Speech by Parliamentary Opposition Leader, DAP Secretary – General and MP for Kota Melaka, Lim Kit Siang, in the Dewan Rakyat on Monday, 25.7.1983 on the motion to appoint the Chairman and Vice Chairman for the Public Accounts Committee.
DAP proposes that the Public Accounts Committee inquire into the billion dollar Bumiputera Malaysia Finance loan scandal in Hong Kong, and report to Parliament.
The Prime Minister has moved this motion to asks the House to appoint Y.B. Tuan Daud bin Dato’ Haji Taha as the Chairman and Y.B. Tuan Lim Liang Seng as Vice Chairman of the Public Accounts Committee for the rest of the Parliamentary session, following the appointment of the previous Chairman Tuan Y.B. Oo Gin Sun, as Deputy Minister for Trade and Industry.
Without referring to the capabilities of the two nominees for the posts of Chairman and Vice Chairman of the Public Accounts Committee, I would ask the Prime Minister to withdraw this motion until later at this Parliamentary meeting, probably next week, as I feel the time has come for both Parliament and Cabinet to review and reconsider what we expected of the Public Accounts Committee.
Up till now, the Public Accounts Committee had failed to play its role as an effective watchdog over public funds, making no impact or contribution to ensure higher standards of public accountability in the handling and expenditure of public funds.
The PAC has been quite impotent, plodding away at out- dated accounts and dealing with the ghosts of government officials who had violated financial propriety or probity, but who are either retired or resigned from public service. What is worse, when the PAC reports are published, they are so dated, that nobody not even Parliament, is interested in them, making the whole AC proceedings a meaningless exercise. Thus, as at present, the PASC had not yet presented its full Report on the 1975 Accounts, for the Federal Government let alone the accounts from 1976 and after.
This is completely out of keeping with the pledge of greater government accountability to the people made by Dr. Mahathir Mohamed when he first assumed the Premiership two years ago, for the PACV system and philosophy at present do not ensure greater public accountability of public funds, but on the contrary, help to evade such public accountability.
If we are to have meaningful public accountability for the expenditure of public funds, then we need an activist and even aggressive Public Accounts Committee, which would leave the musty past of dusty files, high standards in the handling of public money by the present crop of public officials.
I am not asking for a revolution for the PAC, but merely a total change in the present philosophy on the PAC. This is because the Standing Orders on the PAC actually provides for a PAC which could take part actively and meaningful in the process of ensuring high standards of handling public money and accountability, not merely by inquiring into the past, but also by inquiring into the present.
Thus Standing Order 77(1) provides four terms of reference for the Public Accounts Committee, namely to examine:
- the accounts of the Federation and the appropriation of the sums granted by Parliament to meet the public expenditure;
- such accounts of public authorities and other bodies administering public funds as may be laid before the House;
- reports of the Auditor- General laid before the House in accordance with Article 107 of the Constitution;
- such other matters as the Committee may think fit, or which may be referred to the Committee by the House.
Thus far, the PAC has confined itself to dealing with only one of the four items, namely reports of the Auditor- General laid before the House in accordance with Article 107 of the constitution, condemning it to the musty files or the murky past, when it should also had dealt with current problems as permitted to it under the other three terms of reference, which would make the PAC’s work relevant to the present.
In fact, a reading of terms of reference of the PAC shows that the power of the PAC are even wider in scope than the Auditor- General, and that the PAC is not constitutionally required to await the Auditor- General’s reports before conducting examinations into accounts and expenditure of public funds.
It was only in March this year that Parliament amended the Audit Act to confer power on the Auditor- General to examine ‘the accounts of any other body, including a company registered under the Companies Act 1965, in receipt of a grant or loan from the Federation or a State, and including also a company where more than half its paid- up share capital is held by the Federation, a State or a public authority’.
However, the Auditor- General’s new powers are stymied by the proviso that he could only conduct such an examination by the order of the Yang di- Pertuan Agong.
There is also the further doubt whether the Auditor- General is empowered to audit co- operatives, like Bank Rakyat, or banks like Bumiputera, which are in receipt or are wholly constituted by public funds.
The PAC, however, is not bogged down by such limitations, for in pursuance of its duty entrusted by Parliament to ensure that public monies are properly handled and expended, it could delve into areas which are denied to the independent initiative of the Auditor- General, or even into areas which are beyond the jurisdiction of the Auditor- General, as in Co- operatives and Banks in receipt or constituted with public funds. Under Standing Order 77(5), the PAC has the power to send for persons, papers and records and the accounts and expenditures of such public monies so as to be able to report to Parliament.
The PAC has therefore constitutional powers to become an activist, aggressive and relevant watchdog over public funds, but what is needed is the change in the PAC philosophy by the Government and whoever is to occupy the important posts of Chairman and Vice Chairman.
The PAC must be able to live up to its responsibility entrusted to it by Parliament to defeat Executive attempts to avoid public accountability for the expenditure of public monies.
A good example is the attempt over the last seven months by both Cabinet Minister and Bank Bumiputera officials to deny a public accounting on the billion- dollar Bumiputera Malaysia Finance loans in Hong Kong.
During the March meeting of Parliament, from Tengku Razaleigh’s answer to my question on the BMF loans, and after, the people of Malaysia were led to expect that there would be a full accounting of the BMF loans in Hong Kong after the annual general meeting of the Bank Bumiputera.
Unfortunately, the Chairman of Bank Bumiputera, Dr. Nawawi Mat Awin, and the directors of the Bank, all went into hiding, leaving three low- level Bank officials to conduct the post- AGM press conference of Bank Bumiputera, with the officials making it very clear from the start that they were not authorized to answer any questions about the BMF loans.
The Bank Bumiputera Chairman and Director, the Finance Minister and the Cabinet, should realise that Bank Bumiputera is not a private bank, but a bank which had been established with public funds, and which owe a responsibility of public accountability for the proper handling, management and expenditure of public funds, bringing it directly within the terms of reference of the Public Accounts Committee on “the appropriation of the sums granted by Parliament to meet the public expenditure.”
From 1971 to 1980, under the Second and Third Malaysia Plans, Parliament allocated a total of $253.5 million for Bank Bumiputera, which establishes Parliaments right to demand a accounting of its management and expenditure of these monies, by Bank Bumiputera, especially with the series of mysterious happenings surrounding the billion- dollar BMF loans in Hong Kong.
When the BMF loan scandal first broke, Minister had justified their keeping ‘mum’ by a variety of reasons: such as the need to maintain public confidence in the banking community as Bank Bumiputera is the premier bank in the country; that the Minister do not have control over the BMF loans in Hong Kong as they are a matter for Hong Kong regulatory authorities; and Tengku Razaleigh’s reply to me in Parliament that he was unable to say what losses would be incurred from the BMF loans as the Bank’s 1982 accounts were still being audited.
PUBLIC CONFIDENCE SHAKEN
The cold- blooded murder of Bank Bumiputera officer Jalil Ibrahim in Hong Kong last Tuesday where he was assigned to deal with the BMF loans, the fiasco of the Bank Bumiputera post- AGM press conference and the annual report which set out to conceal rather than reveal the actual position, the failure on the part of the Bank Bumiputra and BMF authorities to act on the very explicit reports of international press, especially Asian Wall Street Journal of March 18- 19, naming names of Bank Bumiputra and Bumiputra Malaysia Finance officials who had received million- dollar cheques in their private companies before BMF loans were made out, have shaken public confidence in the integrity and competence of those responsible for the stewardship of banking and finance in Malaysia.
I would call on the Prime Minister to completely clear the air on the BMF loans, to come out publicly on the extent of the BMF loans to Carrian Group, Eda Group and Kevin Hsu in Hong Kong, what percentage of the loans it thought recoverable, and what actions had been taken against the officials remiss in these loan transactions. In view of the Government’s full backing to Bank Bumiputra, such a frank statement on the BMF’s woes not only would have no adverse effect, but could positively regain confidence of the public in the integrity of the whole system.
However, if the Executive and Cabinet refuge to honour the principle of accountability in the BMF loans, then Parliament must invoke its own rights and powers to insist on such accountability.
This is where the Public Accounts Committee must shoulder the responsibility entrusted to it by Parliament to be the Parliamentary watchdog over public monies, and to send for the Bank Bumiputera and BMF officials, their papers and records to enable it to report to Parliament on the BMF loan scandal. The PAC should, to the best of its ability, report to Parliament on the background, status and consequences of the BMF loans; to inquire into specific allegations made by international press against named Bank Bumiputera and BMF officials that they received, through their private companies, million- dollar cheques before BMF loans were made out; whether the increase of the shareholders’ fund of Bank Bumiputera by $500 million from $476 million to $1,076 million would be used primarily to bail out the BMF because of the Hong Kong loans, etc.
If the Prime Minister is not prepared to withdraw the motion to allow for more time for Cabinet and Parliament to consider whether it isn’t time for the PAC to play a more aggressive and relevant role, I would then formally move an amendment to the motion, to read:
“DELETE the full- stop at the end and SUBSTITUTE a semi- colon; and ADD:
‘And under Standing Order 77(1)(d) directs the Public Accounts Committee to examine the loan transactions of Bumiputera Malaysia Finance in Hong Kong and to report to Parliament.”
However, if the Government is prepared to establish a Commission of Inquiry into the Bank Bumiputra Malaysia Finance loan scandal, I am also prepared to withdraw this amendment, provided that the findings of the Commission are made public.
The Chairman and Vice Chairman of the PAC, therefore, must be persons who are not afraid, in the discharge of Parliamentary duties entrusted to them, to step on the toes of Ministers or the Executive, for fear of dimunition of their chances of political promotion. This is why the parliamentary convention in other countries have developed for an Opposition member to be Chairman of the PAC.
Finally, I understand that YB Lim Lian Seng was recently appointed the Special Assistant to the Deputy MCA President and Minister for Labour and Manpower, YB Mak Hon Kam. Standing Order 77(4) makes a clear cut prohibition for a Minister to become a Member of the PAC, for he would end up as prosecutor, accused and judge, so to say. Similarly, Deputy Ministers, Parliamentary Secretaries, and even Political Secretaries and Special Assistants to Ministers should not sit on the Committee, for they are the direct creatures, government or party, of the Minister concerned, and cannot be expected to assert Parliament’s interest over his immediate loyalty to his political superior who is a Minister.
If the Prime Minister is not prepared to withdraw this motion as I suggested, I would hope he would at least accept the principle that there should be no conflict of interest with Ministers, Deputy Ministers, Parliamentary Secretaries, Political Secretaries or Special Assistant to Ministers although in their political party capacity, and a new Vice Chairman for PAC be nominated.