Press Conference Statement by Parliamentary Opposition Leader, DAP Secretary-General, MP for Tanjong and Assemblyman for Kampong Kolam, Lim Kit Siang, in Petaling Jaya on a Sunday, August 10, 1986 at 11 a.m.
DAP calls for a Royal Commission of Inquiry into the $1.5 billion Co-operative Finance scandal in Malaysia and proposes that the Government must bail out the troubled co-operatives for the sake of the depositors in the manner Petronas was used to bail out Bank Bumiputra and BMF
The $1.5 billion Co-operative Finance scandal in Malaysia has taken its first life, with the Klang (Pandanaran) branch manager of the Koperasi Serbaguna Kosmopolitan Berhad (KSL), Tan Choon Tin, 63, committing suicide in Genting Highlands on Friday.
Tan Choon Tin, ex-leadmaster at Pandaran new village, took his own life not because he had committed criminal breach of trust or fraud with the monies of the depositors, but because he falt responsible for the plight of the depositors who could withdraw their deposits from his branch since the raid and freezing of assets of Koperatif Belia Bersatu Bhd. (Kosatu) on July 23.
I do not know how many people will be the victims of the Co-operative Finance scandal in Malaysia when it ran its full course, for undoubtedly, the $1.5 billion Co-operative Finance scandal it even more catastrophic than the $2.5 billion BMF scandal, in terms of the number of people who will be directly affected. When the dependants of the depositors are taken into account, the number of people who will suffer from the Co-operative Finance scandal can run into millions!
I had warned the Government in the March meeting of Parliament of the need to take positive action to ensure that the Co-operative Finance situation do not get out of hand and become an even more serious scandal than the BMF scandal, but it clearly fell on deaf ears!
When I met the Bank Negara Governor, Datuk Jaffar Hussein, in January this year to discuss about the $60 million Setia Timur crisis, I had also drawn his attention to the need for strict government supervision of the co-operative finance sector, to ensure that the interests of the depositors are protested.
I understand that the authorities had wanted to take action two weeks ago against co-operative finance companies, but were vetoed by the political leadership who are afraid that it would have adverse effects on the elections performances of the Barisan Nasional component parties, in particular MCA and Gerakan, whose top leaders are involved.
If Bank Negara had taken earlier action, Tan Chong Tin might not have been driven to taken his own life! In this connection, I find shocking the statement by the Chairman of Koperasi Serbaguna Kosmopolitan (KSK) Maji Abdul Razak Haji Abu Samah, who is also the newly elected MP for Lembah Pantai, who said in the Sunday Mail today that its 15,000 members have nothing to worry as it expects its operations to return to normal within a week.
If the KSK depositors have nothing to worry, why has Tan Chong Tin had to die to try to placate the Pandamaran depositors?
Haji Abdul Razak’s statement is in bad taste, irresponsible and unbecoming of a newly elected Member of Parliament. It is KSK which had ‘killed’ Tan Chong Tin, and public-spirited Malaysians demand that the KSK directors give Tan’s family adequate recompense for its ‘crime’!
I do not pass any pre-judgement on the 23 co-operatives which had been frozen, but clearly there had been fraud, misuse of power, breach of trust in some of them, where depositors’ monies were used for improper purpose. Foe instance, Koperasi Pembangunan Ekonomi Pemuda Malaysia Bhd. should clarify whether it is true that it recently purchased 20 million shares of Malaysian Resources at 90 cents per share, when the market price was in the region of 50 cents per share.
The DAP calls for a Royal Commission of Inquiry into the entire co-operative finance sector, because the failure of the authorities to take action several months earlier, and the two-week delay in taking final action because of political and general elections considerations, has undermined public confidence that the government could be trusted to conduct the investigations and to take follow-up actions fairly and impartially, without fear or fabour!
It is for this reason that a Royal Commission of Inquiry should be established, headed by former Auditor General and chairman of the BMP Inquiry Committee, Tan Sri Ahman Nordin, to take over all investigations into the co-operatives.
The 17 accounting firms which had been appointed by Bank Negara to investigate the 23 deposit-taking co-operatives can continue with their work, but reporting to the Royal Commission of Inquiry instead of to Bank Negara.
DAP wants Government undertaking to bail out the troubled and insolvent deposit-taking companies for the sake of the depositors
The question uppermost in the minds of the people and in particular the depositors, is whether the Bank Negara freeze of the 23 deposit-taking companies is to protect the co-operatives or to protect the interest of the depositors?
Directors who are guilty of fraud, breach of trust and abuse of authority must be brought to book and severely punished, regardless of their political position or influence. But the government owes a moral responsibility to ensure that the depositors do not suffer any losses especially as it is the government’s gross negligence in taking actions earlier which is responsible for the present Co-operative Finance Scandal.
If the Government could use Petronas to bail Bumiputra and BMF in the $ 2.5 billion BMF scandal, then the Government has a greater responsibility to give an undertaking to bail out the troubled and insolvent co-operative for the sake of the ordinary depositors.
Unlike the $ 2.5 billion BMF scandal, the $ 1.5 billion co-operative Scandal touches the lives of millions of Malaysians directly, for it represent the collective life-savings of small-timers, the workers, hawkers, housewives, small businessmen!
The DAP has established a Co-operative Finance Scandal National Committee to monitor the matter, collect and collate information from co-operatives and depositors, and which will also conduct meeting for affected depositors to have an opportunity to express their views and grievances.
This Committee comprises:
Chairman: Wee Choo Keong (Candidate for Klang)
Vice Chairman: K. C. Cheah (Candidate for Raub)
S. K. Song (Assemblyman for Bandar Maharani, Nohore)
Cliff Tan (MP for Sungai Besi)
Secretary: Lim Guan Eng (MP for Kota Melaka)
Asst. Secretaries: Liew Sam Fong (Perak Assemblyman for Jalong)
Lim Hock Seng (Penang assemblyman for Bagan Jermal)
Treasurer: Lee Yuen Fong (Negeri Sembilan Assemblyman for Rahang)
Full committee members to be announced later.