Call for a White Paper on the RM700 million Bank Islam losses to be tabled Parliament, together with a report on what criminal  and professional actions have been taken against those responsible for the losses, whether in Bank Islam, Bank Negara or the professional auditors

________________________________
 

Speech (1) on the Finance Ministry during the 2006 Budget Committee stage

by Lim Kit Siang  
________________________________

(Parliament, Thursday):Although the Second Finance Minister, Tan Sri Nor Mohamed Yakcop said in a written reply in the winding-up of the budget debate on Monday  that action will be taken against those involved in the latest banking scandal, the RM700 million losses in Bank Islam, Parliament and the nation has not been told the details of these losses and what action had been taken against the officers responsible, whether in Bank Islam or Bank Negara, whether for criminal breach of trust or gross negligence.

It is clear that the government has not taken the latest Bank Islam scandal seriously or there would be a full accounting, including a White Paper presented in Parliament on the Bank Islam betrayal.

I still remember vividly the outrage of the third Prime Minister, Tun Hussein Onn in 1979 at the Bank Rakyat scandal involving RM65 million losses and he directed that the whole story of the Bank Rakyat betrayal be presented to the House in the form of a White Paper, which also contained the Price Waterhouse Report on the Bank Rakyat scandal – a sordid tale of malpractices, mismanagement and misuse of public trust and funds.

The Bank Islam betrayal involved RM700 million losses, which is  eights time the sum of the Bank Rakyat betrayal 30 years ago.  Why is there no White Paper to inform Parliament and nation of its the full details and  the outcome of independent investigations into the Bank Islam scandal?

In his written reply, the Second Finance Minister  said the Bank Islam losses were the result of loans given to “non-relevant parties”.  Who are these “non-relevant parties”, when and what  are the sums and who made the decisions for  these “irrelevant” loans?  When were the RM700 million Bank Islam losses first discovered?

The RM700 million Bank Islam betrayal has brought shame to Malaysian banking in general, Islamic banking in particular, and the country as a whole. Such shame and dishonour must be  redeemed by  decisive and uncompromising action to bring to book those responsible for the Bank Islam betrayal, instead of  the country and the finance and  banking authorities bringing more shame and dishonour  by any short-sighted  attempt to cover-up the Bank Islam scandal.

During the debate in Parliament on the Bank Rakyat scandal in 1979, I had  demanded to know what action had been taken against Bank Rakyat’s auditors, Kassim Chan & Co, whose professional negligence had  contributed to the Bank Rakyat losses.

Who are the auditors for Bank Islam and what action has been taken against them for any professional negligence in  the RM480 million Bank Islam scandal.

Nor Mohamad  admitted that Bank Islam was supervised by Bank Negara and Audit should have known about  this much earlier. Why had Bank Negara and Audit failed, who are the officers responsible and what action had been taken against them.  Parliament is entitled to know the full facts and  there should be no cover-up whatsoever.

When we are talking about RM700 million losses to Bank Islam, we are also talking about RM700 million profits to certain  beneficiaries at Bank Negara’s expense. Who are these people who had profited  RM700 million at Bank Negara’s expense.

When we are talking about Bank Negara losing RM700 million, we are not just  talking about  an impersonal corporate institution, but ordinary Malaysians with flesh, blood and tears – for the shareholders of Bank Islam include Permodalan Nasional Bhd with 32 per cent, Tabung Haji (30 per cent), Employees Provident Fund (six per cent) and LTAT (five per cent).

A  White Paper on the RM700 million Bank Islam losses should  be tabled Parliament, together with a report on what criminal  and professional actions have been taken against those responsible for the losses, whether in Bank Islam, Bank Negara or the professional auditors. This White Paper on the RM700 million Bank Islam betrayal should be tabled in Parliament on the first day of our resumed meeting after the Deepa-Raya holidays on November 14, so that it could be debated.

 
(27/10/2005)