per cent above the market price from Tajuddin. 6 years later, at a press conference after launching a book, PM4 denied it was he who instructed Tajuddin Ramli to buy MAS shares as, at that time, the government did not need the monies, albeit a wave of privatisation of national assets being carried out, at that time.
The decision to sell MAS shares to Tajuddin came out of the blue.
No tenders and competing bids. No feasibility and evaluation to evaluate the viability of the offer. Not even a slight rumour. The sale was consummated within 3 months when a deal of such size then would have taken at least 6 months back in 1994 to put together, finalise and complete the documentation.
On paper, the government made a considerable profit from the sale as the share price of MAS was trading at around RM3 while Tajuddin allegedly paid RM8 per share for the takeover. When asked by the reporters what was the collateral for the loan of RM1.792 billion to buy MAS, Tajuddin proudly told the media that he was the collateral.
In June 2006, Tajudin made a counter-claim for a total of RM13.36 billion in relief from the government, TM, Telekom Enterprise Sdn Bhd and TRI. He also names some 22 individuals in his counter-claim.
The court documents revealed that the government gave him a waiver from the single-customer limit usually imposed by BNM on borrowers. The loan for RM1.792 billion was the biggest single loan given by several banks in Malaysia at that time, let alone a loan given to individuals.
In addition, there was a waiver on the stamp duties for loan agreements and transfer of shares.
However, in August 2011, the government, through the then Minister in the Prime Minister's Office, apparently directed all government-linked companies (GLC), including MAS and Danaharta, to cease all suits worth at least RM2 billion against Tajudin.
CLOB International was an over-the-counter market that was extremely popular among Singaporeans for trading, primarily Malaysian shares, in the early 1990s. It was initially established after Malaysia delisted all dual-listed stocks from the Stock Exchange of Singapore (SES) following its split from the Kuala Lumpur Stock Exchange (KLSE) in January 1990.
When Malaysia imposed capital controls and prohibited all offshore transactions of the ringgit in September 1998, it also froze the trading of all Malaysian shares on CLOB. When stocks cannot be traded, they are as good as having no value. At the time of the suspension, some 172,000 Singaporean investors held CLOB shares worth an estimated RM17 billion.
On 28 Aug 1998, Clob shares were traded at a discount of only 9% on average, compared to the prices of the shares on the KLSE. Following the announcement of the Malaysian measures on 31 Aug 98 and 1 Sep 98, the discount on Clob prices widened to 49% on 3 Sep 98. Club was suspended from trading on 4 Sep 98 and subsequently reopened for 5 trading days from 9 to 15 Sep 98. At the end of the trading period, the discount on Clob shares averaged 42%
Effective Capital, a company owned by a Singaporean businessman who was known to be a close associate of a former Senior Minister, again probably the same former Senior Minister in the earlier investigation and who allegedly also told Tajuddin Ramil that he was not allowed to say no to PM4 to buy out the frozen shares at substantial discounts – apparently the deal was almost close to 70% of the then prevailing market prices, giving Effective Capital hundreds of millions in windfall profit.
For a US$4.5B CLOB position (apparently measured at 2000 market prices based on KLSE), Effective Capital offered US$1.5B to "take over the risk" of holding the extended position.
A former Bank Negara assistant governor reignited public attention on the Bank Negara forex speculation losses when in an interview with the media in January 2018 said that the cumulative losses from the 1990s were, in fact, US$10 billion, much higher than previously disclosed.
The government under PM6 followed up on the disclosure by setting up a task force to investigate.
In June 2018, the government formed a Royal Commission of Inquiry (RCI) to probe the matter. PM10, the Opposition Leader, was called and presented himself to be questioned by the RCI.
So were PM4 and a former Senior Minister.
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