The saga of Tajudin Ramli and Dr Mahathir and the collapse of MAS

Tajuddin Ramli




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The saga of Tajudin Ramli and Dr Mahathir and the collapse of MAS timeline

1994 — Tajudin takes RM1.79 billion in loans from several banks to fund the acquisition of a 32% stake in Malaysian Airline System Bhd (MAS). He also controls TRI Industries Bhd, which owns cellular service provider Celcom.

2001 — Government buys back MAS shares from Tajudin, which he controls via Naluri Bhd at RM8 per share, totalling RM1.79 million. The decision caused an uproar because MAS shares were trading at a much lower value.

Oct 2001 — Danaharta and Tajudin reach a settlement agreement that includes a RM468.18 million haircut.April 2002 — Danaharta terminates the agreement and demands Tajudin pay RM1.61 billion. Danaharta subsequently raises RM717.39 million from the sale of his pledged shares in TRI. It also disposes of his 45% stake in Naluri Bhd.

2002 — MAS lodges police report against Tajudin for allegedly causing the flag carrier to suffer losses in excess of RM8 billion. It alleges that the relocation of MAS’ cargo operations in Amsterdam and Frankfurt to a single hub in Hahn, Germany, has caused losses of between RM10 million and RM16 million a month. When the government took over MAS in 2001, the project was terminated and resulted in a RM300 million arbitration claim against the national carrier.2003 — Danaharta disposes of TRI which controls Celcom to Telekom Malaysia Bhd (TM) to reduce Tajudin’s debts

Dec 2005 — The High Court awards summary judgment in favour of Danaharta and two of its subsidiaries against Tajudin for RM589.14 million together with interest at 2% above the base lending rate of Malayan Banking Bhd.

Airbus chairman Jean Pierson (seated,left) shakes hand with Tajudin after signing for the delivery of the European consortium’s 100th Airbus A330/340 at the 41st Paris Air Show in this picture taken on June 15, 1995. Also present were Malaysia’s then prime minister Tun Dr Mahathir Mohamad and his wife Tun Dr Siti Hasmah Ali.

May 2006 — Danaharta commences action to recover the amount outstanding as of Dec 31, 2005 of RM589.14 million.June 2006 — Tajudin counter-claims for a total of RM13.36 billion in relief from the government, TM, Telekom Enterprise Sdn Bhd and TRI. He also names some 22 individuals in his counter-claim. In his counter-claim, Tajudin contends he is forced to buy MAS by former prime minister Tun Dr Mahathir Mohamad and former finance minister Tun Daim Zainuddin.

2009 — On Dec 7, the High Court gives judgment in favour of Danaharta in its claim of RM589.14 million against Tajudin with interest backdated to Jan 1, 2006.

2010 — In January, the Court of Appeal allows Tajudin’s application for stay of execution pending appeal.

March 2011 — Dr Mahathir denied in his autobiography a Doctor in the House; The Memoirs of Tun Dr Mahathir Mohamad that he and Daim had forced Tajudin to acquire 32% in MAS in 1994 for RM1.8 million. “He wanted to swap his Malaysian Helicopter shares (a company with two aircraft) for MAS shares (a company with well over 60 aircraft). The government rejected his plan and asked that he pay in cash instead, which forced him to borrow RM1.8 billion”, he wrote. “He was therefore not coerced by the government to buy the shares, but was forced by his own modest collateral to borrow heavily,” Dr Mahathir wrote in his book.

Aug 11, 2011 — Putrajaya directs all government-linked companies (GLC), including MAS and Danaharta, to cease all suits against Tajudin.

Aug 12, 2011 — Minister in the Prime Minister’s Office Datuk Seri Nazri Aziz, who issued the letter to the GLCs, said he had asked the companies to withdraw their suits worth at least RM2 billion to buy time for all parties concerned to reach a win-win agreement. He also said the move could save the government billions in legal claims.

Aug 12, 2011 — Prime Minister Datuk Seri Najib Razak said his administration’s intervention in Tajudin’s civil cases should not be viewed as an “out-of-court settlement”.

Aug 17, 2011 — TM and MAS, in filings with Bursa Malaysia, said they received a letter from the government with regard to the withdrawal of suits against Tajudin. However, Atlan Holdings Bhd (which had acquired a controlling stake in Naluri from Danaharta) and Axiata Group Bhd denied they received such a letter.

Aug 18, 2011 — CIMB Group Holdings Bhd told Bursa Malaysia it had yet to receive any letter from the government asking it to “settle out of court” with Tajudin.

Oct 6, 2011 — Nazri, in his written reply to Ipoh Timur MP Lim Kit Siang, said Tajudin had breached Section 131 of Companies Act 1965 for failing to disclose his interest during his tenure in the national carrier. Nazri also said Tajudin had applied to the Attorney-General’s Chambers to postpone the compound against him until the civil action is completed.

Oct 14, 2011 — Case management of suit between Danaharta and Tajudin at the Court of Appeal involving judgment of RM589.14 million. Court fixes case to be heard at the Court of Appeal from Feb 13 to Feb 15, 2012.

Jan 27, 2012 — Tajudin applies to the Court of Appeal to adjourn hearing of case until, stating that he has been requested by Danaharta to do so to enable settlement of the cases to be finalised “out of court”.

Jan 31, 2012 — High Court disallows application for adjournment of cases involving Tajudin and orders that case management (of cases in High Court) to proceed as scheduled on March 8, 2012.