UMNO Treasurer Daim Zainuddin should explain what has happened to the 25 million ‘missing’ UEM shares worth some RM400 million

By Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya on Thursday, 5th August , 1993:

UMNO Treasurer Daim Zainuddin should explain what has happened to the 25 million ‘missing’ UEM shares worth some RM400 million

UMNO Treasurer, Tun Daim Zainuddin, issued a statement yesterday denying UMNO’s involvement in business.

He said: “As treasurer of UMNO I supervise the monies of UMNO and I categorically state and place on record that UMNO is not involved in any business, it does not own any company nor any shares in any company.

“When UMNO was deregistered in 1998 all of its assets were vested in the Official Assignee.

“Renong Berhad purchased some of these assets from the Official Assignee. Other than this purchase by Renong, all other assets of UMNO remain with the Official Assignee.”

Daim Zainuddin had not told the whole truth, as apart from the sale of certain UMNO shares in various companies to Renong Bhd. In April 1990, the Official Assignee had also sold other UMNO shares to Hatibudi Nominees Sdn. Bhd in June 1989.

Following the de-registration of UMNO in February 1988, the Official Asignee not only took over Fleet Group, UMNO’s main investment arm, but also Hatibudi Sdn.Bhd. , which had acquired a significant stake in United Engineers Malaysia (UEM), which was then awarded the privatised North-South Highway project.

The shareholders of Hatibudi were Halim Saad and Anuar Othman, who held the shareholdings in trust for UMNO leaders. This was admitted by Halim Saad in a court affidavit in my case in 1987 where I had won a High Court injunction to stop the award of the North-South Highway privatisation contract to UEM on grounds of conflict-of-interest of UMNO leaders.

Halim Saad lost control of Hatibudi (and thus the UEM shares) when it was taken over by the Official Assignee. In June 1989, the Official Assignee sold Hatibudi’s significant stake in UEM to Hatibudi Nominees, which was also controlled by Halim Saad and Anuar Othman.

What authority did the Official Assignee’s office have to approve the sale of the UEM shares of UMNO in Hatibudi to Hatibudi Nominees, without judicial authorisation?

As Halim Saad and Anuar Othman had held their shareholdings in Hatibudi as trustees for UMNO leaders, were they also fronting for UMNO leaders when they bought over the UEM shares as shareholders of HATIBUDI Nominees from the Official Assignees. What was the price of this sale of these UEM shares by the Official Assignee to Halim Saad and Anuar Othman and why did the Official Assignee approve this sale, instead of offering them for sale by open tender or auction?

Furthermore, Daim Zainuddin should explain what has happened to the 25 million ‘missing’ UEM shares, which was worth about RM400 million.

These 25 million UEM shares, together with $37.5 million UEM convertible unsecured loan stock (CULS), were originally held by Hatibudi Sdn.Bhd. openly acknowledged as an UMNO company controlled through proxies, Halim Saad and Anuar Othman. When UMNO was deregistered in February 1988, control of Hatibudi and its interests in UEM were taken over by the Official Assignee’s Office.

Later, without judicial authority or a court order, HATIBUDI’S 25 MILLION uem SHARES AND $37.5 million of CULS were sold off by the Official Assignee to Hatibudi Nominees, whose directors were also Halim Salid and Anuar Othman. The $37.5 million CULS were later bought by Time Engineering Bhd. Form Hatibudi Nominees in a reverse takeover.

The 25 million UEM shares were presumbly left under Hatibudi Nominees’ control. However, when the Renong takeover of Hatibudi Nominees was announced in April 1990, there was no mention of these UEM shares, though the Kuala Lumpur Stock Exchange listing regulations clearly stipulate that the movement of such a substantial number of shares must be reported.

What has happened to these 25 million “missing” UEM shares? Have they been secretly sold off, may be to fund UMNO’s 1990 general elections campaign?

In early 1990, the value of UEM was around RM 16 a share, and 25 million UEM shares would have fetched RM400 million.

I had raised these questions in Parliament on Tuesday during the debate on the Societis Amendment Bill, but the Minister for Law, Datuk Syed Hamid Albar was unable to give an answer.

As UMNO Treasurer and former Finance Minister, Daim Zainuddin is the best person to answer these questions.