Sime Darby scandal implicates youthful Datuk - Keruah Usit

ANTIDOTE The graft scandal that has engulfed former Sime Darby CEO Ahmad Zubir Murshid has laid bare the anatomy of corrupt land deals in Sarawak.

These scams have enriched the state's political elite and their acolytes, while condemning rural Sarawakians to generations of poverty.

On July 17, Zubir was charged in the Kuala Lumpur High Court with criminal breach of trust: the MACC alleged he had cheated Sime Darby of RM100 million before he left the group in 2010. He pleaded not guilty, then declined comment when pursued by reporters.

Even to those unfamiliar with corruption in Sarawak's land deals, it is obvious that it takes two hands to clap - and at least two parties to commit graft. Sime Darby's local partners in these farcical oil palm plantation deals have, therefore, come under scrutiny.

Zubir (on the right in picture above) was alleged to have overseen the purchase of land in Kapit, Julau and Sarikei around three years ago, after the Sarawak government had approved a joint venture (JV) Sime Darby oil palm plantation on native customary rights (NCR) land.

This JV, arranged under Chief Minister Abdul Taib Mahmud's "New Concept" land policy, was formed by Sime Darby and Pelita, a company founded by the Sarawak government's statutory body, the Land Custody and Development Authority, or LCDA.

An astonishing 'New Concept'

Under Taib's "New Concept", a private investor (in this case, the hapless Sime Darby) holds a 60 percent stake in each JV. Pelita owns 10 percent on behalf of the LCDA, while also holding the remaining 30 percent in trust for the NCR landowners.

This model means that major investors can have access to the NCR land assets of the Dayak and other natives, usually for 60 years, without having to compensate all the impoverished landowners involved.

These deals represent a new concept, indeed: hundreds of native communities statewide have sued Taib's government, because the natives have been stripped of their traditional NCR communal land rights, often in return for empty promises.

Disgruntled native communities argue that this "New Concept" has effectively been cast as "robbing the needy to feed the greedy". Opponents of the "New Concept" refer to the LCDA "Let's Chase Dayaks Away".

In a growing number of lawsuits, judges have berated the state government and its partner investors for failing to obtain prior and informed consent from all landowners involved, before launching JVs.

These "New Concept" controversies often revolve around village heads, paid off to sign JV agreements on behalf of entire communities, without consulting other villagers.

NCR landowners have protested that their native rights are guaranteed by the federal constitution, Sarawak's land code and an expanding body of legal precedents in the highest courts in the country.

Young Datuk's windfall

In this case, Sime Darby was not awarded the land in 2008 and 2009, despite the state government's approval of the JV. Instead, in an adroit sleight of hand, the state government awarded the land to two companies with no track record in plantations: Nature Ambience and Vertical Drive.

Sime Darby then had to pay RM16.8 million to buy Nature Ambience and RM85 million for Vertical Drive - a total of nearly RM102 million.

Both Nature Ambience and Vertical Drive were effectively owned by a local businessman, Chew Chiaw Ann (left), 42. He held more than 99.9 percent of the shares in both vehicles, through several layers of proxy companies.

Chew was awarded his datukship in 2009, at the age of 40. He is now the CEO of a construction company called Metro Sedia Sdn Bhd.

In the past two years, Chew's company has been the fortunate recipient of multimillion-ringgit contracts from the Sarawak government.

One was a RM6 million contract to supply solar power to rural Long Peluan, home to fewer than 400 people - a staggering cost of more than RM15,000 per resident.

Chew is a young Chinese businessman, operating in an economy professing overwhelming preference for bumiputeras, so his stellar overnight success has certainly bemused observers.

"He must be extremely capable," See said, "yet I'd never heard of him until now. Chew Chiaw Ann was a nobody until the (Sime Darby) transaction was completed."

In June 2011, Ting Sze Fui, the DAP assemblyperson r Meradong, Sarikei, revealed the existence of a letter dated Nov 20, 2008, signed by the permanent secretary of the Ministry for Land Development, granting approval to Vertical Drive to develop 48,199 hectares of NCR land.

Vertical Drive's parent company had been registered only a month earlier, in October 2008. Sime Darby then bought the company, dropping a princely fortune in Chew Chiaw Ann's lap.

Similarly, Nature Ambience had been set up in October 2008. Only a year later, in October 2009, the Ministry for Land Development awarded Nature Ambience 26,211 hectares of land to develop, and Sime Darby paid a king's ransom for the company in December 2009.

Scandal opens up a can of worms

See pointed out that the chief minister and the minister in charge of issuing provisional leases for NCR land, have seen through increasingly intense strife within the state BN's higher echelons.

These self-enriching land deals, he argued, created artificial and specious competition with genuine private companies looking to invest in Sarawak.

"Sime Darby is not the only investor to have been ripped off by the web of (state) BN politicians' and cronies' companies. It is believed that other big companies such as Tabung Haji Plantations are also falling prey to such corrupt practices," See said.

The swindles have seriously damaged the confidence of potential investors in land development projects, as well as in other sectors of Sarawak, he concluded.

"This scandal exposes the incredible NCR land deals in Sarawak," See said. "It opens up a can of worms."

The Sime Darby debacle seems to be the "New Concept" modus operandi in Sarawak: provisional leases are granted for plantation JVs, in an opaque fashion, to well-connected local companies.

Then, selling the companies to big plantation investors at a handsome premium, the owners of these companies then make clean, instant profits, virtually without lifting a finger.

"What on earth was the permanent secretary of the Ministry for Land Development doing, awarding huge swathes of land to two companies set up shortly beforehand - with zero track record in plantations?" See asked.

"Can an unknown Chinese businessman suddenly become so close to the person at the top, that he is rewarded so handsomely? No, I am sure certain politicians are the true beneficiaries."

If indeed Chew is acting as a proxy for a top political decision-maker, it will train the spotlight squarely on the MACC, the federal anti-graft agency.

The MACC has been faced international condemnation for failing to report any progress on its probe on allegations of corruption against Taib.

With the general election looming, Taib's support for Prime Minister Najib Abdul Razak will be crucial if Najib's party, Umno, is to retain power at the national level. But the relationship between the two leaders has been prickly.

This MACC prosecution of Zubir sends a message from Najib to Sarawak's political leadership that the Sime Darby scandal may yet claim more victims. It may also be a gentle reminder that Taib's MPs must deliver - and toe the Umno line - in the coming election.

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KERUAH USIT is a human rights activist - ‘anak Sarawak, bangsa Malaysia'. This weekly column is an effort to provide a voice for marginalised Malaysians. Keruah Usit can be contacted at keruah_usit@yahoo.com