Malaysian Maverick: Mahathir Mohamad in Turbulent Times Barry Wain (grave mercy .TXT) 📖

in 1971 to build an elaborate new headquarters for itself meant the party would need access to even more substantial resources.

Appointed party treasurer by Razak in 1972, Tengku Razaleigh Hamzah established the UMNO Political Fund to give the party a stable financial base, replacing the informal "special fund" Razak had been operating covertly since 1959, when he was deputy party president.[10] As the Political Fund was to be secret, the Supreme Council authorized the party's leadership, effectively the president, to operate it at his discretion. The arrangement was intended to bypass UMNO's trustees, who normally held assets for the party, as the Political Fund was not to be presented to the party's annual General Assembly.

It was agreed among Razak, his deputy, Ismail Abdul Rahman, who was a stickler for ethics and honesty, and Tengku Razaleigh that the fund should not be linked to major businessmen who dealt with the government; nor should it have anything to do with government contracts. They established an elaborate procedure to avoid any suspicion that donations could be siphoned off for personal use. Every cheque donated to the Political Fund had to be accepted by at least two of the three, photocopied and circulated to all three. A receipt would be issued immediately. The fund was audited annually and the results reviewed by the three of them. While some of the money in the Political Fund was transferred to an administration fund to finance the party's daily operations, the contents of the Political Fund were never disclosed to the UMNO Supreme Council.[11]

With Razak's approval, Tengku Razaleigh began investing UMNO funds in the stock market. By the time of the 1974 general election, UMNO for the first time was able to not only meet its own electoral expenses but also help finance candidates for three of the main National Front components, the Malaysian Indian Congress and Gerakan Rakyat Malaysia, as well as the Malaysian Chinese Association.[12] The UMNO Political Fund built up a modest portfolio. "We bought shares on the open market purely as an investment," said Tengku Razaleigh. "We did not run any organization as a business or a going concern."[13]

At Razak's request, Tengku Razaleigh bought 80 per cent of Singapore's Straits Times Press's operations in Kuala Lumpur in late 1972 and repackaged them as the New Straits Times Press (Malaysia) Bhd. The shares were held by Fleet Holdings Sdn. Bhd., a company that Tengku Razaleigh established in 1972 for UMNO, but which did not have any formal links to the party. Fleet listed New Straits Times on the stock market in early 1973, retaining 51 per cent control and realizing an immediate profit of RM7 million on the sale of the shares it offered to the public.

It was not the first time UMNO had acquired a newspaper. In 1961, Prime Minister Tunku Abdul Rahman had taken over Utusan Melayu Press Bhd., publisher of the leading Malay-language paper, provoking a bitter strike by staff, who objected to the loss of independence. As the voice of the Malays, the paper was an important propaganda weapon for UMNO and the government, and was never considered a business proposition. With the shares held by individuals, who had no written arrangements with UMNO, the company was not part of the party's investments controlled by the treasurer. Razak took over most of the shares from the Tunku and put an aide, Abdullah Ahmad, on the board, starting what became almost a tradition for the prime minister to hold a majority of the shares in Utusan Melayu Press.[14]

In the case of the New Straits Times Press, although it came directly under Tengku Razaleigh's charge, he left it in the hands of professional management. An accountant, Junus Sudin, was recruited from a British multinational to run Fleet as chairman. The company expanded steadily under Junus, who was content to allow Fleet to be sustained by the dividends it received. Profit was reinvested primarily in three sectors: newspapers and publishing, banking, finance and insurance, and telecommunications.

UMNO acquired Bian Chiang, a small bank in Sarawak state, almost by accident. Tengku Razaleigh bought 80 per cent of the bank's equity for just under RM5 million to help a friend, the late Wee Hood Teck, urgently settle a gambling debt. When Razak learned of the purchase, he worried that Tengku Razaleigh would leave his fulltime job at state-owned Bank Bumiputra, where he was chief executive, to run his own bank. Razak insisted that Tengku Razaleigh stay in his post and sell his Bian Chiang Bank shares to UMNO, at the same price for which they had been acquired. The entire bank — Wee's stepbrother also decided to sell his 20 per cent stake — was transferred in 1974 to Fleet Holdings, which was able to pay cash for it.[15] Bian Chiang was renamed Bank of Commerce. It ended up part of CIMB Group — headed by Razak's youngest son, Nazir Razak — whose state-controlled, listed holding company, Bumiputra-Commerce Holdings Bhd., had a market value of RM36 billion at the end of 2007.[16]

Apart from the New Straits Times Press, its subsidiaries and the Bank of Commerce, the only known significant purchase made by Fleet under Junus Sudin and Tengku Razaleigh was in insurance. In 1980, Fleet Group entered into a joint venture with United States-based AFIA Worldwide Insurance to form American Malaysian Insurance.[17]

Fleet Holdings all but disappeared from public view in 1974, when it qualified as an "exempt private company" and no longer had to file financial statements with the government. Fleet Group Sdn. Bhd. was formed in 1976 as a wholly owned subsidiary and operating arm. Public records show that its profit grew strongly, from RM327,443 in 1977 to RM15.7 million in 1982.[18]

Daim Zainuddin, with a penchant for secrecy and distaste for convention, took over Fleet that year, displacing Junus Sudin. Although he would not become UMNO treasurer formally until 1984, Daim effectively exercised some of that authority immediately — "de facto treasurer", as he called himself[19] — since he controlled Fleet and its associated companies.