Politics & Business. A Study of Multi-purpose Holdings Berhad

256 Pages·1985·33.058 MB·English

by  Bruce Gale

A STUDY OF
MULTI-PURPOSE
HOLDINGS BERHAD
:and GALE
iI
Eastern Universities Press (M) Son Bhd
To Carolyn with love
A girl in 6,547,300
(Malaysian Census, 1980)
First published 1985
Copyright © Bruce Gale
All rights resewed. No part of this publication may be reproduced or transmitted in
any form or by any means, electronic or mechanical, including photocopy, recording,
or and information storage and retrieval system, Without permission in writing from
the publisher.
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ISBN 967-908-057-9 (boards)
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Contents
Preface vii
Glossary of M o r Personalities ix
Abbreviations xi _
Introduction I
1 KOPERATIF SERBAGUNA MALAYSIA 15
The MCA in the 1960's 15
Proposal to Form an Economic Organisation 19
The Establishment of KSM 21
Early Projects 23
The Appointment of Tan Koon Swan 27
Continued Growth 32
2 THE ESTABLISHMENT OF
MULTI-PURPOSE HOLDINGS 40
_
Political Developments 1969-1974 4/
Economic Reassessment 46
An MCA-backed Company 52
Campaigning for Chinese Support 57
Restrained Opposition 64
3 CORPORATE EXPANSION 70
Early Moves 74
Acquiring Bandar Raya and Magnum 74
Controversy with the Kuala Lumpur Stock
Exchange 78
C- Takeover of Plantation Holdings 8/
d. The Birth of Malaysian Plantations Ber fad 88
Further Developments 90
a. Rights Issue 90
b. Expansion in Properties 9/
c. Magnum's New Outlook 94
d. Consolidation 96
vi/Contents
4 RELATIONS WITH THE CHINESE
COMMUNITY 103
Early Difficulties /05
a. Southern Banking 105
b. The Selangor Chinese Chamber of
Commerce Elections I06°
New Bases of Support HE
a. The Corporatisation Movement H6
b. Kojadi I2.5
C. The Political Rise of Tan Koon Swan /28
5 MULTI-PURPOSE AND UMNO 137
The UMBC Controversy 141
Another Increase in MPHB's Equity Base I'53
Guthrie Ber fad /57
The Dunlop Dea] /62
Conclusion 172
6 HNVSOI-IPATTQN 178
Building a Sogoshosha /81
Rationalisation /90
a. Properties /92
b. Plantations 196
c. Finance /97
d. Conclusion /99
The Kepong Project 200
New Controversies 208
a. The Koch Lanas Deal 204
b. The Kean Slew Controversy 207
MPHB and the New Economic Policy 209
Appendiccts 220
Index 235
Preface
This study is based on preliminary research undertaken as part of the
requirements for a PhD thesis to be submitted to the Universiti
Kebangsaan Malaysia (Malaysian National University). The thesis
itself, which will examine various aspects of Malaysian political
economy, is still in preparation. It will be published in due course.
This book focuses on the activities of Multi-Purpose Holdings on the
Malaysian corporate chessboard and the significance of the com-
pany's actions, in. to the MCA and the other partners in the
National Front government. It is hoped that the observations
recorded here will be of value not only to academics, but also to
businessmen, corporate plannersand other professionals.
Several people have contributed in various ways to this study. A
special word of thanks must go to Tan Koon Swan, the managing
director (operations) of the Multi-Purpose Group, who took time off
from his busy schedule in 1983 and early 1984 to allow me to
conduct several interviews. Datuk Chu Ching Hwa MPHB managing
director (administration), and Kee Yong Wee, executive director of
Bandar Raya Developments Ber fad, also agreed to be interviewed.
Tan Ken Sin of the Multi-Purpose Group Public Relations Depart-
ment provided invaluable background information during frequent
discussions, as did Thain Ah Mole, Mr Tan's personal assistant. I
would also like to thank Poa Soon Teong, the executive secretary of
the Chinese Assembly Hall in Kuala Lumpur for his assistance.
All of the officials in Multi-Purpose with whom I spoke answered
my questions frankly and patiently. They may not agree with all of
the judgements presented in this book, but I trust they will not
regard my descriptions or conclusions as misrepresentations.
A number of academics assisted me by reading various sections of
the manuscript and offering constructive criticism. As with my two
previous books, I owe a special debt to Professor Khoo Kay Kim of
the I-Iistoly Department, University of Malaya, for his comments
and general encouragement. In addition, I would like to acknow-
ledge the help I received from Lee Kam Hint, also of the History
Department of the University of Malaya. His specialised knowledge
ofMCA politics helped me avoid making several errors. Others who
read parts of the manuscript include Raymond and Susan Lee from
the same university.
viii/Prefa be
My PhD supervisors at the Universiti Kebangsaan, Dr Zacharia bin
Hali Ahmad and Dr Harold Crouch, also provided valuable
guidance. I look forward to their continuing assistance as the
material published in this book is reworked and extended to fulfill
the requirements of the PhD programme.
Finally, I would like to express my sincere appreciation to my
friend Lee Kai Hoe who translated a seemingly endless stream of
Chinese newspaper cuttings that were presented to him. Without his
help this study would have been unable to explore Chinese reactions
to Multi-Purpose Holdings in as much detail. For the convenience of
English educated readers, however, I have avoided referring to
Chinese newspapers in the footnotes whenever substantially the
same material can be found in the English language press.
A few comments also need to be made about titles. The 'Yang di-
Pertuan Agong' is the title of the Supreme Ruler, or Malaysian King,
'Tengku' or 'Tunku' are hereditary titles denoting links with the royal
families of West Malaysia, 'Tun' and 'Tan Sri' are conferred titles
awarded by the Yang di-Pertuan Agong, 'Datuk' is also a conferred
tide, being awarded by the 'Sultaris' (Rulers) of the states.
In the case of the personalities mentioned in this book I have
chosen to give their full names and titles on the first occasion and
later resorted to a shortened version. For example, Datuk Choo
Ching Hwa is later referred to simply as Datuk Chu or Chop Ching
Hwa. The only exception to this rule is in places where this system
would result in ambiguity. For this reason Datuk Lee San Choom and
Datuk Lee Kim Sai are referred to in several places in the book by
their full names. Difficulties also occur when one tries to take
account of personages who have received their titles halfway through
the narrative. In order to avoid confusing the reader 1 have avoided
this problem by using current titles throughout. For those unfami-
liar with Malaysian names, a brief glossary of the main personalities
mentioned has been included.
As is usual in such matters, I accept full responsibility for the
judgements and statements of fact presented in this book.
Bruce Gale
Kuala Lumpur
April 1984
Glossary of Major Personalities
Anwar Ibrahim bin Hajj Kamaruddin
Former president of the Angkatan Belia Islam Malaysia Malaysian
Muslim Youth Movement). Became UMNO Youth leader in Sep~
tember 1981 and was later appointed Minister for Culture, Youth
and Sports.
Chao Ching Hwa, Datum
Honorary secretary of KSM since its establishment. Became chair-
man of Magnum in 1982. Currently an MCA Central Committee
member and managing director (Administration) of MPHB.
Ghafar Baba
An UMNO vice-president and prominent businessman. He is the
chief executive of Goodyield Plaza.
Hussein One, Datum
Became Prime Minister in 1976 after the death of Tun Razak. He
retired in 1981.
Ibrahim Mohamed, Tan Sri
Executive chairman of the Pemodalan Bersatu Ber fad (PBB). Chief
executive of Pro ret.
Kee Yong Wee, Senator
Chiefexecurive of Bandar Raya Developments Ber fad. His personal
invcs unsents are concentrated in Malaysian Resources Sendirian
Ber fad. A close associate of Tan Keen Swan.
Khoo Kay Pens, Datuk
Chairman oT- -Mafayan United Industries (MUI). Chairman of
Magnum umiljune T982. A dose associate of Tan Keen Swan.
r
Lee Kim Sai, Datuk
Head ofMCAYouLh until the MCA crisis of In/larch 1984. 'ReinstatedL'
at the controversial MCA General Assembly in May. A close
associate of Tan Keen Swan.
x/Glossazy
Lee Loy Send, Tan Sri Datum
Executive chairman of KL Kepong. Chairman of1\/IPHB until 1983.
Lee San Choom, Datum
Honorary president of KSM since its establishment. MCA president
from 1974 to 1983. Currently executive chairman ofMulti-Purpose
Holdings Ber fad.
Lee Yan Lian, Tan Sri
Prominent businessman and philanthropist. Former president of
Selangor Chinese Chambers of Comnlerce (SCCC) and the Associa-
ted Chinese Chambers of Commerce and Industry (ACCCIM).
Neo Yee Pan, Datuk (Dr)
Former university lecturer. Succeeded Datuk Lee San Chook as
acting MCA president in 1983.
Oon Send Lee, Datuk
Currently chairman of KSM, founding member of KSM and Multi-
Purpose Group chairman.
Rayleigh bin Hamzah, Tengku
Former chairman of PERNAS and the Bank Bumiputra. Became
Minister of Finance from 1976-84. Currently Minister of Trade and
Industry.
Suhaimi bin I-Iaji Kamaruddin, Datuk
UMNO You Lf leader until September 1981.
Tan Koon Swan
Managing director [Operations] of MPHB since 1977. Became MP
for Reub in 1978 and Federal Territory Liaison Conlmiu;ee chairman
in 1979. Won the Darnansara constituency for the MCA in 1982.
Became chairman of MPHB for a brief period after Tan Sri Lee Loy
Send resigned. Vice-president of the MCA until his expulsion from
:he party in March 1984. 'Reinstated' an the controversial MCA
General Assembly in May. His personal investments are concentrat-
ed in Supreme Corporation.
Abbreviations/xi
Tan Slew Sin, Tun
MCA president until 1974. Chairman of Sirne Darby.
Abbreviations
ACCCIM Associated Chinese Chamber of Commerce
and Industry
CIC Capital Issues Committee
DAP Dernocradc Action Party
DEB Dunlop Estates Ber fad
FIC Foreign Investment Committee
GMHB Guthrie Malaysia Holdings Ber fad
HIL Hutchinson International Limited
ICA Industrial Co-ordination Act
IHD International Housing Development Limited
KLSE Kuala Lumpur Stock Exchange
KOJADI Koperasijaya Diri l
KSM Koperatif Serbaguna Malaysia
MCA Malaysian Chinese Association
MIC Malaysian Indian Congress
MPB Malaysian Plantations Ber fad
MPHB Multi-Purpose Holdings Ber fad
MUD Malaysian United Industries
NEP New Economic Policy
PBB Pernodalan Betsatu Ber fad
PHL Plantation Holdings Limited
PNB Pemodalan Nasional Ber fad
SCCC Selangor Chinese Chamber of Commerce
UDA Urban Development Authority
UMBC United Malayan Banking Corporation
UMNO United Malays National Organisation