by Parliamentary Opposition Leader, DAP Secretary-General, MP for Tanjung and Assemblyman for Kampong Kolam, Lim Kit Siang, in Petaling Jaya on Saturday, January 17,1987:
DAP calls for the revival of the Ahmad Nordin BMF Inquiry Committee to specifically inquire into the three irregular transactions highlighted in the Hashim Shamsuddin case in Hong Kong
Former BMF and Bank Bumiputra director Datuk Hashim Shamsuddin has been sentenced to four-and-a-half years’ jail after pleading guilty to four charges of corruption and conspiracy to defraud in the BMF scandal in Hong Kong.
A day later, the Prime Minister, Datuk Seri Dr. Mahathir Mohamad, lamented in his talk to the London UMNO Club that “we have reached a level where we can no longer trust in people… where we live in a society which no longer has any honour.”
He said there were people who, when put in positions of trust, abused their positions and stole from the very institutions they were in charge of.
Dr. Mahathir rightly stressed that strength of character was an essential quality of holders of public office. His prescription that future candidates for these posts would have to undergo a course to determine their suitability, however, is unlikely to produce upright and trustworthy public office-holders, unless the Government demonstrates a will and determination to bring to book all public office-holders who had betrayed public trust.
Unfortunately, in the greatest banking and financial scandal in Malaysian history, the $2.5 billion BMF scandal, the Government had given the Malaysian people and the world the impression that it had a lot of things to hide, and was going out of its way to protect the BMF culprits.
With the latest pronouncement by the Prime Minister, I call on Dr. Mahathir Mohamed to declare total war against the BMF culprits, and to allow the entire BMF scandal to be publicly exposed, and whoever is involved, however exalted his political status, must be required to answer for this role in the BMF scandal.
The Hashim Shamsuddin trial has highlighted at least three transactions of great irregularity and impropriety.
According to the Hong Kong daily, South China Morning Post, and other Hong Kong papers, the leading counsel for Hashim Shamsuddin, George Carmen, when pleading for mitigation and lesser sentence for Hashim Shamsuddin, submitted that others in BMF, Bank Bumiputra and Malaysian Government were more ‘culpable’, as he only “acquiesced” in what others initiated.
George Carmen described to the Hong Kong Supreme Court. Lord President, Sir Denys Roberts, three instances of such irregular transactions, where Hashim Shamsuddin’s role was to ‘acquiesce’ in what other initiated.
The first involved a request by the Prime Minister, Datuk Seri Dr. Mahathir through Bank Bumiputra’s Chairman, Kamarul Ariffin, for a loan of $US400 million to a Malaysian company, Maminco Sdn. Bhd. “that had no assets”. Mr. Carmen said the purpose of the loan was to “buy up tin reserves so that the tin market might be affected so as to inflate the price of tin.” However, Mr. Carmen said, the loan was totally inadequately documented. It was inadequately secured at the time the advance was made.”
Mr. Carmen added that at the time of the loan, “there was no adequate assessment of the company’s ability to repay. Finally the loan was made so as to conceal the details of it, at the request of the Prime Minister.”
The loan, Mr. Carmen said, was transferred to Bank Bumiputra’s Bahrain branch. The branch’s auditors objected to the loan as did the Bahrain government, which requested that the loan be moved out of the country.
In the end, Bank Bumiputra lost US$200 million. Mr. Carmen said this instance was important because “it showed that before Shamsuddin committed any of the criminal offences he now admitted, he had been instructed by the chairman of the bank, at the behest of the Prime Minister, to behave in a similar way to which he was charged.”
The second instance was Datuk Musa Hitam’s calling in Hashim Shamsuddin, a Tengku Razaleigh appointee, telling him that he would be allowed to stay on as executive director of Bank Bumiputra if Datuk Hashim wouldn’t oppose or attempt to block loans proposed by Datuk Rais Saniman from BMF to unnamed clients.
Mr. Carmen described this as a “very serious interference with the independence and integrity of bank directors.”
In the third instance, Mr. Carman said Datuk Hashim was instructed by Kamarul Aiffin, Bank Bumiputra Chairman, to falsify a currency-exchange transaction with Petronas, to show the bank had made a profit of M$5 million and that Petronas had lost another M$5 million in what Mr. Carmen described as a “donation” for an unidentified high authority “which I am not permitted to name.”
Apart from these three instances, in the statement of facts agreed by both the defense and prosecution, the Hong Kong Supreme Court was told that the former Finance Minister, Tengku Razaleigh, was “given” US$25,100 out of HK$13.7 million in illegal payments made by Carrian group head George Tan to Silver Presents Ltd, a Hong Kong company owned and controlled by Datuk Hashim and his wife, Margaret.
These allegations are made internationally, and Malaysians cannot pretend that they don’t exist. They are a grave slur to Malaysia’s international reputation and image, and should be fully investigated.
The DAP calls for the revival of the Ahmad Nordin BMF Inquiry Committee to specifically investigate into the three allegations as well as the reference to Tengku Razaleigh’s part in the agreed statement of facts between defence and prosecution.
If the Prime Minister is not prepared to order the revival of the Ahmad Nordin Inquiry Committee to get to the bottom of the allegations in the Hong Kong court proceeding, then the Malaysian public can only conclude that the government still lacks the will to ensure that only the highest standards of public integrity, trust and honesty prevail in the public services.