Putrajaya directs GLCs, Danaharta to drop all claims against Tajuddin Ramli

By Leslie Lau, The Malaysian Insider

Putrajaya has directed all government-linked companies, including Malaysia Airlines and the national debt restructuring company Danaharta, to cease all civil suits against Tan Sri Tajuddin Ramli, the former chairman of the national carrier and protege of Tun Daim Zainuddin, according to documents obtained by The Malaysian Insider.

In a letter sent this month to the GLCs and Danaharta by Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz, the GLCs and Danaharta were informed that the Finance Ministry had agreed to settle all outstanding civil suits against Tajuddin, a poster boy of Tun Dr Mahathir Mohamad’s plan to groom Bumiputera entrepreneurs.

“This is to inform you that the government of Malaysia and the Finance Ministry has agreed to settle all civil claims against Tan Sri Dato Tajuddin Ramli and others to be withdrawn immediately in view of the fact that the government and the Finance Ministry have agreed that the said cases will be settled out of court.

“For your information the government has given me the mandate to act for the government in this matter,” Nazri said in the letter sighted by The Malaysian Insider.

At least one government agency is expected to withdraw its claims against Tajudin in court today.

Nazri’s letter also directs the lawyers acting for the GLCs and Danaharta to hand over their cases to the firm of Hasfarizam Wan and Aisha Mubarak, a known Umno lawyer.

But the minister made no mention of the terms of settlement with Tajuddin.

Tajuddin was a protege of Daim, the close friend of Dr Mahathir and ex-finance minister who was the architect of the now discredited policy of nurturing a class of Malay corporate captains on government largesse.

Individuals such as Tajuddin, Tan Sri Halim Saad and others flew high in the 1990s but their true mettle was tested during the Asian financial crisis. Nearly all of them fared poorly.

The Najib government’s move to settle all outstanding claims against Tajuddin appears to be an attempt to wipe the slate clean in a financial saga that goes back decades to the height of Dr Mahathir’s administration.

First police report in 2002

MAS had first lodged a police report against Tajuddin in 2002 for allegedly causing the flag carrier to suffer losses in excess of RM8 billion. Tajuddin was the executive chairman of the airline from 1994 to 2001.

According to a report to the Malaysian Anti-Corruption Commission (MACC), a major contributor to the record losses under Tajuddin was the relocation of MAS’s cargo operation in Amsterdam and Frankfurt to a single hub in Hahn, Germany, where the airline was forced to enter into a disadvantageous aircraft lease contract with a company, which was later linked to Tajuddin’s family.

The new cargo hub operation had caused MAS to suffer losses of between RM10 million and RM16 million a month before the project was terminated after the government regained control of MAS in 2001.

The termination resulted in a RM300 million arbitration claim against MAS by the company.

MAS has had a turbulent past decade after the government bought back the airline from the former corporate high-flyer at RM8 per share or about double the market price at the time.

The airline was at the time saddled with a debt reported to be RM9.5 billion.