UMNO Attempts to Corner Financial Sector A I -The Child is the Father of the Man - so_me reflections on child abuse . R‘?jiv's Last 0rds_... on foreign policy " -Te_naga Nas|onal- ' Abuse of Power? W . , ,f,=,V V,,;- ~, W Religiosity on the Rampage; Spirituality in Slumber...7; Letters..9; “IfWe Were Malays...”...l7; New World Order or Same Old American Imperialism?...l8; The Eagle Must leave the West Asian Sky...21; A Plea: Lift Economic Sanctions Against Iraq...25; The Child is the Father of the Man - Some reections on ch'ldI abuse...27 ; Rll"v’s Last Words...0nforeignp0licy...29; Current C0ncerns..31; Tenaga Nasional: Abuse ofPuwer?...40 ,, UMNO Attempts to Corner Financial Sector steps to not only increase its Paduka Daim Zainuddin. In 1982, The new Finance stranglehold over the Chinese press, when Datuk Seri Dr Mahathir Minister Anwar Ibrahim but also to ensure that its access to Mohamad secured the services of has promised that ties ftmds in future is secure. Daim - then a prominent between politics and businessman - it was widely believed that Daim was inducted to help solve . business wiD be severed. UMNO's flnancial dependence on But, this may be easier said outside sources. than done with the Renong Daim's solution was to make Group's growing deep in-roads into the corporate sec­ involvement in the banking tor using UMNO's investment arm, Fleet Holdings Sdn Bhd, which was and financial sectors, says established by his predecessor EDMUND TERENCE Tengku Razaleigh Hamzah, now GOMEZ in yet another of president of the opposition party, his insightful probes into Semangat 46. Thus, Daim's state­ ment. "I personally feel that UMNO the b~Wness connections of should not be involved in business", UMNO. made during his fmal day in office as Fmance Minister, can only be taken at face value. Since he continues to hen the Barisan Nasional Fonner Finane. Minist« Daim Zainud· remain treasw-er ofUMNO, the party wou the 1990 General din oreat.d thle unique mix of polilice will have a difficult time convincing W Elections with its two­ withbusin... Malaysians that this unholy mix of thirds majority control of parliament politics and business is about to intact. most analysts attributed its cease. success to two main factors - money Yet, even while the former and media. While the seemingly easy The entire deal, fmance minister continues to receive access to funds and the consequently valued at $1.95 accolades from nearly all quarters for greater spending capacity of the billion, is also one of leaving the Malaysian economy in Barisan Nasional raised the conster­ the pink of health after seeing it nation of the opposition, it was the largest in through a severe recession with the probably UMNO's vast control over Malaysian corporate help of some stern economic the mainstream publishing and measures, the criticisms that he has electronic media that eventually history which will received for contributing to this turned the election in favour of the make Renong one of rather unique phenomenon of politics Barisan Nasional. the largest in business have not abated. At the It was only the Chinese press centre of these criticisms stands which showed some semblance of companies in the RenongBhd. independence in its reporting during stock-market in the election campaign. Since the Renong Talu!over results of the elections also revealed terms of paid-up Until early 1990, Renong was an the continuing decline of support, capital. obscure property-based. publicly­ especially from the Chinese com­ listed loss-making entity. Almost munity. for the Barisan Nasional- the overnight. Renong' spoor state of af­ ruling coalition obtained only 51 per UMNO's current vast control fairs changed last April when it an­ cent of the popular vote - it appears over the media and its access to funds nounced the reverse takeover of two that UMNO has already initiated is probably attributable to the efforts ofUMNO's major investtnent hold­ of the party's treasurer, Datuk ingcompanies-AeetOroupSdnBhd 2 a 43 per cent interest in 1V3. That these two companies are the ITlQSt profitable income-generating com­ panies in the Renong Group is ~ue undoubtedly to the benefits they have derived from the privatisation policy. The entire deal, valued at $1.95 billion, is also one of the largest in Malaysian corporate history which will make Renong one of the largest companies in the stock-market in tenns of paid-up capital. As a result of these acquisitions, Renong is now forecasting a massive pre-tax profit of $185.037 million foe the year en­ ding 30 June 1992, a far cry from its precarious financial standing just last year. Acquisition ofNanyang Press The acquisition binge .continued EJection VICtory: UMNO'• vMt control over the main•treem pubbhing and early this March when Renong ob­ et.ctronic mecia helped HCUre the Barisan win. tained an indirect 50 per cent stake in publicly-listed Nanyang Press and Habbudi Nominees Sdn Bhd - holds the remaining 50 per cent stake (Malaya) Bhd through Hume In­ and a 2 per cent stake in publicly­ in PLUS -the company it established dustries. Jaguh Mutiara Sdn Bhd, a listed United Engineers (M) Bhd to oversee the implementation of the company wholly-owned by (UEM). privatised multi-billion North South Renong's Fleet Group, has 23.8 per The takeover, the largest in Highway project cent equity of Hume Industries. Malaysian corporate history. was Nanyang Press is the publisher and through a ~swapping exercise ...it is becoming distributor of Malaysia's largest cir­ worth $1.226 billion which immedi­ culating Chinese daily. Nan yang ately converted Renong into one of evident that there is SiangPau. Malaysia's leading conglomerates an increasing Thus, with this acquisition, having cootrol over a significant Renong now controls the major number of private companies and attempt to comer the Chinese newspapers in the country as eight major publicly-listed com­ financial and NSTP owns the other leading panies including The New Straits banking sectors Chinese daily. Shin Min Daily News. Times Press (NSTP), Sistem Apart from this, also tluough NSlP, Televisyen (M) (or 1V3), Bank of through an intrinsic the leading English and Bahasa Commerce (BCB), Hume Industries, web of interlocking Malaysia dailies come under Time Engineering, Kinta Kellas, Ce­ Renong's control, thus giving the ment Industries of Malaysia (CIMA) relationships leading Group almost near monopolisation andUEM. back ultimately to of Malaysia's mainstream media and Since then, Renong's forays into Renong. publishing sector. the corporate sector have been steadi­ With the publishing sector, not to ly ~ing. In February this year, mention the highly lucmtive con­ the last of Fleet Holdings' publicly­ Faber Group, although ear­ struction sector - through UEM, listed vehicles, the once-ailing hotel marked to benefit from the privatisa­ Time Engineering, Hume Industries and property development company, tion ofMalaysia's postal department. and CIMA - well consolidated under Faber Group (formerly Faber Mer­ will probably depend more on PLUS Renong, it is becoming evident that lin), was brought under the Renong to improve its profitability. At the there is an increasing attempt to umbrella when 50 per cent equity of same time, under an "in-house" con­ comer the financial and banking sec­ Projelc Lebuhrnya Utara-Selatan Sdn solidation exercise, also involving tors tluough an intrinsic web of in tee­ Bhd (PLUS) was swapped for a 30 share-swapping, Renong acquired a locking relationships leading back pee cent stake in Faber Group. UEM direct 30.5 per cent stake in UEM and ultimately to Renong. 3 lion shares when the company went BCB-UAB Merger bank. UMBC has eighty-two branches which extend overseas. public in 1988. In January 1990, he On 24 September 1990, Bank of made a surprising move of divesting Commerce (BCB), in which Renong his shares in Rashid Hussain to obtain has a 60 per cent stake through Fleet ... UMNO's control a controlling 51 per cent stake in Group and NS1P, announced the over a vast financial publicly-listed Juara Perkasa Cor­ purchase of the United Asian Bank porntion Bhd (JPC). which was then (UAB). currently Malaysia's sixth market opens so debt-ridden that its shares had largest bank. from Bank Negara. Es­ avenues for political been suspended from trading. sentially, it is a share- swapping ex­ JPC was rejunevat.ed and later ercise which will see the merger of patronage renamed RJ Reynolds Bhd following BCB and UAB. Following a series of a restructuring and merger exercise extraordinary losses, UAB had to be The consideration that UMBC with RJ Reynolds Tobacco Co., then bailed out by Bank Negara in 1986 and D&C Bank should seek to merge a foreign-controlled entity which had when the central bank could not con­ takes on a different light when it is been under increasing pressure from vince any ofUAB's shareholders to noted that Daim Zainuddin had a per­ the govemrnent to ensure tl}at 30 per inject funds into the ailing bank to sonai interest in both banks before his cent of its equity was allocated to a keep it afloat Bank Negara ended up appointment as Finance Minister in Bumiputera concern in compliance pumping in almost $363 million to 1984. Apart from this, in 1985, Fleet with the New Economic Policy revive UAB. Since then, the central Holdings tried 10 acquire a 41 per (NEP). bank has always been open about its cent stake in UMBC from govern­ Through his 19 per cent control intention to divest its 79 per cent ment-owned Pemas, but the deal of General Lumber. Wan Azrni has stake in UAB for cash.