Should Nazri be Investigated for "Corrupt Practice"?

In an unprecedented move, a Minister in Prime Minister’s Office had directed all Government-Linked Companies (GLCs) to withdraw all civil suits against former MAS owner and chairman, Tan Sri Tajuddin Ramli.

Datuk Seri Nazri Aziz wrote that “the government of Malaysia and the Finance Ministry has agreed to settle all civil claims against Tan Sri Tajuddin Ramli and others to be withdrawn immediately in view of the fact that the government and the Finance Ministry have agreed that the said cases will be settled out of court.”

Such an instruction from a Minister’s office, especially one with no authority over the various GLCs including Malaysia Airlines System (MAS), Telekom Malaysia and Prokhas (formerly Danaharta), must be at the very least highly improper, and at worst an illegal and corrupt practice to allow Tan Sri Tajuddin Ramli to get away with billions of ringgit in debt.

It is a clear case of a Minister using his superior position to exercise undue influence over decisions to be made in these companies. Each of these companies, many of which are listed on Bursa Malaysia, have their own Board of Directors tasked to make decisions in the best interest of the respective companies. Nazri who does not sit in any of these Boards, has no business giving instructions of any kind to them. In fact, the party that is best positioned to advice the Boards on their legal case is their appointed legal team, who were taken by complete surprise by the directive from the Minister.

His directive to these GLCs made a complete mockery of corporate governance in these companies and will only turn away local and foreign investors who will not tolerate blatant interference from the Government on business and financial decisions.

Nazri can be investigated under Section 2(1) of the Emergency (Essential Powers) Ordinance No. 22/1970 where “Any member of the Administration, Parliament or State Legislative Assembly or any public officer who commits a corrupt practice shall be liable to a term of imprisonment of 14 years or a fine of RM 20,000 or both.”

A “corrupt practice” in this case is defined as “any act done by a member…in his capacity as such member…whereby he has used his public position or office for his pecuniary or other advantage…”

It is the exact same law used to find Datuk Seri Anwar Ibrahim guilty of alleged abuse of power in 1999 where he was sentenced to jail for 6 years. Anwar, while holding the post of Deputy Prime Minister and Minister of Finance, was alleged to have “committed corrupt practice” by giving directives to two police officers.

Nazri’s attempt to explain his letter that the suits should be withdrawn so that a settlement between the parties can be reached does not hold water for a settlement could still be reached before the respective suits are withdrawn.

The Minister’s directive for the GLCs to withdraw their civil suits against Tajuddin Ramli is clearly designed to provide the latter breathing space and a desperate attempt to bail him out of billions of ringgit in debt to the government agencies and companies, as well as to excuse him from causing billions of ringgit in losses to our flagship carrier, MAS. In 2001, Tajuddin Ramli via his corporate vehicle, Naluri Bhd was bailed out to the tune of RM1.792 billion by the Malaysian government for the acquisition of MAS at RM8 per share despite the market price being only RM3.62 per share.

What is perhaps most tragic is the fact that all the credibility and goodwill generated by the Prime Minister’s New Economic Model (NEM), where Datuk Seri Najib Abdul Razak boldly declared “we can no longer tolerate practices that support the behaviour of rent-seeking and patronage”, is completely and irreversibly lost.