by Parliamentary Opposition Leader, DAP Secretary-General and Mp for Kota Melaka, Lim Kit Siang, in Petaling Jaya on Tuesday, Dec. 3,1985:
Call on Tan Koon Swan to explain the Pan El’s $140 million forward contract of brand United and Supreme shares, which led to the collapse of the Pan El rescue plan and suspension of the Kuala Lumpur and Singapore Stock exchanges.
It is now confirmed that one of the main causes for the scuttling of the Pan El rescue plan by a group of banks after two-week long-drawn negotiations is the last-minute revelation last Friday that Pan-El had a massive S$140 million share purchase commitment on a forward contract basis for the Grand United and Supreme shares. This deal was apparently not disclosed by Pan-El until much later – and after it had paid the $40 million margin deposit. – leading the group of banks to abandon a rescue plan for Pan-El which had debts of S$350 million, and suspension of the Kuala Lumpur and Singapore stock exchanges.
Many questions are raised by this development: how Pan El, capitalised at $80 million could have approved proposals to buy $140 million of Grand United and Supreme shares on a forward contract basis, and pay a $40 million margin deposit for the block: why this deal was not reported to the group of banks working out a rescue plan until the ‘last minute’: and what is
The actual relationship of Grand United and Supreme shares with Pan El, apart from Grand United’s indirect ownership of Pan El, through Grand United’s ownership of part of Sigma International, which owned part of Pan El.
Tan Koon Swan owe the people a full explanation about Pan El’s $140 million forward contract to buy Grand United and Supreme shares, especially in view of his direct connection with latter two companies.
It is ironic that the first few days of Tan Koon Swan as MCA President should highlight in no uncertain terms that MCA Politics and the Politics of Towkays are inseparable, especially as the MCA Youth Politics is now also the Politics of Towkays with Senator Kee Yong Wee as the MCA Youth Leader.
But before the new Towkay ‘Presidents’ of MCA and MCA Youth could show to the Malaysian Chinese what they could do for the Chinese community, the Chinese community are made immediately aware of the dangers of a politids which is inseparably tied to business, which could only mean its secondary and subservient position to business and high finance.
Just as the people had been asking whether the BMF scandal had anything to do with the Politics of UMNO, the question is now being asked whether the Pan-El scandal has anything to do for the Politics of MCA.
DAP deplores the inability of Bank Negara to take effective action to protect depositors of unlicensed finance companies after two months
I deplore the inabililty of the Bank Negara to take effective action after two long months to protect depositors of unlicensed finance companies, especially the some 10,000 despitors who out in some $60 million in Setia Timur Credit and Leasing Sdn. Bhd.
A Bank Negara spokesman said the Finance Companies Act would be amended to impose heavier penalties against unlicensed finance companies collecting deposits from member of the public to four-fold from the existing $5,000.
This utterly inadequate, and would not serve as a deterrent, if the unlicensed finance company had collected tens of millions of dollars. Furthermore, the question Bank Nagara has failed to address itself is what action it is taking to help look after the interest of the public who deposit monies in existing unlicensed finance companies, like Setia Timur Sdn. Bhd.
The Bank Negara and the Ministry of Finance should be more efficient, competent and responsible, and more come out with a plan to protect the Setia Timur Sdn. Bhd. Depositors an others in the same position, I propose to meet Bank Negara officials to express my grave concern at their inability to act effectively, especially over the Setia Timur Sdn. Bhd. Case.