1993Vol13no.10

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1993Vol13no.10 The Maika-Telekom shares investigation: UNANSWERED QUESTIONS ACA Director-General Zulkifti Mahmood Samy Vellu The 17-month investigation into the Maika-Telekom shares scandal by the A CA concluded with its Director-General Zulkifli Mahmood clearing Samy Vellu of any \vrong-doing but unfortunately without clearing the doubts in the minds of the Malaysians. If anything, his statement had not only raised many questions connected with the Maika scandal, it had apparently undermined the credibility of the ACA as an independent organisation dedicated to fighting corruption, writes ANILNETTO. A/iran Monthly 1993:13 (10) Page 2 IC President Samy Vellu appeared to be absolutely "Far from clearing Samy Vellu, it has Mdelighted with the recent six-paragraph statement from lhe instead raised fresh concern about Anti-Corruption Agency on August the independence of the ACA itselr' 26clearing him of any irregularity in the Maika-Telek.om shares con- troversy. But the verdict was hardly Did aU lhe money go toTAFE Col­ Were similar aUocations made to convincing. Indeed, it left many lege or was some of it diverted else­ RM2 shell companies linked to other questions unanswered and even un­ whe.-e? Barisan component parties. dennined the credibility of lhe ACA Perhaps the most serious flaw in What are lhe controls in place to as an independent organisation dedi­ the ACA report was its failure to ensure that the funds from lhe even­ cated to fighting corruption. address the whole basis of special tual sales of these shares are used for The ACA investigation, which allocations of shares every time the benefit of the underpriviliged lasted 17 months, appeared to be very lhorough. Samy Vellu and olhers were grilled at lenglh on a few occasions and the flam­ boyant Minister was even asked to declare his assets. Unfortunately, the declara­ tion was never made public. A detailed disclosure of Samy VeUu's many assets would have certainly been of great interest to the public. The ACA statement pointed out that Maika had rejected the 10 million share aUocation ~ause it was financially incapable of coming up wilh the neces­ sary financing. However, Maika investors being manhandled... this directly contradicted Mailca Managing Director and not misappropriated by those in positions of powet1 ''A detailed disclosure of Samy These are the crucial, un­ answered questions which make the Vellu's many assets would have ACA report seem almost farcical. Far from clearing Samy VeUu, it has certainly been ofgreat interest to the instead raised fresh concern about public'~ the independence of the ACA itself. It has done nothing to boost the con­ Rama Iyer's public statement that there is a privatisation project. fidence of the public in lhe ACA. The conlroversy surrounding the Maika had already obtained a RM50 What criteria are used to select million loan facility to buy lhe the companies for special allocations Maika-Telek.om shares scandal ap­ shares. of shares? pears to be far from over. Even the The ACA confumed lhat most-of Who makes the final •decision ACA itc;elf seems to be having the money was channelled to lhe and approves such allocations? second thoughts and has resumed the party's education arm, lhe MlED. How is it possible that RM2 shell investigation in earnest, but this time But it failed to explain in detail how companies could be entitled to three by going after various small fries the funds were used by the "MIED. million shares each? linked to lhe Mailca episode. • A/iran Monthly 1993:13 (10) Page 3 The Maika-Telekom Shares Scandal: An .Unbelievable Cover-up! itlt is nothing but a shield to protect • The Treaswy offered 10 mil­ Parliamentary Opposition corruption, breach of trust, abuse of lion Telekom shares to Maika leader, LIM KIT SIANG had power and unethical practices in in a letter dated 27 September reacted with disbelief, outrage high political places. The ACA 1990. The Mlnaging Director and disgust over the ACA should more appropriately change of Maika. G K Rama Iyer in­ findings which cleared Samy its name to Anti Small- Corruption formed Samy Vellu in a letter Vellu. According to Lim IGt Bureau. dated 28 September 1990 that I am greatly demoralised and dis­ Siang it is one of the greatest since Maika's financial posi­ couraged becau~ Zulkifli has failed tion was tight, it would only be oover-ups of fmancial to back his finding with facts and able to take up one million sandals in Malaysian history. figures, dates and a chronology of shares. events after 17 months of investiga­ • Samy veuu informed the tion. It is one of the greatest cover­ Treaswy, which withdrew the read the short six -pam graph press ups of financial scandals in offer. statement by Anti-Corruption Malaysian history. • In letters dated 6 October IAgency (ACA) Director General is Such data central and basic to 1990, the Treaswy instead of­ ZuJkifli Mahmood clearing MJC the bUth about the scandal which fered the 10 million shares to President Samy Vellu and all others defmuded 66,(XX) Maika the following parties: in the RMlOO million Maika­ shareholders. My suspension from Telekom shares scandal again and Parliament at the height of my ex­ Maika 1 miJiio11 again, each time with increasing dis­ pose of the scandal can now be seen Clearway Sdo belief, outrage and disgust. It has in its correct per.;pective. Bhd 3 miJJioll failed to give a convincing case for S 8 Manage- the clearing of Samy Vellu. DOUBTFUL 'FACTS' ment Services I have totally lost confidence in Sdn Bbd 3 miJiio11 The following 'facts' ~ losed the Anti-Corruption Agency in the by the ACA are open to challenge: Advance Per- fight against corruption. It has lost all sonal Com- • The Government decided to credibility and respect If the ACA puters Bhd 3 miJiio11 allocate 10 million shares to were to conduct a swvey today, it TOTAL 10 tnillioll would fmd that over 90 percent of the MIC for the Indian com­ Malaysians have lost confidence in munity. "/have totally lost confidence in the Anti- Corruption Agency in the fight against ·corruption" -um Kit Siang Jtlirtm MonJialy 1993:13 (10) Pt~ge 4 • 1lle offer was made without lion that if the share price fell below the consultants and to reim­ any condition as to how the RM7.50 upon listing, the borrowers burse the cost of construction shares were to be utilised would have to top up the balance, of TAFE College. This otherwise the financier would sell probably refers to the Maika not MIC off the shares to recover the loan. RM2.318 million profit But On 12 November 1992, Par­ It is apparent that Sarny Vellu why were the proceeds in liamentary Secretary to the Prime lied at his 'tell-all' press conference 'casb' and not by cheque as Minister's Department Othman when he said that the total profit of is the normal practice? Abdul reiterated that the 10 million RM7.168 million from the eventual • S B Management sold off all Telekom shares were given through sale of 8.92 millioo Telekom shares three million shares. by the three companies had been Maika Holdings. 1lle Maika Board • APC di~-posed only part of as well as Rama Iyer himself channelled to the MIED in three their shares. Part of the instalments of RM2.318 million publicly denied that Maika had p~eeds of the sale were used rejected the 10 million shares alloca­ (November 19~). RMIOO,<XX> to purchase Renong shares and tion. In fact. Maika was able to bke (December 1990) and RM4.75 mil­ the balance voluntarily handed up the full 10 million shares because lion (March and April 1992). over to Samy Vellu with the Sarny Vellu went on to provide of a RM50 million loon fxiliry o~ instruction that the money be delails of the sales of the Telekom taincd from Ara~Malaysian Mer­ applied in a manner he deemed chant Bankers Bhd. shares: fit for the benefit of the Indian The Maika Boord also denied • Clearway community. Depury Finance Minister Ghani Sold 3 million shares on 7 Does this mean tlmt there Othman's statement on 12 May November 1990. was no second instalment 1992 that his Ministry had diverted ProjiJ: RM2.318 million -paid to payment or RMIOO,OOO to the nine million shares to the other the MIED in November 1990 the MIED? The ACA did not three companies on the recommen­ ('Cash' receipt no. 3701 dated 24 confirm that this amount dation of Maika. In fnct. Maika November 1990) was paid to the MIED. didn't even lrnow that these three • Advance Personal Computers/ • Subsequently, APC' disposed companies existed. S B Management of the balance of the Telekom (Two of these companies - S B Sold 5.5 million shares on 8-15 shares and handed the Management and Cl~ay - were November 1990. Bought 3 million p~eeds to the MIED. actually RM2 shell companies.) Renong shares with part payment Does this refer to the net Did the ACA interview of RM 1.95 milhon. profit orRM4.75 million (the Finance Minister Anwar Ibrahim, ProjiJ: RMlOO.<XX> - purportedly ACA did not conr~rm that Ghani and Othman • who had paid to the MIED in December this third instalment was taken a common stand throughout 1990.('Cash • receipt no 3702 paid to the MIED either) or 1992 that the shares were not dated 2 January 1991) to the further disposal of the given to the MIC but to Maika­ balance or 80,000 Telekom Sold 420,000 Telekom shares in before rejecting their version of shares held by APC? the events? March/April 1992.
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