By Sarawak Report
Petition to the High Court by Datuk Ting against Tufail Mahmud and Noda Corporation of Japan
According to further allegations in the current court case between Dato Ting Check Sii and Tufail Mahmud in Sibu, Japaneseinvestors in the Noda Corporation,a major public companywhich is quoted on the Tokyo Stock Exchange, have been cheated out of millions of ringgitby members of theChiefMinistersfamily.
Thishighly serious claim forms part of a string ofaccusationslodgedby one of Sarawaks mostrespected businessmen, Dato Ting Check Sii,against the Chief Ministers brother Tufail Mahmud,sister Hanifa Taib,niece Anita Tufailand nephewMohammad Tufail.
[See previous article]
Dato Ting is themanbehind the SanyanTower, Sarawaks tallest building in Sibu and the multi-million dollarSanyan Group of companies.His allegations also implicatethe Japanese Directors ofa Sarawak subsidiary of theNoda Corporation, the Ishinomaki Plywood Manufacturing Company, whom hesaysknew about the fraudbut failed to prevent it.
In his evidence, originally submitted in 2008, Dato Ting states:
Your Petitioner [Ting] has just discovered that Datuk Tufail has made secret profits at the expense of the Company through Hamidah Trading, a company owned and controlled by Datuk Tufail
The Company referred to is Sanyan Wood Industries, which was a joint venture between Noda and the Sanyan Group. Tinggoes on to accuse Tufail and the Japanese Directors of the joint venture of being in breach of their fiduciary duties by thusunlawfully and unjustly enriching Datuk Tufail.
Damaging evidence

Dato Ting, who was a close business partner of Tufail Mahmud for 25 years and wasa BN member of the State Assembly,used to beregarded asan ultimate insiderwithin the Taib family circle until he fell out with them in 2003. For this reason his testimony is regarded as being particularly dangerous to the Taibs.
Theinformation from this casecould therefore have far reaching consequences fortheruling family, who are already facing a series of embarrassing disclosures about theirextraordinary wealth and lack of socialpropriety.It is doutless for this reason thatTufailhas both astonished and amused onlookers by bringing groups of black magicbomohs into the court proceedings to chant and prayon hisbehalf.This may not be enough when it comes to the impact of the case onpublic opinion.
But even more serious are the potential consequences in Japan. For while the elderly Chief Minister will strive toprevent anyjudgementagainst his brother, whatever the strength of the evidence,for as long has heremains in power, matters will be handled very differently in Tokyo.


In Japan corporate corruptionis treated with utmost severity and theauthorities thereare likely to scrutinise the available evidence very closely with a view to taking appropriate action againstany entities within their jurisdiction. Previously, in 2007, the Taibfamily faced similar problems duringthe timber kick-back scandal, whena separate group ofJapanese business associates fell foul of Tokyos tax authorities after it was discovered that millions! were bei ng paid by ashipping cartel to a company in Hong Kong associated with Onn Mahmud,another of the Chief Ministers brothers.
The result was a severe fine for the Japanese shippingcompanies and one of Taibs most damaging political embarrassments an episodewhich haunts him to this day. While Taib can protect his familys companies from prosecution in Sarawak, in Tokyo he is powerless.
Hamidah Trading a company set up to perpetrate a fraud?
The substance of the accusation concerns the company Hamidah Trading. Hamidah Trading was set up by Tufail Mahmud in April 2003 with his own daughter Anita Hamidah Tufailand the Chief Ministersdaughter Hanifah Taib as fellow shareholdersat aboutthe timeTufailsucceeded inoustingTingas Managing Director ofUS$ 400 millionSanyan Group.

In order to also remove Ting from thesubsidiaryjoint venture with Noda Corporation (whichis 49% owned by the Noda Corporation and 51% controlled by Ting and Tufail as part of the Sanyan Group) Tufail allegedly put pressureon the three Japanese Directors on the Board, who were the representatives of theNoda Corporation subsidiary Ishinomaki Plywood Manufacturing Company Ltd.In his testimony, which is denied by the defendants, he says that the Japanese Directorsvisited him in July 2003 andexplainedthat Tufail wantedto replace him asManaging Director and that they would have to comply:
I was informed by the Japanese Shareholders that they intended to support Datuk Tufail to protect their foreign investment in Sarawak as Datuk Tufail is an influential man in Sarawak.
Indeed throughout his evidence Tingmakes clearthat Tufail has habituallyexploited his position as the brother of the Chief Minister in order to extract money and favours from his business partners and this case! is just one example. His ability to exploit his position in this wayhas relied on the

fact thateveryone knowsthat the Chief Ministerabuses his power and authority to favour his familyand will remove licences andpermits from anyone who does not comply with their demands.
Fraud?
Ting states that once he was removed from managing the joint venturecompanys affairs the Tufails organised a deal withHamidah Trading in order to be able to cream profits straight into their own pockets.
The purpose of Hamidah Trading is officially expressed as being for the provision of log handling services and the sales of books. Ting says thatonce in control of the joint ventureTufail hadorderedthat Sanyan Wood Industriesshould in future onlybuyits wood supplies through Hamidah Trading. This despite the fact that Hamidahwas not only owned but also directed by himself, his owndaughter and his niece, the Chief Ministers daughter.
Purchasing woodis a job thatprofessionals at Sanyan Wood Industries had previously manageddirectly and it is interesting to considerhow it can be argued that college graduateAnita Tufail, socialite Hanifah Taib and indeed Tufail himself(who had not held an executiverole inthe SanyanGroupuntil this point) could do a better job!

There is also the obvious question as to how agroup ofDir! ectors o f Sanyan Wood Industries could justifysettingup anew company in order to pay themselves to perform a task they hadalready beencarrying out in their existing capacities?

The Defendents in the case have argued thatHamidah Trading was doing a legitimate job for Sanyan Wood Industries, howeverTing alleges that,to the contrary,the only point of Hamidah Trading was to offer Tufail and his family a chance to divert the profitsofSanyan Wood Industries into their own pockets when they should have been paid as dividends toits shareholders in Japan and elsewhere. If this is the case the Tufails haveused their positions as Directors of thejoint venture to defraud shareholders, which is a serious offence.
In support of his claims Ting showsthat in 2007 he managed to have the companys accounts inspected by anapproved auditor who:
reported that a huge amount of the Companys profits had been diverted by Tufail to Hamidah Trading Sdn. Bhd.,a company fully controlled by himself and owned by himself and his family members. One of the shareholders includes the daughter of the Chief Minister of Sarawak.
Ting provides figures listing the revenue of Hamidah Trading for 2003, 2004, 2005 and 2006 showing anincome of overRM43 million and RM86 million for the first two years, before sharply diminishing. The figures show that the Directors paid themselves handsome renumerations and dividends amounting to RM 4. Heclaims:
I am advised by my solicitors and verily believe, that Hamidah Trading is a related intermediary company incorporated by Tufail to recieve profits from the Company [Sanyan Wood Industries].

In response to these allegations the Japanese Directors and Tufail alldeny that Hamidah Trading has made fraudulent profits from the company. Theyinsist that the margin between the declared purchase price of the logs and the sale price on to Sanyan Wood isrelatively small and, given the connections of the defendents, it is perhaps no surprise thatthecourthas so far found in theirfavour.
However, Ting has appealed against that judgement and whatever the outcome,onlookers willcontinue to be baffledby the need for Hamidah Trading, whose only activities have beenregistered asthe log handling services performed for Sanyan Wood Industries and the purchase of books for another related party Wisma Printing Sdn. Bhd.
Money motive
Ting says that his removal from the company that he built up was drivenpurelyby greed and an abuse of power on the part of Tufail Mahmud. However, these issues will not be part of any investigation by the Tokyo authorities, who will be looking only at whether Japanese shareholders have been deprived of their rightful dividends because company profits have been milked byunscrupulousDirectors.
It will not help the mood of those shareholders that from 2005 through to 2008 Noda Corporation announced a series of profit shortfalls and extraordinary losses. At the end of 2008 the company lowered its divendend forecast from JPY3.00 per share to JPY0.00 per share! Investigators may be wondering to what extent those losses were the result of the transfer of company profits into the bank accounts of Tufail Mahmud, his daughter and niece (the daughter of Sarawaks Chief Minister)?
Filed under: corruption, Human rights Tagged: Anak Sarawak Bangsa Malaysia, corruption, Sarawak politics, Save Sarawak, Taib Mahmud
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