Keeping It In The Family! – How Taib ‘The Godfather’ Corruptly Controls CMS
1 Dec 2011
This post is also available in: Chinese (Simplified), Iban, Malay
New research by Sarawak Report has produced further proof that Taib’s claim that he “does no business in Sarawak“ is shockingly untrue.
To the contrary, we can name him as the ‘Godfather’
who blatantly controls most of the shares in Sarawak’s largest public
company, CMS.
We can also
show that he has further manipulated that power to produce maximum
wealth for himself and his family, by ensuring that CMS does as much of
its business as possible with other family firms.
This practice is against stock exchange rules, because it is at the expense of other shareholders and the wider public.
Mafia-style business boss
This matter is
all the more disgraceful, because CMS is a conglomerate that
Taib himself created by privatising key assets that used to belong to
the State of Sarawak. As Finance Minister and Chief Minister he
caused valuable state interests like PPES, Steel Industries Sarawak and
PCMS to be sold for knock down prices to CMS and then engineered
extraordinary ‘share-swaps’ with cheap companies belonging to his own
family members. This enabled the Taibs to take control of the majority
of CMS shares by 1996!
CMS continues
to make its huge income from state monopolies and the massive public
contracts handed to it (without proper open tendering) by Taib
himself. By these means he has blatantly exploited his political power
to enormously enrich himself.
““If I do business inside the country people will say I use my influence to enrich myself. So, we did it outside” [Taib Mahmud March 2011]
Thus, although
the Chief Minister has admitted it would be corrupt for him and his
family to be involved in Sarawak business, our revelations show that
this is exactly what he does on a massive scale through CMS, exploiting
his political role to act as the mafia business boss of the State.
Passing around the shares – and the top jobs!
Our most recent revelations are based on the publicly recorded
movement of shares within CMS. These show how huge chunks of the
company have been passed round Taib’s close family members,
providing only one feasible explanation, which is that it is Taib
himself who is controlling their ownership. To all intents and purposes,
therefore, he created the company and he IS the owner!
To cement this control over the company, Taib has also made sure that
his family members occupy all the key management roles. However, again
he has shifted round these positions between close family members, once
more revealing the pattern of ultimate control by him.
Onn Mahmud
Public documents show how in the early years, while his children were
still students, the largest shareholder and main Director of CMS
was Taib’s brother Onn Mahmud.
Onn was Taib’s original key business proxy in Sarawak and abroad,
until the brothers fell out in 2003. His name can also be found on all
the documents relating to property companies linked to Taib’s children
in Canada and the US and also to Taib related companies in Hong Kong.
According to research available at the London School of Economics,
Onn acquired the family’s first 27% stake in the publicly-owned CMS in
1989 for an undisclosed sum. This followed a shadowy deal with the
Sabah Economic Development Corporation, which was reported as a ‘share
swop’ between Sabah and Sarawak, but turned out to be a private
acquisition by Onn (the Sarawak’s Chief Minister’s brother).
According to CMS records, by April 2002 Onn, as Director and Group
Chairman, owned over 30% of CMS shares. At that time Taib’s two sons
Sulaiman and Abu Bekir (Deputy Group Chairman and Group Executive
Director) also owned a further 12% each.
This gave the three relatives of Taib a controlling interest
over Sarawak’s biggest company – a company that had grown exponentially
due to favourable state contracts and the absorption of state companies
on inexplicably good terms.
The sons take over
The real owner/controller of these shares, however, was Taib. The
movement of jobs and shares in 2003, after Onn lost favour, show this
clearly.
The above CMS document shows that during 2003 Onn Mahmud went from
being the largest shareholder to holding relatively few shares, while
Taib’s sons acquired 44,925,102 shares during the same period.
Because of CMS official declarations, we know that those
44,925,102 shares were held through the company Majaharta, which was
originally ‘owned’ by Onn Mahmud.
The question therefore is why should Onn transfer such a valuable
company as Majaharta, with so many CMS shares, to his nephews, rather
than say to his own children or indeed selling the shares for a big
profit? The answer, clearly, is that he only held those shares by
proxy.
Leila becomes CMS’s largest shareholder
Even more significant is what happened to the remainder of Onn’s
shares. Company reports show that these went straight to Taib’s wife
Lejla!
Can we avoid the conclusion that when he could no longer hide behind
his brother Taib opted to hide behind his own wife as the real
shareholder of CMS!
Onn was replaced as Group Chairman by Taib’s younger son Sulaiman,
the youthful car fanatic, who enjoyed his own period of favour as the
simultaneous Chairman of the Taib controlled RHB bank, Deputy Tourism
Minister and MP for Kota Samarahan.
CMS’s own Annual Reports (produced a year in arrears) illustrate the share transfers after Onn left in 2003.
Next the shares move from Taib’s sons to his daughters!
Taib did not leave his two boys in control such a huge chunk of the
company for long however. Or is it that the young lads decided to be
very generous to their sisters?
Subsequent records show that by March 2007 Majaharta had been
transferred to a joint ownership by Hannifah Taib and Jamilah Taib.
This left the 4 children with fairly equal shareholdings in CMS and
Taib’s wife with an even larger personal share. Who alone could have
been controlling all this?!
Jobs changes reflect the same pattern. It was Sulaiman Taib who originally took over from Onn, but this soon changed.
Singaporean, Syed Ahmad Alwee Alsree, married Taib’s daughter Hanifah
in 2000 and soon joined CMS, straight into the position of Group
General Manager – Human Resources.
By 2006 he was Deputy Group Managing Director and after Taib’s
second son Sulaiman fell from grace he took over as Group Executive
Director in 2008. He and second son Abu Bekir now pose as the main
figureheads of CMS.
One should not forget the nice management job offered to Taib’s
favourite sister Raziah’s 3rd husband, Robert Geneid, as well. He acts
as Managing Director of CMS Premix.
Who can be controlling this succession of ever-changing management
positions for Taib’s family members at the top of this public company?
Again the only conclusion can be Taib himself.
Corrupt business management!
CMS is a publicly listed company on the KL stock exchange, with a
duty to get best value for its shareholders. It is also the recipient
of State contracts for which it should also obtain best value. However,
records show that overwhelmingly the management’s strategy has been to
subcontract to companies owned by Taib family members instead. This has
ensured that even more money goes to the Taibs at the expense of
shareholders and the public.
In 2002 an extraordinary meeting of shareholders was called to confront the issue of so-called ‘recurrent related party transactions’,
demanded under stock exchange rules. The list of Taib family companies
benefitting from longstanding contracts from CMS that was presented to
the May 2002 EGM is jaw-dropping.
From that list we can see that over the previous year alone
RM35million worth of business went through some 20 companies belonging
to Taib family members. These companies, described as recurring
business partners, included:
Achi Jaya Industries Sdn Bhd, Achi Jaya Holdings Sdn Bhd, Satria Realty, Asterix Incorporated Sdn Bhd, Insurepo Sdn Bhd, Wisma Printing Sdn Bhd, Sarawati Sdn Bhd, Centigrade Resources Sdn Bhd, Grogrow Sdn Bhd, Trans Dimension Sdn Bhd, Duta Bistari Sdn Bhd, Alpha Jelita Sdn bhd, Alpha Mantra Sdn Bhd, Alpha Wira Sdn Bhd, Mylink Communications Sdn Bhd, Bormill Line Sdn Bhd, Lanco Shipping Sdn Bhd, Hager Elektronik Sdn Bhd, Automobili Sdn Bhd, Bank Utama Bhd
These companies were providing CMS with such services as rental of
buildings, property letting, shipping services, transportation, petrol,
printing and stationary services, general trading, insurance
consultancy, management services, radio and telecommunications services,
consultancy services, computer hardware and software services and
servicing cars!
Family members involved in these companies included sons Sulaiman and
Abu Bekir, as well as brothers and sisters Onn Mahmud, Tufail Mahmud,
Arip Mahmud, Puan Zaleha Mahmud, Datin Amar Fredahanam Bt Mahmud,
Ibrahim Mahmud, Raziah Mahmud & Robert Geneid plus various wives
and family members.
The vast majority of these wealthy transactions went through
companies ‘owned’ by Onn Mahmud, although we can see that a considerable
amount of property rental went through a company Satria Realty Sdn Bhd,
which was until 1999 still publicly 55% owned by the Chief Minister
himself !
Deals within the family
Unsurprisingly, the extraordinary meeting, called under Stock
Exchange rules to review this outrageous situation, voted in favour of
keeping these recurring arrangements with related companies. After all
the Taibs controlled the majority of shares! To this day, despite
recent attempts to cover up this in-trading, it can be seen from the
Annual Report that the corrupt practice continues.
Time to restore this money!
The above information, which is publicly available in company and
stock exchange records, is quite enough for the MACC to issue a warrant
for the arrest of Taib Mahmud. He and his family have not only done
business in Sarawak, they have run Sarawak as a business along the lines
of a family mafia, using his political power to extract virtually all
the country’s wealth.
Meanwhile, just last week the Public Service Department’s director-general, Tan Sri Abu Bakar Abdullah, announced new measures to fight embezzlement.
“If there are cases of missing government funds or properties, then an
immediate internal probe should be conducted” he announced, and he said
that those found taking money should be made to pay it back.
Top of the list should be Taib Mahmud who has stolen more from Sarawak than a million civil servants could do in ten life-times.
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