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EPISODE 23: The Anwar Ibrahim-Quek Leng Chan Saga


The purpose of the loan was for the purchase of Inchcape Timuran shares and to purchase Kewangan Bersatu Berhad KBB, which had a finance licence. KBB was owned by Ishak Ismail, an Anwar crony and the Umno Penang Treasurer who controlled Idris Hydraulic, another Umno company. Anwar was then the Umno Penang chief. The RM420 million was dispersed but the KBB acquisition never took place. So what happened to the money? Where was it siphoned? Who hijacked it? That is what the court case this week will establish.
THE CORRIDORS OF POWER
Raja Petra Kamarudin
In May 1982, the MUI Group, which is headed by Tan Sri Dato Khoo Kay Peng, acquired Kwong Lee Bank Berhad. Khoo Kay Peng was a strong ally of Tengku Tan Sri Razaleigh Hamzah (Ku Li), Malaysia's Finance Minister from 1976 to 1984. On 2nd February 1983, Kwong Lee Bank Berhad was renamed Malayan United Bank Berhad (MUI Bank).
Those in the Malay Chamber of Commerce Malaysia (MCCM) were extremely unhappy about what they viewed as a close relationship between the Finance Minister and this Chinese business tycoon. For this reason, most members/leaders of the MCCM, who invariably were also Umno members and/or leaders, supported Musa Hitam in the tussle between Ku Li and Musa for the Umno Deputy Presidency.
The joke around town at that time was that Ku Li and 'Ku' Kay were brothers from different mothers and separate fathers. Because of this perception, that Ku Li was a 'tool' of the Chinese, in particular of Khoo Kay Peng, Ku Li twice failed in his bid for the Umno Deputy Presidency. His 'Chinese sympathies' lost him the Deputy Prime Ministership of Malaysia at a time when the New Economic Policy (NEP) was on its final leg and the future of the Malays was in question. Hence a more 'Malay' Musa Hitam was preferred over a 'Chinese tool'. The anti-Ku Li campaign was: kalau Anak Raja naik, maka Cina akan bermaharaja di Malaysia.
Such is how business is done in Malaysia. Chinese business tycoons need Umno Malay benefactors to get things done. And in very 'sensitive' cases, such as banking licences, in particular 'backdoor' banking licences like in the case of the MUI Bank, your relationship with the Finance Minister and/or Prime Minister is extremely crucial.
None of the MCCM or Umno members/leaders had any reservations that Khoo Kay Peng's success in his backdoor banking licence was because of his link to Ku Li. They would swear on their mother's grave that know-who and not know-how is the key to success in Malaysia's highly political environment. And for that Ku Li had to pay, and pay dearly, with his political career. As they say, perception is everything and the MUI Bank episode was the 'evidence' required to create this perception of Ku Li's 'Chineseness'. What was most puzzling is that Ibrahim Ali, the PERKASA head, was Ku Li's campaign manager in the 1987 tussle that would follow.
In 1987, Ku Li challenged Tun Dr Mahathir Mohamad for the Umno Presidency, and thus also for the Prime Ministership of Malaysia, and lost. Soon after, he left Umno (or rather Umno left him when Umno Baru was formed) to form his new party, Semangat 46. That was the end of Ku Li's political career and of his hope of reaching the pinnacle of power. And this too meant the end of Khoo Kay Peng. His link to the 'right' political masters took a nosedive and it was only a matter of time before he would lose his flagship, his MUI Bank.
In Malaysia, one can't own a bank and be on the wrong side of the political divide, as many a banker has since learned -- and the list is endless.
In 1991, Anwar Ibrahim became Malaysia's Finance Minister. The whisperings in the corridors of power was that this was the wish of Tun Daim Zainuddin who wanted to retire to focus on his many business interests but wanted 'his man' to take over so that he would not expose himself to any risk with the appointment of a 'hostile' Finance Minister.
Everyone in the MCCM at that time knew that Anwar was Daim's proxy and that Daim was still the de facto Finance Minister. There was many an occasion when the MCCM met up with Anwar to try to resolve issues affecting the Malay business community and Anwar would reply that he would have to check with Daim first. No one doubted that Anwar was Daim's kuda (horse), as he was infamously labelled then.
In 1993, Anwar took over the post of Malaysia's Deputy Prime Minister after ousting Ghafar Baba in what many say was one of Umno's dirtiest party elections ever. Some say as much as RM200 million was spent to oust Ghafar -- the beginning of Umno's scourge of 'money politics', the 'black culture' that Umno has to grapple with today. Others put the figure as much higher.
Nevertheless, whatever the figure may have been, it was in the hundreds of millions. What many did not know, and which was the main bone of contention: where did Anwar get his hands on such a large sum of money?
On 3rd January 1994, the Hong Leong Group Malaysia, which is controlled by another Chinese business tycoon, Tan Sri Quek Leng Chan, acquired MUI Bank Berhad through Hong Leong Credit Berhad. MUI Bank was renamed Hong Leong Bank Berhad (HLBB).
Initially, another Chinese business tycoon, Tan Sri Dato Vincent Tan Chee Yioun, through his vehicle Berjaya Corporation, made a bid for the bank. It was rumoured that Khoo Kay Peng did not really want to sell his bank but was under pressure to do so. His link to Ku Li, the Semangat 46 leader, had cost him his bank. Chinese business tycoons rise and fall alongside their Umno political bosses. It is the hazards of doing business using Umno leaders as your benefactor.
The whisperings in the corridors of power at that time was that Vincent Tan was told to "back off because Anwar wanted the bank". Being the obedient servant that he always is, Vincent Tan backed off so that Quek Leng Chan could have the bank instead.
But Vincent Tan did not walk away empty-handed though. As compensation, he was allowed his Sports Toto 'special draw', a project which Anwar crony and tennis partner, S. Nallakaruppan, was in charge of. The Sports Toto special draw was a very lucrative cash cow that made enough money for some of it to filter back to Umno as 'election funds'. It is said that this was the basis of the relationship between Anwar and Nalla, the special draw cash cow.
HLBB was listed on the Kuala Lumpur Stock Exchange on 17th October 1994 with its total paid up capital enlarged to RM470 million.
Again, just like Khoo Kay Peng could not get his hands on a bank without his link to the then Finance Minister, Ku Li, Quek Leng Chan also needed the good office of the Finance Minister to finally realise his dream of owning a bank -- something he had been attempting to do in Singapore for quite some time but which Lee Kuan Yew violently opposed. Yes, in Singapore too your links to the political masters is crucial in getting things done -- hence so much for the fallacy of Singapore being 'squeaky-clean'.
But there is a dark secret behind the Quek Leng Chan-Anwar Ibrahim relationship. And that dark secret is about to come out of the closet. Tomorrow, on Wednesday, 28th March 2012, a case is going to be heard in court. And this case involves conflict of interest and the siphoning out of money of an amount of RM445 million. The issue of how the bank's money was siphoned out is not the most interesting part of the story. What is would be where the money went to and what it was used for.
And this is how the story goes.
On 24th March 1997, a syndicated loan of RM420 million was obtained under the names of eight people, all who were acting as nominees for certain people -- RM420 million was the original loan amount with an additional RM25 million given to Faiz Abdullah to cover the outstanding interest. The syndicate lenders were Hong Leong Finance, Sime Bank Berhad, BSN Commercial Bank (Malaysia) Berhad and DCB Bank Berhad. The arrangers of the loan were Hong Leong Finance Berhad and HLG Capital Markets Sdn Bhd.
The purpose of the loan was for the purchase of Inchcape Timuran shares and to purchase Kewangan Bersatu Berhad KBB, which had a finance licence. KBB was owned by Ishak Ismail, an Anwar crony and the Umno Penang Treasurer who controlled Idris Hydraulic, another Umno company. Anwar was then the Umno Penang chief. The RM420 million was dispersed but the KBB acquisition never took place. So what happened to the money? Where was it siphoned? Who hijacked it? That is what the court case this week will establish.
Anwar was about to make his move on Dr Mahahir so he needed to fatten his war chest. It cost him RM200 million to bring down Ghafar. It would cost him much more than that if he wanted to bring down Dr Mahathir. Hence, it was important for Anwar to control the financial institutions, his intended source of cash, as he did with the Umno media group when his boys did the RM600 million MBO.
Anwar realised that to oust Dr Mahathir he would need to surround himself with powerful 'money people' who would have the financial resources to fund the exercise. While Dr Mahathir had people like Ananda Krishnan, Francis Yeoh, Vincent Tan, Daim, etc., to finance his political moves, all Anwar had were people like Tong Kooi Ong, Chan Ah Chye, TK Lim, Kamaruddin Jaafar, Ishak Ismail, etc., and to a lesser extent Rashid Hussein and Azman Hashim. Halim Saad and Tajuddin Ramli were also beginning to get close to Anwar who they viewed as the heir apparent.
The joke that Anwar's people told then was that you must first fatten the cow before you can milk it. However, while Dr Mahathir had fat cows, Anwar's cows were pretty thin so they needed to be fattened a bit.
One person, who decided to place a huge bet on Anwar becoming the next Prime Minister, after ousting Dr Mahathir of course, was Quek Leng Chan. This was the same man who got his bank under Anwar's watch. While both Anwar and Quek handled the planning of their manoeuvres, the actual implementation was left to Nazri Abdullah, Anwar's warlord currently living in London (and one of the beneficiaries of the RM600 million media MBO), and Seow Lun Hoo, Quek's warlord.
To pull this off, it would require creating shell companies with trusted persons to front it and act as nominees. And access to large amounts of funds would be required. This was where Quek Leng Chan's and Hong Leong's financial clout were very crucial. And the Mister Fixit was Seow Lun Hoo.
The Inchcape Timuran deal was executed by Seow, together with Faiz Abdullah, an Anwar crony and lawyer -- who was also one of Anwar's speechwriters, just like Dr Munawar Anees who was later jailed for six months on charges that he had allowed Anwar to bugger him.
The plan was to use the RM420 million syndicated loan facility to acquire Inchcape Timuran and KBB. KBB, which had a finance licence, would then borrow from another financial institution to repay the original loan from Hong Leong. And the beautiful part about this whole thing is: KBB was already owned by Ishak Ismail, Anwar's Treasurer from Penang. So it would be merely transferring money from one pocket to the other.
To fatten the cow further, they planned to inject into the company 2,500 acres of RRI land in Sungai Buloh that would be privatised at RM250,000 per acre. This land, which would have been a RM625 million deal, was practically a goldmine and in the middle of a massive development. This would be the new 'Golden Triangle' in the Kelang Valley.
It is most ironical that Anwar protested recently when Prime Minister Najib Tun Razak talked about this same privatisation proposal. Anwar is objecting to something he was going to do and would have done had he not been ousted in September 1998.
Anwar successfully ousted Ghafar by using Sabah. If he can do it once then he can do it again. The money from the loan was supposed to ensure that he had the support of key Umno players in Sabah and elsewhere. However, everything fell apart when the Asian Financial Crisis hit soon after and Anwar was subsequently ousted and arrested in September 1998.
And now the case has come to court. And in this court hearing a lot of shit is going to hit the fan. We are going to hear about nominees, front men, fall guys, beneficiaries, benefactors, and a lot of conspiracies and counter-conspiracies that are going to make your head spin.
The end game was to take over the seat of the Prime Minister. The game plan was to raise as much money as possible to finance this exercise. The vehicle was Hong Leong. The financial planner was Rashid Hussein. The fixer was Quek Leng Chan. The executor was Seow Lun Hoo. The face of the deal was Faiz Abdullah. The fall guys were eight nominees under whose names the loan was obtained. The sweetener was the 'gold mine' RM625 million RRI land in Sungai Buloh.
It was supposed to have been a win-win situation whereby all would live happily ever after. But, as usual, there must always be a spoiler. And the spoiler was Dr Mahathir who refused to roll over and play dead but chose instead to fight back.
If you have some free time, do attend the hearing tomorrow and witness what is going to be revealed in court. This is probably going to be a more exciting case than Anwar's Sodomy 2 trial.
As I have always said: behind every Malay Umno politician is a Chinese business tycoon. The Chinese need the Malays to get ahead. The Malays also need the Chinese to get ahead. The Malays have political power and know how to abuse this power. The Chinese have economic power and know how to invest their money in the right politician.
But sometimes the Malay Umno politicians do miscalculate their political moves. And sometimes the Chinese business tycoons do make a bad investment. And in this case about to be heard in court, we shall be told how Anwar Ibrahim and Quek Leng Chan bit of more than they can chew and are now suffering the pains of indigestion.
But why is Hong Leong suddenly resurrecting an old case from 1997 that had long disappeared from the radar screen? Why not let sleeping dogs lie? After all, a massive loan of RM445 million was given to eight nominees who in the first place were not qualified to get a loan of that amount and certainly do not have the means to pay back the loan even if you win the case.
Well, Quek Leng Chan is now in the government's bad books and he is worried. He knows that Anwar will never become Prime Minister unless Pakatan Rakyat takes over the federal government. But Quek Leng Chan has written off any possibility of Pakatan Rakyat taking over the federal government -- hence also the chances of Anwar becoming Prime Minister. So, Quek Leng Chan is washing his hands of Anwar and is hoping that by taking this case to court it will be revealed that Anwar is the person behind this whole thing. This is Quek Leng Chan's way of wiping the slate clean and proving to the government that he is no crony of Anwar (if not why would he take this case to court?).
But the court case may backfire on Quek Leng Chan. Not only will Anwar be exposed but Quek Leng Chan's role will be revealed as well. And this case will be an albatross around both Anwar's and Quek's neck. Don't we live in most interesting times?

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