Is the controversy surrounding Maika Holdings going to be Samy Vellu's Achilles heel? Will his immediate political future be determined by how he deflates the various questions that are being asked on Maika's investment returns?

At the rate things have been moving, it will be difficult to predict where and how this will end. In the past one month, the issue which started with a call for Samy Vellu to step down has since escalated into an open war as to how the party president had been leading the community.

According to IPF president MG Pandithan, a former ally-turned-nemesis, the MIC president has cheated the community by failing to uplift its status and conditions in this country.

Pandithan narrowed his attacks on the alleged mismanagement of Maika Holdings, a unit set up by Samy Vellu in 1984 to "identify and successfully participate in viable projects or ventures covering a wide range of industry sectors ... to represent the interests of the Malaysian Indian community".

Pandithan, backed by the anti-Samy Vellu vernacular Tamil daily Malaysia Nanban , raised questions as to what had happened to the RM106 million investment made by 66,000 investors - mostly poor estate workers and MIC members.

This sum was raised in a four-month period, with many having to pawn their jewelleries and sell their properties, all in the hope that Maika would herald a new and better dawn upon them.

Telekom shares

However as Pandithan claimed, and subsequently backed by nationwide police reports by some 350 shareholders, no doubt that Maika was in trouble.

Apart from the claims of mismanagement which resulted in bad investments and facing heavy losses, it also faced a winding-up petition arising from a non-payment to Buildcon Concrete Sdn Bhd, the supplier for concrete mix to a housing project at Shah Alam undertaken by Golden Land Construction Sdn Bhd, a Maika subsidiary.

Shareholders have yet to see sufficient returns to the investments and all blame is squarely placed on Samy Vellu and his son Vell Paari who is the chief executive officer.

Some of the issues raised by Pandithan and the shareholders are not new. Issues such as the alleged "hijacking" of nine million Telekom shares allocated for Maika by Samy Vellu have made its rounds since 1992.

What has happened then was that the government had granted 10 million shares in 1990 to MIC - through Maika - for the purpose of enriching the community. However Samy Vellu, apparently following Maika's financial incapabilities to take up the shares, diverted nine million shares to three other private companies, of which two were just RM2 companies.

The opposition parties had then claimed that Samy Vellu had "hijacked" the shares for his own benefit. Police and Anti Corruption Agency reports were made and investigations started but at the end Samy Vellu was cleared of any wrongdoings.

He then had a clear run, until now.

Bank, hotel

and credit card bills

At present, questions are not only confined to the Telekom shares. In a meeting of Maika shareholders earlier this week, which Malaysian Nanban said 3,000 was present, questions were also raised as to what had happened to other shares allocated to Maika by the government.

These shareholders claim that Maika's mismanagement included selling off these shares so that dividends could be paid to the shareholders. However they claim, this should not be the case as proper investments of the initial RM106 million would have brought healthy returns.

They add that these shares should instead be used to fatten the purse.

They also want Samy Vellu to tell them what has happened to his grand plans of building a five-star hotel and a community-owned bank - supposedly to be financed by Maika's investments. These shareholders also claim that while the land for the hotel had been identified, that 25 percent of the title deed of that land was in the name of some high-level party leader and not the party or Maika.

To add further embarrassment for Samy Vellu, Malaysia Nanban carried an exclusive story on Nov 23 that Maika had to fork out about RM142,000 to settle credit card bills of Vell Paari and another Maika official Sanjay Bhardwaj.

The amount was settled after American Express had filed suits against the two and Maika to recover what was owed to them.

Additional pressure is put on Samy Vellu by the widely read Malaysia Nanban through its editorials and articles that dig out more dirt of Maika's mismanagement.

Time wasting

And what has been Samy Vellu's response to these accusations?

In his typical style, but minus the strong words, Samy Vellu responded to the Pandithan-raised controversy in the other Tamil-language daily, Tamil Nesan , which is heralded by his son.

First he had called Pandithan of wasting the community's time by raising non-issues and that the former MIC vice president was in no position to even raise these issues as he had not done anything for the community.

Samy Vellu said that only those who had worked hard for the community - like him - can raise such issues.

He also brushed aside the gathering of the 3,000 shareholders and the questions they evoked. Instead he ridiculed the shareholders meeting by saying that the venue where the meeting was held could only hold 900 people, not 3,000.

However, he failed to address any of the questions that were raised by the shareholders, but chose to advise the community not to fall into Pandithan's trap in destroying the community.

In his parting shot, Samy Vellu said that Pandithan has no right to accuse and judge him, adding that he will answer all accusations after the police have ended their probe in the various reports lodged by shareholders.

Samy Vellu followed this up on Nov 26 by saying that he will follow the advice of Prime Minister Abdullah Ahmad Badawi by staying quiet. Abdullah had asked both Samy Vellu and Pandithan to stop the public spat.

What to expect

However, this might not be seen as the end of the Maika war. The battle is now no longer confined to the two leading players alone. Shareholders and the two opposing Tamil newspapers have joined in and can only be expected to continue trading barbs.

While no one can say for sure what will happen next, lessons from the past can be of some guidance.

The last time around when the Telekom shares issue cropped up in 1992, shareholders who had gathered to protest were assaulted by a high-level MIC leader.

Then in a true Watergate-style burglary, the Maika office was broken into and ransacked by five unknown men. This led many to claim that the action could have been orchestrated by MIC itself to distract attention away from the Telekom scandal.

In fact the then Opposition Leader Lim Kit Siang even said that such a speculation could be supported by the fact that the burglary could be an attempt to destroy any evidence pertaining to the mismanagement of Maika funds. However it must be stressed that none of this was proven.

In between, a group of men had attacked the office of Tamil weekly Thoothan which had been giving prominent coverage on the Telekom shares issue. Samy Vellu had personally taken defamation action against the editor of the magazine, who had also been knifed and splashed with acid over his articles on the matter by persons unknown and unconnected to the party or its leaders.

So far, things have not come to this and it is hoped it would not. The community will benefit if the issue of Maika's mismanagement is handled properly. However if it turns out to be a clash of personality and popularity between two leaders, then as in 1992, the matter will only fizzle out after some cheap excitements.

Thus returning to the question posed earlier: Is the Maika controversy going to be Samy Vellu's Achilles heel?

No doubt the controversy, which he had first seen off in 1992, would have rattled Samy Vellu but he will be banking on Pandithan's rash and hasty moves to strike back and stay afloat. However until now, to Samy Vellu's consternation, Pandithan seems to be the one making the calculated and wiser moves in this game.

K KABILAN is chief news editor of malaysiakini