This article first appeared in The Edge Malaysia Weekly on May 22, 2023 - May 28, 2023

VARIOUS news media reported last Friday (May 19) that the Malaysian Anti-Corruption Commission (MACC) had opened investigation papers into a RM2.3 billion transaction that took place in the late 1990s that was allegedly linked to a businessman and a former senior minister without naming the companies involved in the transaction.

A senior MACC source has confirmed with The Edge that the transaction was the purchase of a 32.6% stake in Renong Bhd by United Engineers (M) Bhd (UEM) for RM2.3 billion that occurred in November 1997 — in the middle of the 1997/98 Asian financial crisis.

This newspaper had published a few articles that month about the controversial purchase by cash-rich UEM of the stake in its parent company Renong, which was laden with billions of ringgit worth of debt and whose stock price had been falling as investors sold their shares.

The Securities Commission Malaysia was to later compel Tan Sri Halim Saad, who was the then controlling shareholder of Renong Group, to buy back the stake from UEM and payments were to be made between February 2001 and April 2002. In July 2001, however, it was decided that Khazanah Nasional should step in to take over the entire Renong/UEM group — which not only had RM12 billion in debt but also important assets such as the PLUS highway and Commerce Asset Holdings (now CIMB) — for around RM4 billion.

Many deemed the move by Khazanah as a bailout. Halim has always insisted that he was able to buy back Renong but was forced to sell instead. In 2013, he filed a RM1.8 billion civil suit against the government, Khazanah and Tan Sri Nor Mohamed Yakcop alleging he was cheated. He fought all the way to the Federal Court but lost in 2015 (scan the QR code to read the articles “Truth on 2001 sale of Renong/UEM finally coming out?” published on June 10, 2013, and “Halim Saad’s RM2b suit against govt struck out by KL High Court” published on Oct 13, 2013). 

For context, it should be pointed out that Datuk Seri Anwar Ibrahim was the minister of finance in 1997, having replaced Tun Daim Zainuddin in 1991. In September 1998, Tun Dr Mahathir Mohamad sacked Anwar, and Daim returned as finance minister for the second time, only to resign suddenly in June 2001 to be replaced by Mahathir, who appointed Nor Mohamed as his special economic adviser. Nor Mohamed went on to devise the plan for Khazanah to take over the Renong/UEM group.

Halim grew his Renong corporate empire during Daim’s first stint as finance minister from 1984 to 1991, and he is credited for building the North-South Expressway.

The reason for the MACC probe into something that happened 26 years ago is unclear. To help refresh the memory of readers as well as enlighten those who are not aware of this transaction, we reproduce here in full the relevant articles: “Bashing for UEM and Renong”, “The RM2.3 billion question” and “A test case for transparency” (published on Nov 24,1997).

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