Malaysia Uncut

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The Truth About Khairy Jamaluddin – 12

The Truth About Khairy Jamaluddin continues here:


Part 12: The sound of money


There is certainly an element of dishonesty in the government-owned economic and financial institutions. Norza Zakaria has openly admitted to fellow UMNO Youth Exco Members that he reads important minutes even before it reaches the table of Second Finance Minister Nor Mohamed Yakcop. Of course, there are a few honest souls in these organisations who are disgusted by what Khairy Jamaluddin is doing. But they are a very small minority. As young men in their 30s who are just starting out in life, they are hopeful that one day they can reach the heights of their contemporaries who are close to Khairy and therefore now leading the management of the many GLCs under Khazanah. So, most of them grumble only in private. None dare take up the issue with the top, knowing full well that their bosses are also on Khairy’s payroll. One recent employee of a government financial institution who reported a case to the Anti-Corruption Agency found, instead, himself the subject of an internal investigation. The ACA dropped the case like a hot potato when they discovered that the real purchaser of the asset was a Special Purpose Vehicle (SPV) owned by Mr S, Khairy’s and Norza’s proxy. It was the honest employee who found himself transferred to a desk job in Bank Negara.

Khairy’s ‘consultants’ far outnumber these honest souls. Many were brought in during the heady days of 1998 and 1999 when Malaysia fawned on the young Oxbridge graduates who were seen as saviours of the country. Take, for example, the case of Azman Yahaya, the bright young administrator from the London School of Economics who was a deft and able steward in the days immediately following the 1997 Asian Economic Crisis. Azman was rewarded by being given business interests in Scomi as well as awarded a contract to his own company, Symphony, which did nothing more than take over the job of distributing shareholder circulars previously carried out by a government department. In a sense, Azman was being rewarded for doing a good job. But it was a way of removing him from being in the thick of what was to happen next. Many of the boys in the CDRC (Corporate Debt Restructuring Committee), Ministry of Finance and Danaharta that he trained are now Khairy loyalists who do his bidding in the hope of being another Azman Yahaya.

Khairy knows that all this is happening and yet he does nothing to stop it. The natural presumption is that Khairy is building his own empire. But since most of his cronies are relative unknowns to the general public, the goings-on behind closed doors never attract the public condemnation it deserves. The opposition parties in Malaysia are so out of touch that they still focus their attacks on the corruption of Mahathir’s days instead of dealing with current reality. They do not know that far from getting better, the power of patronage in Malaysian political life has been greatly enhanced by the new circle of Abdullah Badawi’s Young Turks.

The only murmurings against Khairy’s stripping of national assets have come from some dissenting voices in UMNO allied to former Prime Minister Dr Mahathir Mohamad. In June this year, some BN Members of Parliament tried to ask questions related to the abuse of GLC, Khazanah and Danaharta funds. One of them actually posed a question to Second Finance Minister Nor Mohamed Yakcop, questioning the logic of giving away such important assignments on a commission basis to untrained and inexperienced companies such as ECM Libra, Ethos Consulting and Binafikir. The hidden agenda of the question was supposed to be an attack on Khairy’s malignant role in the government’s economic activities. When that Member of Parliament put his question on paper, the message was swiftly relayed to Khairy by a woman senator. Khairy promptly called Abdullah’s office, who arranged a private session with that Member of Parliament. In no uncertain terms, he was told that such questions were ‘unhelpful’. No more was heard of the question and probably in the next few years no more will be heard of that Member of Parliament either.

Not forgetting that Khairy is one of the three who make the penultimate decision on who becomes a Barisan Nasional election candidate, the government backbenchers are muted and dare only raise questions on issues that are connected to the former administration of Mahathir Mohamad. No smell except that of mountain roses comes out whenever they speak of the administration of Abdullah Badawi.

There is, of course, the seething discontent. But as long as Abdullah Badawi is Prime Minister, Khairy and his cronies would be free to enrich themselves. The examples of the previous administration are not lost on these bright young things from Oxford and Cambridge, who have found a legal way to make corruption and patronage work for them.

Khairy is free to propose his money-making deals to the government’s many agencies because there are people who would be left free to cream some other deals in return for cooperation and silence. For example, in Khanzah, Azman Mokhtar himself is seen as relatively clean. However, his former company, Binafikir, now headed by his ally Mohd Rashdan Yusof, another Cambridge graduate, is desperately bidding for a multi-million dollar deal that can catapult itself to the highest reaches of Malaysian financial life. To that end, Mohd Rashdan has been lobbying Khairy to allow him to take over Aseambankers on the back of Binafikir’s alleged successes in restructuring government companies.

In reality, Binafikir is no more than a collection of fresh Cambridge graduates led by several accountants who got lucky in 1998 by being tapped by Nor Mohamed Yakcop to split MAS into an asset holding as well as operations companies. Since then, Binafikir has done little business worthy of mention. But Mohd Rashdan feels that by acquiring Aseambankers the deal-flow will be automatic. Aseambankers has a reservoir of ready-made clients, whereas Mohd Rashdan considers Binafikir a reservoir of talent. This view is not shared by veteran bankers and other industry players who deem Binafikir a company with no tangible assets and definitely without the track record it boasts of.

Nevertheless, the deal will go through on the back of Rashdan’s relationship with the Oxbridge mafia led by Khairy. The recent failure of MAS to emerge with flying colours from the crisis of 1997 has served to show that many of the so-called successes of the Khairy allies are no more than hot air. Yet, no one stops the rolling juggernaut because few amongst the people understand what goes on behind the Malaysian government’s very tightly closed doors.

Khairy makes his money not only through the Khazanah deals, but also by making other side deals through his connections in the Finance Ministry headed by his father-in-law. Two such examples are the award of Bumiputra shares in public-listed companies which have foreign majority ownership. Again, Khairy relies on Norza to give him information on such deals. In these particular cases, Khairy promised to allocate the shares to two potential allies. The first company will see its shares allocated to members of a certain royal family closely allied to Khairy. The other, which is also being targeted by one of Najib Tun Razak’s brothers, will see around 19% of its shares given away to a Bumiputra nominee of an existing Chinese billionaire who has often been seen accompanying Abdullah during his many trips to the United States to visit ailing First Lady, Endon Mahmood.

What is the net income for Khairy in these two deals? The first transaction will involve shares worth RM526 million. Commission to Khairy would be around RM15 million. On the second transaction, the sum involved is much bigger, i.e. RM883 million. Khairy is expected to make at least RM20 million on this transaction alone.

So, since March, a rough calculation of Khairy’s received and potential income would be as follows:

1. Commission from sale of 5% of TM to Temasek Holdings, Singapore – RM16 million.
2. Commission from the purchase of M1 shares by Khazanah and TM – RM6 million.
3. Expected commission from further sale of 5% of TM to Temasek Holdings, Singapore – RM17 million.
4. Expected commission from sale of Danaharta assets – RM85 million.
5. Expected commission from sale of Felda non-core assets to Temasek Holdings and DBS Bank – RM30 million.
6. Expected commission from allocation of Bumiputra shares in foreign-owned company 1 – RM15 million.
7. Expected commission from allocation of Bumiputra shares in foreign-owned company 2 – RM20 million.

The total amount? A cool RM189 million. And that’s only the ones that have been in the public eye.

Why is Khairy able to engineer these deals with very little opposition? Firstly, the opposition in Malaysia is extremely fragmented and unable to bring itself together against the hugely popular government of Abdullah Badawi. DAP couches its objections in an academic language that is not easily understood by the majority of the voters. PAS has no economist worth its salt. And PKR is more interested in attacking Mahathir than criticizing Abdullah, the man they credit for releasing Anwar Ibrahim.

Secondly, potential opponents of Khairy within UMNO are tainted by their own cases stemming from the long administration of Mahathir Mohamad. Mahathir’s children, for example, can hardly criticize Khairy for getting the economic benefits of being an insider when they themselves benefited from national assets such as Petronas to the tune of hundreds of millions.

Thirdly, the young professionals who were brought in over the last few years are too worried about their long-term careers to raise objections. They consider Khairy one of their own and hope to share in his achievements on the way to the top.

Fourthly, many of the administrators of the affected organisations have been bought by Khairy, Norza and their allies to the extent that they are themselves involved in the deception of the public.

So Khairy is well on the way to becoming a billionaire by the end of this year. Who knows, like Thai Prime Minister Thaksin, Khairy may yet be the first billionaire to be appointed prime minister of Malaysia.

Of course, the most important reason is that Khairy is a member of the First Family of Malaysia. His marriage to Nori Abdullah gave him the same opportunities that were taken by other Asian luminaries such as General Prabowo (the son-in-law of Suharto), Taufik Kiemas (husband of Megawati Sukarnoputri) and Mike Arroyo (husband of Gloria Macapagal Arroyo).


The Truth About Khairy Jamaluddin continues…in Part 13 – He loves me, he loves me not


Wednesday, October 11, 2006 - Posted by | Commentary

1 Comment »

  1. […] The Truth About Khairy Jamaluddin continues here: […]

    Pingback by The Truth About Khairy Jamaluddin - 13 « Malaysia Uncut | Wednesday, October 11, 2006 | Reply

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