Salleh: What about bailouts in Mahathir’s time?


Sabah State Speaker attacks use of ‘bailout’ to describe Tabung Haji land deal

(Free Malaysia Today) – Sabah State Speaker Salleh Said Keruak has gone on the attack against use of the word “bailout” in the Tabung Haji deal by pointing to four major financial rescues by the Mahathir Mohamad government in the 1980s and 1990s.

Mahathir had used “bailout” to describe Tabung Haji’s controversial RM772 million deal to buy a 68-acre plot of land from the government’s debt-ridden 1Malaysia Development Bhd.

The deal has faced a storm of criticism from Umno politicians as well as from those in Pakatan Rakyat.

Salleh, writing in his blog, said “bailout” was a negative term, intentionally used or misused to insinuate something wrong was going on.

He said bailouts occurred when money was pumped into an ailing organisation without any returns or dividends being obtained “nor do you get your money back”.

He then gave four examples of financial rescues in the past:

1. Bank Bumiputra Malaysia Bhd practically went bankrupt because of bad loans in Hong Kong. Petronas was forced to pump in money to save the bank;

2. Perwaja was a bailout because if government money had not been pumped into that company then it would have gone under. Again, there were no returns;

3. MAS shares were bought back by the government from Tajudin Ramli, its owner in a privatisation deal where the government was forced to buy back the shares at “way above market price” incurring a huge loss to taxpayers, he said, pointing out that if not so Tajuddin would have gone bankrupt;

4. Petronas was asked to buy over Konsortium Perkapalan Berhad, owned by Mahathir’s son Mirzan.

Salleh sarcastically pointed out that Mahathir had recently said that it was not a bailout. Salleh pointed out that Mirzan wanted RM2 billion to cover his RM1.7bn debts but Petronas only agreed to pay RM1bn in the end so “Mirzan ‘lost’ RM1bn while Petronas later sold the company for a huge profit of hundreds of millions.”