Tuesday, November 9, 2010

BMF Scandal Part 3 : The BBMB Story

 IN 1980, Bank Bumiputera Malaysia Bhd (BBMB) was receiving RM50 million a month from Petronas as part of an agreement to increase the coffers of the bank which was set up specifically for the benefit of bumiputras.

Bumiputera Malaysia Finance (BMF) was set up in Hongkong as a vehicle to channel parts of this money. A series of loans totalling about RM2.5 billion were given to Carrian Group’s investment into the territory’s booming property market. However in 1983, Carrian went bust after the property bubble burst and the loans could not be recovered.

BBMB assistant general manager Jalil Ibrahim was sent to the then British colony to conduct an audit. According to court transcripts, on July 17, 1983, he told his staff that he was leaving to meet a "Datuk". The next day, his body was found in a banana plantation outside Hongkong. The connection between Jalil’s death and BMF, and the unseen hands behind the collapse were never established. Klang businessman Mak Fook Than was convicted of the murder and sentenced to life.

At his trial, Mak had claimed that he merely disposed of Jalil’s body – the murder committed by a Korean working for a man named "George".

Mak had also retracted an earlier statement that he was working for the Finance Ministry and was sent to Hongkong to collect money for a high-ranking public official.

Lorrain, however, feels there were no links between Jalil’s murder and his investigations into BMF’s finances, believing that Jalil was a victim of a blackmail that went wrong.

"From what we had gathered then, Jalil had late night visitors at his hotel room where he was staying. On the day of his murder, Jalil had taken HK$20,000 purportedly for ‘Ibrahim’, but he was not in Hongkong then. That money was to pay off someone. Something went wrong and excessive force was used.

"We the directors of BMF welcomed Jalil’s audit for it showed that we were on the right path to recover the loans. There were no secret accounts or that Jalil was going to expose more wrongdoings. Jalil’s report in fact, helped the board by showing that we had done them (the loan transactions) properly. Jalil was doing us a favour."

Investigations revealed that irregular and even fraudulent lending practices led to the loss of billions – losses which were eventually absorbed by BBMB.

Lorrain who was BMF chairman then,alternate director Dr Rais Saniman,

Carrian Group chairman George Tan and BBMB executive director Datuk Mohamed Hashim Shamsuddin were implicated in the collapse and given jail sentences in Hongkong.

In 1986, a Commission of Inquiry headed by former auditor-general Tan Sri Noordin Ahmad established that what was going on in BMF was just "the tip of the iceberg", implying that bigger hands were at play. The commission report was not tabled in Parliament and had limited public release – 2,000 copies at RM250 each. Noordin was ostracised by the Mahathir administration for his findings, where he was even accused of colluding with the Opposition.

Source : The Sun

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