This article first appeared in The Edge Malaysia Weekly on August 8, 2022 - August 14, 2022

Tan Sri Abdul Khalid Ibrahim’s place in Malaysian history was already ensured, even if he had not gone on to chart an illustrious career as a politician.

Khalid, who passed away at the age of 76 on July 31, is well known for his role in the famous “dawn raid” in the takeover of Guthrie Group Ltd from its British owners in 1981.

As the chief investment officer of government-linked investment company Permodalan Nasional Bhd (PNB), Khalid and the fund’s chairman Tun Ismail Ali were the key players who executed the early morning “raid” on the London Stock Exchange, which led to the fund owning 51% of Guthrie within two hours, returning the ownership of some 200,000 acres of plantation land back to Malaysians.

In an interview with The Edge, Khalid said he had felt afraid in executing the plan, not for himself but that he was afraid of failing for Malaysia.

“And when we succeeded, he said he felt so proud because we were a small poor country but we did it. It was entirely legal [at the time], brilliantly planned and well executed,” says former journalist and now Sime Darby Plantation Bhd’s chief communications officer Leela Barrock, who did the interview, adding that Khalid was a brilliant storyteller in conveying the tensions he had felt on that historic day.

As the value in Guthrie was much more than its market price, Khalid often said that PNB got the plantation assets for free after disposing of the non-plantation assets.

Former minister of finance II Datuk Seri Johari Abdul Ghani, who worked under Khalid’s leadership in PNB in 1986, says “I was one of the junior officers then. He was a real technocrat, honest, trustworthy and very dedicated to executing his job.”

In time, Khalid — a successful bumiputera professional manager — became the poster child of the country’s New Economic Policy. He had also turned PNB’s unit trust schemes into the country’s largest.

Khalid’s fame preceded him. Tan Sri Abdul Wahid Omar knew of the “dawn raid” hero only from afar but had the opportunity to work with him closely when the former joined Amanah Capital Group in 1994.

“He was then the chairman of Amanah Capital Malaysia, Amanah Merchant Bank and Amanah General Insurance, among others. I always enjoyed attending board meetings chaired by him where open discussions were encouraged and ‘juniors’ did not feel intimidated,” Wahid remembers.

As a reward for his role in the coup, Khalid was made Guthrie’s CEO in 1994 and given a stake in it as well, in line with the government’s view then that professional managers with an interest in the companies they manage would work hard to ensure the entities performed while also grooming smaller bumiputera companies to grow.

In the nine years Khalid helmed Kumpulan Guthrie Bhd, he took on debt to expand its land bank in Indonesia while venturing into property development by converting the group’s plantations in urban areas into housing estates.

Though the acquisition was criticised at the time, many in the plantation sector today agree that Khalid was visionary in acquiring the 215,000ha of oil palm estates once owned by the politically linked and financially distressed Salim Group from the Indonesian Bank Restructuring Agency in 2001. Guthrie paid US$368 million for the 25 estates located in Sumatra, Kalimantan and Sulawesi.

To pay for the estates, Guthrie took on US$400 million (RM1.5 billion) Islamic syndicated loans. The huge debt, low crude palm oil price and slow pace in rehabilitating the estates bled the group.

“I was critical of the acquisition. He (Khalid) told me then that one day people would realise that land is a scarce resource. I should have told him that he was right,” says Barrock.

While there were those who viewed the acquisition as expensive as the estates had been neglected for years and needed massive investments to get them into a productive state, Sime Darby Plantation is now reaping the fruits of the acquisition.

In fact, in Liem Sioe Liong’s Salim Group: The Business Pillar of Suharto’s Indonesia, Salim Group founder Liem Sioe Liong’s son Anthony Salim was said to have lamented the loss of the estates sold to Guthrie and renamed Minamas. Indofood, also under the Salim Group, was forced to drop a bid for the estates and the asset eventually went to Guthrie.

Paying tribute to Khalid, plantation veteran M R Chandran says, “The attack on Guthrie Group in 1981 is undoubtedly the greatest heist in Malaysian history, followed 20 years later by the acquisition of vast oil palm plantation land belonging to distressed Salim Group, in spite of insurmountable obstacles. He was a master of value — creating acquisition strategies.”

Khalid also won praise for building the Guthrie Corridor Expressway (GCE) that opened up and improved connectivity to the group’s property developments in the outskirts of Shah Alam, namely Bukit Jelutong, Bukit Subang, Denai Alam and Elmina City (developed by Sime Darby Property Bhd). Most of the highway was built on Guthrie’s land. Easier access via the GCE, coupled with the success of Bukit Jelutong, prompted other property developers to expand in the area.

However, Khalid’s tenure at Guthrie came to an end in 2003 when his contract was not renewed. This was despite the fact that the group was undergoing a restructuring and a turnaround was expected around the corner. He was in an interview with The Edge when he received a call informing him of the board’s decision not to renew his service contract as group CEO.

In Khalid’s last interview as Guthrie’s chief, he reiterated his opposition against mergers to create behemoth companies. “You can have a big head office but that’s it. It does not make any sense,” he told The Edge.

Was it his stance against mega mergers that led to his unexpected departure from Guthrie or was it his “independent style” that ruffled feathers at PNB then?

In 2006, the Synergy Drive merger of Sime Darby Bhd, Guthrie and Golden Hope Plantations Bhd as well as five of their subsidiaries to create the world’s largest publicly traded oil palm company was proposed. The merger of the PNB investee companies was completed in 2007.

In 2017, the enlarged Sime Darby was demerged to three listed entities that housed the auto, plantation and property businesses separately.

From the corporate world, Khalid went on to make news as a politician, winning the Ijok state seat in his second attempt on a Parti Keadilan Rakyat ticket (he stood in the 2006 Ijok by-election and lost) in the watershed 12th general election (GE12) in 2008, which saw the opposition coalition of Pakatan Rakyat comprising PKR, DAP and PAS forming the new state government in Selangor. He also contested and won the federal parliamentary seat of Bandar Tun Razak in GE12.

Late in the night of March 8, 2008, Selangor state assemblywoman for Bukit Lanjan Elizabeth Wong remembers getting a call from Khalid. “‘Ellie… Somehow, we have won the elections. I hope you will agree to join me in the cabinet (State Exco),’ he said. I said yes. Those six short years were an experience of a lifetime,” she reminisces.

Khalid became the first non-Barisan Nasional (BN) Menteri Besar (MB) for Selangor — the nation’s richest state and jewel in the crown eyed by contesting parties — on March 13, 2008.

While his venture into the political arena late in life (he was 60 when he contested in Ijok) did not come as a surprise to those who knew him, as he had contested for the position of Kuala Selangor Umno chief in 1995 but lost, it was Khalid’s switch to PKR (he joined the party and was made treasurer in 2006) that marked a paradigm shift not just in his public life but in the local political landscape as well.

GE12 saw BN lose its two-thirds majority in parliament — the first time since 1969. The coalition also lost five out of the 12 contested state legislatures to the Pakatan Rakyat coalition, although Perak fell back to BN in less than a year.

One of the first things Khalid did as Selangor MB was to give away the first 20 cubic meters of water per month to all households in the state. The programme now known as the Darul Ehsan Water Scheme is still in place but limited to low-income households.

The restructuring of the Selangor water sector, which involved the state government taking over water assets from the private sector, remained unresolved throughout Khalid’s ministership, and was only concluded in early 2019, over four years after he resigned as MB on Aug 26, 2014.

Cheap water was one of Pakatan Rakyat’s campaign promises. Hence, Selangor had objected to water tariff hikes as agreed under concession agreements signed prior to GE12. Where the state only wanted to pay the lowest price for the assets, the privately owned concessionaries, which included Puncak Niaga Holdings Bhd controlled by Tan Sri Rozali Ismail (who was Umno Selangor treasurer at one time), would ask for as high a price as possible.

The stalemate dragged on and when the deal was finally concluded after close to a decade, Khalid, who had left office by then, commented that Selangor was overpaying for the assets.

Indeed, as MB, Khalid put the people first, implementing various schemes to help the disadvantaged. During his tenure, the Selangor state assembly passed the country’s first freedom of information legislation. As a corporate figure previously, he was parsimonious in the management of the state’s coffers.

“He once lectured me on the ‘value for money’ and ‘return of investment’. For every cent we spent, we must show him that there were returns for the people and the government,” says Wong, “But Tan Sri was more than just about dollars and cents. Under him, we showed Malaysia what it meant to have good governance under a Pakatan government.”

Under Khalid, the state withdrew an appeal filed by the state before 2008 in the Sagong Tasi case, in which the Orang Asli’s inalienable rights to customary land was recognised by the court.

“I shed tears trying to convince him that we must show to the Orang Asli that for once in history, there is a government that is concerned about them. He finally agreed and today this landmark decision of Sagong Tasi is being used to defend all Orang Asli land in the peninsular,” she explains.

Khalid’s tight-fisted ways in managing the state’s finances, however, did not go down well with his party. He claimed he was sacked from PKR for refusing to use the state’s money for the party’s programmes.

“I did not allow this for a simple reason — because the state money is duit rakyat”, he told a local daily in 2018.

The infamous Kajang move hatched by Datuk Seri Anwar Ibrahim to oust Khalid as Selangor MB set in motion his exit from the administration of the state and his own party.

“He could have been PM material for this country,” says Johari.

Khalid’s achievements are still admirable by any yardstick.

Chandran recalls that when Khalid was the chairman of the Malaysian Palm Oil Association, he was fond of quoting Sir Winston Churchill at various management retreats organised by Guthrie. One quote that stayed with Chandran was: “Success is not final, failure is not fatal — it is the courage to continue that counts.”

In ministerial interactions when they were both ministers, albeit in different administrations, former minister in the Prime Minister’s Department Wahid says Khalid was always business-like and straight forward in his dealings. “A good man indeed. Allahyarham Tan Sri Khalid will be sorely missed. May Allah bless his soul and place him among the righteous,” he says.

Khalid is survived by his wife Puan Sri Salbiah Tunut, four children and two grandchildren.

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