A Malaysian Saga of Corruption Ignored

One of Mahathir’s protégés evades charges, but his accusers are nearly capsized 

The ACL agreement, Ramli’s report said, “was not an arms-length dealing.” Evidence showed that all of the directors were closely connected to Tajudin, including Rizana Mohd Daud, Tajudin’s sister-in-law, his brother, Bistamam Ramli, and companies owned by Tajudin or his family.

Asia Sentinel

On June 4, 1995, Tajudin Ramli, then one of Malaysia’s brightest Bumiputra, or native Malay stars, was named a Tan Sri, the country’s second highest honor, by the country’s reigning sultan. At the time he had been the managing director of Malaysian Airline System, Malaysia’s nationally owned flag carrier, since July 1, 1994.

Like his friend and former Prime Minister Mahathir Mohamad, the then 49-year-old Tajudin was a native of Alor Setar in Kedah state. He would be the recipient of a long list of national honors including being president of the Malay Chambers of Commerce and Industry of Malaysia. He was regarded as a shining example of the bumi businessman that Mahathir wanted to foster to run the country and take the commanding heights of the economy back from the ethnic Chinese who ran it.

Unfortunately, according to a long list of whistle-blowers within the airline, he was also involved in looting it of tens of millions of dollars and very nearly putting it into bankruptcy, so that it had to be rescued by the government before he was forced out in 2001. It is a story that has taken years to emerge, and when officials recommended prosecution, they came under fire that nearly ruined their careers and almost put them in jail.

According to allegations in documents made public last week on Malaysia Today, the widely read website of fugitive gadfly Raja Petra Kamarudin, Tajudin colluded with three other MAS officers and directors through two nominee companies, one in Singapore and the other in Hong Kong, to establish a company called Advanced Cargo Logistics GmbH Germany, at Hahn Airport in Frankfurt, Germany, to provide ground-handling services for MAS.

According to a report filed in March of 2007, to then-Prime Minister Abdullah Ahmad Badawi by Ramli Yusuff, the director of Malaysia’s Commercial Crime Investigation Department and an official who seems to have been singularly incorruptible, “Tan Sri Tajudin Ramli was in control of MAS from 1994 to 2001. When he left MAS in 2001, MAS had accumulated losses in excess of RM8 billion (US$2.54 billion). Many projects were made under very suspicious circumstances.”

The ACL agreement, Ramli’s report said, “was not an arms-length dealing.” Evidence showed that all of the directors were closely connected to Tajudin, including Rizana Mohd Daud, Tajudin’s sister-in-law, his brother, Bistamam Ramli, and companies owned by Tajudin or his family.

MAS suffered losses of approximately RM10-16 million per month from the moment the government-owned airline began to operate into the Frankfurt airport, according to Ramli’s report. “As of November 2000, MAS had suffered RM174 millon in losses.” To prevent the airline from going bankrupt, the MAS board closed the Hahn project, only to have ACL sue the airline for RM300 million for breach of contract on the basis that the contract obligated MAS to fly into Hahn for 10 years. Tajudin himself then sued various parties and the government of Malaysia for RM13.6 million.

Ramli recommended a series of charges against Tajudin, Wan Aishah Wan Hamzah, the former MAS director, and others for not declaring their interest in ACL.

“Since ACL is controlled by Tajudin’s family companies, it is therefore presumed…that he has used his office and position as Executive Chairman of MAS to benefit ACL when MAS entered into (the agreements,)” the report continued. “This offence is punishable with mandatory imprisonment (up to) 20 years and a fine not less than five times the sum of gratification.”

“CCID’s investigation has disclosed that there is sufficient evidence to prosecute Tajudin, Wan Aishah and (another official) for all of the above offenses.”

The case was then handed over to the Malaysian Anti-Corruptin Agency for investigation and possible prosecution. What happened then was totally unexpected. Instead of preferring charges against Tajudin, the Malaysian Anti-Corruption Commission (MACC) went after Ramli Yusuff on three separate allegations, all widely reported in the media, that he had not declared his assets as required under Malaysian law despite the fact that he had declared them as required every year since he had been in office. He was also accused of misusing a Malaysian police airplane although on the flight in question he was on duty, in uniform, and escorted by other police officers. Malaysia’s mainstream media, all of which are owned by component parties of the national ruling coalition, wrote that Ramli and his family possessed assets worth RM27 million. He was accused of abuse of power for allegedly forcing villagers in the Lahad Datu district of Sabah off their land to allow a company in which he had an interest to take it over.

Officials brought 75 witnesses to testify against Ramli in a Sessions Court in Kota Kinabalu. Ultimately, Ramli would face charges in three different courts before he was finally acquitted on Aug. 9. Inspector General of Police Musa Hassan, one of the country’s top police officials, appeared in the Kota Kinabalu court to testify against Ramli, only to have Judge Supang Lian tell him that his “evidence was incredible and not to be believed.”

Attorney General Abdul Gani Patail appealed the Kota Kinabalu ruling to the High Court but lost again, before High Court Judge Rahman Sebli, who acquitted Ramli. Finally, Ramli was acquitted earlier this month outright by Judge SM Komathy, for the third time without having to put on a defense.

Ramli, however, wasn’t the only one to go before the courts. His lawyer, Rosli Dahlan, who was also the lawyer for the airline itself, prepared Ramli’s defense against the criminal charges only to be arrested himself on charges of collaborating with Ramli. At one point, on a pretext that Rosli had mishandled a letter from the MACC, police officers invaded Rosli’s office, arrested and handcuffed him, then kept him in a cell overnight, refusing him medical treatment for injuries to his wrists from the handcuffs. They also refused his request to file a report against the arresting officers.