Taib family's friend-turned-foe spills the beans

Evidence in a Sibu court battle between former friends-turned-foes has spilled out in intricate detail how Sarawak’s first family secures - and expands - its hold on the most lucrative businesses and opportunities in the state.

According to the Sarawak Report , the case brought by a local businessman and former Taib family associate, Ting Check Sii, has shown clearly the direct role Chief Minister Abdul Taib Mahmud and his closest family members have played in the acquisition of businesses and state concessions.

The report entitled ‘Hard Evidence - Sanyan Scandal Exposes Taib!’ also contains salacious details as to how the Taib family employs a network of “tame businessmen and nominees” to manage and “disguise” their acquisitions.

Citing the testimony by Ting from an ongoing case filed almost six years ago against his former partner in Sanyan Lumber Sdn Bhd, Tufail Mahmud, Sarawak Report recounted how Ting had in 1987 set up Sanyan with a Tufail nominee by the name of Draman @ Morshidi Omar.

“Datuk Tufail told me that he needed to use a nominee  because his brother (Taib Mahmud) was then and still is the Minister for Resource Planning.  

“Datuk Tufail now denies Draman is his nominee, even though Datuk Tufail and I are the only joint bank signatories for this company,” wrote Sarawak Report citing Ting’s testimony.  

Close confidante             

Indeed, the anti-Taib website alleged further, Ting had been one of the family’s closest business confidants and one of Sarawak’s top timber towkays.

“For 25 years he partnered Taib’s younger brother Tufail Mahmud as the co-owner of the Sanyan Group, which controlled 25 separate companies.

“The group’s enterprises also benefited a number of the chief minister’s other brothers, including Arip Mahmud, Onn Mahmud and Ibrahim Mahmud.  

“Shares have also been handed to Taib’s own daughter Hanifah Taib, including one million shares in Sanyan Wood Industries,” said the Sarawak Report .

Despite ownership of so many business, Ting had in court made it clear that the Taib family had not made any significant contributions towards the Sanyan Group or purchased their way as its shareowners.

According to Sarawak Report , Ting had confided to third parties that the chief minister had personally told him: “If you offer my brother more than 50 percent of the shares, then there will be more concessions for you.”

In other words, paying off Taib by favouring his brothers was how Ting’s business was allowed to prosper.

That Moshidi is a nominee of Tufail is substantiated, said Sarawak Report , by documented information available from the Registrar of Companies.  

“Moshidi Omar has been listed as the shareholder of several concerns that are controlled by Tufail, yet he has no separate status as a businessman and he has regularly ‘sold’ his shares on to Tufail Mahmud when convenient to do so.”

To substantiate its claims, Sarawak Report cited the case of a Sanyan subidiary - Goodmatch Sdn Bhd - which it said was used by Ting and Tufail in 1993 to enter a joint-venture with the Japanese Noda Corporation to set up a plywood factory.

Not only was Goodmatch granted a timber concession by state planning and resources state finance minister Taib Mahmud, but was also accorded five years’ ‘Pioneer Status’, later extended for another five years by Taib, thereby allowing it a 100 percent tax exemption.

During this time, however, it was again Morshidi Omar who served as Tufail’s nominee director and shareholder for the first five years, holding 55 percent of the shares to Ting’s 45 percent.

In 1998, Goodmatch ‘sold’ 54.997 percent of its shares to Tufail that the latter publicly become a shareholder, leaving Ting with his 45 percent and Morshidi Omar continuing with a mere RM1 stake.

It was only in 2002, furthermore, when Goodmatch’s pioneer status and timber licence expired that Tufail became director.

“Given that Goodmatch is a subsidiary of the Sanyan Group which was co-owned and controlled by Ting and Tufail, the conclusion that Morshidi Omar is indeed merely a nominee (as stated by Ting) is therefore inevitable,” said Sarawak Report .

Before his falling out with the Taibs and the subsequent court battle, Ting profited handsomely from his close relationship with the Taibs by landing a string of valuable contracts by way of their various enterprises.  

“Such rewards would have been unlikely for a less well-connected company, which is why the Taib family members are to be found enjoying such a mass of directorships across the state, sitting on boards for which they have no qualification and to which they have contributed nothing.”

The Hong Kong connection

In the same manner, said Sarawak Report , Ting and the Sanyan Group ventured in 1983 to set up Binta Corporation Sdn Bhd, which court depositions explain was one of a series of shipping companies that benefited from contracts with a certain Archipeligo Shipping to provide transportation services from Sarawak’s Tanjong Manis Port. 

Archipeligo, according to Sarawak Report , was Taib’s ‘gate-keeper’ company that, without any infrastructure and few staff, enabled Onn to privately ‘tax’ and control the shipping of all the logs leaving Sarawak.  

“Several insiders have confirmed to Sarawak Report that all foreign exporters were required to pay backhanders in US dollars into a series of Taib-owned companies set up in Hong Kong in order to be allowed to conduct their business of shipping logs from Sarawak.

“Under the system the weight of the logs exported was totalled each month and Kin Kwok Shea, Onn’s office manager in Hong Kong, would then inform the shipping companies of the cut they had to pay and into which of the various Taib-owned companies in Hong Kong.”

Malaysiakini had earlier reported on the figure of Shea, whose name first surfaced in March 2007 when Hong Kong-based Regent Star was implicated in a multi-million rinngit timber-shipment kickbacks scandal.

Shea, one of two directors of Regent Star, is said to be - like Morshidi - a nominee for Onn Mahmud, who in turn allegedly represents his brother, the chief minister.

It was reported that a Japanese shipping cartel of the country’s top shipping companies paid at least RM32 million to Regent Star to help ‘resolve’ problems enountered in the export of timber from sarawak to japan.

Japan’s tax authorities had considered these payments as ‘illegitimate expenses’ since Regent Star did little ‘substantive work’. As a result, the Japanese shipping companies were slapped with back taxes along with heavy fines for ‘hiding’ the funds from the tax authorities.

‘Fall from grace’

 

Ting’s falling from grace in the eyes of the Taib’s family came about as result of his own doing when he acquiesced, Ting confessed, to Tufail’s request in 1998 that his brother Ibrahim Mahmud be appointed a director of Sanyan Holdings.

In early 2003, Ting again acceded to Tufail’s request, this time that his daughter Anita Hamidah be appointed a director.  

“With the addition of his family members to the board of directors he was able to seize control of the company and disregard [my] interests”, said Ting.

The fallout and souring of relations came swift.

Anita, said to be a fresh graduate in her 20s with little experience in running a company thought she knew how to run the company better and immediately set about criticising the way Sanyan Holdings was run.

“By using the votes of his brother Ibrahim and his daughter, Tufail was able to enact a boardroom coup and remove Ting from his position as managing director of the entire company and all its subsidiaries,” said Sarawak Report .

The Tufail family then stopped the payment of salaries and dividends to Ting, removed him from his office in the Sanyan building, and sacked all the long-term staff considered faithful to Ting.

Furthermore, in the case of Sanyan Lumber, after 16 years of annually renewing its timber concession Taib subsequently cancelled it:

“The timber concession Licence was not renewed in July 2003 and was instead given to Misi Gagah Sdn Bhd, a company controlled by Datuk Tufail through other nominees of his…

"Misi Gagah now occupies the former office of Sanyan Lumber and utilises its former staff whose salaries continue to be paid by Sanyan Lumber until Labour Department put a stop to it in the middle of 2006.″

Sarawak Report said it believes there can be no clearer proof of the level of corruption than the evidence brought forward in the Sanyan case.  

“The Taibs will be doing their utmost to make sure that the judiciary find against Ting's suit for compensation and the rightful return of his company, but they cannot hide the facts that have been brought before the courts.”