Percaturan Ekonomi Di Zaman Tun Dr Mahathir: Bahagian 2

BMF - the first big scandal
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 Hong Kong borrowers, who had promised rich financial returns for Dr. M's political machine and for his United Malays National Organization in return for the property-development loans. Dozens of Bank Bumiputra executives and UMNO officials were instrumental in illegally and imprudently channeling the funds to Hong Kong, and yet not a single one of them was ever charged in Malaysia for the various misdeeds.

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 Switzerland.

From Jakarta, Zaidner headed for Kuala Lumpur, where he got a considerably warmer reception from executives at government-owned Malaysian Mining Corp. By the end of 1980, MMC appointed Marc Rich its tin-trading agent. And before long, Malaysia's secret market-cornering operations were in full swing.

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 Malaysia's own tin reserves and its position as the then world's leading producer and exporter, gave the cornering scheme a reasonable prospect of success in boosting prices by shrinking supply. Or so it seemed to Dr. M and his appointees at MMC.

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 Malaysia's budget planners, already grappling with how to fund Dr. M's unrealistically expansive industrialization agenda, sagging tin prices meant years of yawning deficits and tight financial times.

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 Hong Kong subsidiary. For Bank Bumiputra was secretly financing the huge tin-stockpiling scheme on behalf of the government.

... bersambung di Bahagian 3

Percaturan Ekonomi Di Zaman Tun Dr Mahathir: Bahagian 1

Nota: Siri catitan ini adalah bersumberkan artikel asal yang dihantar sebagai komen pembaca bertajuk “Mahathir suffers fools and knaves” kepada salah satu artikel utama dalam Malaysia Today. Nampak seolah-olah artikel ini asalnya telah disiarkan di laman FreeMalaysia, satu laman yang kini sudah tiada.

Oleh kerana artikel asalnya adalah agak panjang, ianya di blog ini telah dipecahkan kepada beberapa siri supaya lebih mudah dibaca.

Pembaca yang mahir dengan Inggeris akan mencapai salah satu dari dua rumusan setelah membaca keseluruhan artikel ini. Pertama, ianya fitnah semata-mata, atau kedua, ianya adalah satu pendedahan dari musuh dalam selimut di kalangan pembantu Tun Dr Mahathir.

Rudin X berpendapat bahawa kedua-dua rumusan itu ada unsur kebenaran hingga suatu tahap. Banyak perkara yang diperkatakan dalam artikel ini, malah sesetengah ayat dan perenggan adalah asalnya tersiar dalam Wall Street Journal dalam tahun-tahun 80han dulu, sebelum akhbar itu bertukar kepada Asia Wall Street Journal. Sesetengah dari pendedahan atau tuduhan yang sama juga dibuat dalam majalah Far Eastern Economics Review.

Butiran yang disebut dalam artikel ini atau artikel lain dalam pernerbitan yang disebut bukanlah satu misteri. Semasa hidupnya dulu, arwah MGG Pillay pernah memberitahu Rudin X bahawa penerbitan-penerbitan yang disebut dipercayai mempunyai bajet yang besar untuk membolehkan maklumat dalaman yang terperinci “digoda” keluar dari kalangan orang-orang yang rapat dengan Tun Dr Mahathir, atau sesiapa pun watak yang menjadi tajuk utama berita.

Amati juga bahawa tidak semua rumusan atau tuduhan yang dibuat dalam artikel ini atau artikel-artikel lain dari FreeMalaysia adalah tepat.

Mahathir suffers fools and knaves

This is the first in a series of articles that highlight a recurring pattern in Mahathir’s lengthy tour at the helm of government: his readiness to pursue reckless schemes for personal or political enrichment and his talent for cover-ups and stonewalling when these gambits blow up.

The timeline of Mahathir’s rule is pockmarked with these explosions, but only a few minions have ever taken the rap. Even then, they have usually been restored to favored positions after the shortest appropriate period. That fact alone should make clear that they boast the most powerful of patrons – but that fact doesn’t stand alone. For most of these schemes have Mahathir’s fingerprints all over them.

A glutton for harebrained schemes
FreeMalaysia has been remiss for not earlier addressing Prime Minister Mahathir Mohamad's softer, naive, side. Yes, it's there. Consider, for instance, how easily he is taken in by con-artists and schemers. Think about how he so generously takes care of civil and political servants who faithfully guide his misconceived plans to their inevitable doom. And consider how readily he forgives himself and others for frivolously squandering many, many billions of ringgit throughout his 18-year-old regime on an array of harebrained schemes.

In short, Dr. M has been generous to fools and knaves, as long as they remained his fools and knaves.

Mahathir assumed the premiership in 1981 with an energy and zeal that few Malaysians had ever seen from the country's three previous prime ministers. "Clean, Efficient, Trustworthy" was his new administration's slogan and promise of a new form of open and accountable governance. But by the following year, he already was mired in the worst financial scandal in Malaysia's history – loan losses amounting to RM2.5 billion by Bumiputra Malaysia Finance, the Hong Kong subsidiary of state-owned Bank Bumiputra.

... bersambung di Bahagian 2.