Ex-finance minister Daim Zainuddin today put up a spirited defence against allegations by the Court of Appeal that he played a role in siphoning RM32.5 million from a toll concessionaire.

In a 18-page press statement issued late this evening, Daim "categorically" denied that former corporate poster boy Halim Saad enjoyed his patronage.

He also said his "active role" in the Metramac situation ended when he resigned as finance minister on March 14, 1991.

"It was only subsequently that I came to know that the government has asked Metramac to expand the scope of roads and interchanges in Kuala Lumpur and that on or about September 1991, toll collection resumed at substantially reduced rates. By September 1991, I was already at Harvard University to begin my tenure as a visiting scholar."

According to him, the second concession deal between City Hall (DBKL) and Metramac took place 11 months after he had quit his post.

"I had no involvement in the negotiations and/or drafting of the terms and conditions of the 2nd concession agreement," he said referring to the multi-million ringgit compensation paid by the government to Metramac.

He also called on the cabinet to make public all minutes relating to the matter.

"I am requesting that the specific cabinet minutes relating to Syarikat Teratai and/or Metramac be declassified," he said, adding that his version of the events was based on his own recollection of what had happened 15 years ago, and on his private documents.

Scathing judgment

In a Jan 12 judgment, Court of Appeal Judge Gopal Sri Ram suggested that Daim had helped Halim and his ex-partner Anuar Othman siphoned RM32.5 million from Metramac Corporation Sdn Bhd.

He ordered Metramac to pay about RM65 million to Fawziah Holdings in compensation for the loss 'of advertising rights'.

Fawziah Abdul Karim and her mother Maimon Bee, owners of Fawziah Holdings, were the former owners of Syarikat Teratai KG (STKG) Sdn Bhd, which is now known as Metramac.

In July 1986, Fawziah procured a road privatisation tender but toll collection for these roads was suspended in September 1990 following a public outcry and demonstrations at the Cheras toll plaza.

STKG had sought RM764 in compensation for the loss of toll revenue. Gopal noted that in 1990, Daim, who was then still finance minister, said the government could not afford to pay the sum.

Later, Metro Juara, of which Halim and Anuar were shareholders purchased STKG for RM97.5 million and was subsequently renamed Metramac.

Following this, the government paid the compensation due to STKG.

Daim said that he was not alone in making the decision on the issue of compensation to Metramac.

"It was a decision of the cabinet," he said.

Daim, who is a lawyer by training, argued that his press statement should not be regarded as contempt of court as he was merely clarifying those parts of the judgment which, in his view, were based on facts which were wrong.

"I am asking fellow Malaysians to not fear the truth as only through the truth can justice prevail and it is our of duty to bring the truth to the attention of the courts for judges to come to a fair and just decision."



The following is Daim's version of the events as contained in his press statement today:

The previous administration had from the outset sought to transform the economy, unlock value and spread the wealth effect, elevate Malaysians into the middle classes, nurture professionalism and entrepreneurship so central to sustaining economic growth; bring new ideas and dynamism in management of assets; expand the infrastructure, build roads and highways; plant self-esteem in the hearts of all Malaysians; straddle the world to seek new markets and investments; and also, offer our business and professional expertise to the world.

We fast-tracked the process, we had to learn and master new things fast. We needed to develop expertise in a host of areas and make sure these experts are globally competitive. I shared and upheld this vision, articulated and cohesively implemented by the then prime minister. We needed home-grown expertise to build cars, highways and tall buildings. We had towering ambitions. Given the pace of progress since, it is easy to lose sight of the fact that when Tun Dr Mahathir Mohamad became prime minister in 1981, we had been an independent nation for only 24 years.

Uppermost we had to build world-class cities and develop competitiveness. The traffic of Kuala Lumpur was choking. This was affecting the quality of life and stifling the economy as efficiency of city transport is intertwined with economic efficiency. Cheras and the other suburbs were growing at breakneck speed without a cohesive traffic dispersal strategy. Many would still remember the infamous Cheras Crawl. The government, even before I joined the Cabinet in 1984, had decided on a series of interchanges and road widening projects.

In 1987, Syarikat Teratai KG Sdn Bhd ("Syarikat Teratai") signed a Concession Agreement with Dewan Bandaraya Kuala Lumpur ("DBKL") dated 20th November 1987 ("1st Concession Agreement") to construct, finance and manage a number of toll roads and interchanges in Kuala Lumpur. Suffice for me to say that the Cabinet had expressed some views on the 1st Concession Agreement signed between DBKL and Syarikat Teratai, and this was confirmed when the cabinet had to quickly resolve a crisis induced by the stoppage on 12th September 1990 of toll collection at Kilometer 8 Cheras.

The agreement as signed by DBKL and Syarikat Teratai, would compel the government to compensate Syarikat Teratai some RM100,000.00 a day if the toll collection is stopped beyond a certain time frame. Time was of the essence if the government is to avoid this debilitating cost. The government was also mindful that whilst termination of the concession would impose financial liabilities on the government, toll-rate reductions would also further inflict financial difficulties on the concessionaire.

With the near riots and protests that led to the arrest of an MP from the DAP, the cabinet directed that the toll collection be suspended. A task force headed by the secretary-general of the Works Ministry was set up to brief the government on all aspects of the concession. Subsequently, the Task Force was also asked to study the possibility of UEM taking over Syarikat Teratai.

The cabinet was of the collective view that other options should be pursued. It was then that the cabinet noted that UEM was an option. The cabinet had to decide on another pressing issue - the toll rate. Even parties backing the government decision to impose toll felt the rates should be reduced. One justifiable complaint was the lack of alternative roads for the Cheras residents.

Subsequently the various ministries and government agencies such as the Ministry of Finance, Ministry of Works, the Economic Planning Unit in the Prime Minister's Department, the AG's Chambers and DBKL were tasked within their respective jurisdiction with resolving the issue with the concession company.

The Ministry of Finance was asked by the cabinet to talk to the shareholders of Syarikat Teratai and UEM to resolve the issue.

I then asked the various parties to see me as a consequence of the cabinet decision. I met the various shareholders including Dato' Fawziah around the first week of November 1990 when I informed them of the cabinet's decision. On 23rd January 1991, Metro Juara Sdn Bhd signed the Sale and Purchase Agreement wherein Syarikat Teratai shareholders agreed to sell all their shares to Metro Juara Sdn Bhd for a consideration of RM97.5 million.

The government had a moral and economic responsibility not to let the company fail. An appropriate takeover sum had to be worked out. Tabung Haji was a shareholder. It looks after the interest of millions of depositors. The directors of Syarikat Teratai never did dispute the take-over price. In fact Dato Fawziah had on 14 December 1990 written to me informing me that they (Syarikat Teratai and Metro Juara) had reached agreement on all terms of the sale and requested my good office to speed up the signing of the sale and purchase agreement.

On the issue of compensation, the cabinet decided that no compensation be payable. In any event, the government procedure has always been that any payment to be made to any party has to be requested by the relevant government agency, not by a private company or an individual. Additionally, I had by then already tabled the 1991 Budget, which made no provisions for compensations. If the funds were not part of the annual Budget and additional funds were needed, the cabinet would have to discuss the matter and then submit it to Parliament for further debate and approval under a Supplementary Budget.

Dato Fawziah subsequently confirmed that she had met the then deputy prime minister and three other ministers and had been similarly informed of the cabinet's decision that no money would be paid as compensation.

The government took certain positions on the entire deal involving Syarikat Teratai and DBKL. This will be answered if the public could gain access to the relevant cabinet papers.

My active role in the Metramac situation ended when I resigned as Minister of Finance on 14th March 1991. It was only subsequently that I came to know that the government has asked Metramac to expand the scope of roads and interchanges in Kuala Lumpur and that on or about September 1991, toll collection resumed at substantially reduced rates. By September 1991 I was already at Harvard University to begin my tenure as a visiting scholar.

It was only later that Dato' Fawziah saw me on a number of occasions to request my assistance to resolve a prolonged dispute between Fawziah Holdings Sdn Bhd and Metramac regarding the advertising rights under the concession. Of the two companies, it was Dato Fawziah who approached me to mediate in the dispute. I obliged as I have always tried to assist entrepreneurs where possible.


Background to the Metramac scandal