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CIVIL SOCIETY SAYS AYE TO RCIS ON 1MDB, BMF AND FOREX LOSSES

CIVIL SOCIETY SAYS AYE TO RCIS ON 1MDB, BMF AND FOREX LOSSES
Press statement by Kua Kia Soong, SUARAM Adviser, 9 Feb 2017

At last, the two political coalitions in the country have been forced through their grandstanding to call for Royal Commissions of Inquiry (RCIs) into three of the worst financial scandals in recent Malaysian history. Pakatan Harapan has of course been calling for an RCI into the most recent 1MDB scandal that has made international headlines. To get at the former Prime Minister and new member of Pakatan Harapan, Dr Mahathir, the BN Minister Datuk Seri Dr Salleh Said Keruak has called for an RCI to look into the Bumiputera Malaysia Finance Limited (BMF) and Bank Negara foreign exchange (forex) scandals as these equally big financial scandals have never been investigated by an RCI and charges imposed.

Malaysian civil society says Aye to both these calls since the government can never regain the trust of the people until these three multi-billion financial losses have been accounted for and the negligent and corrupt leaders have been brought to account.

1MDB

The first RCI should investigate the current financial scandal around 1MDB. 1Malaysia Development Bhd (1MDB), the state investment fund has come under investigation for alleged impropriety after reports emerged that investigators traced some US$700 million wired into Prime Minister Najib Razak’s bank accounts. 1MDB was 42 billion ringgit in debt at the time of the scandal. Investigations by the US Department of Justice has uncovered the fact that insiders siphoned off billions of dollars and treated themselves to penthouse apartments in New York, a luxury hotel in Beverly Hills and paintings by Monet and Van Gogh. An independent RCI can uncover who authorized these enormous sums of taxpayers’ money to be abused in this way and recommend appropriate convictions of the corrupt and negligent.

Forex losses in the 90s

There has also been no RCI into the colossal forex losses as a result of speculation by Bank Negara in the international currency markets from 1992-1994, with the losses cited as ranging from RM10 billion to RM30 billion. Such a RCI can determine the actual extent of the colossal forex losses and whether there had been any financial malpractices and abuses by then Prime Minister, Finance Minister and Bank Negara Governor in view of the inconsistencies and conflicting explanations about the colossal forex losses. The RCI should recommend the appropriate charges for those who abused their powers.

The BMF Scandal in the 80s

One of the first scandals soon after Mahathir came into office in the 80s was the RM2.5 billion scandal in Bumiputra Malaysia Finance, a Hong Kong based subsidiary of state-owned Bank Bumiputra Malaysia Berhad. Besides the wide range of shady dealings involving the Carrian Group, the sordid details included the murder of a BBMB auditor who had gone to Hong Kong to investigate the propriety of the loans. No RCI has thoroughly investigated this scandal to see who in Kuala Lumpur had authorized those shady deals and recommended the appropriate charges against those responsible for this massive financial scandal.

Other financial scandals of the 80s and 90s

There have been other financial scandals including the $600 million losses suffered by the country over the Maminco-Makuwasa tin caper on 19 Nov 1986, the “piratisation” of the North-South Highway in 1987, the bail out of Mirzan Mahathir’s Konsortium Perkapalan Bhd as well as Renong during the 1997 financial crisis, Perwaja Steel’s RM9 billion liabilities.

No trust if there is impunity

Malaysian civil society demands social justice, democracy and human rights and there is no place for impunity. Impunity is especially common in countries that do not respect the rule of law, that suffers from corruption and have entrenched systems of patronage, or where the judiciary is weak. The First Principle of the Protection and Promotion of Human Rights through Action to Combat Impunity, submitted to the United Nations Commission on Human Rights on 8 February 2005 states that:

“Impunity arises from a failure by States to meet their obligations to investigate violations; to take appropriate measures in respect of the perpetrators, particularly in the area of justice, by ensuring that those suspected of criminal responsibility are prosecuted, tried and duly punished; to provide victims with effective remedies and to ensure that they receive reparation for the injuries suffered; to ensure the inalienable right to know the truth about violations; and to take other necessary steps to prevent a recurrence of violations.”

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