All in the family: How Taib controls Cahya Mata

A probe into publicly available company and stock exchange records on Sarawak’s largest public company Cahya Mata Sarawak Bhd (CMS) would be enough to prove that it is under Chief Minister Abdul Taib Mahmud’s control, said whistleblower website Sarawak Report.

“Our most recent revelations are based on the publicly recorded movement of shares within CMS.

“These show how huge chunks of the company have been passed round Taib's close family members, providing only one feasible explanation, which is that it is Taib himself who is controlling their ownership.

“To all intents and purposes, therefore, he created the company
and he is the owner,” reported the website on Thursday.

Sarawak Report alleged that Taib (right) had created CMS “by privatising key assets that used to belong to the state of Sarawak.”

“As finance minister and chief minister he caused valuable state interests like PPES, Steel Industries Sarawak and PCMS to be sold for knock-down prices to CMS and then engineered extraordinary 'share swaps' with cheap companies belonging to his own family members.

“This enabled the Taibs to take control of the majority of CMS shares by 1996,” it said.

The company, it said, has in turn gain access to the massive wealth of the state through monopoly of massive state and public contracts.

All in the family

The website traced the historical share movements and management of the company to show how Taib was implicated.

It said in the initial years, Taib’s brother Onn Mahmud - the largest shareholder and main director of CMS at the time - was the CM’s business proxy “in Sarawak and abroad, until the
brothers fell out in 2003".

Citing research available at the London School of Economics, Sarawak Report said Onn in 1989 acquired the family's first 27 percent stake in the publicly-owned CMS in 1989.

By 2002, Onn had 30 percent interest while Taib’s two young sons each owned 12 percent, making the Taib family a majority shareholder in CMS.

It notes how in 2003 Onn’s shareholdings were reduced to a minority while Taib’s sons gained 44,925,102 shares through Majaharta, a company originally owned by Onn, while the remainder of the latter’s shares went to Taib’s late wife, Leila.

“The question therefore is why should Onn transfer such a valuable company as Majaharta, with so many CMS shares, to his nephews, rather than say to his own children or indeed selling the shares for a big profit?

“The answer, clearly, is that he only held those shares by proxy,” said the website.

By 2007, it said, Taib’s two daughters Hannifah Taib and Jamilah Taib had acquired joint ownership of Majaharta giving the four siblings roughly equal share in CMS with Leila owning a significant portion herself.

Meanwhile, other relatives such as Taib’s son-in-law Syed Ahmad Alwee Alsree and brother-in-law Robert Geneid were also given key positions in the company.

Lion's share of contracts

Sarawak Report also traced how the family-controlled CMS had long-term access to lucrative state contracts that it handed to other Taib family-owned companies.

“(From annual reports data) we can see that over the previous year alone RM35 million worth of business went through some 20 companies belonging to Taib family members.”

It said a shareholders’ attempt at an extraordinary meeting in 2002 to confront the issue of ‘recurrent related party transactions’ forbidden under Stock Exchange regulations, failed to resolve the matter.

“Unsurprisingly, the extraordinary meeting, called under Stock Exchange rules to review this outrageous situation, voted in favour of keeping these recurring arrangements with related companies.

“After all, the Taibs controlled the majority of shares! To this day, despite recent attempts to cover up this in-trading, it can be seen from the Annual Report that the corrupt practice continues,” said Sarawak Report.

Amongst these contracts, it said, was property rental paid to Satria Realty Sdn Bhd - it said Taib himself owned 55 percent share until 1999.

Such revelations, said the website, proved that Taib’s claim that he was not involved in business within Sarawak was false.

“The above information, which is publicly available in company and stock exchange records, is quite enough for the MACC (Malaysian Anti-Corruption Commission) to issue a warrant for the arrest of Taib Mahmud.

“He and his family have not only done business in Sarawak, they have run Sarawak as a business along the lines of a family mafia, using his political power to extract virtually all the country's wealth.”