Speech by Parliamentary Opposition Leader, DAP Secretary-General and MP for Kota Melaka, Lim Kit Siang, at the DAP Klang Ceramah held at Klang Hokkien Huay Kuan on Saturday, 7th June 1986 at 8pm
DAP calls for the resignation of Daim Zainuddin as Finance Minister if he is not prepared to agree to the establishment of a Public Inquiry Committee to investigate into allegations of conflict of interest in the two UMBC transactions involving his family companies
In the 1982 General Elections, the Barisan Nasional promised the people a ‘clean, efficient and trustworthy government’ and ‘Leadership by Example’.
As former Deputy Prime Minister, Datuk Musa Hitam, said recently, the ‘clean, efficient and trustworthy’ slogan was the rallying cry of the Barisan during the general elections.
Although Malaysians did not expect the Mahathir Government to turn Malaysia into a corruption-free country, they expect the Mahathir administration to be the cleanest and most corruption-free as compared to the previous administrations of Tunku Abdul Rahman, Tun Razak and Hussein Onn. Furthermore, they expect all the top political leaders of the Mahathir Government to be clean, pure and untouched by any allegation or even rumour of corruption, impropriety or illegal wrongdoing.
Both expectations of the people had been disappointed. Never before in the history of Malaysia has there been more widespread allegation of corruption, graft, abuse of power, government unaccountability and irresponsibility, as now.
I call on the Prime Minister, Datuk Seri Dr. Mahathir Mohamed, to give this problem his most serious attention, and to take positive and courageous steps to regain confidence of the people in the government.
As a first step, all Barisan Nasional leaders inside or outside government must be prepared to subject themselves to public scrutiny and examination to clear themselves of any allegation of corruption, impropriety, conflict of interest or abuse of authority. Top government leaders who are prepared to be publicly examined to expose the untruth of allegations of corruption or abuse of authority would not only clear their name as well as that of government, it would inspire confidence among the people that government leaders have nothing to hide from the public.
It is for this reason that I find the reaction and attitude of the Finance Minister, Daim Zainuddin, to public queries as to whether there was any conflict of interest in the two UMBC transactions involving his family companies during the period when he had become Finance minister most disappointing and unsatisfactory.
Daim Zainuddin termed as ‘trash’ the Asian Wall Street Journal allegations of improprieties in the two UMBC transactions by his family companies in 1984 and 1985, and yet, he is not prepared to take the Malaysian public into his confidence as to why these allegations are ‘trash’. Until Daim Zainuddin could proved them as ‘trash’, the Finance Minister must expect the Malaysian public to believe the allegations in the Asian Wall Street Journal, especially as Daim had said that he would not sue the foreign newspaper.
For the good of his name and that of the government, I call on Daim Zainuddin to take the initiative to have a Public Inquiry Committee to be established to investigate into the two UMBC transactions to establish whether there had been conflict of interest.
If Daim Zainuddin is not prepared to agree to the establishment of a Public Inquiry Committee, then the DAP calls on him to resign as Finance Minster, for he would have caused irreparable damage to the reputation and image of Malaysia, both nationally and internationally.
The Public Inquiry Committee, which should be appointed under the Commission of Enquiry Act to have the full powers of a Commission of Inquiry, could be headed by Tan Sri Ahmad Nordin who had done an excellent job in the investigations into the $2.5 billion Bumiputra Malaysia Finance scandal. The Inquiry Committee’s terms of reference should include the following:
(i) Whether there was any conflict of interest or illegality in the 1984 approval for the acquisition of 41% control of UMBC by Daiim Zainuddin family companies, as Daim was already Finance Minister and under Section 25 of the Banking Act, it was the Finance Minister’s legal duty to decide on whether to approve any bank reconstruction;
(ii) Again, whether there was any conflict of interest or illegality in the 1985 approval for the increase from 41% to 51% majority ownership of UMBC by Daim Zainuddin family companies, for the same reason;
(iii) Why outright majority control of the UMBC by the Daim Zainuddin family companies in June 1985 was carried out on a ‘hush, hush’ basis without any public announcement or disclosure until the revelation 1 months later in the Asian Wall Street Journal on April 30, 1986;
(iv) Whether there was any conflict of interest, impropriety or illegality in a situation where the 51% majority control by the Daim Zainuddin family companies in the third largest bank in Malaysia was completed two months before new government regulations limiting equity ownership in banks and finance companies to 10 per cent for individual shareholders, including family-owned companies, and to 20% for corporations;
(v) Whether there was any conflict of interest, impropriety or abuse of authority where the Daim Zainuddin family companies used the Finance Minister’s influence to secure $164 million loans from a foreign bank in Singapore, so that the Daim Zainuddin family companies could acquire majority control of UMBC without risking a cent of its own capital;
(vi) After Daim was appointed Finance Minister, he announced that he would put his private business in a blind trust. From the two UMBC transactions, where the $165 million bank loans to the Daim family companies to acquire 51% of UMBC majority control were made clearly on the basis of Daim’s position and influence in government and with the Prime Minister, Daim’s ‘blind trust’ is not ‘blind’ at all. What was this ‘blind trust’, who operated the ‘blind trust’, whether Asian Wall Street Journal’s report that the blind trust was dominated by his close associates and his brother was correct.
(vii) Is there any truth in the Asian Wall Street Journal report that corporate records show that Daim’s family-owned private companies owe more than $25 million to local and foreign banks.
These and many other questions affecting the UMBC transactions cry out for an answer. I hope Daim would take the personal initiative at coming Wednesday’s Cabinet meeting on June 11 to propose the establishment of a public inquiry committee into the two UMBC transactions.
Parliament has sent out notice for Dewan Rakyat meeting beginning on July 14. Yesterday, I sent in some parliamentary questions for the July meeting, and my first question for the first parliamentary sitting on July 14 is on the UMBC transactions, which reads:
“To ask the Minister of Finance whether the government would establish a Royal Commission of Inquiry to ascertain whether there was any conflict of interest in the two UMBC transactions in 1984 and 1985 resulting in the family companies of the Minister of Finance acquiring first 41% and then 51% majority stake in UMBC, the third largest bank in Malaysia; and also because the 51% control of the bank took place just two months before the new government regulations limiting equity ownership in banks and finance companies to 10 per cent for individuals and 20 per cent for corporations; and if not, why not.”
DAP officially launches nation-wide mass signature to demand return of $10 million plus interest by $2 company, MAKUWASA, to EPF and effective worker control of EPF investment policies in Klang tonight
Tonight, in Klang, the DAP officially launches the nation-wide mass signature campaign to demand the return of $10 million plus interest by $2 company, MAKUWASA, to EPF contributors’ funds for improper profit at the expense of the five million EPF contributors.
The EPF Investment Panel, without authority or knowledge of the EPF Board, and in utter disregard of the law or the interest of the workers, sold 13 share counters to the $2 company, MAKUWASA, at below-market price, when the EPF contributors would have made $10 million profit if the shares were sold at market price.
The $2 company, MAKUWASA, is not entitled to this $10 million gift at the five million contributors’ expense, and this money, together with interest, must be returned to the EPF contributors’ funds. If the $2 company, MAKUWASA, refuses to return this $10 million to the EPF, then the five million workers should hold every member of the EPF Investment Panel liable and responsible for this loss. The Attorney-General, Tan Sri Abu Talib, is a member of the EPF Investment panel. He should explain why he did nothing to prevent such impropriety and even illegality from taking place, as he is the No. 1 Law Enforcement Officer in the country!
The nation-wide mass signature campaign will also demand that there must be effective and meaningful worker control and participation in all important EPF decision-making, in particular in the investments of the $21 billion of EPF contributors’ funds.
I am shocked that for two weeks, there has not been a single worker representative on the EPF Board. All the three worker representatives on the EPF Board had completed their term of appointment, and the refusal of the authorities to immediately fill or re-appoint the worker representatives is an indication of the government’s contempt for trade unions or workers.
The government should not forget that the EPF funds are workers’ money, and should be used, invested and administered by worker representatives.
The nation-wide mass signature campaign will also demand a new deal for the five million EPF contributors. Last year, a study by the Consumers’ Association of Penang reported that because of the EPF’s unfair policy regarding interest payments on EPF contributions, e.g. EPF interest far below the average interest rates paid by finance companies and banks for 15-month fixed deposits, workers lost $2.8 billion between 1970-1985. There should be more liberal rules to allow workers to utilise EPF contributions directly for workers’ benefit, as buying houses, paying education fees and medical bills or starting one’s own business. I call on all workers and even trade unions to give full support to this mass signature campaign to restore to workers the rightful control of EPF contributions, and an end to all misuse of EPF funds against workers’ interests.
The EPF nation-wide mass signature campaign, which is headed by DAP Deputy Secretary-General and MP for Kuala Lumpur Bandar, Sdr. Lee Lam Thye, will be carried out throughout the country simultaneously with the nation-wide mass signature campaign for amendment to the Malaysian Constitution, Article Eleven, to defend the parental right to determine the religion of their children below 18 years.
Both these signature campaigns concern issues of vast importance, and in a country which practises parliamentary democracy, based on the wishes of the people, the citizenry must be vigilant of their rights and be ready to speak up and make their voice heard.
The DAP carried out a very successful nation-wide mass signature campaign to Save Bukit China from being demolished by the Malacca State Government to make way for commercial exploitation and development to protect the cultural heritage of Malaysians. I am confident with equal support from Malaysians for these two campaigns, the workers would be able to regain effective control over the use and investment of EPF funds, as well as parents regaining control over the future, custody and charge of their children.