Trail that led all the way to the PM: Lorrain takes BMF secret to the grave

In the eyes of the world, former Bumiputera Malaysia Finance chairman Lorrain Esme Osman, who died in exile in London on Monday was an unknown banker until the day, one of his auditors, Jalil Ibrahim, turned up murdered in July 1983 in a banana grove in Hong Kong.

Lorrain, 79 and a Eurasian from Penang and an ex-Christian, eventually took the initial rap and pleaded guilty in London in 1993 under a plea bargain to a charge of financial negligence in giving unsecured loans to the tune of RM 2.5 billion in the 1980s to George Tan, a Sarawakian who headed the Carrian Group of Companies until it collapsed like a house of cards.

Even now RM 2.5billion is a huge sum to embezzle and take out of the country without any involvement of top government leaders. The Malaysian financial system makes this virtually impossible, and more likely than not, such deals are transacted on behalf of the top politicos of the day.

It is a sad reflection that nearly 30 years on, and Lorrain finally passed on, the wheels of corruption are still busily rolling in Malaysia. The system has not changed but instead grown dramatically much worse. Most glaring is the Scorpene submarines graft scandal involving Prime Minister Najib Razak and spanning three countries, Malaysia-France-Mongolia.

Malaysians should indeed take a moment to reflect on this or another 30 years might pass, with the jury having no choice but to point out that corruption has worsened even more. If that happens, Malaysia would surely be in receivership and this is another reason why its citizens should wake up now and tackle the scourge of corruption with strong action. The wheels of time truly wait for no one, as Lorrain will attest to.

Trail that led right up to the PM

When Jalil was found, the only thing linking him to Malaysia was a coin caught in the lining of his trousers. He had no wallet or ID of any kind on him but a colleague had apparently reported him missing 24 hours earlier.

The Hong Kong Police got their hands on Jalil’s personal diaries and some letters which revealed that he had stumbled on something big by way of financial irregularities at BMF.

One Hong Kong Independent Commission Against Corruption (ICAC) officer asked Lorrain: “You have been fighting all this while for the benefit of others. Isn’t it time to do something for your own benefit?”

So a deal was concluded. As Lorrain would not plead guilty to corruption and certainly not to all the 43 charges, the Hong Kong prosecutors suggested the one single charge of financial negligence, which Lorrain finally accepted.

Lorrain, who had fled to London in 1983 to avoid being extradited to Hong Kong, spent two months in Stanley Prison in the British crown colony before being released. He had in fact already served six months at the Lai Chi Kok Detention Centre while awaiting trial, and another four months for remission. The ICAC submitted over 30,000 pages of evidence against Lorrain to the British High Court, the Court of Appeals and finally to the House of Lords.

The Carrian Case is the longest criminal case in Hong Kong judiciary history spanning over 17 years at a cost of HK$210 million and with over 4 million pages of exhibit.

Lorrain’s guilty plea closed the file on a long-running case. He continued to claim innocence upon his release and was dismissive of Jalil but nevertheless conceded, rather disingenuously, that “there was a lack of supervision and oversight at BMF” under his watch. He ostensibly never returned to Malaysia where the suspicion is that he was protecting the other culprits involved in the BMF financial scandal. The trail, it’s widely believed, led right up to the Prime Minister, who was then Mahathir Mohamad.

Siphoning money
George Tan, the story goes, was just a conduit to siphon money out of BMF. No proof was ever produced anywhere that the massive loans taken from BMF were entirely for the purpose of doing business. Instead, blame was placed on the collapse of the Hong Kong property market for the loans going sour.

Between Dec 6, 1985 when he was arrested at his London home on a provisional extradition warrant from Hong Kong until he was jailed for two months in 1993, Lorrain fought a long and costly legal battle for 90 months from Brixton Prison to remain in London. He took on the Home Office and complained to the European Commission of Human Rights. He launched several habeas corpus applications and judicial reviews, appealed to the House of Lords several times and put in several bail applications.

Meanwhile, the public lost all hope of ever seeing other culprits behind bars, Lorrain, Tan and smalltime businessman Mak Fook Than – convicted of Jalil’s murder – and three other BMF directors aside.

Mak’s lengthy 24-paged statement about his “ministerial business” trip to Hong Kong went missing during the trial. During his interrogation by the Hong Kong police, Mak claimed that he was in Hong Kong at the behest of a senior Malaysian Minister to collect “some money” from a Malaysian national residing in Hong Kong. He denied having said so after the disappearance of his 24-paged statement.

Lorrain had in one public interview in London hinted at the possibility that Jalil was being blackmailed by Mak “who wanted more”. That’s akin to saying that the blackmailer wanted the goose that was laying the golden eggs, dead. In fact, investigations into the Jalil murder revealed that Lorrain was “holidaying” in Hong Kong at the same time that the BMF auditor met his grisly end.

Another favourite theory floated by Lorrain in public was that “someone wanted to embarrass the Malaysian Government” and thought that one way would be to do in Jalil, presumably the banana stretch in Hong Kong being equally embarrassing. He was once reported as saying he suspected a Russian diplomat who was caught spying in Malaysia and sent home. But by that stage, one could be forgiven for expecting Lorrain to claim that the Ku Klux Kan, the Mafia, Mossad and the CIA were all suspects in Jalil’s murder.

But whichever individual or group that financed his exile in London and all the expensive trials and court appeals are another mystery that perhaps only some senior top leaders in the Malaysian government with privileged information will ever know. – Malaysia Chronicle

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