Monday, June 25, 2012
Malaysia Airlines (MAS) should disclose its terms of settlement with its ex-chairman Tan Sri Tajudin Ramli, Pakatan Rakyat (PR) leaders have said, adding that the lack of transparency was unacceptable as millions of taxpayers’ money were at stake.
Last Friday, MAS settled out of court its three lawsuits against Tajudin (picture), a move the national carrier described as “considerably viable”.
“He (Tajudin) has agreed to surrender valuable land in Langkawi where the Four Seasons Hotel stands,” a court source told The Malaysian Insider on condition of anonymity.
“What exactly is the value of the land in Langkawi which is able to settle all outstanding disputes with MAS?” asked Tony Pua, the DAP’s national publicity secretary.
He said the settlement was “highly suspicious” and “MAS has no right to claim this being a private company settlement because it has been bailed out one too many times with taxpayers’ money.
Stressing that MAS is state-owned, he said: “If there’s no accountability in how the suit is resolved, then the Malaysian government has no right to raise another RM9 billion from taxpayers and other trust funds such as Employees Provident Fund (EPF), civil service pension fund (KWAP), Armed Forces Fund Board (LTAT), Tabung Haji to once again bailout MAS.”
He was referring to the financially-troubled airline’s numerous turnaround plans, with the latest being the issuing of Islamic perpetual bonds, in which KWAP took up the first tranche of RM1 billion on June 12.
Perpetual bonds, also known as perps, are high risk bonds with no guarantee of repayment.
MAS, which has posted large losses for the past several quarters, is proposing to raise about RM9 billion through a combination of perpetual sukuks, commercial loans and government financial assistance.
PKR vice-president Nurul Izzah Anwar said that “MAS’s woes are further compounded no doubt, what with its ‘perp bonds’ befallen fate.”
“There is no choice but for the government to order a full probe and from there total disclosure to the public to ascertain the losses borne not only by MAS, but (by) government coffers and taxpayers’ monies.”
She added that the “settlement just brings to home concerns of hidden secrets that would implicate individuals of high office.”
PAS secretary-general Datuk Mustafa Ali echoed the views of his colleagues in PR, saying that there were “a lot of hidden and unclear things not disclosed by MAS. MAS should clarify the terms of settlement.”
Last Friday, the judge allowed both MAS and Tajudin to withdraw their suits and counterclaims respectively.
Tajudin, who was executive chairman of the airline from 1994 to 2001, had applied to cancel MAS’s suit over allegations he abused his position and concealed his interests in business decisions made during his watch.
Putrajaya also sought to strike out Tajudin’s counterclaims, in which he alleges the government and MAS defamed him with the civil suit for abuse of power while heading the flag carrier.
MAS had accused Tajudin of unconscionable conduct by using his influence to continue the VIP chartering service with the purchase of a Boeing 737 business jet for US$31 million (RM93.5 million) in 1997, despite MAS suffering losses.
The airline also claimed that Tajudin had dishonestly concealed his interests in Cendanasari Insurance Brokers Sdn Bhd, in matters involving a parcel of land in Langkawi and a luxury yacht, Colombo Star.
The Kedah-born businessman had in turn claimed that the suit contains bare allegations with no basis and that MAS had acted with malice and in bad faith in taking legal action against him to embarrass and tarnish his reputation.
Tajudin has been entangled in a complicated series of expensive suits, countersuits and appeals with various parties arising from his failure to service a billion ringgit loan he took to purchase a major stake in MAS in 1994.
He has claimed that his purchase was forced “national service”, disguised as an arm’s length commercial deal, because the government wanted to appease the investment community and the public.
Former Prime Minister Tun Dr Mahathir Mohamad, however, denied in his autobiography published in March last year that he and former Finance Minister Tun Daim Zainuddin had forced Tajudin to bail out MAS in 1994 for RM1.8 billion.
Last August, Putrajaya intervened and commenced action to put an end to the controversial legal battle by ordering all suits against Tajudin to be dropped.
The move has been described as an attempt by the government to cover-up details found in Tajudin’s affidavit in support of his counter-claim where the embattled tycoon purportedly revealed much of the inner workings behind the purchase of MAS.
According to media reports, Tajudin had also claimed of an over-riding agreement protecting him from liabilities.
The 65-year-old was a poster boy of Daim’s now-discredited policy of nurturing a class of Malay corporate captains on government largesse during the Mahathir administration.