27-5-2024 (HONG KONG) In the glamorous realm of Hong Kong’s high-stakes finance, a riveting story of ambition, deception, and eventual retribution has come to life on the silver screen with the release of “The Goldfinger.” This high-budget film, co-produced by AMTD Group, is a fictionalized account of the meteoric rise and catastrophic fall of George Tan Soon-gin’s Carrian Group – a saga that unraveled into Hong Kong’s biggest financial scandal prior to the 1997-98 Asian Financial Crisis. Directed by Felix Chong and starring Tony Leung as a character inspired by the infamous George Tan, “The Goldfinger” shines a spotlight on the corruption and lax financial regulation that pervaded Hong Kong during the 1970s and 1980s, enabling Tan’s audacious scams. While the movie is a dramatized portrayal, the real-life Carrian affair serves as a cautionary tale about the perils of financial malfeasance and the crucial importance of robust institutions in upholding the integrity of global financial centres.
At the heart of this scandal was Malaysian businessman George Tan, a charismatic and daring figure who masterfully wielded charm and audacity to transform a small pest control company into a global conglomerate worth over $1 billion. However, Tan’s empire was built on a foundation of borrowed money, and it all came crashing down amidst revelations of fraud, bribery, and even murder.
While Tan’s exploits have captured public attention, a lesser-known aspect of this saga is the alleged role played by Malaysia’s government and its long-time prime minister, Mahathir Mohamad, in enabling Tan’s shenanigans through lax oversight of the state-owned Bank Bumiputera, which funded Carrian’s meteoric rise. Declassified CIA documents from the 1980s reveal insights into the political scandal unfolding in Malaysia during that period, a scandal that had the potential to topple Mahathir’s administration.
A CIA report dated March 1985 outlines how Bank Bumiputera’s Hong Kong subsidiary, BMF, had extended massive loans to Carrian and other Hong Kong property speculators during the 1970s real estate boom, and continued lending to Tan even after the 1981 property crash left his empire teetering on the brink of collapse. By 1983, BMF had accumulated nearly $1 billion in bad loans, primarily to Carrian. The report indicates that “circumstantial evidence suggests the scandal reached into the Mahathir administration,” highlighting that as a state-controlled bank, Bank Bumiputera’s decisions would have required approval from the
Finance Ministry and Central Bank. It was “unlikely that the government was unaware” of the bank’s overseas lending spree, the report asserted. Most damning were the “alleged connections” between Carrian’s George Tan and officials from Mahathir’s political party, UMNO, which the CIA deemed “the most potentially damaging aspect of the affair.” Trade and Industry Minister Tengku Razaleigh Hamzah was also implicated due to his close ties to several BMF officials involved in the scandal. While the CIA lacked a smoking gun directly implicating Mahathir, the “hint of association has damaged the political standing” of his administration, the report concluded.
Mahathir’s government had already faced criticism for its initial “restrained” response to the BMF fiasco and its attempts to downplay the mounting losses. Mahathir, who had styled himself as a champion of clean government, now found himself in a crisis that the CIA believed could potentially “bring about his ouster” if additional incriminating disclosures emerged. The report noted several “potential trouble spots” ahead, including the ongoing trial in Hong Kong of George Tan and his associates, which could reveal Malaysian links, and the final report of the official Malaysian inquiry into the scandal, which the CIA suspected would be heavily censored to shield senior officials.
Ultimately, Mahathir managed to weather the political storm, calling snap elections in 1986 and securing a resounding victory. The Committee of Inquiry’s final report avoided pointing fingers at government higher-ups, and most of the key players, from Mahathir to Razaleigh to former Prime Minister Hussein Onn, remained influential forces in Malaysian politics for years to come. However, the legacy of the BMF affair was a cosmetic clean-up job that failed to address the underlying systemic issues of corruption and cronyism. A few scapegoats took the fall, but the true extent of the rot remained buried, paving the way for even greater disgraces like the 1MDB scandal three decades later.
The Carrian saga was a scandal of firsts – the first billion-dollar bank fraud, the first major case for the Independent Commission Against Corruption (ICAC), and the first great test of Malaysia’s institutions and rule of law. In every aspect, it served as an early warning of the troubles that would continue to plague Malaysia for decades. The Carrian affair was more than just a salacious tale from a bygone era; it was the original sin that fostered Malaysia’s modern culture of elite impunity and the erosion of its public institutions.
As Malaysia deals with the repercussions of the 1MDB scandal and considers a new political dawn, the unlearned lessons of the BMF debacle warrant closer examination. Though the names and faces have changed, the moral hazards remain the same. Only by confronting the ghosts of past scandals can Malaysia hope to finally banish the spectres of corruption and misconduct that still haunt its politics today.
