Tuesday 17 Dec 2024
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This article first appeared in The Edge Malaysia Weekly on November 18, 2024 - November 24, 2024

ON an evening in June 1995, at an upmarket restaurant in Jalan U Thant, Ampang, Kuala Lumpur, a slightly built, not very tall man walked in with a lady, presumably his wife, and was fawned upon by the owner of the establishment, an ambitious, young woman who seemed to know the older couple.

The gentleman was distant, as if not really there, in his grey trousers that were a little too long and folded at the ends with the tips of his toes showing as he was wearing slippers — not the trendy or some “atas” brand but just rubber slippers, the ones some call selipar Jepun. His round-neck white T-shirt had red short sleeves, and the word “Singer” — popular for its sewing machines — boldly printed in red.

In total contrast, the lady looked elegant with an immaculate coiffure, and she ordered everything for the two of them. For him, spaghetti alle vongole and a glass of water, not the bottled sparkling or still variety, just plain water. And while he drank, he seemed to ponder the many problems of the world with a faraway look.

This writer was at the restaurant making a pit stop on the way to work. “That is the former finance minister — [Tun] Daim Zainuddin,” the manager of the restaurant said, perhaps to explain why the owner was all over the couple, and clarifying why the restaurant’s strict, no slippers policy was not being enforced.

The only sign of him being well heeled was the car, a Jaguar Sovereign, parked outside the restaurant.

Throughout the dinner, Daim did not say a word and seemed deep in thought.

Years later at press conferences, Daim still had the same demeanour: usually quiet, always under-dressed and seemingly deep in thought, almost like he wanted to be somewhere else.

There are also stories told by friends of how they met Daim (always in his slippers) at some local airport and chatted with him before he got into his ride, a white 660cc Perodua Kancil, driven by some young assistant.

All of us have heard stories of him having coffee in some dingy mamak stall, sitting in a corner with a friend or even alone at times.

Such was the mystique of Tun Daim Zainuddin, an enigma almost, often said to be among the wealthiest men in the country, one of the brightest leaders the country has ever had, but without all the pomp and pageantry often displayed by much lesser leaders today.

Born to a simple family as the youngest of 13 children in Alor Setar, Kedah, Daim’s meteoric rise to wealth and power is awe-inspiring, and the extent of his knowledge almost unbelievable.

Even when he emailed his responses to questions from The Edge, his train of thought, his thought process, was crystal clear and he called a spade a spade. Well, of course he would, he was after all Tun Daim, one of the most powerful people in the country, among the smartest corporate chieftains you could ever meet.

While his dressing and demeanour were that of a simple man, he was far from that.

Earlier this year, Daim had said that his joining the government to serve the country resulted in “a great financial loss” because a year after he joined the cabinet in 1984, he was directed to liquidate his investments in public-listed companies.

Daim is reported to have said, “At that point, my liquid assets stood at over RM750 million. If I had put that amount into an S&P 500 index fund in 1984, the value today would be over RM42 billion … If I had stayed in business and done nothing to actively grow these assets, the value of my liquid stock holdings alone would be worth over RM50 billion today. That is my personal cost today in my decision to join the government.”

On Bursa Malaysia, companies linked to Daim include Johor-based property developer Plenitude Bhd (KL:PLENITU) and resort operator Avillion Bhd (KL:AVI). However, the former finance minister is said to often use proxies to hold his shares.

The early days in business

Interestingly, Daim’s first business venture — salt production in Kuala Selangor — went bust as a result of “The Great Flood” of 1971, which claimed 32 lives.

However, his venture into property development in 1973, on a 160-acre tract in Kampung Pandan, which gave birth to Syarikat Maluri Sdn Bhd, set the stage for his becoming the first Malay property player in Kuala Lumpur, developing Taman Maluri and Taman Bukit Maluri in Kepong.

Daim had stakes in other companies such as Daibochi Plastic and Packaging Industry Bhd, which was publicly traded on the Second Board of Bursa Malaysia and is now Scientex Packaging (Ayer Keroh) Bhd (KL:SCIPACK), a 72% unit of plastic packaging and property counter Scientex Bhd (KL:SCIENTX), and Sedap Food Confectionary Bhd, which morphed into shipbuilder PSC Industries Bhd, which later became Boustead Heavy Industries Corp Bhd (KL:BHIC) a 72% unit of armed forces fund, Lembaga Tabung Angkatan Tentera.

Other companies linked to Daim in the past include developer Sime UEP Properties Bhd, which developed the Subang Jaya township, plantation company Guthrie Bhd , TV3, which is now under the Media Prima Bhd (KL:MEDIA) banner, Malayan Banking Bhd (KL:MAYBANK), Consolidated Plantations Bhd, Cold Storage (M) Bhd and Nestlé (M) Bhd (KL:NESTLE), to name but a few.

These are the companies Daim told the court early this year that he had stakes in when he said his liquid stock holdings alone would be worth over RM50 billion today.

“My 10% stake in Nestlé Malaysia today [would have been] worth approximately RM3 billion,” he is reported to have said when disclosing some of the companies he had stakes in.

Daim was linked to so many companies either because he had a stake in them or because he was their chairman, for example, Fleet Holdings Sdn Bhd, which was Umno’s investment arm. Other companies connected to Umno back then are Syarikat Hati Budi Sdn Bhd, Realmild (M) Sdn Bhd and Altima Inc, among others, which held assets for the once all-powerful political party. As Umno treasurer from 1984 to 2001, Daim held sway over the companies as well.

He had a number of protégés, including Tan Sri Halim Saad who controlled seven listed companies under the Renong Bhd and United Engineers Malaysia Bhd (UEM)banners, and Tan Sri Tajudin Ramli who controlled Technology Resources Industries Bhd, or TRI, which controlled such huge assets as cellular service provider Celcom (M) Bhd, and in 1994 acquired a 32% stake in national carrier Malaysian Airline System (MAS) for RM1.79 billion, or RM8 per share, in a huge privatisation exercise.

In early 2001, after MAS was allegedly run into the ground by Tajudin, the government bought back the 32% stake in MAS held by his vehicle Naluri Bhd, at RM8 per share, or RM1.79 billion, although the national carrier was trading at only RM2.75 per share at the time.

Tajudin has often said that he had acquired the 32% block in MAS from the government at the behest of the then prime minister Tun Dr Mahathir Mohamad and Daim.

Others supposedly linked to Daim in clude Tan Sri Amin Shah Omar Shah, who was involved in PSC Industries; Tan Sri Wan Azmi Wan Hamzah who was in Land & General Bhd, among others; Tan Sri Mohd Razali Abdul Rahman of Peremba fame; Datuk Samsudin Abu Hassan, who helmed Landmarks Bhd; and Tan Sri Rob ert Tan Hua Choon, who had companies such as Jasa Kita Bhd (KL:JASKITA), FCW Holdings Bhd (KL:FCW), JKG Land Bhd (KL:JKGLAND) and Marco Holdings Bhd (KL:MARCO), just to name a few.

Daim’s banks

Of all his business ventures, perhaps Daim is best known for his banks.

His involvement in banks started in the early 1980s, when France’s president Francois Mitterrand nationalised all French banks, which worked out well for Daim as Malaysian banking regulations did not allow foreign government-owned banks to operate locally. Daim snapped up Indo-­Suez Bank from the French government in 1981 and created Malaysia-French Bank, which he later injected into United Malayan Banking Corp Bhd (UMBC) for shares. UMBC was taken over by Sime Darby Bhd and renamed Sime Bank Bhd. Sime Bank was hived off in 1999 after incurring huge losses the year before, and is today the Employees Provident Fund-controlled RHB Bank Bhd (KL:RHBBANK).

For the longest time, he was said to be behind Langkah Bahagia Sdn Bhd, which had a 15.4% stake in Malaysian Plantations Bhd which controlled Alliance Bank Malaysia Bhd (KL:ABMB).

To put things in perspective, Alliance Bank’s 2010 annual report indicates that lawyer Lutfiah Ismail, who is said to have been a close confidante of Daim’s, had 29% equity interest in the bank via Langkah Bahagia, partnering Singapore’s Temasek Holdings.

Lutfiah, however, ceased to be a substantial shareholder in Alliance Bank in April 2016.

In 1992, one Robert H C Tan (as stated by the Czech Republic’s then central bank governor Josef Tosovsky) was said to have set up a bank in the Czech Republic called IC Bank, with a capital of US$13 million.

This Robert H C Tan is the same Robert Tan of Jasa Kita, FCW Holdings, JKG Land and Marco Holdings fame.

The bank in the Czech Republic went on to become part of Daim’s International Commercial Bank (ICB) Financial Group, which he listed on the Alternative Investment Market, a sub-market of the London Stock Exchange in May 2007, but was privatised in November 2013.

ICB at one time owned banking institutions in at least 14 countries, including Albania, Gambia, Ghana, Malawi, Senegal, Sierra Leone, Tanzania, Zambia, Bangladesh, Laos and Indonesia.

Daim is also believed to have had a large stake in Malta-based Lombard Bank, which appointed Lee Chen Chong, a former executive director of Malaysia-French Bank to run it.

Government roles

Perhaps with his knowledge of banks and banking, Daim was instrumental in the bank consolidation in Malaysia. Daim was finance minister from 1984 to 1991, and again from 1999 to 2001.

During his second stint as finance minister, Daim initiated a massive consolidation of domestic commercial banks and stockbroking firms, from 54 local banks and finance companies to an initial plan of six major financial institutions, but this number was raised to 10 after much lobbying.

While he did well as the finance minister in many aspects, and he did turn things around for the country, questions will always be raised about his wealth, and if he enriched himself while holding such powerful positions.

Daim was always closely associated with two-time prime minister Mahathir.

In his second stint as prime minister from 2018 to 2020, when Pakatan Harapan won the general election, Mahathir set up the Council of Eminent Persons to analyse the economic and financial affairs of the country, and made Daim its chairman.

This was the last government position he held.

Always considered a close associate of Mahathir, Daim came under scrutiny when current prime minister Datuk Seri Anwar Ibrahim came to power.

At the end of 2023, the Malaysian Anti-Corruption Commission (MACC) seized Daim’s Ilham Tower, a 60-storey building located close to the Petronas Twin Towers, among other assets. Ironically, Ilham Tower was where the Council of Eminent Persons held its meetings.

Daim’s refusal to declare his assets resulted in the investigations, which purportedly included money laundering in relation to corporate transactions involving Renong and UEM in the late 1990s.

In 2018, Daim had said that he had been cleared of corruption by MACC and an internal investigation by his former party, Umno, in response to the then Umno Youth chief Khairy Jamaluddin who cited an old statement by Anwar that referred to Daim as the nation’s “most corrupt person”.

“MACC, and even Umno, has cleared my name of any corruption” Daim is reported to have said at a press conference.

In January this year, a wheelchair-bound, frail Daim arrived at the Kuala Lumpur Courts Complex to face charges, with his wife Toh Puan Na’imah Abdul Khalid and his children in tow, and pleaded not guilty to a charge of failing to comply with a MACC notice to declare his assets, including several luxury vehicles, companies and properties across Kuala Lumpur, Selangor, Pahang, Negeri Sembilan, Perak and Kedah.

Things then turned ugly and Daim sought legal redress, challenging the seizure of his assets and freezing of accounts by MACC, and named as respondents Anwar, and MACC chief Tan Sri Azam Baki among others. While Daim vowed to fight the charges, and even went so far as to say that he “looked forward” to his day in court, his health got the better of him.

Last week, Attorney-General Datuk Mohd Dusuki Mokhtar said he would review the ongoing prosecution of Daim.

Dusuki told The Edge in a brief text message that the prosecution was waiting for the death certificate. “I will review first [the ongoing prosecution]. Normally, we wait for the death certificate.”

While there will always be questions about how he accumulated his wealth, there is no doubt that Daim played a key role in pulling the country out of the Asian Financial Crisis in the late 1990s, and that many of his policies and strategies, whether you like it or not, enriched a number of bumiputera businessmen and created many bumiputera millionaires. 

 

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