Companies mismanaged into state ownership
The companies have been involved a wide variety of activities including media, property development, construction, toll roads, hospital equipment, logistics and distribution, cellular telephony and other businesses. What they had in common was that most of them benefited from government contracts doled out by the Barisan Nasional, the ruling coalition that has controlled Malaysia since its inception as a country. The other thing they had in common was that at some point most of them were mismanaged into financial trouble of one kind or another and had to be bailed out or bought out by the government.
Realmild unloaded Malaysian Resources Corporation Bhd onto the Employee Provident Fund in late 2005 as part settlement for an outstanding Rm500 million loan. Putera Capital Bhd, is threatened with bankruptcy. It formerly owned the Putra World Trade Center, Umno’s headquarters, which rents out office space to businesses. UEM Builders Bhd, an offshoot of United Engineers Malaysia (UEM), along with UEM World Bhd, was dumped onto Kazanah Nasional, the investment holding arm of the government and the government’s strategic investment vehicle.
Kazanah Nasional now also owns PLUS, which held the tollway contract for the national north-south highway, as well as Pharmaniaga, a former UEM subsidiary dealing in hospital supply and other services. Court documents show that MAS, then the state-owned flag carrier, was taken over and privatized by Tajudin Ramli only to lose an estimated RM8 billion (US$2.77 billion at current exchange rate), with a major part of that being funneled into a Frankfurt, Germany cargo logistics company whose directors were closely connected to Tajudin.
According to the website Malaysia Today, Tajudin’s lawyers revealed that Tajudin had only been a front man for Umno and that Umno “not only has to protect him from prosecution but that they also had to ensure that the government bought back the shares at the same price that they were sold to him although the shares were only worth a portion of the real value.”
Overpriced government contracts provide a lifeline
Other depositions made available in recent weeks have listed a long series of documents detailing misdoings in UEM/Renong, once headed by Halim Saad, which has long been accused of looting the government treasury through vastly overpriced construction contracts. Halim told the press in September that he had left the UEM/Renong board in 2001, saying authorities wanted Kazanah to take it over “to prevent a systemic risk to the banking system in Malaysia and to enable a sustained restructuring of the group.”
UEM itself is still at it. The government-linked company was given the contract to build a second bridge from the mainland to the northern city of Penang at a price estimated in 2007 at Rm2.7 billion. It has since climbed to RM4.3 billion without figuring in a variety of ancillary costs including compensation for fishermen and project development costs of RM285 million, with the total now nearing RM5 billion.
Other documents show how completely the country’s press was in the thrall of UMNO. Media Prima Bhd, a listed company, apparently took over the ownership from Realmild of TV3, 8TV, ntv7 and TV9 as well as 90 percent of the equity in The New Straits Times Press (Malaysia) Bhd, which publishes three national newspapers; the New Straits Times, Berita Harian and Harian Metro. It also owns three radio networks, Fly FM, Hot FM and One FM. Other cross media interests of Media Prima include content creation; event and talent management.
It also owns outdoor advertising companies Big Tree Outdoor Sdn Bhd, UPD Sdn Bhd, Right Channel Sdn Bhd, Kurnia Outdoor Sdn Bhd and Jupiter Outdoor Network Sdn Bhd. It is online through a digital communications and broadcasting subsidiary, Alt Media, with the Lifestyle Portal gua.com.my and the newly launched TonTon, a cutting-edge video portal with HD-ready quality viewing experience that offers the individualism of customized content and interactivity of social networking.
- Faber Group Bhd
- KUB Malaysia Bhd
- Malaysian Resources Corp. Bhd
- Media Prima Bhd
- New Straits Times Press (M) Bhd
- Putera Capital Bhd
- UEM Builders Bhd
- UEM World Bhd
- Utusan Melayu (M) Bhd (partly owned by Syed Mokhtar Albukhary, another Mahathir crony and one of Malaysia’s 10 richest men according to the Forbes List
- Renong Bhd
- Realmild Sdn Bhd
- Mahkota Technologies (Also a partnership with Syed Mokhtar Al Bukhary)
- Malaysian Airlines
- Malaysian Helicopter Service
- Temasek Padu Sdh Bhd
- Sabah Shipyard
- Labuan Shipyard