The corporate regulator is investigating the failure of the family of Malaysian tycoon Taib Mahmud to comply with Australia’s disclosure laws, but has stopped short of pursuing corruption allegations.
As revealed in Fairfax Media in September, the billionaire politician is under investigation for corruption in Malaysia and faces allegations his family companies have laundered millions of dollars through the Australian real estate market.
The allegations against the family of Sarawak governor Taib Mahmud are contained in a report by anti-corruption campaigners in Switzerland, concerned with logging of rainforests in Borneo and displacement of its indigenous people.
Under Taib’s governorship, almost 90 per cent of Sarawak’s native rainforests have been logged. Despite his modest income as a politician, the family of Taib Mahmud have interests in more than 400 companies in 25 countries.
In its report, The Adelaide Hilton Case – how a Malaysian politician’s family laundered $30 million in South Australia, the Bruno Manser Fund, a Swiss non-government organisation, exposed the corporate connections of the Taib family in Australia.
The report questions how the Taib family could afford to finance the purchase of a major hotel. It also questions a key loan in the deal, which totalled some $30 million in the early 1990s.
Taib’s daughter, reputed to be the richest woman in Canada, and her husband became shareholders of an Australian company, Sitehost, after the family bought shares worth $9.5 million in 1993.
In the following year, Sitehost acquired Adelaide’s $50 million Hilton Hotel but it failed to lodge financial statements for the eight years to 2006. Its most recent set of accounts, moreover, is for the year 2011.
In its response to petitions for an investigation from Bruno Manser, the Australian Securities & Investments Commission (ASIC) said it had appointed a “specialist team” to investigate the failure of the Taib family to lodge accounts in accordance with the Corporations Act. It would consider, said the letter, whether the company’s conduct warranted “enforcement action”.
Otherwise, ASIC suggested the Swiss NGO contact the Australian Federal Police for any further action because pursuing corruption was not part of its purview.
Bruno Manser also approached Australian politicians to call for action to investigate the Taib family. It received replies from the Foreign Ministry and the government of South Australia, both of which said they would not do anything apart from referring the matter to the AFP.
The Taib saga has been a sensitive issue in South Australia, not only because of the murky corporate circumstances surrounding the Hilton Hotel but because Taib Mahmud was a Colombo Plan graduate of Adelaide University and a large benefactor.
Mark Parnell, of the South Australian Greens, has obtained documents from Adelaide University through a Freedom of Information request (FOI) that confirms the university received at least $400,000 in donations from Taib while he was chief minister of Sarawak. In 2002, Adelaide University sought to raise $1 million to $4 million from Taib but apparently did not succeed.
The FOI documents, obtained by Fairfax Media, show the university seems to be withholding the most-sensitive documents requested, including information about a planned trip by then chancellor Robert Champion de Crespigny and QC Michael Abbott to Kuching to negotiate with Taib Mahmud over a proposed donation of $1 million to $4 million.
Another document, dated July 28, 2002, mentions that Harry Medlin, emeritus senior deputy chancellor, hand delivered a letter by chancellor de Crespigny to Taib Mahmud in Kuching on July 14, 2002, that contained a fundraising proposal by the university to Taib Mahmud. Bruno Manser has asked why the university FOI officers did not list this letter in the document annex to the FOI request.
There are several other unresolved issues surrounding the report from the Swiss NGO. When the Taib family-controlled company Sitehost acquired the Hilton Hotel, it took an unsecured loan of $20.75 million “from a non-bank lender whose identity remained undisclosed for over 10 years”.
An Australian director of Sitehost told Fairfax Media in September he was not aware of the ultimate source of Sitehost’s funding. Sitehost revealed in 2007 that the lender was Victorian company Golborne Pty Ltd. The report tracks how that loan was then transferred to another company, Fordland, located in Queensland.
The last available financial accounts for Sitehost from 2011 show its main liability was a loan of $18.5 million to Fordland.
The accounts describe a company with 361 employees, revenue of $1.3 million and assets of $52 million (primarily the Hilton).
According to the report, there is strong circumstantial evidence, including a shadow structure on the Isle of Man, that Golborne Australia and Fordland Australia represented the same beneficial owners: the Taib family.