|Saturday December 6, 2008|
The politics of business
BEFORE Datuk Seri Anwar Ibrahim’s fall from grace in 1998, several enterprising (some more than others) and ambitious individuals managed to win his trust and entered his innner circle. The careers and wealth of these people, some of whom were young associates, soared as a result of such access.
In 1993, four individuals known to be close to Anwar staged one of the country’s largest management buyouts. The MBO saw Malaysia Resources Corp Bhd (MRCB) taking over newspaper group New Straits Times Press (M) Bhd (NSTP). When Anwar was deposed, the promising careers of the four came to a sudden halt, which again illustrates the inextricable link between politics and business.
Such ties were largely forged when Anwar was Finance Minister from 1991 to 1998. The portfolio, sometimes deemed more powerful that the position of Deputy Prime Minister, is currently held by Datuk Seri Najib Razak.
Similarly, when Tun Daim Zainuddin was Finance Minister between 1984 and 1991, many of the individuals he had hand-picked in the late 80s to run his brainchild, Peremba group, shot to fame. The personalities included Tan Sri Halim Saad, Tan Sri Wan Azmi Wan Hamzah and Tan Sri Samsuddin Hassan.
Such patronage led to the creation of conglomerates, the largest being Renong Bhd.
The meteoric rise of the “Daim boys” continued well after the early 90s. But the Asian financial crisis in 1997/98 dealt a major blow, saddling their companies with massive debts. Many of Daim’s boys have faded into oblivion, but are still basking in luxury.
Subsequently, a makeover of Malaysia Inc was undertaken with unmatched vigour. There was a fundamental shift away from owner-run, politically-linked enterprises. Fresh professional talents were appointed to run many government-linked companies such as Malaysia Airlines, UEM Group and MRCB. It remains very much the same today.
The old clique
Still, nowhere is the business-politics connect clearer than when Tun Dr Mahathir Mohamad was Prime Minister for 22 years from 1981. Dr Mahathir initiated an aggressive privatisation policy and involved the private sector in key strategic sectors. This saw many individuals said to have close ties with Dr Mahathir growing their business empires.
The ex-PM held in high esteem people who had the ability to hatch brilliant ideas and execute them. They included K. Ananda Krishnan of Usaha Tegas Group, Tan Sri Francis Yeoh of YTL Group, the late Tan Sri Lim Goh Tong of Genting, Tan Sri Syed Mokhtar al-Bukhary, the late Tan Sri Yahya Ahmad of Proton, Tan Sri Quek Leng Chan of Hong Leong Group, and Tan Sri Vincent Tan of Berjaya Group.
(Incidentally, Lim was granted the casino licence for Genting Highlands by Malaysia’s first Prime Minister Tunku Abdul Rahman, with whom he shared a close rapport.)
“It couldn’t have been easy for some of them after Dr Mahathir stepped down. Since then, they have had to hedge their bets carefully,” says an analyst.
He adds that after Dr Mahathir’s exit, “it has become more difficult to read the political tea leaves.”
...and the not-so-old clique
In 2004, when Datuk Seri Abdullah Ahmad Badawi took over, there emerged a new group of elite businessmen. The most visible of them were Equine Capital Bhd’s Datuk Patrick Lim, ECM Libra Group’s Datuk seri Kalimullah Hassan and Scomi Group’s Datuk Kamaluddin Abdullah (also the PM’s son).
The rise and fall of Equine is perhaps the most glaring example of the pitfalls of riding on political connections in the business arena.
Once dubbed a darling stock due to its political links, Equine has taken a massive fall since the March 8 general election and after the multi-billion ringgit Penang Global City Centre project in Penang was scrapped.
In October, Lim relinquished his positions in the property development company.
The same month also saw Kalimullah vacating his position as deputy chairman of NSTP. He remains the executive chairman and CEO of ECM Libra financial group. Kamaluddin, while keeping a low profile, still a has controlling stake in Scomi.
In 2005, Abdullah’s son-in-law Khairy Jamaludin, a stake holder in ECM Libra, was involved in arranging the merger of ECM with MoF-controlled Avenue Capital Resources Bhd. Khairy has since sold his entire stake of 1.23% in the merged company, ECM Libra Avenue.
And then, of course, there are those corporate status has outlasted the prime ministers. “Some have hedged their bets well and have shown that their business is worth more than an allegiance to a single leader. More often, it’s not personal,” says an observer.
Reproduced from thestar
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