How Malaysian Gov “Destroyed” A British Company
On September 7, 1981, the London Stock Exchange (LSE) was rocked by an attack on the Malaysian government’s acquisition of a British plantation firm, Guthrie. The attack was led by Tun Dr. Mahathir and executed in around four hours. This significant event is called the Dawn Raid.
At the time, Guthrie was the oldest and largest British plantation firm in Malaysia. Guthrie’s company remained significant after independence as a result of Tunku Abdul Rahman’s policy of attracting foreign investment. In truth, there are other local agencies that have shares in Guthrie, especially Permodalan Nasional Berhad (PNB), which has around 25% of the company’s stock. Despite having an equity share, the British rejected numerous Malaysian requests, such as replanting rubber trees to assist Malay farmers and rubber tappers.
After becoming prime minister in 1981, Tun Dr. Mahathir’s policies appeared to be anti-British. This is due to the fact that Dr. Mahathir is the only former prime minister who is not from the wealthy, i.e., from the common people, unlike his predecessor. Dr. Mahathir is also noted for being the first prime minister who did not smoke or play golf, a luxury activity. “Buy British Last” and his philosophy of looking east are two examples of how he views the British.
Before the attack, the British government stopped providing education grants to Malaysian students studying in the United Kingdom. Not only that, but they have also increased tuition fees for international students, including Malaysian students. A total of 17,000 Malaysian students are burdened with extremely exorbitant fees, which in some cases have grown threefold. And this news did not delight Dr. Mahathir at all. In addition, the British and Malaysian governments are at odds over the plan to provide Malaysia Airlines (MAS) landing rights at Heathrow Airport, which was rejected. And not long after that, the Concorde, a British supersonic aircraft, invaded Malaysian airspace at Subang.
Several folks are disappointed with the British treatment in this Guthrie matter. Tun Dr. Mahathir, Tun Ismail Ali, and Tan Sri Khalid Ibrahim are the mission’s three primary planners. Dr. Mahathir’s brother-in-law Tun Ismail Ali was the Governor of Bank Negara at the time. He is similar to Dr. Mahathir, who does not appear to be pro or anti-British. Tun Ismail was the guy who ordered the transfer of state funds deposited in British institutions such as HSBC to local banks. Additionally, foreign banks, primarily British, were prevented from building new branches.
Dr. Mahathir and Tun Ismail Ali devised a strategy to acquire Guthrie from the British in 1981 since Guthrie had sold its assets without the knowledge of PNB, which held around 25 percent of Guthrie. Later, Tan Sri Khalid Ibrahim was the mission’s №3 player. Tan Sri Khalid Ibrahim, a Malaysian government agency’s investment manager, has been tasked with reviewing and strategizing to assure the mission’s success. In truth, he had previously worked for Guthrie in a London financial advice firm.
After the study is completed, this mission will require a total of RM1 billion, and it must be completed swiftly. The Malaysian government has committed to contribute funding from three distinct sources: Petronas, Pernas, and Amanah Saham. While in England, this aim is accomplished by two groups: Rothschild, which is responsible for convincing M&G Investment to sell their shares, which account for approximately 17 percent of Guthrie shares, and Rowe & Pitman, which guarantees the sale and acquisition of minor shares go well.
After completing all preparations, Malaysia eventually launched this attack. On the morning of September 7, 1981, all Rowe & Pitman-controlled brokerages were mobilized to acquire existing minority shares. Finally, PNB seized 1.6 million or 5 percent of Guthrie Berjaya’s shares. Currently, PNB’s equity is approximately 30 percent, up from 25 percent previously. Subsequently, PNB successfully purchased an additional 12 percent share from a Southeast Asian corporation. And this increased PNB’s equity to 42 percent. As a result of the Singapore-based OCBC Group company’s refusal to sell its 3 to 4 percent ownership to PNB, the original plan failed to materialize as anticipated. However, Tan Sri Khalid Ibrahim created a fresh strategy to contact Kuwait Investment about selling 5% of their shares to PNB.
And finally, Tan Sri Khalid’s approach was successful, as PNB achieved official ownership of 7,995 million shares, or around 50.4%, making it the largest stakeholder in Guthrie. These corporate attacks only occur within three to four hours. Mark Gent, the chairman of Guthrie, only learned of the news of its re-ownership on the radio. This successful takeover by Britain’s erstwhile colonies dealt a severe blow to the British. After a few days, the British Prime Minister responded by tightening the law to prevent such occurrences. The majority of London brokers have complimented Malaysia’s cleverness. After a few months, Guthrie’s shares progressively became state-owned, and by the end of 1981, the state held all of Guthrie’s shares. In 2007, Guthrie was combined with Sime Darby. Guthrie’s name no longer exists, but the historic strategy undertaken by these three individuals is still remembered. Because it is not simply for profit, but also an effort to restore the country’s stolen rights.
