Malay-language daily Utusan Malaysia has clarified that it did not intend to implicate Sarawak Chief Minister Abdul Taib Mahmud in reports alleging corrupt activities and expressed regret if this has resulted in damage to his reputation.

In a three-paragraph statement carried today, the newspaper referred to two articles published on April 13 and April 14.

"We would like to clarify that, with the publication of those reports, we did not intend to suggest (Taib) was corrupt or was involved in the matters reported. Any interpretation by readers that we did (intend as such) would be incorrect," it reads.

"We sincerely express our regrets to (Taib) for any inconvenience or damage of reputation caused to him based on those reports, and we take this opportunity to correct any misunderstanding on this matter."

In the April 13 report quoted Prime Minister Abdullah Ahmad Badawi as saying that the government has not received any complaint about such claims and that the Anti-Corruption Agency can only act based on a report lodged with it, and not through a newspaper article.

The April 14 report, which is from state news agency Bernama, Taib indicated he would sue over media reports that he was being allegedly paid RM32 million in 'kickbacks' by nine Japanese shipping companies transporting logs to Japan.

It was later confirmed that the ACA has launched a probe on the scandal.

In May, Taib made a personal statement in the state assembly denying any involvement and claiming he was not aware of payments to the company, Regent Star.

He then filed a law suit against malaysiakini, Utusan and PKR Sarawak. While the writ of summons has been served on malaysiakini and PKR Sarawak - and both have filed their defence - it is unclear whether Taib will retract his suit against Utusan in the wake of its clarification.

A source said the legal matter is still under negotiation and has yet to be finalised.

"The summons is still in the High Court. Whether Taib withdraws it or not, we hope this matter will be resolved as soon as possible," the source said.

Utusan editor-in-chief Mohd Khalid Mohd is abroad and cannot be reached for comment.

Application by company

Allegations over the timber kickbacks surfaced in a report by Japanese news agency Kyodo News and was published by the Japan Times on March 29.

Reports said Japanese tax authorities had uncovered the scandal and that they deemed the payments by nine companies - part of a shipping cartel - as 'illegitimate expenses'. This is because the Hong Kong agency - believed to be a paper company - did little 'substantive work' to justify the payments.

According to tax authorities, the shipping companies had tried to disguise the payments as 'business expenses' and were thus not taxed.

Japan Times reported that the shipping firms were likely to be slapped with well over 400 million yen (RM11.6 million) in back taxes along heavy penalties for 'hiding' the funds from tax authorities.

The newspaper added that the shipping companies were believed to have used the money as a "lubricant to facilitate their lumber trade".

The shipping firms, which have rejected the tax authorities' claim and argued that the transactions with Regent Star were legitimate, have denied any wrongdoing.

However, the Hong Kong Registrar of Companies stated in a notice last month that Regent Star has applied to be deregistered.

"Unless an objection is received within three months after the date of the publication of gazette notice, the Registrar may deregister the company and dissolve it," said the statement issued on July 20.


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