5th March 2024 – (Kuala Lumpur) As pro-Palestinian boycotts batter sales at Starbucks Malaysia, tycoon Vincent Tan made an impassioned plea for Malaysians to stop the boycott. At a recent press conference, the founder of Berjaya Corp called the boycott “unnecessary” and proclaimed the Starbucks Malaysia franchise is “100% Malaysian owned” with local employees. But Tan’s desperate attempt to invoke nationalism rings hollow when his own controversial crony ties are examined.

Tan’s company, Berjaya Food, holds the license for Starbucks in Malaysia. He claims the brand has “no shares” owned by Americans locally but hardcore boycott supporters argue as Starbucks is a U.S. brand, revenues still flow back to the parent company in Seattle. Anti-Israel sentiment runs deep in Muslim-majority Malaysia, with many viewing American brands as complicit in Israeli actions in Gaza.

For them, the technicality of local ownership is irrelevant. As observed by academic James Chin, “For Malaysians if you choose not to pick a side and claim to be neutral, to them, you are supporting the cursed by God.” Neutrality is seen as acquiescence.

Starbucks Malaysia sales plunged 38% in Q4 2022 after the boycott began. With over 400 stores nationwide, the coffee chain is a lucrative jewel in tycoon Tan’s empire. His urgent attempts to mitigate the boycott reveal not just economic anxiety, but shed light on his modus operandi.

Tan built his fortune not via competitive entrepreneurship, but through cozy deals and government largesse. He epitomizes the crony capitalism that long plagued Malaysia’s political economy. Examining his nexus with ruling party UMNO provides context to evaluate the integrity of his plea.

Tan got his start in business in the 1970s selling used cars and resurrecting distressed companies. In the recession of 1985, his B&B Enterprise was one of 10 selected conglomerates given access to easy credit to restructure ailing firms. Credit flowed despite B&B having defaulted on loans before.

This preferential financing was the catalyst for Tan’s foray into corporate gambling. In 1988, he acquired the McDonald’s fast food franchise in Malaysia with help from Robert Kuok’s Kerry Group. The same year, Tan obtained the license for lucrative lottery Big Sweep through company Pan Malaysian Sweeps. Tan’s biggest break came in 1995 when then Prime Minister Mahathir Mohamad essentially gifted gambling outfit Sports Toto to him for a paltry RM28 million. This surprise handover was slammed as lacking transparency and enriching an UMNO crony.

Sports Toto proved Tan’s golden goose, significantly boosting his Berjaya Group. By 2022, Sports Toto market cap exceeded RM4 billion. Tan gained an enormously profitable gambling concession for peanuts due to political connections. Tan’s ties to ruling party UMNO intensified in the 1990s as corporate patronage peaked under Mahathir. Mahathir named Tan his “favourite businessman” for achieving success through government largesse and Tan’s loyalty was richly rewarded.

Tan spearheaded ostentatious projects like building the RM1.2 billion Berjaya Times Square mall in the midst of the 1998 Asian Financial Crisis, embodying crony excess. He flaunted his ties with Mahathir to obtain bank financing despite the turmoil.

It was also an open secret that Tan bankrolled Mahathir’s political activities, earning him access and favors. Author KS Jomo described Tan’s Berjaya Group as “among the most obvious beneficiaries of Dr. M’s patronage.”

However, Tan and Mahathir share more than just a patron-crony bond. Both also harbour less savoury anti-Semitic tendencies which contradict Tan’s plea for neutrality on the Israel-Palestine conflict.

Tan also highlighted Starbucks Malaysia’s local workforce and community contributions in his statement but to critics these gestures seem superficial corporate social responsibility washing. With a large Muslim workforce, Starbucks Malaysia pays below-average industry wages, particularly in its supply chain. And contributions appear paltry compared to billions in revenues channeled back to parent Starbucks Corp, fuelling perceptions the brand enriches Americans, not Malaysians.This exemplifies how crony capitalism breeds public distrust. After decades witnessing political patronage corrupt governance, Malaysians cynically dismiss elites evoking social causes as publicity stunts when profits are threatened. That Tan’s own past financial successes stemmed from cozy state handouts, not competition or community uplift, renders his pleas now hypocritical to citizens. His awards from Mahathir affirming Tan’s “social contributions” carry ironic weight today.

The Malaysian Anti-Corruption Commission (MACC) has also recently sharpened its focus on several controversial bailouts from the Mahathir era. Ongoing probes revolve around deals linked to Mahathir’s sons and former finance minister Daim Zainuddin. Authorities are investigating the circumstances of Petronas acquiring debt-laden shipping assets from Mirzan Mahathir in 1998 when Dr. Mahathir was both Prime Minister and held direct purview over the state oil company. The conflict of interest and rationale behind the RM1.79 billion bailout of Tajudin Ramli’s stake in Malaysian Airlines are also under scrutiny. Mahathir has taken to social media to express grievances over what he sees as selective prosecution, while current premier Anwar Ibrahim accuses Mahathir of nepotism and abuse of power during his tenure. The MACC’s investigations into past cronyism provide relevant context when examining the anti-corruption credentials of political elites like Vincent Tan today.

Tan’s urgent attempts to placate boycotters highlight risks inherent in crony business models — when profits depend on pubic perception, they remain fragile without authentic goodwill. Tan personifies Malaysia’s rentier capitalism – politically-linked tycoons reaping easy wealth through government largesse, not innovation or ethos. This SYSTEMIC cronyism decayed public trust.

Now when capitalism confronts activism, a firewall of cynicism engulfs corporate social responsibility efforts. No firewall protects profits however, hence Tan’s desperate appeal to boycotters rings hollow.

His statement exposes contradictions between proclaimed neutrality and alleged covert prejudice, selective outrage and opportunism. All undermine his posture of corporate conscience. Malaysia needs systemic reform to open markets, foster competition, elevate ethics and diversify its economy beyond commodities and crony gambling. Without genuine change, tycoons with troubled legacies will struggle to convincingly invoke goodwill when their profits conflict with the public interest.

Tan’s plea crystallises risks for elites when people feel corporations profiteer without principle. It unveils crony capitalism’s profound public trust deficit. Until Malaysia escapes this corrupt legacy, corporate cries for neutrality while reaping the benefits of years of special treatment will fail to persuade boycott supporters. System change is required before capitalists without democratic credentials can credibly position themselves as politically neutral voices deserving to be heard. Vincent Tan’s plea highlights how capitalist capture of democracy breeds scepticism when profits then demand public empathy. His call highlights that in crony cultures, feigning neutrality fails to generate goodwill.