These 4 MARA scandals caught Malaysia off guard… one of them shook Australia.

In case you haven’t heard, MACC raided a number of Majlis Amanah Raya (MARA) offices in KL earlier this week. Allegedly, some MARA senior officers were misusing their powers, with an executive director coming out to declare that no, he didn’t use the company card to buy a Louis Vuitton bag. Some of y’all might be thinking at this point: what does MARA actually do?

MARA isn’t only involved in stuff related to education and educational institutes (like their MRSMs and colleges). It’s been around since before Merdeka Day. Set up under the name Rural Industrial Development Authority (RIDA) in 1951 by our British colonialists, the government agency’s goal was (and is still) to develop, encourage, facilitate and foster the economic and social development of the Bumiputera community.

In the 70-odd years since its inception, MARA’s done a lot in service of those goals – launching the Rancangan Rumah Murah MARA in 1967 to help the impoverished locals in Bukit Katil, Melaka own affordable homes, kicking off the Taman Asohan RIDA (now known as the KEMAS Training Center of Kuala Lumpur) to train people in rural areas in various fields and more recently, spending RM70 million to help entrepreneurs in the automotive field expand their businesses.

Despite all of that, MARA’s been in the spotlight lately for the wrong reasons, possibly overshadowing the good they’ve done. Take these, for example…

1. MARA allegedly laundered RM73 million in an Australian property scam

We covered this in a separate article, but to cut a very, very long story short, MARA apparently owned four buildings in Australia, with one of them being a student dorm: the Dudley International House in Melbourne. It all began when MARA contracted a company to outfit the building with windows and doors. Said company ended up not getting paid, and the owner, John Bond, took MARA to the Victorian Supreme Court.

The case caught the attention of Australian media, and after doing some digging, two of these media companies found out that MARA had supposedly paid AUD$22.5 million (approximately RM69.7 milion) for the building… which raised a few eyebrows. How come? Well, the building was initially valued at “only” AUD$17.8 million. All that extra money reportedly went to a cake shop in Singapore for laundering (yeah, weird, we know, but just roll with it).

The Dudley International House wasn’t the only building MARA had in Australia that was purchased at an inflated price, though; they might’ve done the same with a UniLodge building, also in Melbourne. In this instance, the property was first valued at AUD$23.5 million, and when it was bought up by MARA, the final valuation put it at AUD$43 million… so MARA “overpaid” AUD$19.5 million (approximately RM59 million) for it. Two shell companies were later revealed to have ties to this transaction, and the extra cash was said to have been used to line the pockets of the Malaysians who were involved.

Far as we can tell, a former MARA chairman was charged in March 2021 for receiving RM33.45 million in bribes from these property purchases. However, there have been no updates since then, so we guess we’ll have wait for further developments in the future.

2. The MARA digital malls never became Low Yat 2.0

Yes, there was more than one MARA digital mall. The first one that was opened in Jalan Tuanku Abdul Rahman was kind of in response to a Malay dude who was caught stealing in a smartphone store in Plaza Low Yat in 2015. It started out doing quite well – profits from the mall reached RM18.4 million within the first year, but that didn’t last very long.

Two more MARA digital malls were opened in Kuantan and Johor Bahru – they were closed down in 2018 and 2019 respectively due to overwhelmingly underwhelming response. Lack of product choice, non-competitive pricing and bad marketing were cited as reasons for the closures. What made it worse was when ex-MARA chairman, Akhramsyah Muammar Ubaidah Sanusi, admitted that the digital mall was established with politically-driven motives instead of business driven ones.

Today, the MARA digital mall in KL is the only one left standing and even then, it’s still struggling in terms of sales.

3. MARA Corp’s deal with Lynas was done without MARA’s approval

Remember Lynas? Yeah, the Australian rare-earths mining company. The one that got a ton of backlash when they wanted to open a refinery in Kuantan circa 2012. Fast forward to 2019 – Mara Corporation Sdn Bhd, MARA’s investing holding company, and Lynas Malaysia Sdn Bhd signed a memorandum of understanding that marked a beginning of a collaboration on several key projects.

Ex-Mara Corp chairman, Akhramsyah Muammar Ubaidah Sanusi (yes, the same guy that said the digital malls weren’t made with profits in mind) said that the collaboration was done to create job opportunities, initiate research and development in the industry and more downstream industries.

Thing is, the memorandum of understanding was signed without the approval of MARA Council. In a statement, the council said that all new initiatives “need the consideration and approval of the council”. They also said they would review Mara Corp and its subsidiaries’ future direction. Kind of a big oversight, considering the scope of the agreement.

4. MARA ran out of money to give students loans in 2016

In 2016, a study done by the PKR Youth student bureau disclosed that nearly a thousand new students in 33 private colleges were left in the lurch cuz MARA stopped giving out education loans (at the time). 80% of the 945 students were studying in MARA-related colleges, and said that MARA had promised them loans. The students that weren’t in colleges affiliated with MARA had planned to apply for loans midway through their studies.

The same study showed that 80.7% of the participants were thinking of quitting college if they couldn’t get financing from MARA, while 82% knew someone who had actually quit after failing to secure a loan. Fahmi Zainol, ex-chief of the PKR Youth student bureau and author of the study said:

The conclusion from our study is that Mara does have a problem with giving out loans. Its online loan application facility has also stopped accepting applications. – Fahmi in an interview with Malaysian Insider.

At that point in time, Malaysiakini tried to contact Annuar Musa, the then-chairman of MARA, but he declined to comment on the issues until he came back from overseas.

Has the bad overshadowed the good?

That… might be the public perception MARA has right now, what with the MACC raids, allegations of abuse involving allowances and failure to report loans they’ve handed out. Let’s not forget, however, that MARA has contributed much to the intended demographic. For instance, they’ve extended assistance to folk who were affected by the floods nationwide at the end of last year, given capital injections of RM45.9 million to Sabahan SMEs throughout 2021, and offered free online business training to micro entrepreneurs during MCO on how to sustain their businesses.

Of course, as is with any organization, there’s always room for improvement – many of their recent troubles seem to stem from some bad apples in the basket. Tun Arshad Ayub, pro-chancellor of UiTM, said in an interview with The Edge:

The time has come for a royal commission to look into it. What are you going to do over the next 25 years? There must at least be a review, even if it takes five years to conduct the review. We must be brave enough to relook at Mara.

Given the agency’s importance to the development of the Bumiputera community, MARA would only stand to benefit these people even more… should they decide to clean up their act and turn their focus back on what they set out to do in the first place.