Friday, August 12, 2011

Bank Bumi Mystery Figure Dies

The late Lorrain Esme Osman (center)

The man at the center of what was then the world’s biggest bank failure and Asia’s biggest corporate failure takes his secrets to the grave

Was Lorrain Esme Osman the man who ordered the death of Bank Bumiputra auditor Jalil Ibrahim in Hong Kong in 1983? The death on Aug. 8 of Osman, the onetime chairman of Bumiputra Malaysia Finance, makes it ever less likely that the identity of the culprit will be revealed.

But Osman always ranked high on the list of suspects of those behind a murder that sparked the collapse of the Carrian Group, a Hong Kong corporate edifice created by Malaysians but built on bogus accounting, corruption and sheer bravado and which ensnared numerous greedy or gullible international bankers, auditors and lawyers. Carrian was the biggest Asian corporate collapse of that era, seriously blackening the reputations not just of Malaysian companies but the Hong Kong and Shanghai Bank – through its investment banking subsidiary Wardley -- and the accounting firm then known as Price Waterhouse, which not only audited Carrian’s dubious accounts, but whose then-senior partner John Marshall was appointed managing director of the major Carrian companies for 18 months before they collapsed.

The Carrian disaster also resulted in the near collapse of BMF’s parent, Bank Bumi, which required nearly US$1 billion in recapitalization by the Malaysian government. It was the biggest bank failure in the world at the time. It is unique for another reason. Despite considerable suspicion of fraud and corrupt payments to officials, the Malaysian government, then headed by Prime Minister Mahathir Mohamad, declined to attempt to prosecute any of the bank’s officers or government officials. It was the first major milestone in a culture of impunity that has handicapped Malaysia’s ruling Barisan Nasional ever since.

Lorrain Osman already has a place in history but for a different if related reason. He spent a record seven years on remand in London’s Brixton prison fighting extradition to Hong Kong to face various charges related to BMF and its relationship with Carrian. That he managed to fight for so long against extradition to what was then a British colony with an almost identical judicial system was thanks to apparently limitless access to funds for legal plus friends in high places in Kuala Lumpur and London. Although he was eventually extradited to Hong Kong he only served a few months in jail there because of his period on remand and he left Hong Kong owing a million pounds sterling to the government in legal fees.

For most Malaysians, and in particular Jalil’s widow, the issue was who and what caused him to be murdered. A small-time Malaysian businessman named Mak Foon Than was convicted of the actual murder, which took place at the ultra smart Regent Hotel (now the Intercontinental) on the Kowloon waterfront. Although Mak denied the murder but only confessed to helping dump Jalil’s body in a banana grove, he was convicted. (Mak claimed that a Korean hit man had done the deed but no such person was traced). Mak served his sentence and is now a free man living, apparently prosperously, in Penang. He has always kept his silence – doubtless wisely.

He had no obvious motive for being involved other than as one who performed errands for more important Malaysians. So which important Malaysian was desperate to see Jalil dead? Or was Jalil killed by mistake, the cord around his neck being intended to frighten, not kill?

Osman, who was staying in Hong Kong at the time, was an obvious suspect. Jalil, sent from KL to find out more about what was going on at BMF, was obstructing a big new loan by BMF to parties related to the Carrian group needed in a last-ditch effort to prevent it from going under. Osman was BMF chairman but Jalil insisted on approval from KL. Another was the founder and head of the group, George Tan, also a Malaysian, who was even more desperate for the life-saving cash but had no evident connection to Mak. More distant suspects included the bankers, lawyers and accountants who had taken Carrian kickbacks or made unprofessional judgments for money. One lawyer, a senior partner in Hong Kong’s largest law firm was found dead in his swimming pool with a concrete manhole cover around his neck. This was deemed suicide.Read more.

1 comment:

SM said...

Bro HL,

Another cover up that has gone away without the guilty parties having to pay for their crimes.
Unfortunatley, one in a loooooong list of cover-ups in Malaysia.