Outrage Grows Over Scandal-Tainted Malaysia State Boss; Despite earning a civil servant’s salary for three decades, Taib Mahmud, the powerful chief minister of Sarawak, is reputed by critics to be one of Asia’s richest man with $15 billion

Outrage Grows Over Scandal-Tainted Malaysia State Boss

By Agence France-Presse on 7:16 pm May 23, 2013.

Kuching. Despite earning a civil servant’s salary for three decades, Taib Mahmud, the powerful chief minister of Malaysia’s Sarawak state, is reputed by critics to be one of Asia’s richest men. Taib, 77, and his family are accused of massive corruption and running Malaysia’s largest state like a family business, controlling its biggest companies with stakes in hundreds of corporations in Malaysia and abroad. A Rolls Royce and flashy jet cover his transportation, while a vast war chest has kept his political authority unrivaled in 32 years in charge of the resource-rich Borneo island state, which remains one of Malaysia’s poorest. “The amount of control he has is astounding. He has been able to dominate politics and society here for nearly four decades,” said Faisal Hazis, a political scientist with Universiti Malaysia Sarawak. But pressure is rising both at home and abroad for action against a man referred to by his harshest critics as the “thief minister” and viewed as the prime example of a culture of corruption fueling public disgust. Swiss-based activists Bruno Manser Fund (BMF), citing financial records, last year estimated the 77-year-old’s worth at $15 billion, which would make him Malaysia’s richest person. Such revelations are hugely embarrassing for Prime Minister Najib Razak, who faces a slide in support due in part to corruption blamed for bleeding the country of billions of dollars annually.But Taib, a member of Malaysia’s 56-year-old ruling coalition, is widely considered untouchable because the Sarawak parliamentary bloc he controls helps keep the coalition in power.

“We don’t see the political will to address grand corruption like this and it could destroy the country” by crippling economic development, said Josie Fernandez, Transparency International’s Malaysia director.

A 2008 US State Department cable revealed by WikiLeaks called Taib “highly corrupt” and “unchallenged”, saying Taib-linked companies dominate Sarawak’s emerging economy.

He and his family are accused of routinely taking kickbacks for lucrative government contracts or awarding the projects to companies they control.

A prime example dominates the languid capital Kuching — the state-assembly building whose swooping, golden roof gleams like a crown in the tropical sun.

A Taib-linked company won the $98 million contract to build the structure, which opened in 2009 and is home to a legislature he controls. A similar story surrounds a futuristic convention center nearby.

Taib’s office declined repeated interview requests.

A member of the Melanau tribe, supporters see him as defender of the autonomy of Sarawak — which is marked by Christian and tribal groups — against the Muslim Malay-dominated federal coalition based on mainland Malaysia.

Taib denies wrongdoing, saying Sarawak must be developed for its 2.4 million people. His critics spout “a web of lies and half-truths wrapped around ignorance and twisted logic”, he fumed last year.

But pressure grows, including in the rugged interior where Taib is blamed for decimating vast rainforests through logging and dam projects and evicting tribes from ancestral lands, sparking protests.

Philip Jau travelled for two days by road with dozens of his Kayan tribesmen to protest this week in Kuching against a mega-dam pushed by Taib on the remote Baram river despite local opposition.

“The dam is a curse from hell,” said Jau, wearing a feather-strewn traditional woven cap. “Taib will benefit, but he is killing the people.”

Jau fears the dam will destroy a river ecosystem the Kayan rely on, noting that tribes near the already-completed Bakun dam, Malaysia’s largest, say that has happened there.

BMF head Lukas Strauman said Taib and his family are the “chief culprits in destroying one of the world’s last great rainforest areas.”

In December, Swiss parliamentarians called for a freeze on any Taib assets there, saying he had abused office “in a spectacular way”. Swiss authorities are yet to respond.

Malaysia’s anti-graft agency launched an investigation in 2011, but it is widely accused of foot-dragging.

Faisal said action is highly unlikely as Sarawak seats proved crucial to the federal coalition winning May 5 elections, showing Taib is “more important than ever” to the government.

Premier Najib’s office declined to comment.

Taib has gotten even richer since the polls.

Shares of Taib-linked CMS — Sarawak’s largest conglomerate — have soared 65 percent following the ruling-coalition win, and the compliant state assembly tripled Taib’s pay to nearly $400,000 on Tuesday — his birthday.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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