Friday 15 June 2012


A case of banks and bad loans (unedited).

by CT Ali

With thanks to FMT

We know that suspects are murdered while in PDRM custody in the very place where they should be most secure – a Police Station! The gruesome state of Kugan corpse, beaten to a pulp, gave mute testimony of the physical abuse Kugan endured before death mercifully ended the horror of a defenceless Indian being beaten to death by PDRM!  Kugan’s last conscious thoughts on this earth must have been of abject terror and hopelessness in the face of such cruelty and inhumanity. Man’s inhumanity against his own species is one of life’s recurrent nightmares – one often visited upon us by those sworn to protect us: PDRM!

We know of the murder of  Altantuya by UTK operatives who are trained to do as told – even murder. The question still unanswered is who directed them to murder?  That she was murdered by two UTK officers of Najib’s bodyguard detail  - both unknown to her – shot to death in circumstances still to be explained to us – is indeed remarkable! Remarkable because our courts deemed it not in the public interest to pursue their inquiries any further than the actual act of murder done. Remarkable because it involved Razak Baginda, a closed close confidant of our Prime Minister. Remarkable because under Najib Razak’s watch the Ministry of Defence awarded the Scorpene Submarine tender to Razak Baginda – an award that led to the murder of Tuya – and this fact alone should have required the Courts to act more vigorously in their sworn duty to do what is in the public interest! Is it not in the public interest to know why Tuya was murdered?  

For sheer financial lunacy and reckless disregard of one’s own sworn duty to King and Country, it seems that nothing could come close to PKFZ. An astounding display of how political power and greed have cost our Nation billions. It chronicles how this Tun descended from being President of MCA to being the accused in a trial that could possibly see no end nor have anybody blamed. What more punished for a financial debacle of such epic proportions that PKFZ shall forever be the standards by which future scams in Malaysia would be measured against!

And I thought I have seen it all! All that a great power like UMNO could and would do as they continue to pilfirage and plunder our Nation’s wealth - but in truth I have not seen it all!

Fresh in our mind is NFC: a scandal perhaps, a debacle maybe but certainly an abuse of trust placed upon Sharizat’s and her family by the Nation, albeit unknown to us until now. But if the truth were to be told, they have not done anything illegal. Any Lawyer worth his salt will take them through the courts without any convictions – possibly a censure at most for the abuse of trust – nothing more! What this Barisan Nasional government should do is not to waste the Nations money by taking them to court. They should ask Sharizat’s family to pay back what was given to them! All the work Rafizi has done to score some political points and mileage will come to naught because in the end Bank Negara and the Courts will ensure Rafizi will end up the victim not the hero of this NFC saga. Sharizat and her family will be given time “to make NFC work” or given time to repay or God forbid, a slap on the hand as a form of ‘tick-off’. If Barsian Nasional wins the 13th general election, you and I will see NFA stamped on the files of NFC!

So we have not seen it all!

A few weeks back I was discussing the Global Financial Crisis that happened many years back, which has now been predicted to resurface in the form of Non-Performing loans (NPL) resulting from it,  with an acquaintance when the conversation wandered East of Siberia!

This was asked of me:    

What if the most August of our financial Institutions – Premier Foreign and Local Banks, knowingly and with the collusion of MOF and Bank Negara and those in Government did what it must not and should not do if Bafia is to be obeyed?

And what if what these Banks did, involved billions of Ringgit, required the collusion of their Lawyers who may or may not know of the duplicity?

And what if their criminality was resolved through a political solution which compromises the integrity of MOF, the office of the Minister of Finance and Bank Negara?

And the person I was talking to started to unravel a horrifying tale that seemed only plausible in the time that we now live in! A time under UMNO, under Najib and under this ‘Malaysia Boleh’ mentality that makes the impossible possible, the acquisition of material wealth the be all and end all of all things Malaysian and the illegal legal!

Now where do I start…. at the beginning I guess.    

Banks in Malaysia have always had problems with Non Performing Loans (NPL), save for the intervention of Danaharta. Some Banks like SME worked within their own structure to recover the NPL but most Banks used Debt Collection agencies to recover their debts.

Debt Collection became a lucrative business and like all things Malaysian, ‘good business opportunities’ has its own attractions to the rich, the powerful and the politically connected. Collusion between those in the Banks, Debt Collection Agencies and Politicians fed of each other. Thugs and gangsters become the enforcement arm necessary to ensure the collection of these debts and as they say, in every cloud there is a silver lining. In the misery of those who were in debts these agencies thrived. 

The Banks tried to use these arrangements legally and the Debt Collection Agencies received their remunerations via commission and fees agreed to between themselves and the Banks.

But like in all things under this Barisan Nasional regime, these ‘arrangements’ soon morphed into a situation where the Banks ‘sold’ these NPL to the Debt Collection Agencies under Sale and Purchase Agreements  – something that BAFIA does not allow the Banks to do.

For example, CIMB can appoint a Debt Collection Agency to collect a NPL from their customer on the Banks’ behalf – but what CIMB cannot do is to appoint Shern Delamore  or Adnan Sundra & Low to prepare a Sales and Purchase Agreement to sell that NPL to the Debt Collection Agency. To do this they have to go through a ‘vesting order’ giving the rights of the NPL to the Debt Collection Agency. THIS THE BANK CANNOT DO! If Shern Delamore  or Adnan Sundra & Low knowingly abets them in doing this then what Shern Delamore or Adnan Sundra & Low are doing is illegal! If CIMB does not tell Shern Delamore  or Adnan Sundra & Low that it cannot vest the NPL to the Debt Collection Agency then it is not telling its lawyer the truth, the whole truth and nothing but the truth….so help me God! unless of course this elite legal firm is in on it!

Local and foreign premier Banks are involved in this illegal selling of NPL through Sales and Purchase agreements to Debt Collection Agencies.

Some of these Debts Collection Agencies are owned by individuals/corporations closely linked to those in the Banks and by people linked to those in Government.  What they were doing was illegal and contravenes BAFIA’S regulation and they started to look for a political solution to the problem of legalizing the sale of NPL to the Debt Collection Agencies.

In 2009 such a political solution was arrived at. A blanket approval was given by the Minister of Finance to the Banks to do precisely this AFTER THE FACT (act of Vesting) . Thus the Minister of Finance attempted to make legal what the Banks were doing illegally. The Minister of Finance who did this is Najib Tun Razak. Even more fascinating, Tan Sri Nor Yaacob attempted to amend Section 49(9)(a) of the BAFIA to allow these debt collection agencies to buy these non-performing loans, in the form of PU(A)184. However, it was NEVER laid before the Dewan Rakyat nor passed by Parliament. Unscrupulous lawyers representing the Banks and debt collecting agencies passed it off as having been amended. Funnily enough our ‘honourable’ courts bought their limp averments. Not a surprise, considering what has transpired before when ‘vested interest’ are working in collusion!

Our concern should be this. We have seen just about every institution in Malaysia corrupted for political expediency and profit.

Expediency : ‘the use of methods that brings the most immediate benefits, based on practical rather than moral considerations’

Banks are regulated by Bank Negara and the issuance of their License is by the Ministry of Finance. A feeble attempt was made to deregularise the system. There are other checks and balances that strictly outline what they can and cannot do. This NPL caper happened because MOF and Bank Negara failed in their duty to regulate the Banks and the collusion of some  Barisan Nasional politicians in covering up this failure is just standard operating procedure for this Barisan Nasional government in the hope that they can ‘manage’ the situation before the shit hits the fan!  

And if the Minister of Finance did give the blanket approval for this to be done  - AFTER THE Vesting of these non-performing loans, FACT – these questions need to be asked:

  • Has the Minister the power to do so contrary to what Bafia regulates and the Delegation of Powers Act?

  • Does it make any such illegal act done before the Minister’s Letter in 2009 legal?    

  • Why should the Minister condone this practice by issuing a letter giving approval for this practice AFTER Vesting of these non-performing loans THE FACT  - given that he has a brother in CIMB and another in Shern Delamore who are currently representing Standard Chartered Bank in this matter!  .

  • Were MOF and Bank Negara aware of these practices? If ‘yes’ why did they condone it, and if ‘No” why were they not aware of it?

The sums involved are massive and almost all the Banks operating in Malaysia, local and foreign are involved. Does this include HSBC, Standard Chartered Bank, Maybank ….the mind boggles with the implications of such duplicity by these august financial institutions!

This is another one of those questionable issues that keeps coming out of the woodwork – and they do keep coming out because these are things you cannot just sweep under the carpets. Like most of UMNO’s deeds – their motives are questionable because those affected by the decisions made by the Minister seems to be his cronies or those connected to Barisan Nasional politicians. We also know that in these debt collection agencies, criminal element lurks just below the surface as they are the ones used to retrieve these debts – and so to what extent are these criminal elements able to influence the decision making of those in MOF, Bank Negara and in Government?

For now this story is just about to break. The Head of Surveillance for Financial Institution is already aware of the outing of these facts and its implications on the financial institutions involved. He will be holding a Press Conference this Thursday on this matter. The Banks, Local and Foreign are stirring from their slumber and are aware of what this entails in terms of their own alleged collusion and participation in the illegal practice of selling NPL to Debt Collection Agencies and they are already starting to take positions to contained the matter.

Where this will go will depend on the vested interest of UMNO, Barisan Nasional, MOF, Bank Negara, the Banks themselves and all those involved in this matter.

We wait for relevant documentations to confirm these Sales and Purchase Agreements of the NPL from the Banks to the Debt Collection Agencies to emerge on to the public domain.

We wait for disclosures of the amount of ringgits involved!

We wait for the names of companies, individuals in MOF, Bank Negara and in Government (some call them scapegoats or sacrificial lambs taken to the slaughter so that others may live!) to be revealed.

Banks, Debt Collection Agencies, Lawyers and MOF officials will be summoned and questioned on a need basis to satisfy another of those ‘no stone unturned’ investigations that will be announced by Najib Tun Razak, Minister of Finance merangkap Perdana Menteri Malaysia and President of UMNO! 

The Nation will again be in shock and in awe of the goings on of our nations elites (or should I say ULATS!) – political and financial.  Smoke screens are already being thrown around to try and distract our attention to other ‘more pressing issues’. Muhyiddin has already asked DSAI to explain the RM3 billion squandered during DSAI time as Minister of Finance - purely divisionary tactics in as far as I am concerned but they will still try! Let the games begin!  

steadyaku47 comment:

In all the abuses and excesses that UMNO has been involved in Bank Negara the Premier Banks and MOF have somehow managed to be “above it all!”. If what CT Ali tells us is true then we have a situation where the Banks, the Debt Collections Agencies and the Politicians are colluding together to make money out of the miseries of the Rakyat!

Let me tell you how it works a case involving Metroplex Berhad and CIMB Berhad as follows:

SAMAN PEMULA NO: D-24-22-2009

On or about 1998, Metroplex had obtained banking facilities
from Commerce International Merchant Bankers

Metroplex’s loan accounts were classified as Non-Performing
Loans pursuant to Bank Negara Malaysia’s (the Bank) Guidelines of
Non-Performing Loan and Provisions for Substandard, Bad and
Doubtful Debts (NPL).

On 13.8.2006 CIMB and Sinesinga executed a Sale and
Purchase Agreement to sell and transfer CIMB’s NPL (including
Metroplex’s loan accounts) to Sinesinga. Vide a letter dated
27.11.2008 the Bank informed CIMB and Sinesinga that:-

2. Bank Negara Malaysia wishes to inform that the Minister of
Finance has granted approval pursuant to Section 49(1)(b) of the
Banking and Financial Institutions Act 1989 (BAFIA) to any licensed
institution that seeks Bank Negara Malaysia’s approval, to enter into
agreement of sale / disposal / transfer of NPL subject to fulfillment of the requirements stipulated in the “Guidelines on the Disposal / Purchase of Non-Performing Loans by Banking Institutions”.

I am not going to bore you with the details of the case – suffice  that we all know that what Bafia has put together, these UMNO Politicians have wreck asunder! The Lawyers can argue the case in CIMB favor till the cows come home but they will not convince us that a political solution was found to make legal what the Banks have been doing illegally! I would even dare to suggest that Nor Mohamed Yaacob and Nazri Aziz are somehow involve in all this. I rest my case.


  1. Don't waste energy mate. Why so long winded. Your articles are just repetative and long past their due dates. Why not be current and give some insights about the FELDA deal. Better still, write about the Pandas and the RM20mil required to feed them.
    Otherwise, just stay cool and play pocket billiards.

  2. I always have doubts about NPLs. A few years ago, I read with disbelief CIMB selling off a few billions of its NPLs as if it was a routine banking practice. Now I know why.

    It had happened before, the failure of banks like Bank Bumi and Sime Bank, as a result of NPLs arising from mega loans to politically connected persons, without proper collaterals or even without proper loan documentation which could be deliberate. It was only a matter of time when the NPLs would cause problems to the banks. That NPLs could be sold off meant a convenient way for it to show a healthy balance sheet. But one can imagine the details of each case to be really shitty.

  3. Fact that banks are scum won't change with PKR - they are even MORE in bed with them.

  4. One thing unique about banks is that since they are in the money business, they take deposits at low interest rates and lend out at much higher rates. As a result, the amounts in terms of deposits held as well as the loans extended to customers are many times that of their own capital base. Besides having complied with Bank Negara's statutory ratio requirement, the NPLs of a bank could be larger than their share capital and reserves. This means when really tested, NPLs could actually break a bank. I hope bankers out there would correct me if I am mistaken.

  5. The letter given by Najib in September 2009 confirms that the blanket ministerial Sanction was given on 6.7.2007. My question...Where is that blanket approval/sanction?