Digest on Malaysian News

Continued from The Taib Timber Mafia

Chief Minister Abdul Taib bin Mahmud (Taib) is the eldest of 10 children born to Mahmud Abang Yahya and Wan Hamidah in Sarawak, on 21 May 1936.

To understand the relevance of Taib’s  family connections, we need to look at his relationship to the previous Chief Minister of Sarawak. Abdul Rahman Ya’kub, the third Chief Minister of Sarawak is Taib’s uncle. It was through this connection that Taib entered politics in 1963 and which ultimately led him to his thirty year grasp of power over Sarawak.

Taib  concurrently holds the offices of Chief Minister, Finance Minister, as well as that of State Planning and Resources Minister, which gives him enormous  political  and economic power. Sarawak's largest private company, large-scale logging  and plantation interests and the control of log exports are concentrated in the hands of the Taib family. One of the Chief Minister’s brothers, Mohamad Ali, and one of his sons, Sulaiman, have also been involved in politics and one daughter, Hanifah, and a first cousin, Hamed Sepawi, run various media outlets in Sarawak.

In  1995, Asiaweek identified nine  "political warlords" in Asia, Taib Mahmud was described as having "no private army, but he runs the closest thing to a Malaysian political fiefdom. Kuala Lumpur leaves the Sarawak chief minister alone in return for keeping the state sweet at election time“.

Taib has  recently been described by Singapore-based political scientist Faisal S. Hazis as having "total control over Sarawak."

Despite earning a moderate official salary per year in his role as Chief Minister of Sarawak, MYR 590,000 (USD 194,000), Taib is known for his magnificent wealth and string of assets. 

He is often seen travelling in a Rolls Royce, sporting a designer suit, wearing a walnut-sized ruby ring and he is residing in a well-guarded palace-like mansion in Kuching.

Famously, in 2010 he told rural voters in Sarawak: "I have more money than I can ever spend."

Taib’s modus operandi

During his thirty years of iron grip over Sarawak, Taib Mahmud has systematically plundered a country once rich in natural resources, partiuclarly oil, gas and timber. While the proceeds of the oil and gas extraction are mostly benefiting Malaysia’s federal government, the Sarawak state government enjoys total autonomy as to the use of the state’s forest resources and state lands.

Taib has abused his position as Chief Minister, State Finance Minister, and Planning and Resources Minister, to award his family members vast timber concessions, palm oil concessions, state contracts and directorships in Sarawak’s largest companies. In 2009, his three ministries controlled 49.6% of the state’s operating expenditure of MYR 1.19 billion (USD 391 million) and 80% of the state’s development expenditure of MYR 3.08 billion (USD 1.01 billion), with the other ten ministers sharing the rest.

Taib’s position as Planning and Resources Minister means that he has ultimate control over the granting of timber concessions in Sarawak that are worth several billion dollars. Already in the late 1980s, family members and clients loyal to Taib Mahmud were estimated to control over 1.6 million hectares of timber concessions in Sarawak. That constitutes more than 10% of the total land mass of Sarawak. Political observer Daniel Lev has described how Taib abused his power over the allocation of timber concessions in Sarawak: “Timber rent is used by the national ruling party for political expenditures during election time and for financing business objectives of ruling party linked conglomerates.”

In 2011, the Bruno Manser Fund released information detailing the Taib family’s connection to over 400 companies in 25 countries and offshore districts.

These include many offshore finance centers such as the British Virgin Islands, Jersey, Bermuda and the Cayman Islands.

Although Taib’s own name is rarely listed as a director or shareholder, it is his family members who are known to act as nominees for the Chief Minister. A 2001 PhD thesis by US economist David W. Brown, states that: "While the Chief Minister himself occupies no publicly recorded directorships or shareholdings in any of the timber concessions said to belong to him, the Chief Minister's family members....occupy managerial..positions on the boards of the timber concessions of the top four major Sarawak timber conglomerates."

The Taib family runs a well-diversified financial empire with interests in Sarawak’s largest timber and logging companies (Ta Ann, Samling, WTK, Sanyan), monopolistic control of log exports (Achi Jaya Transportation), plantations (Sarawak Plantation), construction (Cahya Mata Sarawak Berhad, Naim Holdings, Titanium Management), electricity supply (Sarawak Cable, Sarawak Energy), property development (Custodev, Kumpulan Parabena) and state media (Cats FM, New Sarawak Tribune) to name a few.

The flagship of the Taib family empire is the largest private company in the state, Cahya Mata Sarawak Berhad (CMS), with net assets totalling 2.4 billion Malaysian ringgit (USD 788 million) in 2010. CMS has been awarded some of the state’s largest contracts including the MYR 300 million (USD 98 million) construction of the State Legislative Assembly building in Kuching, a contract over the maintenance of all state roads in Sarawak (4000 kms) and a 15-year concession to maintain 643 kms of federal roads.

Commonly referred to as "Chief Minister and Sons", the Taib family own over 80% of CMS, but recent annual reports have raised questions over the true beneficiary of the company’s wealth. In 2009, Taib’s first wife Lejla Chalecki died.

Since 2002, she had been the single largest shareholder of the company, but CMS’ latest annual reports still list her as a major shareholder.

The largest shareholder of CMS is Majaharta Sdn. Bhd. which is jointly owned by Taib’s two daughters, Jamilah and Hanifah.

Since his appointment as Sarawak Chief Minister in 1981, Taib and his immediate family members have transferred considerable parts of their ill-gotten assets overseas to countries including Canada (Sakto group of companies), the United States (Sakti Corporation and related companies), Australia (Sitehost Pty Ltd), the United Kingdom (Ridgeford Properties), Hong Kong (Richfold Investment Ltd.) and to a number of offshore finance centers, namely the British Virgin Islands. While the above-mentioned companies officially name Taib family members as their shareholders or directors, it is believed that many other companies are held through nominees.

Sakti International, a US property development company owned by the Taib family was incorporated in 1987 in California. In a court deposition, Sakti admits that "beginning September 10, 1987, Sakti’s designated Chief Executive Officer, Secretary and Chief Financial Officer was Mahmud Taib", the Chief Minister’s son.

Significantly, the deposition also admits that the shareholders of Sakti are none other than Taib’s children and brothers. Whilst it is Taib’s relatives who are publicly registered as the official shareholders and directors of the companies, a private agreement ensures that the shares are actually held in trust for Taib.

Official documents leaked by a former employee prove that it is a system of private deals that ensures that half of these shares „are held in trust for the Chief Minister.“

One of Sakti International’s early public documents lists the Chief Minister as a director.

The Ottawa (Canada) - based Sakto group of companies, mainly active in real estate and property development, is currently run by daughter Jamilah and her Canadian husband, Sean Murray.

In 2011, Sean Murray stated that "Sakto, Sakti and Ridgeford are not and have never been funded by Mr Taib Mahmud" but later that year Taib admitted on video that he had given money to his daughter to start the business “It started 20 to 30 years ago. I gave money to my daughter because I was resigning from Federal Government. I got a gratuity and gave some money to her to start a new business, it thrived. It got successful and from successful they go to do business in London”.