Scandal of SALCO – How Taib Plans To Make Billions From Bakun. Exclusive!

Scandal of SALCO – How Taib Plans To Make Billions From Bakun. Exclusive!

16 Feb 2012

This post is also available in: Iban, Malay

SALCO discussions in January - Taib, brother in law Robert Geneid, CMS Chief Richard Curtis meet with Rio Tinto Alcan executives in Kuching

Displaced families, who have received so little compensation from Bakun, may be interested to learn how Taib and his own family are planning to make billions for themselves out of the hydro-electric dam, based on an investment of just RM2.00!

We can reveal that SALCO (Sarawak Aluminium Company Sdn Bhd), the company that has been handed a licence to build a vast smelter in Simalaju, powered by cheap electricity from the dam, is secretively entirely owned by the Taib family company, CMS.

So far, they have only issued two shares for the company, worth a mere one ringgit each!

Scandalous SALCO scam!

Controlling interest - SALCO is run out of the Taib building, Wisma Mahmud

Our revelation sheds light on a classic money-making scam, that is still in its early stages for the Chief Minister, but where the planned outcome is plain to see.

It depends on a blatant willingness by Taib to abuse his political influence, in order to divert public money into his own pocket and on the apparent willingness of the multi-national company Rio Tinto Alcan to invest in a corrupted project.

At the centre of the ploy, is the company Sarawak Aluminium Company Sdn Bhd, which has always been officially presented as a ‘Joint Venture’  between the giant multinational, Rio Tinto Alcan and CMS, after the two companies signed a so-called Heads of Agreement in 2007 to explore the possibility of investing in the smelter project.

Government support - invaluable for a company with just RM2.00 investment!

In 2008 this supposed joint venture received a manufacturing licence from the Malaysian Federal Government’s Industrial Development Authority and it also established a Memorandum of Understanding to open negotiations with Sarawak’s energy authority, SEB, over access to the electricity.

Ever since, the planned SALCO aluminium smelter has been placed at the top of Taib’s proclaimed SCORE agenda for developing the potential of the Bakun Dam.

SALCO - is this really who we are?

And, whenever the project is referred to, whether in press releases, statements by ministers, interviews by CMS executives or, indeed, on SALCO’s own website (above) it has always been clearly suggested that the company is 60% owned by Rio Tinto and 40% owned by CMS.

Likewise, the licences and agreements granted by government agencies have further implied that SALCO represents a serious joint financial investment backed by the multi-national.

Heads of agreement between Rio Tinto and CMS's Richard Curtis - with Chief Minister (and Chief Shareholder) Taib Mahmud centre stage in a deal designed to net him a fortune!

However, our company research reveals that in fact SALCO consists of just two shares, issued for a mere one ringgit each, both owned  by a company called Samalaju Aluminium Industries Sdn Bhd.

Just two shares at one ringgit each

We can further demonstrate that this Samalaju Aluminium Industries Sdn Bhd is in turn entirely owned by another company named Samalaju Industries Sdn Bhd.

Samalaju Aluminium Industries Sdn Bhd is owned by Samalaju Industries Sdn Bhd

… and this Samalaju Industries Sdn Bhd is 100% owned by CMS!

One ringgit per share

Earlier this week a spokesman for Rio Tinto Alcan in the company’s Montreal headquarters conceded to Sarawak Report that as yet the multi-national has no direct investment in Sarawak:

“There is not much news to report in terms of the Joint Venture”, he said and he stressed that the aluminium manufacturing giant would not buy into the SALCO project “unless the price is right” for the electricity:

“We are actively participating in the negotiations for the power purchase agreement for the feasibility studies to commence”[RTA spokesman]

Since the Taib family company CMS has itself no credentials as an aluminium manufacturer it seems extraordinary that the State of Sarawak and Federal authorities have nevertheless given its 100% subsidiary SALCO the licence and go ahead to start manufacturing!

For Taib and his family side-kick Robert Geneid this 'important meeting' had a personal significance. If they can flog 60% of SALCO to RTS they should make billions of ringgit.

However, for CMS there is all to play for. The RTA spokesman confirmed to Sarawak Report that the multi-national is indeed interested in the proposed 60% stake in SALCO, as long as it can negotiate the large amounts of cheap electricity it wants.

Given that, as predicted, the Bakun Dam has created a glut of electricity in the state, even with just two of its eight turbines in action, and given there are few other customers in sight, it is likely to succeed.

This means that the stage is now set for Rio Tinto Alcan to buy over a 60% stake in SALCO!  Its the deal that Taib and his latest top family side-kick Robert Geneid have been frantically trying to pull together, holding ‘important meetings’ (Borneo Post) with Rio Tinto in Kuching just last month.

Who wins?

Promoting SALCO - so much political support!

Think of the potential profit for the main shareholders of CMS, if Rio Tinto Alcan moves in to take a 60% stake of this giant aluminium smelter project!

These shareholders, of course, are firstly Taib’s own long dead wife Laila, followed by his four children.

In total, as has been detailed many times on this site, the Taib family own at least half the company and all the top management positions – so plenty of bonus opportunities there as well!

Remember, Taib has so far invested just RM2.00.  Yet this factory is expected to absorb an enormous RM7billion in construction costs and it is then expected to produce at least 550,000 tons of aluminium a year, worth an annual RM2.4billion to Malaysian GDP. This could be extended to a full capacity of 1.5 million tons! [Rio Tinto Alcan press information]

Getting in there - Australia has been happy to promote Rio Tinto's bid to work with Taib in Sarawak

So, why would CMS, with such a project under its control, hand over 60% of it to Rio Tinto Alcan for less than a commensurate price?

In fact, once a nice cheap electricity deal has been cut with SEB (run by Taib’s cousin and proxy Hamed Sepawi), CMS will be in a position to make a fat multi-billion ringgit profit out of their tiny two ringgit investment in SALCO!

And, further down the line, consider what a 40% stake in such a venture would be worth should Taib and his family eventually decide to sell it off!  They could even decide to cash in early and sell off their holding for a few billion up front – after all they only invested RM2.00!

Indeed, such RM2.00 companies have been the method by which corrupt politicians in Malaysia have exploited their positions for years, passing huge contracts and concessions into these empty shells, so that they can then be sold or the work sub-contracted to a real working concern.

But, this project is on a scale of its own!  The question is, why does Rio Tinto Alcan, a supposedly respectable multi-national, think it is appropriate to become involved?

Off repeated lie - "we are a joint venture between RTA and CMS"!

The losers

The losers are just as easy to identify.  To start with, Taib failed to tender the project, so the State of Sarawak stands to get no realistic premium from the licence.  Likewise, with the rock bottom price for the hydro electricity, SEB is likely to make very little with which to improve its services and infrastructure.

As usual, other construction companies have found themselves squeezed out of the opportunity, but will probably end up sub-contracting for CMS.

Then consider the Civil Service pension funds, which were forced by ministers to invest billions in the Bakun Dam project to keep it afloat, because private investors were too wary.  The promise of rock bottom prices for the resulting hydro-power does not provide much prospect of any reasonable return on that investment, which means civil service pensioners will lose out!

Noxious - the Pressmetal plant in Mukah has provided no jobs for the locals, but it has taken their land and poisoned their fields and their health

And what of the local people in the area?  They are already living in terror of the arrival of the plant, because of the worrying levels of pollution already being experienced by the people of Mukah, who are affected by the existing Pressmetal aluminium plant.

Aluminium manufacturing can be a highly toxic process, unless carefully managed, and the people of Mukah, who have of course lost much of their NCR land to the plant that now looms over them, are suffering health problems and their plants are dying.

And what about the possibility of jobs for such people?  Well, unfortunately, it appears they are not suitable.  Rio Tinto Alcan has announced a projected 4,700 jobs on the plant, however none of the local people have managed to find employment at Pressmetal.

Instead, Taib has already made clear in his announcements that he plans to import tens of thousands of foreigners from places like India to work in his SCORE projects.  Doubtless these immigrants will be given houses, identity cards and voting rights, all of which so many local people find hard to obtain.

Just days ago the Australian High Commissioner was over in Kuching promoting Rio Tinto Alcan's involvement in SCORE. He is supporting Australian big businesses venture with the Taib family, but what will it mean for jobs back in Tasmania's aluminium plant which Rio Tinto is planning to shut?

Doubtless, they will be expected to vote BN in return!

Finally, what about the workers in existing Rio Tinto Alcan plants in places like Tasmania?

Rio Tinto Alcan have in fact just signalled that they are interested in selling off their Tasmania plant, presumably because they have a cheaper option elsewhere!

Rio Tinto Alcan and its Corporate Social Responsibility

RTA spokesmen have made plain that they have yet to move to the stage of feasibility studies and environmental and social impact assessments for this Simalaju smelter project.

However, they can be under no illusion that in conducting prospective business with CMS they are proposing to enter into a joint venture partnership with one of the world’s most notoriously corrupted and politically exposed companies.

Taib stands to make billions (as usual), but what is in this project for local people?

Taib Mahmud himself is being formally investigated by his own federal government’s anti-corruption commission (MACC).  And countries all over the globe have confirmed that they are looking into the assets of Taib and his family, with respect to money laundering!

So, what on earth do Rio Tinto Alcan think they are doing even considering entering into such a deal with a company that is blatantly owned by Taib?

Of course, they stand to make a fortune for their shareholders if they are able to swing a ludicrously cheap deal for their electricity and to set up in a country like Sarawak, which has no carbon taxes and low standards of supervision on matters like the environment and labour matters.

But these days shareholders also expect certain basic ethical standards.  Do they include doing business with corrupt companies personally owned by Chief Minister of the state in which they are investing?

Is this what Rio Tinto Alcan mean by the statement:

“We respect the laws and customs of our host countries and communities. We work with them to ensure benefits and opportunities are shared”?

To the contrary, the Bakun Dam and the whole planned string of future dams and SCORE related projects that are now being rolled out in Sarawak, represent nothing less than a human and environmental disaster in one of the world’s last remaining great tropical rainforests.

What's in store? A Rio Tinto Alcan factory in Canada

The driving motivation behind this project is the desire by Taib Mahmud and relatives like his brother in law Robert Geneid (who now features as a key negotiator in the SALCO ‘joint venture’ project) to become personally even richer.

So, is it right for companies like Rio Tinto Alcan to threaten to pull out of established locations like Tasmania in order to get involved with a man like Taib in a place like Sarawak?




Sign up to receive regular updates from Sarawak Report

Your views are valuable to us, but Sarawak Report kindly requests that comments be deposited in suitable language and do not support racism or violence or we will be forced to withdraw them from the site.

  • Anti Kronist

    Masing pleads ‘not guilty’ over indigenous displacement

    Malaysia Kini, 21 March 2009

    Sarawak Land Development Minister James Masing told a tv news channel that he has absolutely no guilt over the displacement of indigenous people caused by the construction of hydro-electric dams in the state.

    “I don’t feel guilty. I feel that is the correct way of doing it. I don’t have any guilt feeling for trying to help my people,” said Masing on the Al-Jazeera’s 101 East programme Thursday night. [Watch 10-min video]


    Host Fauziah Ibrahim had asked Masing if he felt guilty, as a person of indigenous descent, over indigenous people being displaced to make way for economic development.

    During the programme, Masing defended the construction of dams, such as the massive Bakun hydroelectric dam and the proposal to build 12 new ones, because the state government was preparing for the future.

    “Sarawak has enough energy as it is today. But we must look 20 years down the road. By that time we may not have enough energy. You know very well the cost of fuel (is escalating),” he said.

    Masing defends CM

    Masing also defended the involvement of Cahaya Mata Sarawak (CMS), a company owned by family members of Chief Minister Taib Mahmud in the construction of the dams.

    “The dam constructions are done to legal tenders. The lowest tender gets it. It doesn’t matter if CMS or somebody else. It must be done on tender basis.

    “That is very transparent. The international community can take a look at it… it is an open book for everyone to look,” he said.

    When Fuziah pointed out that there are numerous cases in which projects were given to companies linked to Taib without open tenders, Masing said: “I was not aware of it”.

    Fuziah replied by that the Similajau aluminum smelting plant was given to CMS while the construction of several bridges were awarded to Titanium Management Sdn Bhd, which Taib’s eldest son Mahmud Abu Bekir holds substantial interest in.

    ‘Everything was transparent’

    Even with evidence presented before him, Masing maintained that these awards were given fairly and in accordance with the law.

    “We have rules and laws… If there is a decision made by people who have vested interest, there are laws which does not allow it. It is illegal for people in authority to give authority with vested interest.

    “All these things have been done through open tenders. They are transparent,” he said.

    “In the case of the aluminum smelter, there were a few companies that were asked to bid for it. I know. And the best company gets it.

    “Unfortunately, it was given to a company where the authority has some interest. But it is done legally,” he added.

    ‘I’m a friend of the chief minister’

    Meanwhile, Fuziah also scrutinised Masing over his links to Taib. Masing admitted that he was an “ally” to Taib, but gave a less outright answer when asked if he was Taib’s “crony”.

    “I don’t think (so). Crony means friends. I am a friend of the chief minister,” he said.

    On whether there was “crony capitalism” going on in Sarawak, Masing replied in the negative because no one has been brought to book over such matters.

    “I don’t think so. If there is, those who deal in it would be dealt by the law. Until today, there is nothing. One must assume there is no cronyism as such,” he said.

    On who would keep the chief minister and his family accountable, Masing said the electorate would.

    “I believe the voters in Sarawak are a very intelligent group of people,” he added.

  • Anti Kronist

    Masing believes Taib clean (Aok manah nyak wai)

    Borneo Post, June 23, 2011, Thursday

    CENTRE OF MEDIA ATTENTION: Reporters crowd around a speaker in the Media Room as Chief Minister Pehin Sri Abdul Taib Mahmud delivers his personal statement regarding the investigation by the Swiss Federation into his alleged assets in Switzerland.

    KUCHING: Land Development Minister Tan Sri Dr James Jemut Masing said he believed Chief Minister Pehin Sri Abdul Taib Mahmud is innocent of all the corruption allegations hurled at him.

    The Baleh assemblyman also lauded Taib for being brave enough to tackle the issue head on yesterday.

    He said this when asked to comment on Taib’s explanations to the State Legislative Assembly (DUN) yesterday that he does not own a Swiss bank account or assets and investments in Switzerland.

    “It is very good for him (Taib) to tackle the issue straight on.

    “That is what I expected a leader to do. As a politician you must not hide anything. If you have nothing to hide then go straight on because we are judged by public perception,” Masing said.

    Masing added that he was “impressed and satisfied” with the Chief Minister’s answer and he eagerly awaits the Swiss authorities to respond.

    “The onus of proof is from the other side,” Masing stressed.

    Asked whether the public would be convinced of Taib’s innocence, Masing lamented that members of the public always make judgement based on emotion and not the law.

    That, he added, represented one of the toughest obstacles which all politicians have to endure.

    “We are not judged by the fine lines of the law. We are judged by allegations, half truths and lies.”

    Meanwhile, Second Minister of Finance Dato Sri Wong Soon Koh said what Taib did yesterday was to make it known to the whole world that the graft allegations were unfair to him.

    “Of course once the allegation is made and published in the press, not only the image of the Chief Minister but the state government of Sarawak may be tarnished,” he lamented.

    Therefore, he added, it was important for Taib to make the statement in DUN to redeem himself and to clear his name.

    “I think it is the right thing to do,” Soon Koh said.

    Meanwhile, the Chief Minister’s statement failed to impress PKR leaders.

    State PKR liaison chief and Ba Kelalan assemblyman Baru Bian said it was “quite unfortunate” that Taib’s statement was not put up for debate.

    He pointed out that there was no mention of whether the Chief Minister’s letter had been replied to and that PKR would be interested to know what Taib wrote and the reply, if any, to it.

    “As it has been reported that this involves MACC, we hope that the whole investigation will continue on in spite of the explanations he (Taib) made in the Dewan…as it is only an explanation. If there is really truth in it, then of course it is of concern to the public at large, especially Sarawakians,” said Baru.

    When asked whether the Chief Minister’s denial would help to assuage public concerns, Baru said he did not think so as there was nothing particularly significant about the statement.

    “You need to have concrete facts and evidence and decisions made either by the Swiss President or authority of Switzerland, or even from MACC. The report we hear is about an ongoing kind of investigation, so as for now, we’ll leave it as it is.

    “Unless they come up with a conclusion, it’s nothing that would wipe out any doubts or anything for that matter.”



    Australia and Sarawak not much difference actually, both founded by CROOKS!!!

    Whatever the Australia may be now, the veins and bloods of Crooks Convicts still running until now and more than willing to help, transit, hide all Billions of loot from Sarawak people money

    Ironic isn’t it Australia champion itself as human rights advocate but beneath protecting Taib lootings plunderings and the rest gangs of BN Crooks

    Australia really safe heaven for Crooks hiding their Multi Billion lootings second to none after Switzerland, Monaco, Caribbean tax pirate offshore account islands

    How very true of this prophecy until now by Aboriginal activist Jenny Munro :

    ”In 200 years white Australians have learned very little about Aboriginal people, the importance of land to us, the importance of relationships to us. They have demonstrated their moral bankruptcy in so many different ways.”



    Convict Australia – Journey through our nation’s criminal past

    Brad Newsome, The Age, January 19, 2012

    Pay TV show of the week: Convict Australia, History, Thursday, 3.30pm

    THE History Channel hasn’t exactly busted a gut coming up with Australia Day programming this year. While it’s no doubt true that this program is, as the preview disc proudly declares, an ”Australian premiere documentary”, it’s also true that it was made way back in 1998. But don’t let that put you off – it’s still a good one. And it might even introduce you to a thing or two about which you’ve never heard.

    The first of these might come even before presenter Ian Wright (of the original Lonely Planet program fame) departs Britain for the antipodes. It seems that it was the done thing for convicts awaiting transportation was to painstakingly inscribe pennies with messages to their loved ones. On a boat on Portsmouth Harbour, Wright displays two of them and reads the inscriptions: ”Dear Sarah, When this you see remember me, when I’m in some foreign country” and ”I love thee ’til death shall take my breath.” They are, as Wright says, very sad – ”almost like tombstones of their lives in England.”

    When Wright arrives in Sydney, more interesting stuff follows, not least a look at the designs of the big back tattoos that convicts had done to send a message when their backs were bared for flogging. One of them exhorts – or taunts – the flogger to do his duty; another is a picture of Christ on the cross.

    But the documentary isn’t without its annoying oversimplifications. For one thing, Britain didn’t set about colonising Australia merely to keep convicts ”out of sight and out of mind” – there were important strategic and economic motives too. But the most frustrating thing is that while the documentary has captions to identify the places that Wright visits, it has no captions to identify the people he speaks to.

    You have to wait until the credits roll (and then hit the pause button if you can) to find out, for instance, that it was the Aboriginal activist Jenny Munro to whom he was speaking at the January 26, Day of Mourning protest in Sydney. Munro doesn’t mince words: ”In 200 years white Australians have learned very little about Aboriginal people, the importance of land to us, the importance of relationships to us. They have demonstrated their moral bankruptcy in so many different ways.” Munro also explains that Aborigines around Sydney felt sorry for the convicts they saw being brutally treated and helped them when they fled to the bush.

    It’s pleasing that the documentary seeks out an Aboriginal perspective and also that it looks at how the white perceptions of convicts have changed. From Sydney, Wright moves on to Canberra to learn about the convicts’ conditions of parole, to Port Arthur to learn about how that ”model” prison was an experiment in sensory deprivation, and to Norfolk Island, where conditions and punishments were so horrific that, legend has it, many convicts saw communal suicide as their only option.

  • Alison

    Curtin degrees burnt as students call for boycott
    Rhianna King
    February 17, 2012 – 10:27AM
    Read laterComments 13

    The protest page on Facebook.
    Curtin University has sparked a major online protest over its decision to award the wife of the Malaysian prime minister an honorary doctorate, with some students burning their degrees and hundreds of others joining calls for a boycott of the university.

    Angry past and present students, most from Malaysia, have demanded the university revoke the honorary doctorate of letters it awarded Rosmah Mansor for “her dedication to early education.”

    One student posted a video of a degree being burnt, while another posted a photo of a degree which had been taken from its frame and ripped to shreds, along with the comment: “Shame on Curtin University.”

    Advertisement: Story continues below

    The ‘First Lady of Malaysia’, Rosmah Mansor, sparked student outrage at Curtin University.
    Mrs Mansor was presented with the honorary doctorate before 600 students at the university’s campus in Bentley on Saturday.

    Curtin said she had devoted herself to community life, “becoming the driving force behind the Permata project, which focuses on early childhood education and care for Malaysian children aged under five.”

    But a group of past and present Malaysian students claim the project, which is funded by the Malaysian government, is in fact abusing tax payers money.

    In Malaysia, Ms Mansor has a reputation as a big spender.

    She reportedly spent $100,000 at one Sydney fashion boutique in January and has been forced to deny reports that she splashed out $US24 million on a diamond ring and another $US200,000 on a designer handbag.

    In an open letter to the university, a former student wrote: “There’s rife corruption, over-funding, safety and responsibility issues (with Permata).”

    The students have demanded the university explain its decision, saying “we strongly disagree with Rosmah being given this distinguished award.”

    “This would be the equivalent of Julia Gillard’s partner using Australian tax payer’s money to set up day cares all over Australia and receives an award from a foreign university for his philanthropical work,” the letter said.

    A Facebook page, titled Boycott Curtin University Until Rosmah Mansor’s Doctorate Revoked, has 1,697 ‘likes,’ and hundreds of posts.

    The group claims its objective is to: “Prove that Rosmah is bringing disrepute to Curtin, and that she is taking down Curtin’s reputation.”

    Many students have also taken to Curtin’s page to express their outrage.

    In a response to the letter, the university acknowledged the decision had attracted criticism.

    Vice-Chancellor Jeanette Hacket apologised for using the term ‘first lady’ to describe Rosmah, after hundreds complained that the title in fact belonged to the queen of Malaysia.

    “Curtin has a tradition of conferring honorary awards to recognise those who have given distinguished service to the university, the community or society; or who have made a distinguished contribution to a field of academic endeavour,” she said.

    “Recipients of such awards are selected through a process which engages several committees within the University. It is not a competitive process; all nominees are considered on their own merits.”

    “Datin Sri Rosmah was recognised as the founder and driving force behind the Permata early childhood centres which enable children below the age of five to experience quality early learning.

    “We acknowledge that there are a range of views on this award, but the university stands by its decision to grant the honorary doctorate.”

  • aborium

    No one has mentioned the earth and bone shattering reality of aluminum production from bauxite mining, aluminum refining to aluminum smelting. The public is not told on the plant’s life cycle impacts:

    1. biodiversity richness of bauxite mining area and the smelter plant designated area to estimate total environmental loss or degradation and ascertain its value;

    2. impacts of emissions, effluents and residues from the aluminum smelter plant on local ecology, and available natural resources of the area;

    3. impacts of emissions and chemical exposures from smelter plant on the health, lives and livelihoods of local people within close proximity to the plant, greenhouse emissions and the effects acid rain and air pollutants which can be spread over considerable distances even as far as 100km away.

    They want to hide this ugly side of the story and happy to regard as a ‘given’ and not be held responsible for any pollution or destruction that may occur? RT has a track record of human rights violation and environment destruction charges involving several law suits in several regions round the world where they have mining interests. This should ring alarm bells, loud enough to be heard throughout the State, but chosen to be ignored by self-serving politicians who only seem to take good care of their own pockets. It’s putting profit before people and environment.

    It’s also the story of an oligarch where the one family has ultimate control over state’s resources, use their power over the government to enrich its family-owned businesses through its network of companies with everything to gain and nothing to lose or even pay. SCORE is dressed up as an official development corridor to benefit the State, or so it seems. Looks can be deceiving. This latest expose by SR gives hard truths which lead us to believe that the oligarch’s endgame is the complete control and dominance over Sarawak. Orwell’s “1984” is indeed becoming a reality!

  • Pingback: Backing Out Of Bakun – Rio Tinto Pulls Out! « pisaukarat()