by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya on Thursday, 21st July 1994:
Call on Anwar Ibrahim to issue a statement on Bank Negara’s investigations into UMBC
Finance Minister, Datuk Seri Anwar Ibrahim, should issue a statement on Bank Negara’s investigations into UMBC in connection with questionable loans and other irregularities at the country’s fourth-largest bank.
This is the latest scandal involving the UMBC. As far back as 1984, 1985 and 1986, UMBC had been embroiled in a series of political scandals, particularly as to whether there had been any conflict of interest or illegality in the 1984 approval for the acquisition of 40.7% control of UMBC by Daim Zainuddin’s family companies, as it took place at a time when Daim Zainuddin was already the Finance Minister.
Next, there was the question whether there was further conflict of interest or illegality when without any public announcement, approval was given in 1985 for the increase from 40.7 per cent to 50.4 per cent majority ownership of UMBC by Daim Zainuddin’s family companies.
In 1986, there was the further UMBC scandal as to whether Pernas was forced to purchase the 50.4 per cent stake in UMBC from Daim Zainuddin and his family companies in the region of RM9 per share – giving Daim Zainuddin’s family companies a profit of some RM100 million.
As reported by foreign financial journals, Pernas lacked the cash for the purchase and had to raise the money through yen-dominated loan arranged by Daim Zainuddin’s Finance Ministry. But when the yen appreciated sharply against the ringgit, Pernas struggled to meet interest payments, eventually borrowing more to service the debt. Banking analysts estimate that altogether Pernas had between RM900 million to RM1 billion tied up in its money-losing UMBC investment.
In the middle of last year, the Mahathir Administration approved the takeover of Pernas’s UMBC stake by Datuk Keramat Holdings Bhd. whose chairman is Datuk Mohamed Noor (now also Chairman of UMBC). Datuk Mohamed Noor was former political secretary to the Prime Minister and described as a political ally of Finance Minister, Anwar Ibrahim.
The Aisan Wall Street Journal reported a few days ago that for the past three months, Bank Negara has been delving into UMBC’s affairs and its links to Datuk Keramat Holdings Sdn. Bhd over the latter’s acquisition of a controlling interest in George Town Holdings Bhd. last year, and the violation of the banking regulations prohibiting financial institutions from lending to itself or related parties.