Call for a public inquiry as to whether the misuse of $68 million disbursed under the Special Credit Scheme for Agriculture (SPKP) by Bank Pertanian Malaysia (BPM) took place during the time when Anwar Ibrahim was Agriculture Minister or after

by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya on Tuesday, January 21, 1992:

Call for a public inquiry as to whether the misuse of $68 million disbursed under the Special Credit Scheme for Agriculture (SPKP) by Bank Pertanian Malaysia (BPM) took place during the time when Anwar Ibrahim was Agriculture Minister or after

One of the issues I would be asking for a full explanation in my meeting with Bank Pertanian Malaysia (BPM) Board of Directors or its top management which I had requested in my letter o the BPM Chairman, Datuk Abu Bakar Rautin, will be the misuse of the funds under the Special Credit Scheme for Agriculture (SPKP) managed by the BOM.

The fifth Malaysia Plan originally allocated $250 million for the SPKP but this was subsequently revised downwards to $115 million and under the Sixth Malaysia Plan, $80 million has been allocated for the scheme.

However, the Treasury has frozen funds for the SPKP special scheme for two years, i.e. 1990 and 1991, which offers soft loans to farmers with a 4 per cent interest per year, because of mismanagement of the fund.

The two-year freeze was only made public last month when the Chairman of the Farmers’ Organisation Authority, Tan Sri Mustaffa Jabar, asked for an explanation from the Ministry of Finance why the low-interest SPKP loans for farmers were frozen for two years.

Tan Sri Mustaffa Jabar said that the freeze had affected about 5100,000 farmers nationwide who faced difficulties completing or starting their projects. Tan Sri Mustaffa said the Treasury had terminated the loan scheme without any explanation or notice.

What is even more shocking is that the Chairman of Bank Pertanian Malaysia, Datuk Abu Bakar Rautin, said in the Business Times of 28th December 1991 that the Bank was never informed, officially or unofficially, of the Treasury’s freeze on funds for the SPKP until they read of a statement by the Finance Minister, Anwar Ibrahim, in the press a week earlier.

This is most shocking and scandalous way of operating a soft-loan scheme to provide concessional loans to farmers. It reflects very badly on the efficiency, competence, sense of responsibility and the commitment to help the poor farmer to improve their incomes, standard of living and quality of life on the part of all the three government agencies concerned, namely the Bank Pertanian Malaysia, the Ministry of Agriculture and Ministry of Finance.

In his statement which appeared in the Business Times on 19th December 1991, the Finance Minister, Anwar Ibrahim, made it clear that the Treasury had frozen the funds for the SPKP because Bank Pertanian Malaysia had not complied with the procedures for channeling the loans-which is a very polite way o saying that there had been mismanagement and misuse of the SPKP funds and that the money was not going to the poor farmers.
What I most noteworthy is the response from the Agriculture Minister, Sanusi junid, in the New Straight but Any incidence of fraud in Bank Pertanian occurred before my time, and right now I am satisfied with the bank’s management.

In the Business Times of the same day, Datuk Sanusi was quoted as saying:”as far as I know, there was no misuse of funds at the bank and if it happened, it was not during my times.”

Everyone knows what Datuk Sanusi was suggesting –that if there was fraud and mismanagement of the SPKP funds, it was not during his time as Agriculture Minister but that of his predecessors. Sanusi’s immediate predecessor as Agriculture Minister happens to be the preset Finance Minister, Anwar Ibrahim.

The people of Malaysia, and in particular, the farmers, are entitled to know the true facts with regard to the misuse of funds of the SPKP, which resulted in the two year freeze of the soft-loans for the farmers.

DAP calls for a public inquiry into the misuse of SPKP funds and fraud by the Bank PertanianMalaysia and
whether they took place during the time when Anwar Ibrahim as Minister of Agriculture, or after.

I am sure that Anwar Ibrahim would want to clear his name and redeem his reputation.
The inquiry should also investigate as to how the Bank Pertanian Malaysia and in particular its Chairman never knew anything about the two-year freeze of the SPKP funds by the Ministry of Finance.

In this connection, the statement by the BPM Chairman, Datuk Abu Bakar Rautin, in the Business Times of 28th December 1991 is most extraordinary. Dato Abu Bakar Rautin said that as funds from the Treasury for the SPKP had ‘dried up’, BPM had been using its own funds to keep the SPKP going. If Datuk Abu Bakar Rautin did not know about the Treasury freeze, how did he know that Treasury funds for SPKP had ‘dried up’?

Datuk Abu Bakar said that Treasury has so far issued funds in three tranches totaling $46.7 million to the bank for the scheme, the last being $10 million in December 1989.

Datuk Abu Bakar said that as at October 1991, BPM approved $99.9 million to 7,709 borrowers under the scheme, of which $68.1 million is outstanding.

According to the BMP 1989 Annual Report, as at the end of 1989, Bank Pertanian Malaysia received $46.7 million from the Treasury for the SPKP, and disbursed $43,306 million to 6,772 borrowers.

Is Datuk Abu Bakar suggesting that in 1990 and the first 10 months of 1991, although Treasury had frozen the SPKP funds, RPM disbursed another $24.7 million under the SPKP?

Where did the BPM find the money for this $24.7 million, when BPM chalked up $410 million losses in 1988, 1989 and 1990?

The public inquiry into the $68 million SPKP scandal in Bank Pertanian Malaysia should examine this matter, as well as inquire as to why the original Fifth Malaysia Plan allocation of $250 million for SPKP was so drastically slashed to $115 million. Furthermore, why despite such a drastic revision to $115 million, there was such a great shortfall in disbursements in the SPKP loans to the farmers.
The $68 million SPKP scandal is the latest proof that the government boasts a lot about help to farmers, but very little of this is translated in action.