No News Is Bad News
For image info, go to https://www.reddit.com/r/malaysia/comments/kmqaxs/revisiting_dr_m_plan_to_artificially_inflate_tin/ (Revisiting Dr M plan to artificially inflate Tin Prices in the 1980s (The Maminco Sdn Bhd scandal)
For image info, go to https://www.freemalaysiatoday.com/category/opinion/2019/07/16/a-reminder-on-what-kit-siang-said-about-mahathir-era-scandals/ (A reminder on what Lim Kit Siang said about Mahathir-era scandals)
Governments still good only for catching ikan bilis (anchovies), not ikan jerung (sharks)
KUALA LUMPUR, Dec 10, 2023: Malaysians have a low opinion of Malaysia’s anti-graft enforcement agencies. Call it by any name you like, selective persecution and prosecution is the order of the day since Merdeka (Independence) 1957.
A TikTok video clip, featuring disgraced former prime minister Najib Razak, blaming Dr Mahathir Mohamad for the Maminco Scandal that led to the collapse of the tin industry.
Though, today, it is aking to the pot calling the kettle black, Najib did expose the facts of the Maminco Scandal in the 80s where a RM2 company could secure up to RM1.5 billion in loan from state-owned Bank Bumiputra Malaysia Berhad, allegedly directed by the Government.
The amazing question in the mind of Malaysians is: “Why no action by the police and Malaysian Anti-Corruption Commission (MACC) till today by subsequent federal governments? (federal governments are elected once every five years).
Maminco is one of the many political and government-linked scandals to rock Malaysia but, hardly anyone has been prosecuted for decades.
Do you blame Malaysians for labelling the federal governments as good only for catching the ikan bilis (anchovies) but not the ikan jerung (sharks), thereby undermining public confidence in justice.
No News Is Bad News reproduces below[past news reports on Maminco:
A flashback to the 80s Maminco scandal
Felix Jeubelie
Published: Mar 17, 2015 2:58 PM
⋅
Updated: 3:03 PM
I read with interest ‘Tis the season of forgetfulness over financial scandals’ which triggered my interest in a scandal that occurred in the 1980s.
Previously, the tin industry was Malaysia’s heaven-sent treasure trove. At one point, it employed more than forty thousand workers. However, when the tin price was halved in 1985, mines closed down and many lost their jobs.
Back in 1981, Maminco Sdn Bhd was set up as a RM2 company to to spike tin prices on the London exchange with loans from BBM.
Conversely, the tin price collapsed in 1981, and the country’s exchequer lost huge amounts of money. Eventually, the company had debts of RM1.5 billion.
Lim Kit Siang noted : “It is clear that the $2 company, Maminco, is really mysterious for more reasons than one, and not just it being the mysterious tin-buyer in the London and Penang markets in 1981, leading to at least $660 million losses, but also with regard to its parentage, operation and management, as well as motivation. Maminco is incorporated under the Companies Act 1965 on 26th June 1981, but since its incorporation document, it has never submitted any annual returns or accounts for the past five years.”
The US intervened by releasing its stockpile of tin so the tin price collapsed.
Terrence Netto observed: When the Maminco Affair began to leak into the public sphere, Hussein Onn, who had retired as PM in the middle of 1981, was already in a state of advanced disenchantment with the way things were going under Mahathir Mohamad.
A new development emerged.
Rather than acknowledge the losses in the tin speculation, the government set up another dummy company called Makuwasa Sdn Bhd, creating new shares supposedly reserved for ethnic Malays which were allocated to the Employees Provident Fund, the country’s retirement fund for private and public workers. The plan was to sell these cheaply acquired shares, supposedly reserved for poor bumis, at market price for a profit to cover Maminco’s losses.
A Bar Council statement notes that during the Umno general assembly on Sept 18, 1986, Mahathir was forced to admit that Makuwasa was created to recoup the government’s losses from the Maminco debacle and to repay loans to Bank Bumiputra.
Thus this is a tale of immeasurable loss to our nation’s repute and standing regionally and internationally, this scandal from the 1980s and many other scandals before/after paved the way for many obstacles to our country's development.
It is commendable to be reminded of this debacle and also others in their post. However, where do we go from here?
How Dr M abused EPF money on London tin market
By A JALIL HAMID - September 17, 2017 @ 9:56am
In 1981, Tun Dr Mahathir Mohamad (insert) approved a clandestine plan to artificially prop up sagging tin prices. FILE PIX
POLITICAL scientists R.S. Milne and Diane K. Mauzy, in their book Malaysian politics under Mahathir, wrote that Malaysia’s financial scandals reached almost endemic proportions in the mid-1980s.
They concluded that the episodes might have been generated as a result of a “get-quick-rich” mentality, which might have led to the “pursuit of wealth, untempered by ethics, or even by fear of law”.
Even as early as 1981, when Tun Dr Mahathir Mohamad took office as prime minister, some of the country’s biggest financial scandals were already brewing.
Milne and Mauzy’s observations were largely borne out of several scandals, including the infamous London tin market caper involving our own Employees Provident Fund (EPF) money.
It was a major breach of propriety when the Mahathir administration in the 1980s raided the EPF to fund dubious transactions resulting in the EPF-Makuwasa scandal, causing huge losses to the EPF.
The EPF-Makuwasa scandal came about because the government wanted to recoup the RM600 million losses suffered in a failed attempt to corner the London tin market through shadowy Maminco operations in the early 1980s, which flopped instead.
As we all know, Malaysia was once a leading producer of tin. In 1979, the country produced about 63,000 tonnes, or 31 per cent of the world’s output. More than 40,000 people were employed in this sector and it was a major revenue earner to the economy.
In 1981, Dr Mahathir approved a clandestine plan to artificially prop up sagging tin prices. Maminco Sdn Bhd, a RM2 company, was set up to secretly mop up tin to help lift prices of the metal on the London Metal Exchange.
To solely finance its activities, Maminco obtained a RM1.5 billion loan from state-owned Bank Bumiputra Malaysia Bhd.
The Malaysian secret plan helped to push up world tin prices for a spell, but the higher prices also led to increases in tin production and the untimely release of the United States’ strategic tin stockpile. Unable to maintain the artificially high prices, the global tin market then collapsed. Maminco became a RM1.5 billion liability overnight.
In order to help recoup its investments and repay the bank loans, money was siphoned out of another RM2 company called Makuwasa Securities Sdn Bhd, also a shadowy company.
Newly-issued shares reserved for Bumiputeras and allocated to the EPF were discreetly channelled to Makuwasa at par value. The cheap shares were then sold at market prices for a profit.
On Sept 18, 1986, Dr Mahathir was forced to admit that Makuwasa was created to help plug the losses accrued by Maminco in order to repay the bank loans. In his memoirs, however, Dr Mahathir called it a “debacle” and admitted to a “mistake we made in the management of the country’s finances”.
But the cost to the country’s reputation was equally huge, after having repeatedly trying to conceal the truth.
The then primary industries minister, Datuk Seri Lim Keng Yaik, said Maminco had ended up about RM660.5 million in the red, including actual trading losses.
Gone are the days when EPF funds were used to bail out troubled companies. There is a strict governance now on how and where the EPF invests its funds.
A veteran newsman, Jalil believes that a good journalist should be curious and sceptical at the same time
The dirtiest scandals in Malaysian history. Part 1 – The Maminco tin scandal as never before told
The Dirtiest Scandals In Malaysian History. Part 1 – The Maminco Tin Scandal As Never Before Told
THE THIRD FORCE
By MT Webmaster Last updated Jan 3, 2018
“One thing led to another before the Egyptian trickster was appointed the MMC’s de facto advisor on tin trade. That bothered the GTF immensely. A third wiretap revealed that Hamzah was tasked by the Prime Minister himself to intensify the smuggling of tin through Southeast Asian markets with the help of Zaidner. Now, before I go any further, I dare Mahathir to publically deny this or sue me.”
THE THIRD FORCE
On the 30th of August 1977, the United States (US) Department of State received a cable warning it that three Malaysian Ministers were slated to partake in discussions pertaining the (then proposed) Common Fund for Commodities (CFC), a vestige of the New International Economic Order. A tap of that cable revealed that the said ministers were a “dominating influence in any cabinet established by the Government of Malaysia (GoM) and needed to be further surveilled.” The ministers named were as follows:
1. Dr Mahathir Mohamad – Deputy Prime Minister
2. Musa Hitam – Minister of Primary Industries
3. Tengku Razaleigh Hamzah – Minister of Finance
4. Hamzah Samah – Minister of Trade and Industry
The tap further revealed that the ministers were under surveillance by the CIA since 1976 through the GoM Task Force (GTF), a special unit put together to keep a tab on their movements. The main purpose of the GTF was to monitor their positions on the proposed CFC which was then a matter of great concern for the London Metal Exchange (LME). The CFC was eventually set up in 1980 and agreed upon by the GoM, which taps reveal were based on recommendations by both Razaleigh and the late Tan Sri Hamzah Abu Samah.
A year later, Mahathir was announced the fourth Prime Minister of Malaysia. The CIA intensified its surveillance on the GoM and discovered numerous backdoor discussions the then premier had with Hamzah (who was no longer a minister). One of these discussions pertained the regulation of tin prices at the London Exchange, which Mahathir contended was “being manipulated by the US and the UK (United Kingdom) through excessive speculation” of the futures market.
“They are stockpiling on tin and have unrealistic delivery dates which they know we cannot comply,” said Mahathir.
Around then, the International Tin Council (ITC) played a major role in managing fluctuations of tin prices by presenting guidelines on the sale of the commodity to participating nations. But the CIA was wary of Mahathir’s advances and were constantly keeping a tab on him. On the 20th of March 1981, another wiretap revealed that the Prime Minister sought the establishment of an RM2 company with intent “to purchase tin futures contracts and stockpile on the commodity.”
The trading concern eventually came into existence in June 1981, barely a month ahead of Mahathir’s appointment as Prime Minister. A CIA insider then leading the GTF alerted president Ronald Regan that plans were afoot to “buoy tin prices through manipulation of the futures market.” But Regan ignored the alert. According to him, no amount of stockpile could “match America’s buffer stock by any measure.” When the agent spoke of plans to artificially inflate a “tin bubble,” Regan had this to say:
“What? You’re telling me that some joker from Malaysia is gonna give us rope to hang?”
The US president was relying more on data provided by insiders from the LME suggesting that the volume of tin entering the market, then at a reasonable high, was expected to increase. But the head of Central Intelligence, William J. Casey, warned that the increase was due in part to large quantities of tin smugglers were releasing “in gushes” through the Asian market. According to Casey, the amount was “sufficient to exert pressure to the floor of the ITC’s target band.”
Still, Regan decided to wait and see what Mahathir was up to. In January 1982, the head of the GTF informed the president that the Prime Minister “was soaking up tin as if it were water.” According to him, the GoM was colluding with David Zaidner to “intensify the smuggling of tin through Southeast Asian markets.”
And this is true.
Back then, Zaidner was already on the CIA’s shit list for his role in spiriting ill-gotten wealth through the US and the UK. The Egyptian confidence trickster was a well-known extortionist who blackmailed directors of UK and Hong Kong based tin establishments he was complicit with to smuggle tin into Asia. One of these directors – who is the chairperson of the Hong Kong Exchanges and Clearing – had quite an influence over the way tin futures were traded.
Unbeknown to many, Zaidner was well acquainted with the late Tan Sri Hamzah Abu Samah. He assured the former Minister of Trade and Industry that the GoM could make “tons and tons of money” if he were assured more contracts from the Malaysian Mining Corporation Bhd (MMC). But the director of the MMC, Abdul Rahim Aki, had a better idea – he brought Zaidner straight into Mahathir’s office.
One thing led to another before the Egyptian trickster was appointed the MMC’s de facto advisor on tin trade. That bothered the GTF immensely. A third wiretap revealed that Hamzah was tasked by the Prime Minister himself to intensify the smuggling of tin through Southeast Asian markets with the help of Zaidner. Now, before I go any further, I dare Mahathir to publically deny this or even sue me.
I dare him to deny that Maminco made some RM500 million out of the illegal trade. In December 1981, Mahathir tasked Tengku Razaleigh Hamzah with getting Bank Bumiputra Malaysia Berhad (BBMB) to approve borrowings worth over RM1 billion through two offshore subsidiaries of the bank – one in Bahrain, and another, in London. Some of these transactions do not appear on paper, though further wiretaps reveal that the transfers were confirmed by all officials concerned. The Hong Kong based Bumiputra Malaysia Finance was later involved with another transaction to the tune of RM200 million.
No comments:
Post a Comment