Monday, January 26, 2015

Swiss group pushing for probe into Sarawak company linked to Taib


Tun Abdul Taib Mahmud is accused awarding state contracts to Cahya Mata Sarawak, benefitting his relatives and family members during his time as Sarawak chief minister. – The Malaysian Insider file pic, January 26, 2015.

Tun Abdul Taib Mahmud is accused awarding state contracts to Cahya Mata Sarawak, benefitting his relatives and family members during his time as Sarawak chief minister. – The Malaysian Insider file pic, January 26, 2015.
A staunch critic of Sarawak governor Tun Abdul Taib Mahmud is pushing Putrajaya to set up a royal commission of inquiry (RCI) to look into the privatisation of a conglomerate linked to his family.
Swiss-based Bruno Manser Fund said the RCI should investigate the legality of the privatisation of Cahya Mata Sarawak (CMS), a former state-owned company listed on Bursa Malaysia with monopolies in cement and steel production, into the hands of the Taib family.

Saying it has uncovered “systematic corruption” to show how Taib as chief minister “generated massive profits for CMS by the awarding of state contracts, making the former chief minister’s family the single largest beneficiary of public contracts in Sarawak”, BMF urged that all shares held by his family members in the company be frozen.

Taib stepped down as Sarawak chief minister on February 28 last year after 33 years in office.

He was succeeded by his former brother-in-law, Tan Sri Adenan Satem.

In its report "Corruption Management Sarawak – Cahya Mata Sarawak and Malaysia’s Taib family", BMF analysed 89 contracts granted to CMS between 1993 and 2013.

It alleged that CMS received over RM4.9 billion in state contracts since its takeover by Taib's family in 1993 up till 2013.

The contracts include the RM295 million construction of Sarawak’s new state legislative assembly building in Kuching, and a 15-year contract in 2003 for the maintenance of all state roads valued at RM86 million annually.
BMF said it wanted the RCI to investigate the series of reverse takeovers that began in the early 1990s that “privatised CMS into the hands of the Taib family”, claiming that the takeovers were “carefully crafted political manipulations”.

CMS started its business in 1974 as Cement Manufacturers Sarawak Sdn Bhd, and originated from a joint venture between the state-owned Sarawak Economic Development Corporation (SEDC) and the Sabah Economic Development Corporation (Sedco).

Following its privatisation, the company was renamed Cahya Mata Sarawak, retaining the company initials CMS.

Taib’s brother Onn Mahmud was appointed chairman of the group and was superseded seven years later by Taib’s youngest son, Datuk Seri Sulaiman Abdul Rahman Taib.

The BMF report said that though CMS appointed as chairman Tan Sri Syed Anwar Jamalullai, who is not related to Taib's family, as well as British lawyer Datuk Richard Curtis as group managing director in 2006, the company remained firmly in the hands of the Taib family.

It said for the past 20 years, Taib’s family has controlled the group with 11 family members being involved as shareholders, directors or members of CMS senior management.

Apart from Onn and Sulaiman, the others include Taib's late wife Laila, who died of cancer in 2009, his sister Datuk Raziah Mahmud Geneid, Raziah's Lebanese husband Robert who holds a senior management position, another brother Arip who also is in a senior management position, daughter Jamilah Murray, his eldest son Datuk Seri Mahmud Abu Bekir Abdul Taib (pic), youngest daughter Hanifah Hajar Taib-Alsree and her husband Datuk Syed Ahmad Alwee Alsree, who is the group executive director.

CMS was the first cement producer in East Malaysia and the first company from Sarawak to be listed on the then Kuala Lumpur Stock Exchange (in 1989).

For years, the company benefited from its monopoly in the cement market.

It has since evolved from a single product manufacturer of cement to Sarawak’s largest infrastructure developmet group, benefiting from numerous public contracts.

Today, the CMS group comprises over 40 companies involved in cement production, construction, road maintenance, trading and finance.

The BMF report said that in 2013, CMS had group annual revenue of RM1.4 billion with more than one-third of CMS’s revenue, RM514 million, derived from its cement division, the largest of CMS’s five core business divisions.

The report cited Maybank IB Research which said the company is expected to benefit from the ongoing development to turn Sarawak's central heartland into an industrial belt popularly known as the Sarawak Corridor of Renewable Energy, or Score, which includes the construction of several controversial mega-dams.
The report stated that CMS has major projects in the Samalaju Industrial Park (SIP) in Bintulu – the northern industial node of Score - through its wholly owned subsidiary Samalaju Industries Sdn Bhd, which owns 65 acres of industrial land.

The company, the report stated, also holds 51% stake in Samalaju Property Development Sdn Bhd, which is building the Samalaju township, comprising worker camps, a hotel, light industrial areas and other services on an area of 2,334acres; and a 20% stake in OMMaterials (Sarawak) Sdn Bhd which is developing a ferro silicon and manganese alloy smelter in SIP.

It stated that CMS expects further profits from the project from 2016.

BMF said it would ask potential Score investors, meeting tomorrow in Kuching during the “International Energy Week 2015”, not to invest in Score as long as CMS and other Taib family endeavours are among its main beneficiaries.

It said since the takeovers were questionable and there were corrupt practices in the awards of state contracts, the Sarawak government must review all current and previous contracts awarded to CMS in an “open, transparent and publicly accountable manner” and suspend contracts “as long as the group is majority owned by Taib Mahmud’s family”.

BMF is also asking Bursa Malaysia to suspend the trading of CMS shares until further notice and check if CMS fulfils legal compliance and transactions with related parties.
It also wants Malaysian and international companies to stop conducting business with CMS “as long as the group is controlled by the Taib family” and to divest from CMS for the company’s “key role in systemic corruption in Sarawak”.
On January 16, BMF said a London law firm had been commissioned by Taib to stop a BBC interview on the book, “Money Logging: On the Trail of the Asian Timber Mafia”, authored by BMF executive director Lukas Straumann.
The book exposes Taib's vast wealth allegedly derived from illegal logging.

The previous week, Straumann had challenged Taib to explain the source of his wealth and set a January 13 deadline for his lawyers to reply.
Straumann also invited Taib to make a public statement on the sources of his wealth on the occasion of the London book launch on January 16, but Taib did not turn up. – January 26, 2015.
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