Malaysia's trade minister in tears, denies cronyism

Malaysia's trade minister in tears, denies cronyism

Jalil Hamid, Reuters/Kuala Lumpur

Malaysia's trade minister denied on Tuesday her ministry handed out lucrative import licenses to corporate cronies, bursting into tears and swearing on the Koran she had no reason to resign.

Rafidah Aziz, one of the world's high-profile Muslim woman politicians and reputedly the longest-serving trade minister, made the denial after it was revealed her ministry gave two former trade officials lucrative rights to import cars.

"Of course it's false, for God's sake," Rafidah, 61, snapped when asked about speculation she was set to quit and end a cabinet career that has spanned 25 years. "My conscience is very clear... I have nothing to hide."

On Monday night, Malaysia's prime minister surprised many Malaysians and delighted opposition parties by answering calls for the government to reveal the names of firms and individuals who hold Approved Permits (APs) -- licenses to import cars.

APs are seen as licenses to print money. They are given free to firms controlled by ethnic Malays under a decades-old affirmative-action policy designed to redistribute wealth in a society where majority Malays own a minority of the economy.

APs give their holders an exclusive right to import certain brands of foreign cars. For each car imported, the AP holder can make as much as 40,000 ringgit (US$10,530), local media said.

The system has been criticized as fertile ground for corporate cronyism and an economic inefficiency. But it only came under serious scrutiny in the past few months when one of its architects, former premier Mahathir Mohamad, called for reform.

Two former trade officials were on the previously secretive list of AP holders released by Mahathir's chosen successor, Abdullah Ahmad Badawi. Firms owned by the ex-bureaucrats have been allocated rights to about a fifth of all imported cars this year, according to the list published in the Business Times.

Tourism Minister Leo Michael Toyad was also on the list as shareholder of an AP-holding firm but he told local media this holding pre-dated his parliamentary career and had been declared.

Rafidah, trade minister since 1987, said she had no personal links to any of the AP holders and at one point reached for the Koran to swear that she had nothing to hide.

"I have nothing to do with any AP holders. I stand by God," she told reporters after chairing a meeting of the women's wing of Malaysia's main ruling party.

"Why should we penalize ex-government servants. They retire and they want to do business, so why not?" she added.

Rafidah's defiant tone then dissolved into tears when she was asked about her recent spat with Mahathir over the APs issue.

Mahathir, adviser to state-controlled car-maker Proton Holdings Bhd, had argued too many cars were being imported by too few people and some importers tried to dodge import duty. Rafidah has rejected his criticisms.

"It saddens me that everybody perceives that I was rude to Tun," she sobbed, using his Malay title. "You are wrong, you are completely wrong...I respect him."