Ten Questions about RM2.34 billion UEM-Renong deal, and if government cannot give satisfactory answers, DAP demands for full public inquiry to ascertain whether there had been violation of Banking and Financial Institutions Act, Companies Act and Securities Industry Act as well as other malpractices


Speech
- Labuan Offshore Securities Industry Bill
by Lim Kit Siang

(Dewan Rakyat, Thursday): The Prime Minister, Datuk Seri Dr. Mahathir Mohamad had been in the international forefront condemning "rogue speculators" and manipulators who have through their "immoral" actions destroyed the currencies and economies of developing and small natiions.

However, there seems to be very little government action or concern over the years against unscrupulous corporate figures who, either through inside information or connections with the powers-that-be, manipulated the Kuala Lumpur stock market to profiteer at the expense of the small investors.

There should not be any double standards where we rail against "manipulators" in the currency market while closing our eyes to the "manipulators" in the stock market.

This is why I am very disappointed that the Deputy Finance Minister, Datuk Dr. Affifudin Othman had not replied to my queries about the RM2.34 billion UEM-Renong deal, which had been the single biggest corporate catastrophe in recent times, precipitating the biggest crash in the Kuala Lumpur stock market in the five-month economic crisis, causing the KLSE Composite Index to fall by 19.58 per cent, from 667.29 to 536.62 points in three days, wiping out RM70 billion of the investors' funds in the stock exchange.

Yesterday, I had specifically raised five questions:

whether it is true that the RM2.34 billion UEM-Renong deal is actually a bail-out for Tan Sri Halim Saad in his US$800 million purchase of Philippines' National Steel Corporation (NSC) from Wing Tiek Holdings Bhd, through his proxy, Abdul Rashid Manaf, through the shell company Hong Kong-based Hottick Investment Ltd as well as take over the liabilities.

Today, I want to pose five further questions:

Parliament and the country are entitled to full answers to these ten questions about the UEM-Renong deal, and unless the government could be forthcoming with satisfactory answers, there should be a full public inquiry into the UEM-Renong deal, as well as to ascertain whether there had been violation of Banking and Financial Institutions Act, Companies Act and Securities Industry Act as well as other malpractices.

The UEM-Renong deal is a test case as to whether the government has the will to clean up malpractices in the corporate sector, including the banking and financial sector, or whether transparency and accountability would remain to be a major problem in the corporate and banking sector.

A United States-based risk consultancy has just come out with a report which is unfavourable to Malaysia. The Business Risk Service (Beri), which ranks profit opportunities for 50 major countries for next year and the next five years, has issued a report which tracked developments from July to mid-November to come up with its "profit opportunity" recommendations.

According to the November report of Beri, Singapore retained its position as the world’s second most profitable place to invest in for the next one to five years, despite the currency turmoil that has hit the region.

Beri gave Malaysia a score of 57, down from 59 in its previous report in July. The rating slipped one notch to 19th.

In its analysis of Malaysia, Beri noted that the Malaysian government had been slow to react to the crisis and that the Prime Minister, Datuk Seri Dr. Mahthir Mohamad’s "intemperate remarks" attacking foreign currency speculators and the "ill-judged measures to strengthen the collapsing stock market also undermined confidence abroad".

I know Barisan Nasional MPs hate to hear these reports, which is further evidence that the "denial syndrome" still dominates the thinking of Barisan Nasional leaders. It is such "denial syndrome" which would be the biggest obstacle to the success of any national economic recovery programme to ride out the current economic crisis.

(11/12/97)


*Lim Kit Siang - Malaysian Parliamentary Opposition Leader, Democratic Action Party Secretary-General & Member of Parliament for Tanjong