The controversy surrounding the issue of Telekom Malaysia shares to Maika Holdings way back in 1990 refuses to dissipate.

On 23rd May, 2008 readers at the popular web site Malaysia-Today were able to access a copy of the police report filed by Klang resident Thiagarasan A/L Palaniaya (the website identifies Thiagarasan as the Klang MIC chairman) demanding that the police conduct an investigation on the alleged losses, misuse of power, mismanagement and criminal breach of trust which had occurred over the allocation of Telekom shares to MIC in 1990.

Thiagarasan states in the police report that back in September 1990, the Finance Ministry had made a special offer or allocation of 10 million Telekom Malaysia (TM) shares to Maika Holdings. At that time, TM shares were generally traded at price levels in excess of RM10 per share. In 1992, the Indian community found out that the MIC wound up with only one million shares.

What had happened?

On May 16, 1992 Tan Sri G. K. Rama Iyer, the then Managing Director of Maika Holdings revealed that Samy Vellu was informed at 6.10 am on October 5th 1990, that Maika had been offered 10 million TM shares and of the probability of obtaining full loan financing and that Maika intended to take up the entire allocation of 10 million shares. Rama Iyer further disclosed that Samy Vellu replied that there must have been a mistake. The offer to Maika should be for one million and not 10 million. According to Samy Vellu, the remaining 9 million shares were meant to be allocated to “other MIC bodies”.

Thus after Samy Vellu had contacted the Finance Ministry, the letter of offer was retracted and Maika’s allocation was reduced to 1 million shares.
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Samy Vellu’s response to this disclosure was that Maika Holdings did not have the capacity (funds) to purchase the TM shares but this was denied by Rama Iyer (NST, Dec 10 2003). Indeed, in 1992, Rama Iyer had disclosed that a letter from Arab-Malaysian Merchant Bankers Bhd offering RM50 million to finance the purchase of the 10 million shares was received on October 6th 1990.

In a statement before Parliament after the scandal broke, then Finance Minister Datuk Seri Anwar Ibrahim disclosed that since Maika had stated that it could take up only one million shares, the other nine million shares were allocated to three companies proposed by Maika because to his “ministry’s knowledge, the three companies represented the interests of the Indian community” (The Star, April 30, 1992). According to one Pasamanikam, a Maika director at that time, Maika did not reject the Finance Ministry’s offer and did not propose that the nine million shares be allocated to other companies. He further revealed that Maika had indeed raised a RM50 million loan to facilitate the acquisition of the entire 10 million shares even before the Finance Ministry had withdrawn its offer.

The 3 companies that received the 9 million shares were named by Thiagarasan in the police report as:

* A name search at the Companies Commission of Malaysia (SSM) website does not return these names. These 2 companies may have been wound up or the names may have been changed.

** Positive search result at SSM; company number is 177706-U

The media did not question the basis upon which these 3 companies, with so little capital, were deemed to be companies representing Indian interests. And how could a company with RM250,000 capital, let alone the RM2 or RM3 ones, afford to buy RM45 million worth of TM shares?

The Anti Corruption Agency investigated this case and no further action was deemed necessary. To the public at large this should mean everything was above board and Samy Vellu was unfairly tarnished. Yet the saga refuses to die down, perhaps because people believe there had been a cover up.

On behalf of the people and in the spirit of the transparency in government promised to the people, BENAR would ask the Ministry of Finance and the Anti Corruption Agency to clarify some lingering doubts so that people who are suspected of wrongdoing are either cleared or brought to account for their actions.

1. At whose behest were the 9 million TM shares, originally earmarked for Maika, re-allotted to the 3 companies listed above?
2. How did the Ministry of Finance satisfy itself that the companies nominated for the 9 million shares represented the interests of the Indian community? If all that it did was to rely on the statement or representation of someone, who was that person?
3. How did the 3 companies finance the purchase of 9 million shares? As TM is a large entity in an important industry, there should have no shortage of willing buyers, both foreign and local, for a large block of TM shares at perhaps a discount to the market as a sweetener. With the eventual selling price more than double the offer price for the TM shares, and thus a low lending risk, it would not have been difficult to obtain short term loans from most banks or even their brokerage houses to fund the purchase of the said shares. Thus the rationale that Maika did not have the financial resources to execute the deal is rather feeble. After all, none of the other 3 companies could be said to be financially capable to purchase millions of Ringgit worth of shares with their paid up capital.
4. What were the ultimate profits made by the 3 companies? The sales would most likely have been done on a block basis. Even if the shares were sold off in smaller chunks, it should not have been difficult for the ACA to trace the cash movements through the bank account(s) of these companies to determine the ultimate gain on the disposal of these shares. According to Maika Holdings, it earned a profit of RM5.6 million from the sale of their million shares. Nine times this would amount to some RM50 million if the 9 million shares were sold at around the same time.
5. How were the profits made by the 3 companies distributed? Did the ACA test the claim that the 3 companies represented the interests of the Indian community?In Thiagarasan’s police report, he claimed that Clearways Sdn Bhd had paid RM2.318 million and APC and SBN had paid RM4.85 million to Tafe College. The total of these amounts is less than one-fifth of the possible profits. BENAR believes the authorities should reveal the actual amounts paid by these 3 companies towards causes that benefit the Indian community to demonstrate the veracity or otherwise of the claim that these companies had the interests of the Indian community in their hearts.
6. Were other transactions investigated? In the police report Thiagarasan lists a series of multi-million ringgit movements in what appears to be Samy Vellu’s personal bank account between April 4, 1992 and May 1992. The documentation for these transactions was apparently disclosed by one V. Subramaniam in 1993. Did the ACA determine whether the cash involved was derived from the gains arising from the sale of the 9 million TM shares?

Let us hope there are meaningful answers to these questions so we can respect the decision that was made by the government in this saga.

MIC has purchased a parcel of land in Bandar Utama, Selangor that should rightfully belong to a Tamil school, said Subang MP R Sivarasa.

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“It is a clear case of MIC robbing from school children,” said Sivarasa when met outside the school SRJK (T) Effingham today.

Sivarasa argued that official documents show the three-acre land bought by MIC was initially earmarked for SRJK (T) Effingham which currently sits on the adjacent three acre of land.
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“The six acres were gazetted for the school in 1995. How then is the school only allowed to utilise three acres while the other three acres were sold to MIC?” he said.

Sivarasa was speaking to reporters after leading a group of protesters in front of the school calling for MIC to return the land to the school and for the Anti-Corruption Agency to investigate the matter.

According to The Sun on Wednesday, Petaling Land Office records show MIC is holding the land in trust for its president S Samy Vellu on a 99-year lease issued by the Selangor government led by then menteri besar Abu Hassan Omar.

Still Indian’s champion?

Yesterday, MIC secretary-general Dr S Subramaniam had argued that MIC bought the land legally in 2000 and that the Land Office had caused an “error” by naming Samy Vellu as the owner.

Similarly, Samy Vellu has also denied ownership of the land and has warned the Selangor state government that any attempts to seize the land would be met with court action.

Sivarasa said regardless of Subramaniam and Samy Vellu’s claims, the latter is still regarded as the legal owner of the land, which is estimated to be worth RM50 million.

“They claim to be champions of the Indian community, but robbing the school of its land is an act of shortchanging the community,” said Sivarasa.

Sivarasa, a practising lawyer, said that MIC should not have bought the land as it should have been aware that the Selangor Education Department had also stipulated that the minimum size of all schools should be five acres.

The school was built in 1998 and consist of a field and a three-story building.�

Barisan Nasional component party Gerakan has upped the ante in the Ahmad Ismail ‘racial slur’ controversy.

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The party has today issued an ultimatum - that the Gerakan Bukit Bendera division will “disassociate itself” from the Umno division chief if he continues to refuse to apologise for his allegedly racist remarks.

“(We) will have nothing to do with Ahmad Ismail any more. We call upon all like-minded Malaysians to do the same,” said Gerakan Penang secretary Dr Teng Hock Nan in a strongly-worded statement.

Teng described Ahmad’s refusal to apologise as “a clear sign of disrespect and insubordination” to both the prime minister and deputy prime minister.

Prime Minister Abdullah Ahmad Badawi has earlier told Ahmad, a powerful local Umno leader, to apologise while Deputy Prime Minister Najib Razak had said sorry on his behalf three days ago.

According to Teng, the defiance shown by Ahmad was a “slap in the face” for the top two leaders, who are Umno’s president and deputy president respectively.

Ahmad was accused to have uttered seditious remarks describing the Chinese as “immigrants squatting in the country, thus were not entitled to equal rights in Malaysia” at a BN by-election rally late last month.
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The former municipal councillor also questioned the Chinese community’s willingness to share their wealth with other races.

In a clear snub against Abdullah, who is also Penang Umno chief, all 13 party divisions in the island state had yesterday thrown their support for Ahmad.

Calls for Gerakan to leave BN

Gerakan has demanded that action be taken against Ahmad.

“We urge the prime minister to take stern action without fear or favour against Ahmad, not only for his racist and extremist remark which jeopardises and threatens the existing racial unity and harmony in the country but also for his disrespect and insubordination to the prime minister and his leadership,” said Teng.

Meanwhile, the party’s Penang Youth wing called on Gerakan to withdraw from BN “immediately”.

The state Gerakan Youth secretary, Oh Tong Keong, said the party should allow its members to vote on whether to remain in BN at the National Delegates Conference next month.

“If Umno not willing to listen and respect the views of other member parties, then it gives no reasons for Gerakan to continue working with Umno in BN,” he said.

Leaders of the opposition Pakatan Rakyat are tickled by the reported two-week overseas holidays government MPs had been told to take beginning this Sunday to Sept 19.

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Backbenchers Club chairperson Tiong King Sing has however denied that the overseas trips were a ploy to get Barisan Nasional MPs out of the clutches of Pakatan, which is seeking to poach enough defectors to form a new government on Sept 16.

Pakatan leaders said whatever attempt being made to try and hold back government MPs who have decided to join the opposition will be a futile exercise.

“How long can you hold them back? One week? Two weeks? If they have already made up their mind, they will cross sooner or later,’ said PRK leader See Chee How.

He was commenting on the Star report quoting BBC chief Tiong (right), who is Bintulu MP, as saying that government MPs had been invited to go on a overseas ‘study trip’ ahead of Sept 16.

“The BN should treat the MPs with respect, and not like cattles or sheep,” said See, who is state PKR legal adviser and Stampin division chief .

Opposition leader and newly-elected Permatang Pauh MP Anwar Ibrahim has expressed confidence that Pakatan will have enough support from BN parliamentarians to form the government by that date.

A rouse to flush out defectors?

Most of Barisan MPs, especially in Sarawak and Sabah, whose names have been frequently mentioned as likely to join Pakatan are playing their cards very close to the chest.

Meetings between them and PKR leaders have taken place under a shroud of secrecy.

According to PKR sources, many of the meetings were held not in MPs’ home states with some even outside the country, or the parliamentarians were represented by their trusted aides.

The all-expenses-paid holidays for the BN parliamentarians could be a rouse for the ruling BN coalition to flush out likely defectors.

“But they will never find out,” one PKR leader told Malaysiakini.

Local Chinese newspapers, quoting various sources, say about 12 BN representatives each from Sarawak and Sarawak and at least 16 from Peninsular Malaysia are expected to join Pakatan.

The exact number will probably not be known until it actually happens.

But one deputy minister from Sarawak told a close friend he had been approached by Pakatan. He indicated that if fresh polls are held, he is likely to stay out of the race.

“This has been taken to mean that he is probably not confident he will be able to win should he contest on a BN ticket,” he said.

The Star report also quoted Kapit MP Alexander Nanta that he had been asked by fellow MPs from Sarawak “if he was available” for the planned overseas trips organised by the Backbenchers Club.

But he had already been invited earlier by the government to join Commodities and Plantation Industries Minister Peter Chin on a oil-palm campaign mission overseas to London and Belgium. He left today.

Malaysiakini understands that Hulu Rajang MP Billy Abit, whose name has frequently cropped up as a likely defector, had also been invited to go on what the BBC described as an agricultural study trip overseas.

But he told his colleagues that he had taken too many trips overseas and he would stay put this time.

Sapp leaders not at PM’s function

Sabah Progressive Party (Sapp) secretary-general Richard Yong told Malaysiakini he had heard his party colleague, Sepanggar MP Eric Majimbun, had also been invited on such an overseas trip this weekend but he too could not make it.

Similarly the party’s Tawau MP Chua Soon Bui also told Malaysiakini that she would also not being going on the trio due to her prior engagements.

Majimbun and Chua are Sapp’s only MPs. The party had had publicly declared its support for a no-confidence motion against Prime Minister Abdullah Ahmad Badawi.

During his ‘Buka Puasa’ visit to Kota Kinabalu earlier this week, Abdullah found Sapp leader Yong Teck Lee - his most vocal critic within the BN - and the rebel party’s two MPs conspicuously absent from the function.

“They had prior engagements, and so they could not make it,” was how the party secretary-general put it when asked by Malaysiakini.

Meanwhile, Sarawak PKR advisor Wan Zainal Wan Senusi (left) said in a press statement yesterday that at least three MPs from his state would join Pakatan.

He reiterated the party’s line that Pakatan has already more than 40 MPs in the bag. They will bolster the present 81 opposition MPs in Parliament to form a relatively stable government.

“This will set a new chapter in the politics of Malaysia,” he added.

Wan Zainal said he was perplexed as to why the BN viewed such crossovers as immoral since they had accepted such defections in the past in Sarawak and Sabah, citing the case of the Joseph Pairin Kitingan-led Parti Bersatu Sabah (PBS).