Call on Johore MCA State Committee and Divisions to account as to how many tens of millions of dollars it had collected from its members and the public

Speech by Parliamentary Opposition Leader, DAP Secretary-General and MP for Petaling, Lim Kit Siang, at the DAP Pudu Branch Annual General Meeting held at DAP Pudu Branch premises in Kuala Lumpur on Friday, 19th June 1981 at 8 p.m.

Call on Johore MCA State Committee and Divisions to account as to how many tens of millions of dollars it had collected from its members and the public in the form of interest-free loans purportedly for shares in the unregistered and non-existent Matang Holding Bhd

Recently, a craze had hit the Malaysian Chinese, who have been mesmerised into believing that a new era in money-making has begun in Malaysia, where in fact, money could be conjured out of nothing provided they buy MCA’s Multi-purpose holding shares, or other related ‘holding’ shares. An investment of $1,000 in ‘holdings shares’ will hey presto become overnight ten times its value to $10,000!

Overnight, ‘holdings shares’ has become the ‘Miracle money-maker’, and there is a rush to divest hard-earned money and savings to buy ‘holding shares’, all believing that somehow the laws of nature have been suspended and that the riddle of how to make money out of nothing has somehow miraculously been solved.

This has also allowed unscrupulous people to cash in on the present craze on ‘holdings shares’ to divest the people of their hard-earned money.

Johore is the worst-affected state. For a week, banks and finance companies were hard-put to cope with long queues of people who wanted to take out their savings and even break their fixed deposits to have a share in the miracle money-maker, ‘h0ldings shares’. Money seems to have disappeared from the market, badly hitting business.

What is most shocking is the way Johore MCA tried to capitalize on this MCA-created craze to sweep up tens of millions of dollars of the people’s hard-earned money.

Johore MCA divisions, on the instructions of the Johore MCA State Committee, had collected an estimated sum of about $30 million in the last two weeks from MCA members and the public purportedly for shares in the Johore MCA state multi-purpose holdings, named Matang Holdings Bhd. In fact, Matang Holding Bhd., had not been registered, and is non-existent.

Although MCA members and the public, (who could participate by immediately signing up as member), were told in meeting and circulars that they were invited to buy shares in the Matang Holdings Bhd., when it came to handing over money ranging from $500 to $5,000, they were required to sign a pre-printed form, addressed to the MCA Division Chairman, stating that it was an interest free loan to the MCA Division! The Cheque or bankdraft had to be written as payable to the MCA Division concerned. (A copy of the form is attached.).

There is no time limit to the interest-free loan to the MCA Division, it could be one year, two years or five years. There is no protection as to the money being paid to the MCA Division. But because the MCA members and the public were told that the money were to be used to but the miracle-money maker, ‘holdings shares’ of Matang Holding Bhd., there is a rush throughout Johore to get out their saving and even fixed deposits from banks, finance companies, to take part in the new era of rapid money-making. In the new villages and small towns, who have never talked about shares, the only topic of conversation is now ‘holdings shares’ – and the smaller the town and village, the greater the percentage of monies being brought out to the MCA Divisions.

In Muar District, I estimate that some $4 million have been collected by the MCA for the so-called ‘Matang Holdings’, in Rengam, over $3 million – and in the whole state of Johore, a total figure of $30 million!

To invite the subscription of Matang Holdings Bhd. shares, and collect some $30 million in the form of interest-free loans to the respective MCA divisions, is most improper for any political party, and downright cheating on top of it.

I call on the MCA Johore State Committee and the respective MCA Divisions to publicly state as to how many millions of dollars they had collected from their members and the public in this form of ‘interest-free loans’, under the guise of subscription to a non-existent Matang Holdings Bhd.

The authorities, in particular the Police, the NBI, the Registrar of Companies and the Registrar of Societies, should investigate into such a multi-million dollar scandal perpetrated by a political party, and I will be contacting all the above authorities concerned to urge them to take the necessary actions to protect the public interest.

The present craze rooted in the belief that with an initial investment, money will multiply five, seven or ten times, is reminiscent of the 1973 shares market, which eventually led to a share market collapse, resulting in so many bankriptities and human tragedies.

At that time, not only in Malaysia, but the whole world idolized Jim Slater as a financial wizard who was ‘clever with money than anyone else in the world’. In three years from 1966 – 1969, in a series of company mergers and take-overs, Slater’s empire saw profits rise from £370,000 to £10,000 – and Slater Walker’s market valuation shot from £4 million to $135 million.

When the Slater empire collapsed at the end of 1973, bringing so many starry-eyed admirers of Slater in the world to their doom, analysts found that the Slater empire was built on nothing more than Slater’s reputation as a financial wizard, which gave other people the confidence to support his adventures with their money! In fact, subsequent studies have shown that there was not a single moment in its history when Slater Walker, by traditional criteria, would have been described as a ‘sound’ financial institution.

The people in Malaysia should not forget the lessons of the Slater empire and the 1973 share market collapse, and must not believe that all they need to make money, is to invest the initial sum and wait for it to multiply five times or ten times in a very short time.

There is in Malaysia today too much dishonesty and too many unscrupulous men who are prepared to capitalise on the people’s housing hunger by collecting from $1,000 to $30,000 of booking fees and ‘tea money’ for houses which are non-existent. And when Sdr. Lee Lam Thye takes up the cause of the victims of these bogus housing developers, who throughout the country must have made tens and hundreds of millions of dollars from such acts alone, Sdr. Lee is threatened with ‘death’! But DAP leaders cannot be so easily deterred or cowed.

The collection of some $30 million in Johore by Johore MCA State Committee and Divisions is no different from the actions of such bogus housing developers. If a component political party in government can do such dishonest things, then it speaks ill in the struggle to create and build a honest, clean and just Malaysian society.