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

successor party to UMNO with a similar name ahead of his opponents. The Official Assignee's office, like the Registrar of Societies, was part of his home affairs ministry. Operating in secrecy, the Official Assignee sold UMNO's Hatibudi interest in United Engineers in June 1989, though it remained publicly unknown until the following month, when relatively small, publicly listed Time Engineering Bhd. made an announcement to the stock exchange. Time Engineering revealed it had acquired RM37.5 million of convertible unsecured loan stock in United Engineers from the company that obviously got it from the Official Assignee: Hatibudi Nominees Sdn. Bhd, created in 1987. Not only did the company's name closely resemble that of the former trustee of UMNO's holdings in United Engineers, but its two shareholders, Halim Saad and Anuar Othman, were also directors of the original Hatibudi, and of United Engineers. In a complex share-swapping arrangement, Hatibudi Nominees, the controlling shareholder in United Engineers, took over Time Engineering, which was given a RM400 million contract to provide electrical and communications equipment and steel guardrails for the north-south highway project. The bottom line was that the Mahathir faction had regained UMNO's coveted source of recurrent earnings — its "golden goose", as one party legislator called it — while also adding another company to the stable.[66]

With the highway contract as its bedrock, United Engineers, which had voluntarily suspended trading in its shares for five years until 1988, prepared for a phoenix-like rise. Toll revenue and management fees alone would guarantee the company about a 17 per cent return on its outlay. In addition to the basic contract, revised from RM3.42 billion to RM5.7 billion, rising eventually to RM7 billion, there were multiple spin-offs, such as roadside advertising, service stations, rest areas, restaurants, towing concessions and cable-communication lines. With a 60-metre right-of-way on both sides of the highway, United Engineers effectively had become one of Malaysia's largest landholders.[67]

The Time Engineering deal was a model for the rapid expansion that followed. By entering a series of financial and partial-ownership arrangements with major subcontractors, United Engineers and UMNO tried to ensure quick returns from work finished, rather than waiting several years for toll revenue to grow as stretches of the highway were completed. The acquisition of controlling stakes in listed companies and the creation of affiliated joint-venture construction concerns required little cash and generated ready income. Largely by swapping sharply appreciating United Engineers shares for those stakes, the company moved easily into the cement industry, electrical contracting, manufacturing and property. United Engineers also landed a host of other government contracts and privatization deals, ranging from land reclamation to a second road link with Singapore, and manufacturing drugs and distributing medical and dental products to state-run hospitals.[68]

By early 1990 UMNO, through proxies working on its behalf, principally Halim Saad and Anuar Othman, had regained control of most of the party's assets.[69] And, largely through United Engineers, those proxies had also built Hatibudi Nominees into another large business group that was ultimately beholden to the UMNO leadership.[70] One significant chunk of shares in Utusan Melayu Press, however, remained beyond the reach of the leadership. They were registered in the name of Tengku Razaleigh, the former party treasurer. He signed a public declaration that the shares belonged to UMNO and authorized the company to pay any dividends to the party, but refused to sign them over to a proxy, "afraid that somebody may hijack them".[71]

To consolidate what was threatening to become an unwieldy corporate sprawl and to get a grip on its runaway debt, UMNO in April 1990 restructured its businesses in one of the largest financial arrangements in Malaysia's history. It was valued at RM1.23 billion, though no cash was involved.[72] UMNO designated Renong Bhd., a modest-sized property company, in which to merge the party's controlling interests in eight publicly listed companies and dozens of its unlisted concerns, converting it into one of the biggest holding companies in Southeast Asia. The stakes included those in United Engineers and the bulk of the profitable communications and financial operations of Fleet Group. Renong swapped a controlling block of its shares for the party's corporate stakes, giving UMNO a commanding interest in Renong. To generate nearly RM440 million in cash for UMNO, Fleet Holdings sold some of its new Renong shares to existing Renong shareholders and reduced its stake in the company to 28.5 per cent. UMNO was in no danger of losing control of Renong, because Halim Saad also held, directly and indirectly, a substantial stake.[73]

Also subsumed under the Renong corporate umbrella were the ever-evolving companies in Halimtan Sdn. Bhd., another UMNO-linked conglomerate in which Daim figured prominently. Halimtan, an exempt private company whose activities spanned gambling, gold mining, manufacturing, food retailing and financial services, was an example of how common directorships were used to shift assets from the government to private, UMNO or party-related business groups.[74] A number of publicly listed former tin mining companies were separated from state-owned Malaysia Mining Corporation Bhd., becoming the core of Halimtan later, via a web of minority shareholdings and common or sympathetic directors.[75] The intricate manoeuvres showed "the increasingly symbiotic relationship between the government and the party".[76] In one "extraordinary passage" tracked by analysts, Daim's stake in Cold Storage was fed through three UMNO-linked, cash-rich companies within two years, earning substantial profit at each stage.[77] Commented Peter Searle, the academic business specialist, "Although it was difficult to determine at what points the individuals concerned were acting for the party or their private corporate interests, ultimately it appeared that both were served by the relationship."[78]

In early 1991, only nine months after the dramatic reverse takeover of Renong, UMNO again restructured what had become its flagship holding company. A RM1.95 billion package of measures sought to consolidate Renong's control over group companies, expand its operations and bolster cash flow. Renong increased its stakes in United Engineers and TV3, the two companies that were expected to contribute most to profit. In addition, Faber Group Bhd., the party's once-faltering hotel and property concern formerly known