Malaysia's Mahathir Defends Sarawak Chieftain

Malaysia’s former Prime Minister, Mahathir Mohamad, has defended Sarawak’s embattled chief minister, Abdul Taib Mahmud, questioning calls by international NGOs for investigations of Taib’s vast fortune.

"When an election is near, you get funny things like this coming out," Mahathir told reporters at a press conference Tuesday. "If it is just a political game to try and undermine somebody's political image then I think it is not right."

If the allegations are true, the 86-year-old Mahathir said, the authorities could be expected to take action. In May, Swiss authorities announced they were investigating accounts held in Swiss banks by the Taib family for evidence of corruption. Shortly after that, the Malaysian Anti-Corruption Commission announced it would also investigate Taib’s holdings, although observers in Kuala Lumpur said it was unlikely that the MACC would follow through, Indeed, one source told Asia Sentinel recently that the investigation had “gone cold.” A Taib spokesman said the funds had been legitimately deposited and that there was no evidence of criminality.

Many political observers expect Prime Minister Najib Tun Razak to call national elections in the early part of 2012, possibly in March. Sarawak, the country’s largest state, is key to efforts by the Barisan Nasional, the country’s ruling national coalition, to maintain a healthy majority in parliament. Both Najib and Mahathir earlier this year reportedly tried to dissuade the scandal-ridden chief minister to quit before state elections.

When Taib refused to step down, both had to criss-cross the state, campaigning for Taib’s coalition. However, the coalition produced a two-thirds majority in the state assembly. Although he had publicly offered to step down, the magnitude of the victory impelled him to stay in power.

Mahathir’s defense of Taib was generated by the fact that on Tuesday, NGOs from six different countries issued a joint letter demanding that Malaysia’s sultan appoint a royal commission of inquiry and that authorities arrest and prosecute Taib and 13 members of his family for massive fraud, theft, corruption, illegal appropriation of land and abuse of public office. They allege that the looting of Sarawak’s rich timber and other natural resources has earned Taib’s family billions of US dollars through investment in as many as 400 companies in 25 countries.

They also demanded that a multi-agency task force be appointed to attempt to repatriate the vast sums from other countries to the people of Sarawak.

Research released earlier this month by the Switzerland-based Bruno Manser Fund said official documents show the Taib family stake in 14 Malaysian companies alone is worth US$1.46 billion. The fund has uploaded all of the documents onto the Internet. They can be found here. Billions more are believed to be held in other countries.

The fund said its research only covers publicly available information from Malaysia’s Registry of Companies and other official documents and the total of all of the Taib family’s holdings could run well in excess of that amount.

“Not counting their more hidden wealth, this puts the Taib family firmly into the category of one of the richest families in the world and makes them far richer than the Queen of England (whose assets are a mere half billion pounds),” the fund said.

In all, according to the fund, named for a Swiss environmentalist who disappeared in Sarawak in 2000 while trying to aid the Penan tribe, the family also has stakes in companies in Australia (22 companies), Bermuda (1), the British Virgin Islands (7), Brunei (1), Cambodia (1), Canada (9), the Cayman Islands (1), Fiji (3), Hong Kong (7), India (2), Indonesia (3), Jersey (1), the Kingdom of Saudi Arabia (1), Labuan (1), New Zealand (5), the People’s Republic of China (2), the Philippines (1), Singapore (2), Sri Lanka (1), Thailand (2), the United Arab Emirates (1), the United Kingdom (4), the United States of America (6) and Vietnam (1).

Allegations are that as chief minister, Taib granted timber access permits to a plethora of companies, most of them owned by ethnic Chinese, that denuded much of the state of its tropical rainforest. The two NGOs previously reported that Taib's children are the shareholders and directors of numerous companies controlling residential and commercial buildings in Canada, Australia, Britain and the United States together worth hundreds of millions of US dollars. Many of the assets came into their possession when they were in their early 20s and were still college students with no visible access to legitimate resources to invest.

Taib has been chief minister, finance minister and planning and resources management minister of since 1981 and he hardly conceals his vast wealth, riding around the capital of Kuching in a cream-colored Rolls-Royce sedan.

Taib, his four children, eight siblings and his first cousin Hamed bin Sepawi have stakes in 332 companies worth several billion US dollars in Malaysia, the report says. “The Taib family’s share in 14 large companies’ net assets alone has been calculated at US$1.46 billion (RM4.6 billion). The three largest Taib family-linked companies are the 84 percent Taib-owned Cahya Mata Sarawak (net assets RM2.4 billion), the 25 percent Taib-owned Custodev Sdn Bhd (net assets RM1.6 billion) and the at least 35 percent Taib-owned Ta Ann Holdings Bhd (net assets: RM1.4 billion).

Cahya Mata Sarawak is a construction conglomerate listed on the Kuala Lumpur stock exchange (KLSE 2852) that allegedly has benefited enormously from a cement monopoly and from untendered public contracts awarded by the Taib-led Sarawak state government. Ta Ann Holdings Bhd (KLSE 5012), which is chaired by Hamed Sepawi, is an internationally active logging company. Since its foundation in the 1980s, Ta Ann has been granted more than 675,000 hectares of logging and plantation concessions by the Taib government. Privately-held Custodev Sdn Bhd is a Sarawak-based property development company. Achi Jaya Holdings (net assets RM550 million), which is wholly owned by the Taib family, holds a monopoly over log exports from the timber-rich state.

“We consider these corporate interests of the Taib family to be illicit assets”, said Bruno Manser Fund director Lukas Straumann in the prepared release. “There are many clear indications that Taib has abused his public office to build a corruption and fraud-based billion-dollar empire.”

“We are shocked to see that the Taib family has so shamelessly enriched itself while the people of Sarawak have to struggle with widespread poverty and an appalling lack of infrastructure and government services.”

The Bruno Manser Fund called on anti-corruption and anti-money-laundering authorities worldwide to investigate the Taib family’s business activities and freeze Taib family assets in their countries.