Son’s divorce settlement battle exposes unexplained wealth of ex-Sarawak ruler Abdul Taib Mahmud
Ex-wife of Sarawak godfather's elder son seeks US$120 million payout, drawing attention to unexplained fortune estimated at US$1 billion
Bloomberg in Singapore
Abdul Taib Mahmud, who ruled the Malaysian state of Sarawak for more than three decades, retired in February with a family fortune estimated in the US$1 billion range.
Now, some details of Taib's family wealth are surfacing in a divorce settlement battle between his elder son, Mahmud Abu Bekir Taib, and his ex-wife, who is seeking a separation payout of more than US$120 million.
Abdul Taib Mahmud became the country's longest-serving politician as he oversaw finance, planning and resources management in Malaysia's biggest state, source of about half the nation's crude oil output. He was given a "relatively free hand" to govern Sarawak on Borneo island because of his pivotal role in keeping Prime Minister Najib Razak's National Front coalition in power, said Andrew Aeria, an associate professor at Universiti Malaysia Sarawak.
"The former chief minister was very powerful and influential, not only in Sarawak but in national politics on account of his experience, knowledge and longevity in office," said Aeria, who wrote the 2004 report, "Political Business in Sarawak: Productive or Lumpen Capitalist?"
Yet details of the wealth accumulated by Taib and his family have been difficult to confirm. The legal tussle between his son and his ex-wife, Shahnaz Abdul Majid, has thus been closely followed. A forensic accounting of Mahmud Abu Bekir Taib's assets has been presented to the court by lawyers for Shahnaz. Mahmud is the deputy chairman of Kuala Lumpur-listed Cahya Mata Sarawak, the largest infrastructure group in Sarawak. He personally controls assets valued at about US$300 million, according to forensic accounting firm Ferrier Hodgson's Malaysian venture, which Shahnaz hired. He also has stakes in 49 companies, according to documents presented by the accounting firm in court.
The value of Mahmud's holdings could be "substantially" higher because 18 of those companies are exempted from filing their annual financial statements to regulators and couldn't be valued, Andrew Heng, a partner at Ferrier Hodgson's Malaysian office, told the court on January 22.
Heng was cross-examined by Mahmud's lawyer on April 14 and said his report was prepared without bias or external influence, The Star reported.
Shahnaz, who has an MBA in finance, told the sharia high court in Kuala Lumpur in September that she was deprived of sex for a decade and said Mahmud had wed an Australian and, later, a Russian without her knowledge during their 19-year marriage. Under Malaysian law, it's legal for Muslim men to marry as many as four wives.
According to Shahnaz, Mahmud may also have stakes in 85 companies abroad that haven't been valued, her lawyer, Rafie Mohd Shafie, told the court.
"The 85 foreign companies don't exist," Mahmud said in response to a journalist's query about the valuation of his assets, as he walked out of the courtroom on January 22, accompanied by a bodyguard. "I don't know anyone who has 85 companies. Do you know anyone who has 85 companies?"
Mahmud didn't respond to e-mailed questions about his family's wealth and the valuation of his assets listed in the divorce settlement court hearings.
Mahmud's father controls 42 per cent of Cahya Mata Sarawak through the family holding company, Majaharta, and under the names of his children and late wife, Lejla Taib, according to stock exchange filings.
The family became the biggest shareholder in the company, which started as a state-owned cement manufacturer, through a series of acquisitions in the 1990s, transforming it into a conglomerate with interests that included a brokerage and a road construction business, said Aeria's report.
Taib and his political allies won 25 seats in the general election in May last year, without which the coalition government would have lost its majority in Malaysia's national parliament. He stepped down as chief minister on February 28 and became Sarawak's governor, a largely ceremonial role, the following day.
The 77-year-old has never appeared on an international wealth ranking but presides over a family whose fortune exceeds US$1 billion, according to the Bloomberg Billionaires Index. He declined to comment on his net worth calculation and a request for an interview.
The Malaysian Anti-Corruption Commission said in a written reply in March to members of parliament that a corruption investigation of Taib was still ongoing. The former chief minister wasn't involved in decisions to award any project or land to his family members, according to findings made so far by the commission. Taib had denied corruption allegations and has never been charged.