The makings of a political patron

Of land grabs and money politics.

Former prime minister Muhyiddin Yassin on the GE15 campaign trail. Pic: Facebook

Editor's note: This story was published on May 27, 2020, on my old Substack blog. This was written during the early days of Muhyiddin Yassin's prime ministership.

It has been republished here as Muhyiddin is back in frontline politics after his Perikatan Nasional coalition won 73 federal seats at the 15th general election.

While things are still fluid, the most important update, for now, is that the Agong has requested leaders of respective political coalitions to submit a list of supporting MPs to him by 2pm, tomorrow.

Prime Minister Muhyiddin Yassin made his Cabinet debut as youth and sports minister in 1995.

After years of building rapport among the Umno grassroots and completing a nine-year stint as Johor menteri besar (1986-1995), this Muslim cleric’s son finally graduated from the jaguh kampung (local hero) image he had crafted since the early days of his political career and was ready to fulfil national ambitions.

But Muhyiddin’s foray at the federal stage that year was immediately marred by a land grab scandal he was accused of participating in during his time as menteri besar.

This was also one of the earliest glimpses into the nexus of business and politics that would help prop up Muhyiddin throughout his ministerial career.

The privileged few

In 1995, Stamford Holdings Sdn Bhd alleged that the Johor government illegally appropriated land owned by the aggrieved property company.

The company charged that Muhyiddin and two close associates, tycoon Syed Mokhtar Albukhary and Yahya Talib, conspired to arrange the acquisition out of “vengeance” after Stamford rejected the Muhyiddin group’s proposal to jointly develop its 2,670ha landbank.

Initially, in April that year, a Johor High Court judicial commissioner dismissed the suit, stating that the acquisition was lawful. But Stamford appealed against the decision on June 15.

The timing of the appeal could not have been any better. Muhyiddin’s inclusion in the suit provided a strong political dimension. He was already a month in as youth and sports minister, an aspirant for future national leadership, a vice-president in Umno, and a backer of then deputy prime minister Anwar Ibrahim, the heir apparent to then prime minister Dr Mahathir Mohamad.

“It was clear that Muhyiddin was a rising star in Umno at the time, but he operated under the shadow of Mahathir and Anwar until Anwar’s arrest (in 1998),” says Murray Hiebert, a former journalist with now defunct Far Eastern Economic Review (FEER).

Hiebert, who was then a Malaysia correspondent for FEER, wrote about the entire legal drama but as part of a larger story titled “Malaysia — the privileged few” that touched on the web of patronage and privilege between certain influential politicians and private business groups. Muhyiddin was part of that “privileged” cohort.

Around the time I wrote the article, there was a lot of focus in the Malaysian courts and newspapers on political patronage and land-grabbing problems. Trials at the time detailed how influential politicians were using government policies to enrich themselves. The Stamford land grab was an example of that trend.

According to court filings, Stamford said that the tussle over its land originated from the company’s efforts to convert about 3,398ha of plantation estate near Johor Bahru to commercial property for development.

Stamford was then 90% owned by three families: the Gan and Wang families from Malaysia and the Seet family from Singapore.

In 1984, Stamford applied to the Johor government for permission to develop 723ha out of the 3,398ha but the company, in its suit, claimed that nothing happened until 1998. Then, Stamford directors met Syed Mokhtar and Yahya as they claimed they were Muhyiddin’s “close friends and business associates.”

Stamford’s court submission detailed that in 1989, the company agreed to partner with Syed Mokhtar and Yahya. Both men were “acting for themselves and [Muhyiddin],” to form a joint-venture to develop 309ha of Stamford’s land. The Muhyiddin group, led by Syed Mokhtar, invested RM1.8 mil in the joint venture and taking a 30% stake in the JV.

The JV then acquired the property from Stamford and submitted a fresh application to convert the land to industrial use.

Stamford, in its suit, said the conversion was “speedily approved” by Muhyiddin. The company also alleged that the Muhyiddin group made a killing from this investment where their initial RM1.8 mil investment “made a clean profit of RM83.2 mil.”

Then, in 1992, Stamford said the Muhyiddin group approached its directors and proposed for the development of the remaining 2,638ha. Stamford charged that Muhyiddin and his men insisted on taking up a 70% equity stake in a new JV and proposed that the land be sold to the venture at “RM30,000 per acre.”

Stamford rebuffed the offer, insisted it wanted to hold 70% of the venture and demanded that it be paid more than twice that price for the land. The company went on to claim that it had begun planning to develop the land on its own after falling out with Muhyiddin’s group.

‘Not a single shred of truth’

This tension, according to Stamford, provoked Muhyiddin, Syed Mokhtar and Yahya to conspire and push the Johor government to acquire Stamford’s property through the Land Acquisition Act 1960.

Stamford said it reached this conclusion after claiming to be warned that the land-acquisition papers were on Muhyiddin’s desk and could be “signed at any time.” Muhyiddin himself, according to Stamford’s court filings, threatened Stamford in Dec 1992 by telling one of the company’s directors that “time is getting short.”

In July 1994, the state government acquired the land on behalf of the Johor Islamic Economic Development Corp.

Muhyiddin denied Stamford’s claims. “There is not a single shred of truth in any of the allegations against me,” the state and the development agency on whose behalf the state government appropriated the land, he said in a statement then.

Stamford went on to appeal the decision after its suit was struck out. But it was only two years later, in 1997, where the Court of Appeal ordered that the proceedings in the civil suit proceed pending an appeal by Muhyiddin and his men.

And in 1999, the High Court recorded a consent order between the Johor government and four others including Muhyiddin and Stamford Holdings Sdn Bhd requiring RM405 mil in compensation to be paid to Stamford over the land deal.

In return, the Johor government would alienate the land to Syed Mokhtar’s Kelana Ventures Sdn Bhd. Stamford was ordered to hand over the land title as well as compensate workers affected by the return of the land to Kelana Ventures.

‘Business as usual’

Land grabbing and money politics back then were “pretty much business as usual” for Malaysia, Hiebert adds.

That was the political culture at that time in general. I wouldn’t say that it tells us much about Muhyiddin himself at the time.

But such was the environment that Muhyiddin operated in during the first stint of Mahathir Mohamad as prime minister (1981-2003) where money politics and weak governance were the hallmarks of his government then.

Aside from Muhyiddin, Hiebert’s article documented cases involving the likes of former international trade and industry (MITI) minister Rafidah Aziz and former Melaka chief minister Rahim Thamby Chik, all of which happened the very same year the Stamford scandal exploded.

At the trial of a former MITI official in 1995, defence lawyers charged that Rafidah had violated conflict-of-interest guidelines when a committee in her ministry set aside 1.5 million shares in then listed company Leader Universal Holdings Bhd to her son-in-law Fazrin Azwar Mohd Nor. She denied such allegations.

Rahim, on the other hand, stood trial that year following allegations of “unexplained wealth”. This was after he had been investigated for purportedly having an affair with an underaged girl in Oct 1994.

That statutory rape scandal forced Rahim to resign as chief minister pending the outcome of the court case which would turn out to be in his favour as then attorney-general Mohtar Abdullah threw out the charge on grounds that there was insufficient evidence to prosecute Rahim.

Under the radar

“Muhyiddin had always had a hand in business even when he was Johor menteri besar,” says James Chin, director of the Asia Institute, University of Tasmania. “But as far as I know, he has always been quite careful. He has always put his business relations second to that of the Johor royal palace. So he has been quite careful in that respect.”

Since the Stamford Holdings scandal, Muhyiddin has gone down the well-trodden path of his Umno peers, to further entrench himself in the nexus of business and politics. Muhyiddin’s status as a patron or strongman came to the fore when he left Umno to join Mahathir’s Bersatu in 2016.

A report by news publication Malaysiakini in 2017 details the concerns of his constituents who depended on Muhyiddin for business and contracts. Supporting him when he was with the opposition proved to be a costly affair.

Chin observes that Muhyiddin’s priority now as prime minister is to hold the government together. “He has already amassed enough wealth for himself,” he says.

Muhyiddin has reached the pinnacle of his career as prime minister. At this level, the wealth-making aspect is secondary to staying in government at least until the next general election.

To achieve that, Muhyiddin has resorted to the very structure that helped him climb the ranks and survive some of the challenging moments in his career —  he has turned on the patronage tap full swing.

To this end, he has been doling out plum jobs in government-linked corporations (GLCs) to MPs as well as key politicians in Perikatan Nasional (PN), a loose coalition consisting Bersatu, Umno, PAS and Gabungan Parti Sarawak.

Some of Muhyiddin’s Bersatu colleagues also watch over key ministries such as rural development, an important tool in money politics.

The business community, especially the non-bumiputera tycoons, have already made inroads.

“They are expected to approach him the way they approached the old Umno government. That everything is negotiable. My opinion is that the tycoons see the present government as Barisan Nasional 2.0,” says Chin.

But whether the so-called benefits from old patronage structures would trickle down to the average Malaysian today remains to be seen. For now, it has helped keep in power and reward Muhyiddin and his allies.

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