How Mahathir turned millionaire Vincent Tan into a billionaire

By MT Webmaster Last updated Jan 14, 2016

And they want to talk about 1MDB? Come on! Let’s talk about those other more dubious deals first. And Tony Pua and DAP will not make a sound regarding these deals because they are receiving large donations from these people. And although it may not be RM2.6 billion it is still a huge amount of money nevertheless. Over to you Muhyiddin Yassin! Tell us how much you received as well.

THE CORRIDORS OF POWER

Raja Petra Kamarudin

I was in Ahmad Sebi Abu Bakar’s office that day when Vincent Tan rudely barged in without knocking. It seems Vincent Tan needs not make an appointment to see the then Prime Minister Tun Dr Mahathir Mohamad or Finance Minister Tun Daim Zainuddin. He can just walk in even if there is someone else in the room, foreign dignitaries included.

Anyway, the reason why Vincent Tan was summoned to meet Tun Daim’s henchman, Ahmad Sebi, who was at that time running TV3, was to discuss Sports Toto. They wanted Vincent Tan to take over Sports Toto. Dr Mahathir’s government called it privatisation. We in the Malay Chamber of Commerce called it piratisation.

One thing that the Chamber members were not happy about is that this so-called privatisation was not done openly or on a tender basis. So there was absolutely no transparency in how it was being done. The deals were done secretly and ‘under-the-table’ and benefited cronies of those who walked in the corridors of power — Malays, Chinese, as well as Indians.

(So in that sense the piratisation was colour-blind and non-racial — which means the New Economic Policy or NEP worked better for the non-Malays. For example, Dr Mahathir gave the Chinese RM3 billion and the Malays just RM500 million to bail out those who were facing bankruptcy during the 1985 economic crisis).

What was a further bone of contention was that the privatised government assets, investments, holdings and concessions were given away for a song, sometimes 10% or less of the real market value. With one stroke of the pen, cronies became overnight millionaires and millionaires became billionaires.

Anyway, you can read more about this issue in the report by Jomo K. S. and Tan Wooi Syn, which you can READ HERE.

As I said, I was there when Vincent Tan was told to make an offer for the very profitable government-owned cash cow, Sports Toto. In 1995, Sports Toto was secretly sold to Vincent Tan without any prior public announcement and with no competing bids.

The first 70% was sold for RM28 million to Vincent Tan’s B & B Enterprise, which was said to be 60% Bumiputera-owned, and of which 10% was subsequently sold to Melewar Corporation — a company owned by another Dr Mahathir crony (and business partner of Tan Sri Loy Hean Heong of MBF), Tunku Tan Sri Abdullah ibni Almarhum Tuanku Abdul Rahman.

The remaining 30% was later sold for RM85 million to Tun Daim’s Raleigh Berhad, which was 26% owned by Bumiputeras such as Tajudin Ramli of MAS ‘fame’. While the second sale involved a share price seven times that of the first, it must be noted that when Sports Toto was listed on the KLSE, it traded at a much higher price on the first day.

As at the close of the stock market yesterday, the listed Sports Toto was worth RM4.2 billion — a big return compared to when Dr Mahathir gave it to Vincent Tan 30 years ago, which was almost free-of-charge at just RM28 million.

Since Berjaya Corporation, B & B’s holding company, had almost 56% of Sports Toto at the end of the 1990-1991 financial year, and was about 42% Bumiputera-owned, Jones and Fadil (1992c) concluded that private Bumiputera interests had relinquished control by selling out, while presumably realising very considerable capital gains to non-Bumiputera interests.

Sports Toto is believed to have been the most lucrative major asset in Vincent Tan’s Berjaya conglomerate. Sports Toto’s profitability has been enhanced by its lower tax rates – compared to other legal gambling operations, as determined on a discretionary basis by the Finance Minister – as well as its modest – if highly publicised – contributions to sports development in Malaysia

In September 1988, Big Sweep lottery operations were privatised to Pan Malaysian Sweeps Sdn Bhd, which was controlled by Ananda Krishnan, another close associate and crony of Dr Mahathir (New Straits Times, 16 February 1989). The license for the Big Sweep lottery had been issued to the Selangor, Perak, and Penang Turf Clubs, which only sold lottery tickets to their members.

With Pan Malaysia Sweeps taking over, since February 1989 tickets have been sold to the general public. Big Sweep’s more lucrative prizes adversely affected the sales of the government Welfare Ministry’s own Social Welfare Lottery, which was subsequently closed down by the government, ostensibly in line with its Islamisation policy — thus giving Big Sweep a virtual monopoly on lottery ticket sales in Malaysia, a monopoly that has lasted 25 years until today.

Also in January 1989, the Totalisator Board of Malaysia, a government statutory body which organised and regulated horse-racing totalisators since 1961, appointed Ananda Krishnan’s Usaha Tegas Sdn Bhd to manage the Numbers Forecast Totalisator Operation (NFO).

The management of the NFO was undertaken by Usaha Tegas’ wholly owned subsidiary, Pan Malaysian Pools Sdn Bhd, incorporated in July 1988. The NFO operated two gaming activities – the ‘3-digit’ operation, which had commenced in 1961, and the ‘1+3’ digit operation, introduced by Pan Malaysian Pools in September 1989 (Malaysian Business, 16 November 1991) – further enhancing the gambling monopoly rents accruing to Ananda Krishnan’s stable.

On top of the hundreds of millions in profits every year over two decades, this operation, which was re-named Da Ma Cai, was sold in 2011 by Ananda for RM2.1 billion to a group of prominent Malaysian Chinese tycoons – not bad for an operation that Ananda was given almost free-of-charge when he was appointed (not sold) to take over the operations.

And on top of that, a few years later in 1993, Ananda Krishnan was also given the rights to acquire the Selangor Turf Club land in Jalan Ampang for RM400 million, using money he earned from the gifted gambling operations.

Almost immediately, Petronas (which already had its own land and was about to build its new headquarters) was instructed to fund and take over this project and renamed as the KLCC. In the process, within a few short years of being allowed to take over the land, billions of ringgit of Petronas money flowed over to Dr Mahathir’s good friend Ananda Krishnan.

But this is a different story for another day. Suffice to say that Petronas took over one tower at a price of two towers plus the land cost. Hence Ananda Krishnan got the second tower free-of-charge in the end — much to the chagrin of Petronas who could not do anything about it since this deal was made between the Prime Minister and Ananda Krishnan.

Now, why have all these cronies ganged up on Prime Minister Najib Tun Razak and are financing Dr Mahathir in his bid to oust him? The answer is simple. Najib is systematically removing all those projects that Dr Mahathir gave to his friends and cronies.

Since Najib took over as Prime Minister the Big Sweep and Da MA Cai are now charities instead of contributing to the pockets of Ananda Krishnan. Najib has suspended Vincent Tan’s sports-betting license that Dr Mahathir gave him one month before retiring. Vincent Tan’s request to turn Bukit Tinggi into a casino has not been approved. And Ananda Krishnan lost his lucrative IPPs to 1MDB.

Do you need to be a rocket scientist to figure this one out? And do you really think it was about 1MDB? If you did then you are more stupid than you look.

Raja Petra Kamarudin RPK