Malaysian Insider’s sinister agenda to divert away from ‘share-swap deal’


The hottest business this week is the ‘Malaysia Airlines-AirAsia share swap’ deal. It got so many reactions despite the mainstream media playing the text-book perspective on how positive and progressive the ‘strategic alliance’ is. In the many criticism of the alternative media, The Malaysian Insider in its usual sinister agenda misled the focus of the issue away from the crux of the deal and how it would benefit Malaysia Airlines.

Suspiciously, looks like Kalimullah “Riong Kali” Hassan playing his cards to deflect the issue away.

The Malaysian Insider the past few days felt that it was important to highlight the current suit and counter suit between Danaharta and former Malaysia Airlines, TRI and Naluri Chairman Tan Sri Tajuddin. They were compelled to skew the on-going civil case, even to a point of false reporting and getting quotations meant to demonise a onetime power Malay business baron.

They even got quotations from the Opposition, to show the ruling party’s patronage on certain business personalities is still very much alive, just like former-abuse-of-power-convict Anwar “Mat King Leather” Ibrahim’s immediate charge against then Dato’ Seri Dr Mahathir Mohamad when the former was sacked as Deputy Prime Minister on 2 September 1998, ‘cronyism’.

The case was about complications of a business loan spinning into a very vicious cycle and eventually turned bad. A straight forward term loan was raised by Tajuddin as a ‘privatisation project to improve financial and profitability of Malaysia Airlines’. Many also want to be believe that then he was asked to take over Malaysia Airlines from Bank Negara in 1994 for RM 1.792 billion. The taking-over of Malaysia Airlines shares from Bank Negara alone was a story which has a very interesting history to it.

The RM 1.792 billion was raised via a term loan syndicated through RHB Bank. The collateral of the loan then was 130 million of TRI shares, 309.6 million of Naluri shares and 45.2 million of Promet Langkawi shares.

Then came the Asian financial crisis of 1997/8. Business was bad and Tajuddin and his group was cash strapped. His loan defaulted. It became non-performing loan.

As an after math of the 1997/8 Asian Financial crisis, RM 90 billion worth of loans defaulted and became non performing loans (NPLs). Government of Malaysia set up Danaharta to take-over these NPLs from the financial institution so that they could move on. Instead, Danaharta would do its best to either supervise a recovery plan to for turn-around and make these NPLs productive or recover the most from these NPLs, which include liquidating it.

An extract of a Bank Negara presentation in 2005:

•Pengurusan Danaharta Nasional Berhad (“Danaharta”) was established by the Malaysian Government in June 1998 to address the non-performing loans (“NPLs”) problem plaguing the banking system during the Asian financial crisis.
•The NPL resolution agency, euphemistically known as the national asset management company (“AMC”), was established as a pre-emptive measure to avert a failure in the banking system.
•Danaharta’s objectives are:
–to remove NPLs from the banking system to allow banks to concentrate on their core business of lending to viable borrowers (completed in March 2001)
–to maximise recovery from its NPL portfolio (ongoing till 2005)

So, Danaharta took over these loans from the banks at 30sen from the nominal RM 1.00 value. After a series of discussion which involved the Government of Malaysia, Tajuddin entered into a Settlement Agreement with Danaharta on 8 October 2001.

Considering Danaharta took over the balance of Tajuddin’s loan amounting to RM 942 million for RM 300 million, it was agreed that the repayment tranche was broken into four: