DAP regrets at Dr. Mahathir‘s intemperate speech at UMNO General assembly and express dissatisfaction with Dr. Mahathir’s confused explanation on the mysterious tin-buying in London and Makuwasa

Statement by Parliamentary Opposition Leader, DAP Secretary-General, MP fpr Tanjung and Assemblymen for Kampong Kolam, Lim Kit Siang, in Petaling jaya on Friday, Sept. 19,1986.

DAP regrets at Dr. Mahathir‘s intemperate speech at UMNO General assembly and express dissatisfaction with Dr. Mahathir’s confused explanation on the mysterious tin-buying in London and Makuwasa.

I regret that the Prime Minister, Datuk Seri Mahathir Mohamed, has made an intemperate speech at the 37th UMNO General Assembly yesterday, on the DAP, national unity, the general elections, the investment climate in the country, indulging in his typically unwarranted allegations and charges against the DAP and other critics of the Barisan Nasional Government.

I propose to comment and reply to Dr. Mahathir’s speech in penang this weekend, and will confine myself to one or two points of Dr. Mahathir’s speech in my statement today.

Firstly, I note that Dr. Mahathir has at last, for the first time, admitted the government’s involvement in the mysterious London tin-buying in 1981. as well as the mysterious background of the $2 company, Makuwasa, in connection with EPF investments in the shares market.

Dr. Mahathir must have realized that the government cannot delay giving a public explanation of the mysterious tin-buying in London and the Makuwasa dealings as I have again submitted questions for oral answer for the Parliamentary meeting beginning on Oct.6. I had submitted these questions for the July meeting of Parliament, but the cancellation of the July Parliamentary meeting as a result of dissolution saved the Prime minister and the Government from having to give answers then.

The first question Dr. Mahathir should answer is why he did not volunteer to give explanation about the mysterious London tin-buying before and during the general elections, if he really believes in the principle of public accountability. Why must he be forced by impending DAP parliamentary question in order to give a public explanation?

Secondly, I find Dr. Mahathir, the Cabiner approved in 1980 the operation to buy tin on the London Metal Exchange to help shore up the price of the commodity, but only suffered losses because the London Metal Exchange (LME) changed its rules to protect its members.

The following questions about the government’s tin-buying in London should answered:

1. When did the Cabinet give approval for the London tin-buying operation – was it in 1980 or 1981; during the Hussein Onn administration or after Dr. Mahathir had become Prime Minister; and if it was during the Hussein Onn administration, was it at a Cabinet chaired by Hussein Onn or by Dr. Mahathir as during the final months of Hussein Onn’s administration, Hussein Onn was under medical leave;

2. According to published accounts, the mysterious tin buying operation which Dr. Mahathir has now admitted authorship of the Malaysian government, started in July 1981 – the month Dr. Mahathir become the fourth Prime Minister of Malaysia.

As a result of the mysterious tin-buying operation by the Malaysian Government, the cost of tin on the London Metal Exchange shot from a low of US$ 4.33 a pound to nearly US$7.50 a pound. The price of tin had tumbled from a high of US$8.65 a pound in March 1980 to the US$4.33 figure in July 1981. The price of tin began to collapse in January 1982 when the United States government released its federal tin stockpile at a lower price.

This published account of the 1981 mysterious London tin buying in 1981 does not really tally with the account given by the prime Minister at the UMNO General assembly yesterday.

Which account is correct?

3. According to one study, the Malaysian Government lost about $1 billion from the London mysterious tin-buying operation in 1981. Can the Prime Minister confirm or correct this estimate?

4. Dr. Mahathir said the government planned to recoup its losses from the London mysterious tin-buying operation by selling the tin it held through specific trading activities of its wholly-owed company Makuwasa. Did Makuwasa make profit or lose money from its trading activities to sell the estimated 60,000 tons unwanted tin left in the hands of the Malaysian government when the mysterious tin-buying operation collapsed? How much tin is now still with the Malaysian Government from the 1981 hoard which had been disposed? Is the 1981 Malaysian ‘stockpile’ of tin partly responsible for the collapse of the London tin market in October 1985 which to this date had not recovered?

5. I am baffled by Makuwasa’s connection with the attempt to dispose of the hoard or stockpile of unwanted tin held by the Malaysian Government after the 1981 operation, for it was the $2 company, MAMINCO which had been associated with the operation, rather than the $2 company, MAKUWASA, which was not incorporated as a company until 21st June 1984. MAMINCO was incorporated as a $2 company on 23rd June 1981 with the nature of business specified as “to undertake commodity and minerals trading”. Could Dr. Mahathir have been confused between MAMINCO and MAKUWASA?

6. Dr. Mahathir also commented on the SPF’s share dealings, where between June 1984 to March 1985, EPF invested $12.8 million in 13 stocks, seventy per cent of which were sold to MAKUWASA at below market price so that EPF lost some $10 million profit.

Dr Mahathir said that “the truth” is that the shares transferred by the EPF to MAKUWASA were not owned by EPF, as they were shares reserved for bumiputras whose price was lower than the market price.

Dr. Mahathir said the EPF was not allocated any shares to be held in reserve for bumiputras because it is not a recognized bumiputra body. The allocation was made to EPF to enable the shares to be transferred to MAKUWASA and with the profits to go to the Government.

Why is it necessary to take such a round-about route involving the EPF, when these so-called reserved bumiputra shares could have been allocated directly to MAKUSAWA? How does a $2 company set up by MUKUWASA become a ‘bumiputra company’? Isn’t it true that despite Dr. Mahathir’s claim that the EPF is not entitled to hold the 13 stocks, 30% of each of these 13 stocks are being retained by EPF? Why this contradiction?

7. In view of the vast sums of money under the change of these mysterious $2 companies, like Maminco and Makuwasa, who exercise control over them if Parliament is also kept in the dark, until the Opposition ‘digs’ them out of deep cover?

Is the Government prepared to submit annual statement of accounts and annual reports of Maminco and Makuwasa to Parliament when it meets on Oct.6?

8. In view of the many unanswered questions about the 1981 mysterious London tin buying and the EPF-Makuwasa shares investments, is the Prime Minister prepared to agree to the establishment of a Parlaimentary Committee to fully inquire and report into both items?

Dr. Mahathir challenged the DAP to make a report if we have any proof that the government leaders or officers were involved in corruption in these two deals. It is not a question of whether the DAP can prove there is any corruption in the London mysterious tin-buying and the Makuwasa-EPF affair, but whether the Barisan Nasional Government is prepared to submit itself to the closest public scrutiny and parliamentary inquiry to prove to all Malaysians that it has nothing to hide, and to demonstrate that it accepts the principle of public accountability.

The DAP is not in the dock in the 1981 London mysterious tin buying or the EPF Makuwasa affair. It is the Barisan Nasional Government which is in the dock, especially considering the circumstances whereby it had sought to hide the real nature of the transactions from public attention for as long as possible – and after the 1986 general elections for fear that its full investigation may cost the Barisan Nasional great loss in votes and seats, both in the Parliament and the State assemblies.