14th April 1987
YAB Dato' Seri Mahathir Mohamed,
President UMNO Malaysia,
38th floor, Menara Dato' Onn,
Jalan Tun Ismail,
FLEET HOLDINGS SDN BHD
On behalf of the UMNO members who had elected me to the Supreme Council of UMNO, permit me to convey to you several matters concerning the Companies owned by UMNO named FLEET HOLDINGS SND BHD. As I have not succeeded to see you even though I have tried several times to do since November 1986, I am forced to communicate by letter.
Several years ago I was appointed together with YB Dato' Rais Yatim in the UMNO Assets Committee. We were appointed to investigate and list out all UMNO Assets. Several questions were forwarded to you which to date have not received any reply.
Fleet Holdings Sdn Bhd was formed in 1972 by YBM Tengku Razaleigh Hamzah as the Treasurer of UMNO on the instructions of Tun Abdul Razak (deceased). This Company was formed and started with Tengku Razaleigh's own money and was well and cleverly administered. The original purpose was to take over control of the local newspapers which were controlled by foreigners both inthe form of management and capital. Fleet Holdings was directed to control the New Straits Times Press (M) Bhd Group being the biggest premier newspaper group in the country.
Fleet Holdings started moved forward, controlling and tgaking over the Straits Times Press (M) Group and spreading into the field of banking, insurance, leasing, car rental, communications, filming and others.
When YBM Tengku Razaleigh handed over control of Fleet Holdings Sdn Bhd to YB Encik Daim Zainuddin in the year 1983 the value of the properties and shares in Fleet Holdings totalled more than $500 million with debts of $56 million only. But today the debts of Fleet Holdings and its subsidiaries exceed $448 million. We are told today it is unable to service its interest of $3 million a month. It is most likely those enormous debts cannot be repaid. We UMNO members take a serious view of the fact that these Companies will be controlled by foreign interests eventually.
As you are well aware Straits Times Press (M) Bhd has been listed in the Stock Exchange of Kuala Lumpur and Singapore and in 1974 its name was changed to New Straits Times Press (M) Bhd. Fleet Holdings paid $32 million to control 80 per cent of Straits Times Press (M) Bhd with borrowings from Bank Bumiputra. After that Fleet Holdings sold 25 per cent of its shares to pay part of the debt.
Other than Fleet Communications all the subsidiaries of Fleet Holdings showed profits. New Straits Times Bhd showed profits of RM43 million from a paid up capital of $21 million in 1983. When Encik Daim and his friends took over in early 1983 they changed the style of business interests. They closed andn sold several companies while buying several other companies including those connected with YB Mr Daim himself.
1 FABER MERLIN
We have doubts over the purchase of Faber Merlin shares at such a high price. To facilitate this purchase a port of the NST shares were withdrawn from Bank Bumiputra and charged again to Malayan Banking and Overseas Union Bank. A portion more of the NST shares were charged to Malayan Banking to get a loan of $90 million.
The puchases of the Faber Merlin shares were made through the broker firms Rashid Hussain in Kuala Lumpur, Thong and Oh in Penang and Kay Hin Securities in Singapore in the name of Citivest Sdn Bhd. We have been informed that the shares purchased by Fleet Holdings Sdn Bhd were shares personally owned by YB Mr Daim and his friends. YB Mr Daim and his friends personally informed that the sale price to Fleet Holdings Sdn Bhd was $3.00 per share. The result is that YB Mr Daim and his friends made profits of nor less than $50 million.
Details of the sale of these shares can be obtained from the above-stated firms. The credibility of one of the above brokers has become questionable when one of the partners of Kay Hin Securities, Mr Peh, had his passport confiscated by the Singapore Government.
2 TAMAN BUKIT MALURI
After Fleet Holdings controlled Faber Merlin, YB Mr Daim and his friends directed Faber Merlin to buy land belonging to Bukit Maluri Sdn Bhd at the price of $86 million. Before that Mr Daim had bought this land from Syarikat Permodalan Kebangsaan (SPK) at a price of $16 million. This meant that YB Mr Daim and his friends made profits of not less than $70 million.
3. DAZA SDN BHD
Another loss to us was a result of YB Mr Daim's and his friends' negotiations with Straits Times Singapore for the purchase of 25 per cent of New Straits Times. He bought these shares not for Fleet but for himself and his friends, through his company called DAZA Sdn Bhd with a loan of $58 million from the Union Bank of Switzerland. After that YB Mr Daim directed Faber Merlin to buy the shares at the price of $136 million. Therefore YB Mr Daim and his friends made profits of $80 million. Unfortunately Faber Merlin could only afford to pay $34 million as deposit. As the price fixed by YB Mr Daim and his friends were too high and not reasonable Faber Merlin failed to get sufficient funds to pay the balance. As a result Faber Merlin was given 5 per cent of the shares and the balance of l20 per cent remained in Daza Sdn Bhd. it was obvious that the sale of only 5 per cent of the New Straits Times Press shares to Faber Merlin was not enough to repay the loan of $57 million from the Union Bank of Switzerland given to Daza Sdn Bhd. To overcome the problems of Daza Sdn Bhd and YB Mr Daim and his friends, Fleet Holdings was forced to buy Daza Sdn Bhd for $1 million. At first glance it was cheap, but in fact with the purchase Fleet Holdings was forced to bear the debts of Daza Sdn Bhd totalling $120 million.
4 UNITED ESTATES PROJECTS BHD
YB Mr Daim and his friends succeeded in selling the United Estates Project Berhad to Sime Darby. Before this company was taken over by Sime Darby YB with his friends directed Faber Merlin to buy Subang View Hotel at a price of $56 million and it ws paid by the exchange of $36 million Faber Merlin shares valued at $1.60 each. The cost of the construction of the Hotel was only $26 million. This meant Mr Daim and his friends made profits of not less than $30 million.
The income of Fleet Holdings were from the dividends of its subisidiaries. As all the subisidiaries, other than New Straits Times, suffered losses, their income was affected. Fleet Holdings failed to repay the loans taken from Malayan Banking, Overseas Union Bank and Bank Bumiputra. Daza Sdn Bhd also failed to pay the interest and principal loan from Union Bank of Switzerland (UBS). As a result, Overseas Union Bank and Malayan Banking Berhad are the institutions that actually control the shares of New Straits Times (M) Bhd and its subsidiaries including TV3 today.
What is the result of YB Mr Daim's and his friends' actions to the fate of the company owned by UMNO, that is, Fleet Holdings? It is estimated that Mr Daim and his friends made clean profits of more than $200 million from these manipulations and transactions. Unfortunately Fleet Holdings and Faber Merlin are facing heavy losses. There is no other way for Fleet Holdings to reduce its debts except to sell a portion of its NST shares. Now the shares of Fleet Holdings in NST is only 50.3 per cent from the 55 per cent it had before.
Recently, as YAB Datuk Seri announced, New Straits Times has been directed to buy shares of Malaysian Television Sistem Berhad which is held by Utusan, Fleet Group and Syed Kechik Holdings at a price of $77 million. Not enough with this purchase, New Straits Times has been directed to buy shares of Bank of Commerce and american Malayan Insurance owned by Fleet Holdings. To facilitate the puchase of the shares New Straits Times has borrowed from local banks. Throughout its existence New Straits Times has never borrowed. As a result of this borrowing and reduced profits for the last three years we are concerned that New Straits Times will face the same fate as Fleet Holdings.
Together with this letter I enclosed a list of debts of Fleet Holdings Group for your perusal.
It is obvious that the banks holding the shares of New Straits Times charged as security for the loans listed above, can immediately take over control of the New Straits Times Malaysia Berhad Group and UMNO will lose its hold on the above companies.
6. DAAN AND DANI
We should also like to state here that Daan and Dani (companies owned by YB Mr Daim) also own 2.5 million shares in TV3. Should this occur when TV3 is supposed to be owned by UMNO through Fleet Holdings and not by individuals?
By right YAB Dato Seri should take immediate and firm action before it becomes worse. Unfortunately you have tried to conceal this matter by saying it is "secret". Once more we repeat, if YAB Dato' Seri does not take immediate and firm action to rectify the matter, it is most likely Fleet Holdings Sdn Bhd and its subsidiaries will be owned by foreign powers. This is in conflict with UMNO's policies.
In all humility we request immediate, positive and meaningful action be taken so that the image of UMNO and the interest of the Malay race will not be made merchandise by certain personalities in UMNO.
Hajjah Marina Yusoff
Note: The $ figures in this letter refer to Malaysian dollars.