MAS seeks police probe on fund irregularities

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(AFP) Loss-making Malaysian Airline System (MAS) said today it had sought police help to investigate allegations of management irregularities at the national carrier.

"Malaysia Airlines confirms that a police report has been lodged and as this is now a police matter, we are not in a position to reveal further details," senior general manager for corporate services Mohamadon Abdullah said in a statement.

The airline was responding to a report in the Asian Wall Street Journal saying it lodged a police report last month accusing former chairman Tajudin Ramli and three former senior executives of management irregularities.

The police report filed by MAS followed an audit ordered by the new management after the government renationalised it in February.

MAS chairman Azizan Zainul Abidin was quoted as saying that the irregularities focused particularly on several transactions involving the cargo division during Tajudin's tenure as chairman from 1994 to 2001.

"It's now up to the police to decide on the next step," Azizan said.

Senior police officials confirmed that an investigation into MAS was underway, the newspaper reported.

Personal debt

It said the government was pushing for Tajudin to settle some RM1 billion in personal debt, which was now under government control through the Pengurusan Danaharta Nasional debt collection agency.

The debt is secured by Tajudin's stakes in Naluri Bhd and Technology Resources Corp Bhd.

In what was widely seen as a bailout, Tajudin early last year sold his 29 percent stake in MAS, held through Naluri, back to the government at a price more than twice the prevailing market value.

The deal was endorsed by then finance minister Daim Zainuddin, who resigned in the middle of last year.

The report said the moves against Tajudin were part of Prime Minister Dr Mahathir Mohamad's drive to clean up some of the country's most heavily indebted corporations, many of which have avoided painful restructuring due to political connections.

MAS, struggling under some RM10 billion in debt, embarked on a restructuring plan last year to return to the black by 2004.

Last month, it announced it would be delisted from the stock exchange and that it would split its domestic and international operations as part of restructuring plans.



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