Tengku Razaleigh : Mahathir Squandered From Petronas RM 529 Billion Since 1970s – Bailed Out Mirzan & Mokhzani

The Coverage : The founding chairman of Petronas and its first CEO, Tengku Razaleigh Hamzah said that the federal government in Putrajaya under Mahathir has been treating the oil and gas corporation as a cash cow, especially in bailing out government-linked companies in financial trouble.

Petronas provided the money to build some of former Prime Minister Mahathir Mohamed’s most grandiose projects, including the KL Twin Towers, the Putra Jaya administrative capital and to bring Formula One racing in Malaysia.

Petronas was used to get Malaysia out of an RM31.5 billion forex scandal perpetrated by Mahathir in the early 1990s in which the financier George Soros outfoxed Bank Negara, making billions and earning Mahathir’s eternal antagonism. It paid off US$800 million in losses from Mahathir’s ill-fated Perwaja Steel project.

In 1998, it bailed out Mahathir’s eldest son Mirzan, purchasing his Konsortium Perkapalan for RM226 million and assuming debts of more than RM324 million. It also awarded in 2012 a RM700 contract to a firm in which Mahathir’s other son Mokhzani was a vice president.

Tengku Razaleigh, or Ku Li, said that since its inception in 1974, Petronas has paid out RM529 billion to the government in the form of dividends, taxes, petroleum revenue and export duties.

He also said the government’s reliance on Petronas to rescue financially floundering government-linked companies (GLCs) had been going on since 1985. Ku Li was the Minister of Finance from 1974 to 1984. In 1985, Petronas bailed out Bank Bumiputra with a Rm2.5 billion infusion. In 1991, Petronas shored up the banks’ finances again when it pumped in an additional RM1 billion.

In 1997, he said Petronas had to rescue the troubled Konsortium Perkapalan Berhad for RM2 billion. He added that Petronas was made to underwrite the construction of the KLCC Twin Towers for RM6 billion and the construction of Putrajaya for a further RM22 billion.

“This amount could have been used more productively to fund a national pension programme for Malaysians, as has been done by a certain Scandinavian country,” he said in his speech at the launch of the book “Rich Malaysia, Poor Malaysians” at the Sultan Sulaiman Club in Kuala Lumpur last night.

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