Call on Datin Rafidah Aziz to invite the Anti-Corruption Agency to conduct full and free investigations into LPN to clean up agency and restore public confidence

Press Conference Statement by Parliamentary opposition Leader, DAP Secretary-General, MP for Tanjung and Assemblyman for Kampong Kolam, Lim Kit Siang, at DAP Headquarters on Wednesday, 10.9.1986 at 12 noon.

Call on Datin Rafidah Aziz to invite the Anti-Corruption Agency to conduct full and free investigations into LPN to clean up agency and restore public confidence.

I am very disappointed by the belated reaction of the Minister for Public Enterprises, Datin Paduka Rafidah Aziz, on the LPN mess in Kedah and perils where because of its bufigle, inefficiency and incompetence, the padi farmers in Kedah and Perlis face the prospect of losing $25 million in the present padi harvest.

From Datin Rafidah’s remarks made after a Wanita UMNO Exco meeting, it is clear that she does not fully understand the problems faced by padi farmers in Kedah and Perlis, where padi-laden Lorries had to queue for three days and two nights outside LPN complexes.

Datin Rafidah said the lorries queue on their own choices as they had been told by LPN not to leave their lorries outside the complexes after the grading counters have closed.

How insensitive and out of touch with reality could Datin Rafidah be? Who want to queue for three days and two nights for the fun of it? If lorries who queue up had to wait for three days and two nights to get their padi cleared, those who break the queue every night may have to wait for one week to get their turn, by which time, their padi would have gone rotten and the LPN may give the record-breaking discount of 80 or 90 per cent!

As it is, with a queue of three days and two nights, farmers complain that LPN complexes are discounting their padi as high as 40 or over 40 per cent, for impurities and padi gone rotten because of the long wait and rain.

On the complaint that contract laborers engaged by LBN to unload padi from the lorries into the LPN complexes are demanding money from lorry operators and farmers, Datin Paduka Rafidah advised the farmers not to give these laborers any money as they are paid by LPN for such tasks.

Again, nobody would want to pay money unnecessarily to the contract labourers, except where they are put in a position where they could be victimized if they do not do so.

The farmers are afraid that if they do not comply with the demand for extra payments, they would be victimized, as there is an arrangement between LPN staff contract labourers where delays and obstructions could cause great losses to the farmers.

The Minister’s advice is really no help. The Minister should know that over the past 14 years of the LPN’s existence, there has been widespread complaint of graft and corruption in the LPN. I have been told of LPN staffs that are paid $300 or $400 a month but who could afford expensive cars, expensive houses and expensive life-styles.

I call on the Minister of Public enterprises to respect the Barisan Nasional’s government pledge of clean and trustworthiness, and invite the Anti-Corruption Agency to send a special team to have full and free investigations into the LPN throughout the country, to clean up the LPN and to restore public confidence.

There must be a full shake-up and clean-up of the LPN, as well as a full review of the role, function and directions of the LPN, so that the perennial complaints by farmers, millers, retailers and consumers could be resolved once and for all.

DAP calls on the Government to institute an inquiry into the Co-operative Central Bank Ltd, with regard to its huge loans and allegations of improprieties to make sure that there would not be another Bank Rakyat scandal

I have received complaints from individual members and member-societies about the running of the Co-operative Central Bank Ltd. (CCB), the huge bad loans carried by CCB, the manner of appointment of directors as well as allegations of various improprieties.

CCB, like Bank Rakyat, is not a bank under the Banking Act, but a co-operative under the Co-operatives Ordinance. About 10 years ago, Parliamnet had to pass a vote of $150 million to come to the rescue of Bank Rakyat because of corruption, mismanagement, negligence, breach of trust and abuse of authority.

A month ago, 24 deposit-taking co-operatives with total amount of $1.6 billion had their assets frozen by Bank Negara under Essential powers specially invoked for the occasion.

In these circumstances, it is vital that serious complaints about the CCB should get priority attention of the government, especially as we do not want to have another Bank Rakyat scandal.

According to the CCB’s 1985 Annual report and Financial Statement, the shareholders capital stood at $40.5 million, but in 1985 itself, the provision for doubtful loans as well as bad debts written off came to $11.4 million, which is $9 million more than for 1984.

The details of these bad debts and doubtful loans for 1985 and 1984 as given by the Financial Statement 1985 are as follows:

1985 1984
Provison For Doubtful loans:
Specific $6,673,216 –
General $4,095,500 $2,500,000

Bad loans written off : $ 626,430 $ 43,341
_______________ _________________
$11,395,146 $2,543,341
_______________ _________________

This represents a 28.12 per cent depletion of the share capital, which must reflect on the management of CCB.

I understand that for CCB, it is not easy for members to get a loan. Personal loans are mainly granted to government servants who are required to pay through Angkasa by monthly deductions from their salaries, and defaulters in this category should be minimal.

The CCB owe the 221 society members, 2,583 individual members and the public an explanation why the CCB have to provide $11.4 million in 1985 for dubious and bad loans.

The 1985 Financial Statement, however, does not reflect the full state of the bad loans in CCB. CCB has a total deposit of about $1.6 billion, with total loans advances of about $1.2 billion, where bad loans which have not been serviced estimated to be in the region of $250 million. Many of these bad loans had not been serviced for more than a year.

Among such loans is a $20 million loan to a MCA Deputy Minister. At least 20 CCB debtors have loans exceeding $5 million which are not being serviced!

Bank Negara and the Co-operative Department must move in to hold an inquiry into the CCB, because Malaysia cannot afford another financial scandal.

The inquiry should also inquire into the very strange movement of directors and top CCB officers 19 days after the CCB Annual General Meeting held at Hotel Merlin, Kuala Lumpur on 7th May 1986.

CCB Members have raised the question about the propriety of the co-option of the Chief Executive of CCB as a member and appointment as Chairman of the Management Committee, and the further co-option of two senior managers of associate or subsidiary organizations of CCB to the Board in mid-July, all replacing elected Board members.

The complaint that CCB is becoming a co-operative where the employees have taken over the Board must be inquired into.

I hope the authorities will take immediate action to investigate into the various complaints about the CCB, and that it would not be necessary for me to further reveal more facts and information about the CCB.

Call on EPF to explain why they allowed Macair to accumulate $1.3 million in arrears in EPF arrear from January 1985 without taking any action.

Malaysia’s first private airline company, MacAir has been placed under receivership, throwing over 200 employees, including pilots, engineers, ground crew and other staff, out of job.

MacAir, however, is not strictly speaking a private company, as two-thirds of its equity is held by two State Governments of Penang and Terengganu, through yayasan Bumiputra Pulau pinang and yayasan Islam Terengganu.

The receivership of MacAir is therefore also a matter of public interests, as the public have a right to know whether MacAir has collapsed because of unavoidable business losses, or gross mismanagement and negligence.

I would suggest that the Federal Government, together with Penang and terengganu Governments, set up an inquiry committee to find out why MacAir collapsed.

I have received complaints about mismanagement in MacAir, as well as shady deals, how the purchase of aircrafts had leasing arrangements which were double the price of the aircraft: how spare parts costing $20 were finally billed for $750, etc.

In this connection, the EPF must explain why it had allowed MacAir to accumulate EPF arrears totaling $1.3 million from January 1985 without taking firm action for 18 months. MacAir employees had complained to the EPF about the non-payment of EPF contributions many months back, but were told that there were ‘influential people’ in MacAir and they could not do much.

MacAir employees are convinced that if properly managed, there is no reason why MacAir should operate at a loss, to the extent of having to go into receivership.

At a time when the government is favoring privatization, the collapse of MacAir and MOIC among others should be used as public lessons for all Malaysians as to how not to mismanage companies, and this is why public inquiries into their operations is important.