Their relationship blew up after the Asian Wall Street Journal (AWSJ) financial daily carried a report on the massive losses incurred by Perwaja Steel under the headline “Steel fiasco may rattle Malaysian government”, writes journalist Leslie Lopez.
Anwar stormed into Mahathir’s office on Feb 9, 1996 with a copy of the AWSJ, reminding Mahathir that he had said the government could not cover up the fiasco, Lopez writes in his book “The Siege Within”.
“Sullen-faced, Mahathir delivered his curt response: ‘You leaked it to him’,” Lopez writes. Anwar later denied leaking the story to the media when recounting the incident two months after his confrontation with Mahathir, according to Lopez.
“In the months that followed the AWSJ expose, Mahathir would be persuaded by his closest business and political cronies that Anwar, his heir apparent presumptive, had become a clear and present danger,” Lopez writes.
Perwaja Steel had been set up in 1982 as a showpiece of Mahathir’s industrialisation policy. It incurred losses of US$1 billion (RM2.5 billion at the time), which caused Mahathir to rope in businessman Eric Chia as managing director, only to see losses increase to US$2.5 billion (RM6.25 billion) in 1995.
In 2002, Mahathir had admitted that Perwaja’s downfall was due to mismanagement and fraud. Chia was subsequently charged with criminal breach of trust in 2004 before being acquitted three years later.
Lopez writes that Anwar had risen up the political ladder being seen as an “antithesis to Mahathir’s brand of politics and business, often referred to as Malaysia Inc”.
The prime minister became increasingly intolerant of Anwar, who was perceived as a threat to the intricate web of patronage and racketeering that defined national politics.
Mahathir’s feelings boiled to the surface during the 1997 Asian financial crisis when Anwar opposed the use of public funds to bail out businessmen linked to Mahathir.
To keep intact the economic and political system that Mahathir built, “Anwar had to be brought down at all costs”, writes Lopez. Anwar was subsequently sacked as deputy prime minister and expelled from Umno on Sept 2, 1998.
He was later arrested and detained under the now defunct Internal Security Act, or ISA, then charged in court and convicted of corruption.
The Siege Within, published by Penguin Books, is available on pre-order at Kinokuniya, Lit Books and Amazon Singapore.