Dr. M called the episode a "heinous crime." But still he feverishly worked the formidable levers of power to prevent the full disclosure of the bank's dealings with George Tan's Carrian Group and other
If they had been charged and tried, Dr. M's ambitious industrialization and development plans probably never would have gotten off the ground. Indeed, his young administration might not have survived the next mid-1980s general election. But he seized upon a plan to make the sordid Carrian saga go away and to recoup all the lost funds. And with a little luck, it would come together before the Malaysian public even got wind of the bank's loan losses. But it was not to be. The losses eventually caught up with the bank, wiping out its capital and reserves and ushering in a rescue takeover by Petronas, the national oil company, in the institution's first of four government bailouts over the last two decades.
Actually, the plan wasn't Dr. M's. But the moment he heard of the scheme, he embraced it as if it were his own. In his desperate straits, it must have seemed the providential answer to resolving the first serious scandal of his young administration.
The plan, devised by Egyptian tin trader David Zaidner, was a blueprint to corner the world's tin market. No small feat, but then Mahathir was never one to concentrate on the attainable when the grandiose was available.
Zaidner, then working for Swiss-based Marc Rich & Co., first presented the scheme in 1980 to a few well-connected Indonesian officials, according to a story six years later by Raphael Pura in The Asian Wall Street Journal and to a 1985 book by A. Craig Copetas, "Metal Man: Marc Rich and the 10 Billion-Dollar Scam."
Not all were so gullible
The Indonesians, however, told him to take a hike. They had been tipped off by tin industry officials that Zaidner had been implicated in a 1975 scandal. Suspicious executives at Amalgamated Metals Corp., Zaidner's then employer, raided the trader's office and found a number of irregularities, including evidence that Zaidner may have bribed an Indonesian working as the buffer-stock manager at the International Tin Council (ITC). He was fired. But three years later, he was hired by Marc Rich. Both companies were based in
The plan consisted largely of clandestinely buying huge amounts of tin futures and tin on the world market through Zaidner and Marc Rich. Those purchases, coupled with
At the time the operation was launched in July of 1981, the accepted rationale among Malaysians in the know was to boost global tin prices. Between March of 1980 and mid-1981, the tin price had slumped to US$4.33 a pound from US$8.65 and had been widely expected to fall further because of weak demand. For
Months after the cornering scheme was launched, its success took on even greater urgency, with signs that massive loan troubles were afoot at Bank Bumiputra's
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