Malaysia turns up heat on Singaporean businessman Akbar Khan amid graft probe against Daim Zainuddin

Malaysia’s corporate law prohibits corporations that own a financial concern to extend loans to related parties. In the Akbar takeover of MPHB, which at the time owned a commercial bank and had an insurance arm, the businessman did not only receive financing from a related party. The loan was also collateralised with MPHB stocks, which is another breach of Malaysia’s corporate law.

While laying the groundwork for his takeover of MPHB, Mr Akbar also secured exclusive – and lucrative – rights from the Daim-led Finance Ministry at the time to handle the repatriation of frozen shares valued at over US$4 billion that were listed on CLOB. 

The equities in 112 Malaysian companies were frozen when Malaysia imposed capital controls in September 1998 to protect its battered currency. After months of government-to-government negotiations, Mr Akbar’s privately owned Effective Capital was appointed to arrange the transfer of the frozen shares back to the Malaysian exchange.

Government officials noted that under the arrangement, Effective Capital is estimated to have grossed almost RM300 million to return the CLOB shares to over 172,000 investors.

OTHER PROMINENT BUSINESSMEN SUMMONED, AUDITED

Days before Mr Akbar was temporarily detained for questioning, the MACC summoned another one-time Daim business acolyte, Tajudin Ramli. 

Mr Tajudin, who previously had a controlling interest in national carrier Malaysian Airline System (MAS), was grilled by MACC investigators over a controversial plan by the government in early 2000 to bail out the airline. 

MACC sources told CNA that the agency is investigating whether there were elements of corruption in the transaction, which was actively promoted by Daim. 

Daim had convinced then-Prime Minister Mahathir Mohamad’s government to pay Mr Tajudin RM1.79 billion, or RM8 per share, for his controlling stake. At the time, the national carrier’s stock was trading at around RM3 apiece, which put the value of the businessman’s equity holding at roughly RM718 million. 

Mr Tajudin, who has largely withdrawn from Malaysia’s corporate scene, could not be reached for comment.

The MACC’s investigations have also led to separate, but related, audits of the dealings of other businessmen such as Mr Halim Saad, who served as the chief corporate nominee for the United Malays National Organisation (UMNO) political party, and Mr Tan Hua Choon, a low-profile tycoon who controls a concession to manage and maintain the government’s fleet of motor vehicles valued at over RM4.5 billion (just under US$1 billion).

Mr Daim was UMNO’s longest serving treasurer. Under his watch as both purse-keeper of the party and the country’s finance minister, the Halim-controlled conglomerate Renong Bhd emerged as the main beneficiary of government contracts worth billions of ringgit, including the construction of the 772km North-South Highway that runs the length of Peninsular Malaysia and other infrastructure undertakings.

It was also during Daim’s stint as finance minister that Mr Tan, who enjoyed close ties with the politician, won the lucrative concession to operate and manage the government’s vehicle fleet. Both Mr Halim and Mr Tan could not be immediately reached for comment.