Sports Toto is the best example as to how privatization has degenerated into piratisation where a select few had been allowed to raid the government domain for their self-interest at public expense


Speech by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Dewan Rakyat on Friday, March 13, 1987 on the 1986 Supplementary Estimates

Sports Toto is the best example as to how privatization has degenerated into piratisation where a select few had been allowed to raid the government domain for their self-interest at public expense

The Government has come to the House for approval for three sets of supplementary estimates, the second supplementary operating estimates for 1986, and supplementary estimates for 1985 as well as for 1986 – all totaling some $1,300 million.

At this time of great economic hardship for the country and people, the government must satisfy Parliament that it had exercised all possible economies, avoided all possible wastes, and extracted maximum efficiency of the government service, to justify committing the government in more expenditure.

If economic mismanagement if the nation continues to be the order of the day, with wasteful and extravagant expenditures on white-elephant projects, rampant corruption and conflict of interest situations in public service, inhibiting economic recovery because the inability of the government to fully restore the grave and prolonged crisis of confidence afflicting the government, then Parliament should tell the government that requests for also more appropriations of monies for supplementary estimates, the Government must also really and truly addresses itself to the root problems of the crisis of confidence in the country.

Parliament will be failing in its duty if it does not make it clear to the Government its displeasure at receiving more requests for supplementary appropriations of public funds for operating and development expenditures for 1985 and 1986 when various major issues raised during the debates on the 1985 and 1986 Budgets in Parliament had not been given the attention they deserved.

For instance, the government has repeatedly said that it is committed to privatization because this will reduce the government’s financial and administrative burden and the size of the public sector.

Two days ago, during question time, I asked the Prime Minister, Datuk Seri Dr. Mahathir Mohamed, why there was no open tender for the privatisation of the Sports Toto. Dr. Mahathir said the idea of the privatization of the Sports Toto came from a private sector group and that “it would have been unfair if their unique proposal had been accepted by the Government and been awarded to someone else.”

I find this a most extraordinary definition of public interest. In fact, it appear that ‘public interest’ in Malaysia today is defined, not I terms of what is good for the people at large, but what is in the interest for a select group or chosen individuals.

The Sports Toto was privatised in June 1985, and it has been estimated that in 1985, the privatised Sports Toto made $8 million for six months of operation, as it donated $800,000 to the National Sports Council, representing 10 per cent of its profits.

Based on 1985 results, the privatised Sport Toto would make $16 million net profit for 1986. For 1987, Sport Toto’s profit is expected to exceed $30 million as it has been allowed to introduce three new types of gambling, including Chee Fah or 36 numbers which is drawn every day of the week.

Although the Ministry of Finance holds 30 per cent in the privatised Sports Toto, its controlling share of 60 per cent is held by B and B Enterprise Sdn. Bhd whose largest shareholder is Vincent Tan Chee Yioun more well-known in his ownership and control of Berjaya Corporation Bhd, while 10 per cent is held by Melewar Corporation.

What “unique idea” did Vincent Tan come up for the privatisation of Sports Toto that it would be unfair to have an open tender? I can think of Chee Fah, the 36 numbers, and other forms of gambling, which cannot be very unique. I stand to be corrected, but I understand that there had been umpteenth but unsuccessful applications for the operation of Chee Fah in the past years – so what is so unique about Sports Toto running Chee Fah?

If Sports Toto is to ve given a free hand to be able to introduce new forms of gambling, to make $30 million net profit a year, the entire earnings should go to the state coffers, and not to private pockets. Or at the very least, there should be regular bidding for the operation of Sports Toto, say very two or three years, the franchise to go to the highest bidder.

The Sports Toto case us very clear example of how privatisation has degenerated into piratisation where a select few had been allowed to raid the government domain for their self-interest at public expense, channeling the tens millions of dollars a year into private pockets which should go to government coffers.

I challenge the Minister of Finance to tell Parliament and the House the basis for the privatisation of Sports Toto to B & B Enterprise Sdn Bhd. – what ‘unique idea’ the Prime Minister referred to when he said it would be unfair to submit the privatization to open tender?

I have no doubt that if the government made it clear to the public that the government welcomes ideas about making money through gambling, the Treasury would liberally be flooded with proposals and ingenious ideas from the public.

Can the Finance Minister explain on what basis and what are the terms and conditions Sports Toto was privatised to B & B Enterprise Sdn. Bhd. A search in the Registry of Companies showed that B & B Enterprise Sdn Bhd. Owed a total of $82 million, involving five loans from Co-operative Central Bank amounting to $24 million!

Further breakdown of the government’s commitment to the principles of accountability and efficiency as illustrated in the unlawful Investment of $50 million of EPF funds in non-trustee stocks

Parliament must be very concerned at the requests for increased appropriations for supplementary expenditures for the past two years when there is at the same time an increasing breakdown of the government’s commitment to the principles of accountability and efficiency. The best case of illustration is the unlawful investment of $50 million of EPF funds on non-trustee stocks as highlighted by the Auditor-General, Datuk Ishak Tadin, in the 1985 EPF audited accounts.

Yesterday, the Deputy Finance Minister, Datuk Sabarrudin Cik, gave an evasive answer when I asked why the Government and in particular the Finance Ministry had taken no action on this matter although the Auditor-General’s comment on the 1985 EPF accounts were completed in September last year.

A government which could allow more than six months to pass without taking any action or decision on the unlawful investment of $50 million of EPF funds on non-trustee stocks, in violation of the EPF 1951 Act, is not government which could be trusted with the stewardship of public funds and workers’ monies.

In this connection, I call on the Finance Minister or his Deputy Minister to make a clear-cut stand as to whether the Government accepts the Auditor-General’s comments that it was unlawful for the EPF monies to be invested in non-trustee stocks, or whether the Government is contesting this position of the Auditor-General.

What is noteworthy is that the Deputy Chairman of the EPF Investment Panel, which is not answerable to the EPF Board, is none other than the Attorney-General, Tan Sri Abu Talib Othman, himself. How could the Attorney-General, Tan Sri Abu Talib, get the EPF Investment Panel to break the law by violating the EPF Act in investment of EPF funds?

Is Tan Sri Abu Talib the Attorney-General going to take action against Tan Sri Abu Talib the Deputy Chairman of the EPF Investment Panel for such illegality, and for reimbursements for whatever losses suffered by the five million EPF contributors arising from such unlawful investment in non-trustee stock?

Let me inform the House that if Tan Sri Abu Talib as Attorney-General is not prepared to protect the interest of the EPF contributors by filing proceedings against the Investment Panel of EPF, including himself, the DAP lawyers will consider the possibility of filing action against him and the EPF Investment Panel to ensure that the rights and interests of the unlawful actions of the EPF Investment Panel.

It is not only in the EPF affair that the people note the increasing breakdown of the governement’s commitment to the principles of accountability and efficiency, but in a whole range of issues, including the long-standing but unresolved scandals like the $2.5 billion BMF scandal, the UMBC shares transaction of the Finance Minister, Daim Zainuddin and his family; the $660 million losses incurred by the Maminco tin-buying operation in London; the $1.5 billion Co-operative Finance Scandal; the Co-operative Central Bank Scandal; the spectacle of Barison Nasional leaders, including Ministers and Deputy Ministers, suspected of conflict of interest situations or criminal breach of trust or grave pecuniary indebtedness and embarrassment – where the Finance Minister Daim Zainuddin had to fly to Singapore to plead with the creditor banks of the Deputy Agriculture Minister, Alex Lee, for clemency. These are not the stuff to restore confidence, but to spread further demoralisation and despair!

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