On 12th November 2013, Anwar Ibrahim said the original intent to privatise Bernas was to ensure the fulfillment of the nation’s growing rice requirement through management of the National Stockpile and the Padi Price Subsidy Scheme. He also added that privatisation was introduced to ensure the bumiputera farmers, rice distributors and workers at Bernas benefit from the equity ownership.


Raja Petra Kamarudin

How the Shahidan clan acquired the Bernas cash cow

Lembaga Padi Negara or LPN was privatised about eight years ago (23 years ago now) into what is known today as Padiberas Nasional Berhad (Bernas). Though it is supposed to be a public company, Bernas is very much controlled by one family, that of the Menteri Besar of Perlis, Shahidan Kassim.

How did Shahidan get his hands on Malaysia’s rice monopoly that brings in a turnover of almost RM2 billion per annum and profits averaging about RM80 million per year? The story of Bernas is not a rags-to-riches story but one of richer-to-even-richer.

Shahidan, the well-known Umno gangster, was Mahathir’s hit-man whose job was to take out any and all threats to Mahathir
Shahidan was then the Member of Parliament for Arau, Perlis, the Chairman of Parliament’s Back Benchers Club (BBC), Chairman of FAMA, Chairman of Yayasan MARA, Director of MARA, and many more. The then Menteri Besar of Perlis was Dr Hamid Pawanteh who was slotted for ‘retirement’ due some ‘indiscretions’ that was threatening to blow up if he continued as Menteri Besar. Shahidan was identified as Dr Hamid’s successor.

Malaysian Prime Minister Dr Mahathir Mohamad summoned Shahidan and told him that he and Dr Hamid would have to switch jobs. Dr Hamid would be contesting the 1995 General Election on a Parliament seat while Shahidan would in turn take over his state seat. The reason being, Shahidan would have to take over as the next Menteri Besar of Perlis.

However, much to Dr Mahathir’s surprise, Shahidan declined the Prime Minister’s ‘offer’. He told the Prime Minister he was not interested in the Perlis Menteri Besar’s job. He was more interested in getting rich and would rather do business.

And this was what Shahidan discussed with the Prime Minister as revealed by one of his business partners whose company Shahidan was the Chairman of.

“Why should I want to be the Menteri Besar of Perlis?” asked Shahidan Kassim when I met him just before the 1995 General Elections. “What has Perlis got?”

“At least if I am Menteri Besar of Kedah that is something. Kedah is big. There are a lot of business opportunities there. Perlis is so small, it has nothing!”

“And that is what I told the PM,” said Shahidan. “I told him I am not interested in being the Perlis MB. I want to do business.”

“The PM was taken aback,” added Shahidan. “He asked me what business I wanted to do and I told him I wanted to take over the privatisation of Bernas.”

“The PM was puzzled. He told me he has offered me the Perlis MB’s post and I reject the offer. Other people would jump at the chance.”

“I told him I am more interested in getting rich,” laughed Shahidan.

“The PM said he will think about it and get back to me later. A few days later the PM told me that he will agree to me taking over Bernas if I agree to become the MB.”

“I asked the PM, how is this possible? The PM replied to leave that to him. He will clear it with the Cabinet. He will explain to the Cabinet that the Bernas deal is part of the terms for me accepting the MB’s post.”

And that was how Shahidan ended up with control of the privatised Bernas.

FAC News spoke to one senior officer of LPN to get his side of the story on the wheeling and dealing of that one-time national rice board. This officer, on being told that LPN would be privatised, decided to throw in the towel and seek early retirement.

“Once I saw what they were going to do, I decided to quit,” explained the officer.

“I saw the move to privatise LPN as just one more move to make some people rich and I wanted nothing to do with it.”

“I spent practically my entire working life serving LPN. Our only mission in life was to serve the rice farmers and ensure that their welfare was well taken care of. But what they wanted to do to LPN is criminal. So I just left in disgust.”

“It’s not only what they wanted to do that was so wrong. It is also the people who were behind the whole exercise that was not right.”

“I personally know Shahidan so I know what type of person he is. He is just out to make money. And he was going to do so at the welfare of the rice farmers.”

“There are 160,000 rice farmers in Malaysia,” argued the retired LPN officer. “And most of them live in poverty.”

“For example, for the year 2000, an estimated 9% or almost 16,000 rice farmers have incomes below the poverty level.”

“The estimated annual average net income from rice cultivation in Peninsula Malaysia for that same year ranged from RM1,500, or RM125 per month, in areas like Telok Intan, Kelantan and Terengganu, to RM6,000, or RM500 per month, in advanced areas like MADA.”

“How does one support a family with that low income level?” asked the retired officer.

“It is time the truth is revealed and Malaysians are made aware of the exploitation the rice farmers are being subjected to.”

Despite government expenditures for infrastructure development and financial assistance through input subsidisation and price support policies, a high level of poverty still exists amongst rice farmers. The situation did not improve much since the eight years after the privatisation of LPN into Bernas. Under Bernas, the individual shareholders of the privatised entity are now making profits at the expense of several hundred thousands rice farmers, their families, and other public stakeholders.

For example, for the year 2001, Bernas made a RM128 million profit before tax. For the year 2000, it made RM83 million and, in 1999, RM117 million. In 2002, it made about RM60 million.

But who really benefits from this profit? The rice farmers? Of course not! Those who benefit from these hundreds of millions of Ringgit every year are the major shareholders of Bernas.

And who are these shareholders?

One of them is Budaya Generasi Sdn Bhd (BGSB), which owns 34% of Bernas. The single largest shareholder of BGSB is Permatang Jaya Sdn Bhd (PJSB), which has a 44% interest in BGSB or, effectively, 15% of Bernas.

And who are the shareholders of BGSB?

The shareholders of BGSB are Dohat Bin Shafie and his daughter Nur Daliza Binti Dohat. Dohat Bin Shafie is the brother-in-law of none other than Shahidan!

The point is, the Shahidan family of Perlis owns 15% of the privatised national rice entity which is of strategic importance to the country and which the government acknowledged in its National Agriculture Policy 3 (NAP3) to be the backbone of the food security policy of the country!

Then, Sebiro Holdings Sdn Bhd, another shareholder, owns 5.5% of BGSB. A prominent Director of the company is Megat Junid Bin Megat Ayob, the Prime Minister’s henchman.

The other four (public) shareholders of BGSB representing the interests of several hundred thousand rice farmers, farmers and fishermen, own the other 34% of BGSB or only 11% of Bernas. These four are:

Pertubuhan Peladang Kebangsaan (NAFAS)
Persatuan Nelayan Kebangsaan (NEKMAT)
Syarikat Perniagaan Peladang (MADA) Sdn. Bhd.
Syarikat Perniagaan Peladang (KADA) Sdn. Bhd.

Just for the record, Yayasan Pok Rafeah Berdaftar, is the 11th largest shareholder of Bernas. Yayasan Pok Rafeah funds the Pok Rafeah Chair at Institut Kefahaman Malaysia dan Antarabangsa (IKMAS) at UKM. And Pok Rafeah is the mother to Tun Daim Zainuddin, another Umno kingpin and one-time Finance Minister of Malaysia.

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