Mahathir, Tengku Razaleigh, Ling Liong Sik and the birth of Makuwasa Securities Sdn Bhd

“The real reason Anwar was brought into UMNO is something I will discuss in a later part of this series. Suffice to say, the 22nd of April 1982 general election saw Razaleigh being retained as Minister of Finance and Ling Liong Sik being made his deputy. To appease the Yang di-Pertuan Agong, Najib was appointed the Menteri Besar of Pahang on the 4th of May 1982. When Hamzah asked Mahathir what the latter had used as excuse to ‘boot’ Najib out from the federal, Mahathir sarcastically replied, “I needed Najib to learn the ropes.”


On the28th of January 1983, the General Manager of Bumiputera Malaysia Finance (BMF), Ibrahim Jaafar, discussed with Tengku Razaleigh Hamzah a 10th of November 1982 report by the Asian Wall Street Journal (AWSJ). The duo was concerned that the front page exclusive by the daily was damaging to the Government of Malaysia (GoM) as it detailed the extent of BMF’s involvement with the Hong Kong based Carrian Group. The expose was the first of its kind by any newspaper anywhere in the world.

Razaleigh, who was then the Minister of Finance, confided in Ibrahim that “the leak was from the Carrian Group and had nothing to do with BMF.” According to him, the leak “could not have been from Kamarul, as he himself is liable for all decisions made by us.” The Minister of Finance was referring to the former Group Chairman of BBMB, Tan Sri Kamarul Ariffin Mohamed Yassin, who was replaced by Dr. Nawawi Mat Awin on the 9th of February 1982.

Now, the AWSJ expose caused the GoM Task Force (GTF) instituted by the CIA (REFER PART 1, LINK BELOW) to put the Carrian Group on its radars. The task force quickly discovered that Kamarul’s departure had something to do with the “mega loans that BMF was approving to the Carrian’s Eda Group and Kevin Hsu Group.” The head of Central Intelligence, William J. Casey, informed the then president of the United States (US), Ronald Regan, that BMF had extended a RM200 million loan to Maminco (REFER PART 1, LINK BELOW) through a subsidiary of its parent bank (BBMB) in Bahrain.

By then, the US president had already established a “mini tin council” with key personnel from the London Metal Exchange (LME) to crash the tin market. As a matter of fact, the Bolivian and the United Kingdom (UK) governments had already begun to speculate on tin futures through several of their affiliates based in the UK and Europe. By the time Kamarul left BBMB, the tin market was already in quite a bad shape. But none of that bothered Razaleigh.

What bothered him most was the information Kamarul had conveyed to him. On the 2nd of February 1982, the exiting BBMB chairman spoke at length about Jalil Ibrahim, a senior member of the group’s audit team who was exceptionally close to Nawawi, one of Razaleigh’s (then) affiliates. Kamarul expressed concern that Jalil had begun “digging into the books” and discovered that “the loans BMF was giving out to Carrian was quickly exceeding (the) capital reserves of Bumi (BBMB), then estimated to be worth RM1.2 billion. The very next day, Razaleigh conveyed Kamarul’s concerns to the Prime Minister of Malaysia, Dr. Mahathir Mohamad.


The Minister of Finance figured that Mahathir would be shocked to discover Jalil’s alleged betrayal. But little did he know that the Prime Minister was being kept abreast of the goings on in BMF at all times by someone in BBMB. A wiretap reveals that Mahathir relayed whatever he learnt from Razaleigh to the late Tan Sri Hamzah Abu Samah, a former minister in the late Tun Abdul Razak’s government. On the 7th of February 1982 – just two days prior to Kamarul’s departure – a decision was made to “remove Dato’ Seri Najib Tun Razak from the post of Deputy Minister of Finance.”

The decision to ‘boot’ Najib from Federal was made by Mahathir, Hamzah and Daim (who was yet to join government). The trio felt that the son of the late Razak was “too well connected with the Palace of Pahang to be trusted.” What concerned them most was Najib’s links with the ruler of Pahang, Sultan Haji Ahmad Shah, who was then also the Yang di-Pertuan Agong. The Prime Minister did not want the Agong to discover the wheeling and dealing that was going on between BBMB, BMF and the founder of the Carrian Group, a Singaporean Civil Engineer (and uncle to Danny Lee) who went by the name George Tan.

Now, a day after Kamarul left BBMB, Razaleigh held a press conference (PC) to announce that he was “going to get tough with (the various) ministries to rectify financial mistakes uncovered in the Auditor General’s (1982) report.” The announcement was planned by both the Kelantan Prince and Mahathir to shift conversations away from Kamarul’s ‘mysterious’ departure. However, the then Member of Parliament (MP) for Petaling, Lim Kit Siang, had already begun snooping around the Ministry of Finance and seemed privy to the goings on in Maminco and BBMB. Mahathir began to suspect that it was Jalil who leaked all the info to the Secretary General of the DAP.

Still, the PC was successful in casting the spotlight away from BBMB. Both the Prime Minister and Daim had long discussed the premature dissolution of Parliament to anticipate the possibility that Kit Siang and his DAP would capitalize on a controversy they planned to stir towards the end of the year. When the decision was made to pull Najib out of government, plans were already afoot to field Dato’ Seri Anwar Ibrahim as Barisan Nasional’s candidate for the Permatang Pauh parliamentary constituency.

But that was not why Anwar was ushered into UMNO – the real reason is something I will discuss at a later date, possibly in the fourth or fifth instalment of this series. Suffice to say, the 22nd of April 1982 general election saw Razaleigh being retained as Minister of Finance and Ling Liong Sik being made his deputy. To appease the Yang di-Pertuan Agong, Najib was appointed the Menteri Besar of Pahang on the 4th of May 1982. When Hamzah asked Mahathir what the latter had used as excuse to ‘boot’ Najib from the Federal, Mahathir sarcastically replied, “I needed Najib to learn the ropes.”

With ‘the son of Razak’ out of the way, Liong Sik got to work doing what he was tasked to do – to help Razaleigh formulate ways the GoM could repay BBMB and BMF. The MCA leader was also brought in to assist Daim Zainuddin acquire the United Malayan Banking Corporation (UMBC) from Multi-Purpose Holdings Berhad (MPHB), then an investment arm of the MCA. Both Mahathir and Daim were not too pleased that the Holdings was being run like a Godfather-styled cooperative to support and finance businesses belonging to Chinese associations and temples.

For the record, MPHB was then under the purview of the party’s State Liaison Committee Chairman for Willayah Persekutuan, Tan Koon Swan. He was someone Daim despised and Mahathir needed out of the way at all cost. On the 23rd of August 1982, Liong Sik proposed a scheme for Daim to gain control of UMBC and an elaborate 10-year plan to bring MPHB under the heels of UMNO.  While Mahathir agreed to the plan, he cautioned the MCA leader “never to reveal anything to Razaleigh,” who he knew was in cahoots with “someone from Sri Hartamas” to negotiate the acquisition of Gammon House, a commercial office building in the Central District of Hong Kong.

As a result, Liong Sik tweaked his plan to incorporate the setting up of a company that would assist Sri Hartamas Corporation Berhad compound its earnings through kickbacks from the sales of shares. In return, the mysterious figure “from Sri Hartamas” (who I shall name later) agreed to help Mahathir sabotage Razaleigh’s plans to have the GoM purchase the Hong Kong commercial unit. Two days later, Mahathir got his informant from BBMB to leak some notes to an AWSJ correspondent in Hong Kong. The notes purported that Razaleigh had hidden interests in Gammon House and was negotiating a deal through the backdoor with Jalil Ibrahim. But the informant leaked a little more than he should have…

Then, on the 23rd of June 1984, Makuwasa Securities Sdn Bhd suddenly came into existence.

To be continued…


Part 1: The dirtiest scandals in Malaysian history. Part 1 – The Maminco tin scandal as never before told




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