Speech by Parliamentary Opposition Leader, DAP Secretary-General, MP for Tanjong and Assemblyman for Kampong Kolam, Lim Kit Siang, at the meeting of co-operative depositors organized by the DAP National Co-operatives Scandal Committee at Tien Hou Kong, Kuala Lumpur on Monday, January 5, 1987 at 8 p.m.
Call on Bank Negara to make public its proposals on the refund plans for each of the 23 co-operatives on appointment of receivership to convince depositors that the receivers will not be a new stone-wall to frustrate depositors to get back their life-savings
MCA Deputy Natkonal and Rural Development Minister and MCA Youth Secretary-General, Ng Cheng Kuai, said yesterday that the former MCA President. Tan Koon Swan, had asked him to convey his ‘Happy Chinese New Year’ wishes to the Malaysian Chinese when Ng Cheng Kuai visited Tan Koon Swan in Moon Crescent, Changi Prison in Singapore on 31st December l986.
In actual fact, that Malaysian Chinese have nothing to be happy about during the coming Chinese New Year, all because of Tan Koon Swan and the MCA leaders. In the past year, the trust and confidence placed by the Malaysian Chinese in the MCA, in particular the economic ‘wizardrt’ of Tan Koon Swan in proposing the twin ‘breakthrough’ for Chinese economic rights – MPH and other holding companies on the one hand and co-operative finance system on the other – came crashing down with the Pan E1 scandal .As a result, billions of dollars of the savings of the Chinese small-timers have been wiped out or frozen, including the $l.5 billion of the 588,000 depositors in the 24 co-operatives.
The coming year of the Rabbit will in fact be the most ‘unhappy Chinese New Year’ for at least 60 per cent of the Malaysian Chinese, as at least 3 million Chinese are directly affected by the Co-operative Finance Calamity.
There is nothing for Malaysian Chinese to cerebrate in the coming Chinese New Year at all co-operative depositors should visit the residences of the MCA and Gerakan Ministers, Deputy Ministers, Mps, State Assemblymen and leaders during the Chinese New Year to ask them what they propose to do to get the government to bail out the depositors and ensure the safety of the $1.5 billion deposits.
Ling Liong Sik is only good at calling on depositors to ‘keep calm’ while letting the depositors’ position going from bad to worse
MAC President and Transport Minister, Datuk Ling Liong Sik, has yesterday called on the depositors to ‘remain calm’ over the co-operative problem, and not to be “exploited by those who choose to be destructive rather than constructive.”
Datuk Dr. Ling could only call on the depositors to ‘keep calm’, while allowing the position of the 588,000 depositors go from bad to worse. In fact, every time Datuk Dr. Ling calls on the depositors to ‘keep calm’, the position of the depositors become even more untenable.
The first time Datuk Dr. Ling called on the depositors to ‘remain calm’ was on July 26, l986, after Bank Negara’s action to freeze KOSATU three days earlier had triggered off a run on the other co-operatives.
Datuk Dr. Ling sought to assure the depositors of the other co-operatives by declaring that Bank Negara was investigating only one co-operative – KOSATU – and he had contacted Bank Negara and that reports that other co-operatives were also being investigated “is absolutely not true.”
Depositors who listened to Datuk Dr. Ling Liong Sik’s advice to ‘remain calm’ found, after the Bank Negara’s action freezing the other 23 co-operatives, that their entire life-savings had been frozen as well! A Bank Negara statement on August 20 has also shown that Datuk Dr. Ling’s statement in July that the Bank Negara was not investigating other co-operatives was completely untrue and misleading.
The second time Datuk Dr. Ling called on the depositors to ‘remain calm’ was on 9th August, after the Bank Negara’s freeze of the 23 co-operatives. Datuk Dr.Ling said the Bank Negara had to act ‘quickly and decisively’ to protect the interest of the depositors.
Depositors who believed in Datuk Dr. Ling’s second ‘remain calm’ call never realized that Bank Negara and the Government would drag its foot out for five months without any fair and just solution for the depositors.
When Bank Negara froze the 23 co-operatives on August 8, Finance Minister, Daim Zainuddin, said “the principal aim of this exercise is to act quickly to protect the interest of depositors”. He said that “in the event of a co-operative is found to be viable, the intention is to allow it to re-open as soon as possible.”
Bank Negara Governor Datuk Jaffar Hussein said the investigations into the 24 co-operatives would be completed in a month at the latest.
All these assurances and promises have come to nought. Bank Negara did act ‘quickly’ to freeze the 24 co-operatives, but the government shows no sense of urgency in finding a solution to the $l.5 billion Co-operative Finance Calamity, to the extent that MCA Ministers – who must bear the greatest political responsibility for the scandal – could even take long holidays overseas while depositors agonise over their life-savings, to the extent that at least 3 person had taken their own lives in frustration and despair!
The Government’s promises of allowing ‘viable’ co-operatives to re-open has also been disregarded, as it is now the government’s intention to close down all deposit-taking co-operatives. Koperasi Jasa Rakyat Bhd. for instance had asked the Bank Negara to lift the freeze as its board of directors is confident of its own viability, but there has been no positive response from Bank Negara.
I understand Koperasi Jasa Rakyat Bhd. Is prepared to refund 30 per cent of the depositors’ monies on lifting of the freeze, but a very different situation will arise with the appointment of receivers for all the co-operatives.
If the appointment of receivers is the most suitable manner to resolve the Co-operative Finance Calamity and Crisis, then Bank Negara and the Government should have taken this action in September itself, and not wait until January.
This does not seem to support Datuk Dr. Ling Liong Sik’s claim yesterday that “we have the best financial brains in the country working in Bank Negara on the co-operative problem.”
Why is Dr. Lim Keng Yaik and Gerakan not prepared to ask the Cabinet to extend to the 24 co-operatives the same held as it extended to Bank Rakyat and Bank Bumiputra?
Yesterday, the Gerakan President, Dr. Lim Keng Yaik, said he would raise at Wednesday’s Cabinet meeting the proposal that the assets of those found guilty of misdeameanour in the co-operative scandal should be confiscated.
I am surprised that after five months after the co-operative scandal, the Gerakan President and Minister for Primary Industries is belatedly proposing confiscation of assets of the criminal co-operative directors and officials.
What Dr. Lim Should do on Wednesday is to get the Cabinet to decide that Section 47 of the Co-operative Societies Ordinance should be invoked to make the corrupt and criminal co-operative directors and officials to compensate the co-operative and the depositors all the losses they suffered from their breach of trust and irresponsibility.
Secondly, Dr. Lim Keng Yaik should get the Cabinet to extend to the 24 co-operatives the same help the government extended to Bank Rakyat and Bank Bumiputra, unless Dr. Lim Keng Yaik can give a satisfactory explanation why Gerakan supported the Government’s rescue plan to advance $ 150 million to bail out Bank Rakyat and $ 2.5 billion to bail out Bank Bumiputra, but not to bail out the 24 co-operatives.
Apart from the corrupt and criminal co-operative directors and officials, there is no doubt that the Government itself, whether through the MCA and Gerakan Ministers, the Co-operative Development, the Police or the Finance Ministry, must bear a great responsibility for the $1.5 billion co-operative scandal.
The 588,000 depositors have a right to demand that the Government bail them out with a $ 600 million rescue plan, for if the Government had been efficient, competent and responsible in protecting the interests of the depositors, the $1.5 billion co-operative scandal would never have taken place. I have said in Parliament during the various debate in the Budget session that the Government had numerous opportunities since 1982 to stop the co-operative malpractices, but did nothing, for reason which are still unknown.
The latest Bank Negara move to appoint receivers for the 23 co-operatives is seen by thee depositors as another move by the government to stone-wall and frustrate their demand to get back their life-savings.
If the bank Negara claims that the appointment of receivers is in the interest of the depositors, then I call on Bank Negara to make public its proposals on the refund plans for each of the 23 co-operatives before Chinese New Year, and this announcement must be made before the court hearing on Wednesday for the appointment of receivers for the co-operatives.
If the Bank Negara is not prepared to make public its proposals before the appointment of receivers with regard to the refund of monies to the depositors before Chinese New Year, then it is unlikely to assume any responsibility for the 23 co-operatives after the co-operatives have been put under the charge of the receivers.