Speech by Parliamentary Opposition Leader, Dap Secretary-General, MP for Tanjung and Assemblymen for Kampong Kolam, Lim Kit Siang, at the meeting of the DAP Co-Operatives scandal Committee held at DAP PJ Hqrs on Saturday, Sept.27, 1986 at 2 p.m.
DAP calls on the Government to provide an emergency interim $100 million rescue scheme to make partial pay-outs to needy depositors from Oct.8 to minimize hardships of the 540,000 depositors in the 24 co-operatives.
The establishment of the top-level Government Committee to find solution to the $1.6 billion Co-operative Finance Scandal is a great disappointment for the 540,000 depositors in the 24 affected co-operatives, for it means that the whole $1.6 billion Co-operative Finance Scandal is back to square one.
This is further confirmed by the statement by the Deputy Prime Minister, Ghaffar Baba, at the Malaysian Co-operative College yesterday that the committee would have to come up with its own proposals to solve the $1.6 billion Co-operative Finance crisis.
The deputy Prime Minister and the entire Cabinet must be reminded that when Bank Negara froze the assets and activities of the 23 co-operatives on August 8, the 540,000 depositors were promised that the government would come out with a solution in a month’s time. It is now coming to the second month.
Whatever the final rescue plan, I call on the Government to provide an emergency interim rescue scheme to make partial pay-outs to the needy depositors from Oct. 8 ( which would be the second full month since the Bank Negara freeze on the 23 co-operatives), to minimize the hardships of the 540,000 depositors in the 2 co-operatives. The Government should allocate $100 million for this purpose – which is a very small sum compared to the $2.5 billion the government spent to salvage Bank Bumiputra and BMF in the BMF scandal.
Secondly, the Government must give the Government Committee on the co-operatives a deadline to finish its work – for if it is allowed its own time to operate, it may take one out two years. After the Committee had made recommendations, they had again to be considered by the Cabinet, which will again involve more delays.
The Government Committee on Co-operatives should be given one week to complete its work, and all the Committee members should drop all other work, and put in 24 hours a day if necessary, because of the urgency of the problem, which had already been long-standing for seven weeks.
There is also no reason for the various proposals to be kept secret, but should be made public for the 540,000 depositors to have an opportunity to take part in the devising of an overall rescue plan for the 24 co-operatives and the 540,000 depositors.
Meeting with IGP on Monday on Co-operatives Scandal and Fraud
I will be meeting the Inspector-general of Police, Tan Sri Haniff Omar, on Monday, to convey to him my grave concern at the inability of the Police to cope with the Co-operative Finance Scandal, by bringing all the directors and officials of the co-operatives who had defrauded or committed breach of trust to court to face action.
There will be a great crisis of confidence in the Police and the legal system if those who have caused such great hardships to 540,000 depositors are allowed to get away scot-free.
Has MCA Ministers agreed to amendment of the Co-operative Act to stop co-operatives from accepting deposits from non-members?
Yesterday, Ghaffar Baba announced that the Government would amend the Co-operatives Act to stop co-operatives from accepting deposits from non-members.
I want to ask the MCA and Gerakan Ministers whether they have agreed to such an amendment. I find the MCA’s role in the entire $1.6 billion Co-operative Scandal most disturbing. There is no doubt that the MCA and its co-operatives were responsible for the Bank Negara action on August 8 to freeze the 23 co-operatives, as the KSM had been the worst hit by the run on the co-operative financed branches.
Now that the KSM had succeeded in getting the Bank Negara to freeze the $1.6 billion deposits of the 540,000 depositors in the 24 co-operatives, what is the MCA doing in Cabinet to protect their deposits and ensure that none of them suffer any financial loss and to get a rescue plan worked out in the shortest possible time?
Instead of forming a Government Committee seven weeks after the August 8 freeze action, the MCA and Gerakan Ministers should have suggested the formation of a Cabinet Committee to work out a rescue plan.