Part II of 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.
Understand that the Bank Negara Governor’s statement that nine co-operatives had reached agreement with their appointed financial institutions is incorrect
Bank Negara Governor, Datuk Jaffar Hussien, announced today that KOJADA is being de-frozen, while another nine deposit-taking co-operatives have reached agreement with their appointed financial institutions on arrangements to repay depositors of the DTCs.
I understand that the Bank Negara’ Governor’s claim that the nine named DTCs which had reached agreement with their appointed financial institutions is not correct, and the Bank Negara appears to be applying some ‘arm-twisting’ tactics to compel the DTCs to submit to the terms laid down by the financial institutions concerned.
In this connection, I call on the Bank Negara Governor to make it clear whether the so-called ‘agreement’ reached between these nine named co-operatives and their appointed banks or financial institutions is based on the net asset value started in the Government White Paper or very much lower.
The depositors have a right to this answer because they have bearned that the financial institutions appointed had offered very much lower net-asset value for the co-operatives as those contained in the White Paper. For instance, there is one co-operative whose net asset value was assessed as over $ 1 by the White Paper, but the appointed financial institution assessed its net asset value at half the White Paper value of around 50 cents.
It is pertinent to note that of the nine DTCa named, together with KOLADI, only a small minority of the 588,000 depositors are involved – i.e. slightly over 10 per cent of the total amount, comprising about 63,000 depositors.
The nine named co-operatives, with total deposit collection of $ 153.4 million, have an accumulated capital loss of $ 9.8 million, with their net asset value estimated by the White Paper as 83 cents to 97 cents per dollar of deposit.
The depositors of these nine co-operatives have a right to know the terms of agreement claimed by Bank Negara as reached with the respective financial institutions. Is the appointment of receivers to by-pass and ignore the views and rights of the depositors altogether? And what is the position of the 90 per cent of the 588,000 depositors, who put their monies amunting to $ 1,340,000 million in the other 14 co-operatives?
In the past five months, Bank Negara has kept the negotiations and discussions about the co-operative financial crisis in the greatest secrecy, as if it does not affect the depositors at all. This is most shocking, for it is the 588,000 depositors who have the first claim and right to know and decide on the details of the proposed solution of the co-operative crisis, and I call on Bank Negara to act in the best interests of the 588,000 depositors, by bringing the depositors into their confidence about Bank Negara’s plans for the depositors.