YOU would be forgiven if you wondered whether the Mahathir
government is out to nail the associates of former finance minister
Daim Zainudin. Even the Malaysian media has been harbouring such
thoughts. And its urge to know got so strong that the burning
question was finally popped recently. Deputy Premier Abdullah Badawi
was asked: What should the market be told about what's going on?
Three top corporate honchos have lost hold of the business
empires they once proudly controlled: Halim Saad of the Renong-UEM
Group; Tajudin Ramli of Technology Resources Industries (TRI); and
Abdul Rahman Maidin of Malaysian Resources Corp Bhd (MRCB). The fact
is, this coincided with Mr Daim's exit as finance minister last
year. And all three bigwigs are seen to be allied or closely linked
Today, they are all heavily in debt. Their once lucrative empires
have become an embarrassment to Dr Mahathir and Umno, with the
post-Asian crisis years exposing wrenching overgearing, or
mismanagement, or both.
Of the three men, the one most in the spotlight now is Mr
Tajudin, who is also the former boss of MAS, the national airline.
In the latest turn of events, a police report has been lodged by the
new Malaysia Airlines management after it discovered alleged
misappropriation of funds under the previous team.
But deputy premier Abdullah denied that a witch hunt is on for Mr
Daim's associates. 'There is none,' he said. 'The message (to the
market) is that there is no witch hunt. The government certainly
does not want to do that.' And it's not as if 'because Tun Daim is
no longer the finance minister, so we'll go after his boys. That is
not (the case)', he added.
The New Straits Times, the main English-language newspaper,
splashed the story on its front page the next day, with the
headline: 'No witch hunt against Daim.'
But if Mr Abdullah is measured in his comments, Prime Minister
Mahathir Mohamad - true to form - pulled no punches about what is
going on. Speaking to Malaysian students in London, he put on notice
all those who have fallen foul of the law - even 'cronies of the
'We can't tolerate any deliberate misappropriation of funds or
mismanagement, be it by a crony or otherwise,' he said. 'Even though
the previous owner was probably a crony of the government, this does
not prevent us from taking actions against the people who have
It was not only Dr Mahathir's first public comment on the MAS
saga, but a blunt way of putting the current imbroglio in context.
Still, the wagging tongues refused to be tamed. And the Opposition
jumped into the fray. So, upon his return to Malaysia from London,
the premier moved to counter the raging speculation: 'I would like
to stress that the government is not going after anyone,' he told a
packed news conference.
In fact, the government's sweep is actually broader than
portrayed by the media. It's part of the overall restructuring of
the corporate landscape. According to business sources within Umno,
companies outside the Daim circle have also been shaken up,
including some controlled by Malaysian Chinese businessmen.
But the intervention in the Daim-linked companies has attracted
greater interest because of the stature of the people involved and
what that means for the country's 'social engineering' exercise.
The bottom line is that the troubles faced by the likes of Halim
Saad, Tajudin Ramli and Rahman Maidin - indeed, the exit of Mr Daim
himself - point also to a purging of seemingly flawed 'experiments'
in the ambitious programme to build a bumiputra entrepreneurial
class. The success, or otherwise, of such experiments reflects the
success or failure of the New Economic Policy (NEP) - the long-term
strategy of re-ordering society and changing the ethnic balance of
So what do the declining fortunes of the 'Daim boys' portend for
the government's social engineering mandate?
I put this question recently to someone who has played a part in
the drive to promote bumiputra entrepreneurship - Mustapa Mohamad -
when he was in Singapore. His remarks were illuminating. The
economic adviser to the government, and currently the executive
director of the National Economic Action Council (NEAC), did not
counter the suggestion of a top-level shake-up on the corporate
In fact, he talked about the need for a new bumiputra
entrepreneurial class, one with a completely new mindset - without
the old dependency mentality, of waiting for government largesse.
And he talked about the government's intent to develop a new layer
of younger corporate professionals to form the next generation of
bumiputra business high-fliers.
He said the government is prepared to do it 'all over again' if
it has to. And it will not shed a tear if the old icons of bumiputra
entrepreneurship have to go. 'One model of development cannot be
relevant at all times,' he said.
But what if, in the end, there are no more icons of bumiputra
business? 'Sure, there will be (new icons),' he said. 'It's a
process of rejuvenation. For business, this is normal. Some will
fall by the side. But there will be others to fill in their places,
probably in bigger numbers . . . We have to look at new models.'
Although still unclear for now, a new model is clearly in the works.
And the 'Remaking of Malaysia Inc' - as it is being dubbed - is
probably being fashioned by no less than the prime minister
The emerging model, as another government economic adviser, Nor
Mohamad Yakcop put it, must not be devoid of morality. Moral ethics
must act as the self-correcting mechanism in a restructured
corporate landscape, he said. An ethical framework breeds
self-discipline and, eventually, strong corporate governance.
'It is impossible for the government to regulate all things . . .
The police and legal system should, ideally, only serve as a
reminder that we live in an ordered and ethical society,' Mr Nor
Mohd told NST.
Fair enough. But the remaking of Malaysia Inc must also come with
much less politics. Social and political change in Malaysia has been
traumatic, to say the least, and inevitable, some may argue. But the
exercise has come at a cost - and that cost is too much of a loss of
the nation's already limited talent. The many people who have fallen
by the wayside do have skills and energy that the country badly
Sure, talent must not come at the expense of other overriding
needs, such as propriety, honesty and selflessness. But must change
necessarily come with bitterness borne out of fractious enmity?
Dr Mahathir began his long journey to create a 'new Malay' way
back in the 1960s. He was young then, and full of energy; today, he
is almost 80. Time is not on his side, if he wants to do it all over
Who can be as equipped to carry on the herculean task when he has
to quit the scene? Will the next man have the same drive, passion,
vision - and guile - to finish the interrupted agenda of rebuilding
Dr Mahathir's contribution to the country, sterling as it is,
will be more complete if he can, as a final act, come to terms with
the many casualties of change and find a way to somehow tap them
once again for the country's good. For a leader with a reputation
for thinking the unthinkable and doing the unexpected, such an act
of statesmanship is not beyond his capacity.
The writer is BT's regional analysis editor