Tun Daim Zainuddin – The Silent Corrupt Billionaire

While it is known that Daim Zainuddin was Malaysia’s finance minister for two stints (July 1984-March 1991, and January 1999- May 2001) during Mahathir Mohamad’s long tenure as prime minister as well as UMNO’s treasurer (1981-91), what is not known is how did this lawyer turned businessman became one of the richest men in Malaysia?

The answer lies principally due to Daim’s close ties to Mahathir Mohamad, who remains his Kedahan political mentor, friend, ally and partner, both in politics and business. Though Daim is 13 years younger than Mahathir, both are born in Alor Setar, Kedah and have been long-time friends, and became especially close since Mahathir became Malaysia’s deputy prime minister in March 1976. A report has also talked of both being from the same kampong in Sebarang Perak, Alor Setar. This special relationship was enhanced during Mahathir’s term as prime minister from July 1981 to October 2003, and again, from May 2018 to February 2020.  Daim headed the Council of Eminent Persons that was appointed by Mahathir when the PH government was formed in May 2018.

Daim as Mahathir’s Right-hand Man and trusted ally, in-charge of most ‘backdoor deals’, was a Senator from 1980 to 1982 and a Member of Parliament from 1982 to 2004. He remained an UMNO member until 2016, when he was sacked for supporting Mahathir by the UMNO leadership under Najib and since then, has been a member of BERSATU and supports the PH coalition.

Daim’s Controversies During Mahathir’s First Tenure as Prime minister

The title of Tun, the highest honour in Malaysia for a non-royalty, was bestowed on Daim in June 1991 on the recommendation of Mahathir to the Agong. But even before Daim returned as a finance minister again in 1991 following the outbreak of the Asian Financial Crisis and Mahathir’s conflict with his deputy, Anwar Ibrahim, Daim was already mired is a series of controversies. These controversies involved the manner Daim had enriched himself and his corporate comrade-in-arms, all of whom also happened to be allies of Mahathir and Mahathir’s children who were involved in business activities.

Some of the financial wheeling and dealing that Daim was directly and indirectly involved in were made public by Anwar Ibrahim following his fallout with Mahathir. In this regard, even though Mahathir was later to condemn Najib Tun Razak as a ‘thief’ and ‘corruptor’, what is often forgotten is that in October 2016, when Mahathir had joined forces with BERSATU and PH, and was trying to bring down the BN government, he did admit that there was massive corruption when he was prime minister. Strangely for the longest-serving prime minister of Malaysia, Mahathir quipped, “there was corruption, for example, but not to the extent that it stops the development of this country”. It was during this period that Mahathir and his finance minister, Daim, launched the privatization wave of state-owned companies and this led to the rise of cronyism and corruption on a scale never ever seen in Malaysia before.

With Mahathir as prime minister and Daim as the finance minister, Malaysia’s kleptocracy reached its initial golden age. With Mahathir all-powerful politically and all other ministers in awe and fear of Mahathir, including the deputy prime ministers (Musa, Ghafar and Anwar) and where Mahathir was also bashing Malaysia’s royal houses (1983), there was no internal or external oversight to what the Mahathir-Daim duo could do with regard to the supply and disbursal of public funds.

The country’s treasury, especially at a time of privatization (which Lim Kit Siang, now turned ally of Mahathir, once called ‘piratisation’), became a source great personal wealth with funds being transferred to accounts overseas and with family members and cronies benefitting from the largesse at the expense of the public. For Mahathir and his handyman like Daim, this was ‘legitimate’ as the country’s ‘development’ was still progressing. Of course, Malaysians should ask today, how far Malaysia would have developed if no such leakages of funds had taken place during the first 23 years of Mahathir’s premiership.

Daim’s Financial Misdeeds during Mahathir’s First Tenure as Prime Minister

By the 1990s, Daim was alleged to have become one of the richest men in Malaysia and probably in Asia and the world but it was never captured by Forbes, or other ranking agencies that tend to capture these ‘successful billionaires’. Why this was not done is also a question that needs to be answered. The same probably goes for the wealth of Mahathir and his family members such as Mohkzani, now one of the richest men in Malaysia.

While there have been many allegations of the ill-gotten wealth of Mahathir and his family members and his key cronies such as Daim, it was none other than Anwar Ibrahim, a leading politician in Malaysia and the former deputy prime minister, who brought this to the public view. In October 1999, Anwar also accused Daim of pocketing US$158 million from a group of businessmen in the country.

The other key alleged financial misdeeds and profiteering involved the following:

1. Bakun Dam project in Sarawak
2. Perwaja steel project, involving Eric Chia with losses amounting to RM9.9 billion
3. Putrajaya project
4. KLCC project

With regard to the Bakun Dam, a project initiated by Mahathir as a source of cheap electricity for the country, Anwar alleged that Mahathir and Daim bypassed the due process as the majority interest in the project was held by Ekran which was controlled by Mahathir and Daim’s close friends such as Tan Sri Ting Peck Khing and Rasip Harun, a business partner of Daim. Anwar claimed that Rasip Harun and Robert Tan Hua Choon, another business partner of Daim, controlled Jasa Kita, which was earlier involved in the Telecom shares scandal, apparently allocated by Daim to Malaysian Indian community. These shares were said to be diverted to three companies related to Samu Vellu, the then leader of the MIC. Tan Sri Ting was also given a contract to manufacture submarine cables that also involved one of Mahathir’s sons.  

What is interesting is that during Mahathir’s unchallenged reign of power, the country suffered serious scandals worth billions, with Daim overseeing these losses as the country’s finance minister. Among others, this included losses suffered by Maminco-Makuwasa (losing RM600 million), Bumiputra Malaysia Finance (losing RM2.5 billion), Bank Negara loses in the forex market (making Malaysia RM31 billion poorer), and the North-South Highway. Many members of the political elites and their children also benefitted from these businesses and projects, such as Mahathir’s children, Mirzan and Mokhzani, as some of the beneficiaries of these projects supposed meant to assist bumiputras. Not surprisingly, Barry Wain claimed that during Mahathir’s term of office from 1981 to 2003, about RM100 billion may have been squandered.

In June 2017, interestingly, a member of BERSATU reported Mahathir and his family members to the Malaysian Anti-Corruption Commission, especially as nearly 500 companies were believed to be registered under Mahathir and his children. The number of companies by the Mahathir clan was as follows: Mahathir 16, Marina 29, Mirzan 156, Mokhzani 158 and Mukhriz 126. A similar complaint was also made by BERSATU’s Youth Wing against Mahathir and his family members in June 2017.  

In tandem with Mahathir’s enrichment, Daim’s wealth acquisition has gained attention but not succeeded in exciting the public as he is seen as a ‘smart and successful’ businessman. Yet, the extreme wealth this ‘quiet, behind-the-scenes, largely hidden’ operator has accumulated raises serious questions. At one time, Daim was alleged to have at least RM65 billion worth of shares in the Malaysian stock exchange.  In December 2017, it was reported that Daim had immense wealth parked overseas, especially through the ICB Financial Group Holding AG, which Daim founded and is based in Switzerland.

Daim Continues to do what he is best at – making money by hook and crook even in 2020

Mahathir’s return as prime minister in May 2018 could not have been more propitious for Daim. Daim expressed his gratitude to Najib for sacking him from UMNO in early May 2018 for supporting Mahathir. The 21-months of Mahathir as comeback-prime minister also proved lucrative for Daim and his corporate cronies. While accusing Najib and UMNO of being corrupt, Daim continued to pursue what he admitted was good at – making money. This was being done by influencing politicians like Mahathir to appoint key officials to head government agencies that Daim hope he will be able to manipulate to gain special concessions.

Some of the targeted agencies and corporations include the following:

1. Taking over the country’s national airline, MAS, by using his former crony, who used to be the former owner of MAS
2.  He tried to use his influence to ensure that a lot of the 40 percent of the local sub-contracting portion of a mega rail project would be awarded to his cronies and proxies
3. Following the cancellation of the port operating licence by the government of the RM 50 billion Melaka Gateway Project in Malacca, Daim lobbied for his proxies to take over much of the project. However, the project owner KAJ Development Sdn Bhd has sued the government for RM 139 billion and Daim did not lose any interest in the project.
4.  He has been using his connections with the private business groups overseas to buy a large property Hong Kong with a complicated scheme which may not be in the best interest of the seller, which is the government.
5. He is also rumoured to be trying to take over an important heritage, through a proxy, near Kuala Lumpur. He is believed to be trying to influence an agency to use legally questionable, unjust and unethical means to quickly end the current tenancy of a respected NGO which is due to expire early next year.

In this regard it is also very instructive to note that the then MACC deputy chief Azam Bakri confirmed that his agency received a report in connection with Daim’s alleged corruption involving the East Coast Rail Link. Bernama even reported that the project that was cancelled in January 2019 was put on track in April 2019 following a renegotiation with the Chinese contractor at a price of RM44 billion by Daim. The original project cost RM65.5 billion and this was reduced to RM44 billion. However, the complaint against Daim stated that the new plan actually cost only RM30 billion, not RM44 billion. What was the rest of RM14 billion for remains unanswered.

Source : Suara Harimau